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SAP White Paper
Continuous Performance Management
Getting People to Talk: Creating a Culture of
Continuous Performance Management
©2017SAPSEoranSAPaffiliatecompany.Allrightsreserved.
1 / 22
2 / 222 / 22
Table of Contents
Joe Sherwood and Steven Hunt
SAP SuccessFactors HCM Research
4	Introduction
5	 Studying the Conditions that Make
Continuous Performance Management Work
20	Conclusion
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
Continuous Performance Management
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The need to more effectively engage
employees coupled with advances in
social, mobile, and cloud technology have
created an explosion of innovation in
continuous performance management
methods. The primary goal of continuous
performance management is to create
effective ongoing conversations and
feedback between employees, managers,
and coworkers to drive agile and
continuous performance improvement
and development. Putting continuous
performance management into practice
involves much more than creating a new
process or deploying a new application.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
4 / 22
Continuous performance management requires
changing the behavioral habits of managers and
employees to engage in conversations that other-
wise might not happen. SAP SuccessFactors has
a growing number of customers who are actively
pursuing a continuous performance manage-
ment model. They are learning through real-world
experience what it takes to make continuous per-
formance management successful. This paper
shares insights gained from working with these
customers on what it takes to make continuous
performance management work.
WHAT MAKES CONTINUOUS PERFORMANCE
MANAGEMENT DIFFICULT?
The idea of continuous performance manage-
ment is not new. For decades, companies have
advised managers that performance manage-
ment conversations should be ongoing through-
out the year. However, managers were rarely
held accountable or recognized for engaging in
ongoing coaching discussions. As a result, many
performance management systems developed
into an annual exercise in completing forms and
having uncomfortable conversations centered
around vague recollections of past performance.
In contrast, a continuous approach to perfor-
mance management embraces processes that
encourage more frequent feedback conversa-
tions and proactive discussions about develop-
ment. These processes downplay, and in some
cases totally eliminate, the use of backward-fo-
cused performance evaluations and annual
ratings peformed by managers. Instead, manag-
ers and employees benefit from technological ad-
vances and applications that facilitate more fre-
quent coaching conversations. These tools can
also collect data throughout the year to simplify
and increase the accuracy of assessments that
help guide total workforce management
decisions related to compensation, staffing,
and development.
The success of continuous performance man-
agement hinges on managers and employees
actively engaging in effective ongoing dialogue
about performance and development. Most
managers and employees know they should
have these sorts of ongoing feedback discus-
sions, but many fail to do so. This is one of the
primary challenges associated with continuous
performance management. Feedback conversa-
tions do not come easily for many people. Estab-
lishing new patterns of behavior can be difficult,
and often people lack the necessary skills or
motivation. Implementing continuous perfor-
mance management is much like changing
health habits. It is one thing to recognize that a
healthy diet and regular exercises are important,
or even to join a gym and buy vegetables; it is
another to actually live a healthy lifestyle. Like
managing one’s health, the main challenge with
continuous performance management is often
not a lack of knowledge or resources, but in
changing daily habits so that the understanding
of how performance should be managed aligns
with how it is managed.
Continuous Performance Management
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Introduction
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
5 / 22
SAP SuccessFactors has more than 3500 custom-
ers using our performance management technol-
ogy. Many of our customers have invested consid-
erable energy to transition to more continuous
performance management. Starting in 2017, we
began a series of ongoing interviews with many
of these customers, representing a mix of indus-
tries, geographies, and size, to identify what con-
ditions are associated with a successful move to
continuous performance management. A num-
ber of these customers are making extensive use
of technology recently developed by SAP Suc-
cessFactors specifically designed to stimulate
more continuous performance conversations
and feedback. Aptly named Continous Perfor-
mance Management (CPM) and delivered as part
of SAP SuccessFactors Performance and Goals,
these capabilities enable and facilitate the move
to continuous performance management pro-
cesses. Throughout the paper we provide illustra-
tive examples of how this technology is playing a
role in enabling companies to implement contin-
uous performance management. This paper is
not about technology per se, but many of the
continuous performance management methods
discussed in this paper could not be deployed in
a scalable and sustainable fashion without the
use of modern, cloud-based technology solu-
tions. This report provides real-world insights
from customers who are on the path toward con-
tinuous performance management.
Customers vary considerably in their approach to
continuous performance management based on
their unique needs and organizational cultures.
However, we discovered several common themes
associated with companies that are successfully
deploying continuous performance management
programs. By coupling these patterns with find-
ings drawn from empirical research studying em-
ployee feedback and performance, we have iden-
tified a list of conditions that influence the
success of continuous performance manage-
ment programs. Table 1 lists eight conditions that
are associated with more effective continuous
performance management processes. The effort
needed to implement continuous performance
management and the value it provides are both
influenced by the degree to which these condi-
tions exist in an organization. Note that these
conditions represent an ideal. None of the cus-
tomers we interviewed, including some with
very effective continuous performance manage-
ment processes would claim to have fully ad-
dressed all eight conditions. With that said, the
more these conditions exist, the more value com-
panies receive from continuous performance
management processes and tools. Conversely,
the more companies invest in continuous perfor-
mance management, the more likely they are to
create the conditions in Table 1. Most of these
conditions are outcomes of using continuous
performance management over time. Not meet-
ing some of these conditions is not a reason to
back away from pursuing continuous performance
management. Rather, it’s likely that the more a
company fails to create these conditions, the more
time and effort it will require to achieve the trans-
formation necessary for realizing significant value.
The remainder of this document discusses each
of the conditions in Table 1 in more detail, and
provides suggestions on how to create and
strengthen them over time.
Studying the Conditions that Make
Continuous Performance Management Work
Continuous Performance Management
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© 2017 SAP SE or an SAP affiliate company. All rights reserved.
6 / 22
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Table 1.
Summary of conditions facilitating a successful move to continuous performance management
Buy-in and
Motivation
Continuous performance management only works when leaders in the organization
and process stakeholders have a strong commitment to its value. They must per-
ceive the cultural and business benefits associated with continuous performance
management as worthy of their time, energy and resources.
Feedback-rich
Culture
Continuous performance management is easier in companies where people are al-
ready accustomed to regularly giving, seeking, and receiving feedback.
Goal-Oriented
Culture
Continuous performance management is easier in companies where goals and
roles are well-defined and communicated, and people are held accountable. People
should have a clear sense of shared purpose and commitment toward organization-
al objectives.
Quality
Relationships
Continuous performance management is more effective when there is a strong level
of trust between managers and employees. People are more willing to give and re-
ceive feedback from those they know and believe are committed to their success.
Training on
Giving and
Receiving
Feedback
Continuous performance management only works if managers and employees
know how to give and receive feedback. Feedback must be delivered appropriately
to maximize performance and engagement. Poorly delivered feedback can seriously
hurt performance and commitment.
Transparency
of Data and
Talent
Decisions
Continuous performance management works better when people understand how
talent decisions are made.The better they understand how these decisions are made,
the more comfortable they will be with openly talking about their performance.
Feedback
Systems
Continuous performance management depends on regular feedback conversations.
It is important to have triggers that encourage routine dialogue and feedback, and
maintain an accessible record of what is discussed.
Program
Evaluation
and
Management
Continuous performance management often requires creating and nurturing a spe-
cific type of organizational culture. This process is aided by careful measurement of
core metrics and strategic action based on continual program observation and
learning.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
7 / 22
Table 2. Differentiated value of continuous performance management by job role
What they want to know… Why their support matters…
Senior
leaders
•	How is continuous performance man-
agement linked to business
performance?
•	How does continuous performance
management align with the competi-
tive strategy of the business?
•	Employees take cultural cues from
their managers, who in turn take cues
from their leaders.
•	Support from senior leaders demon-
strates how seriously the organization
takes the change.
HR
professionals
•	How does continuous performance
management positively impact other
HR processes like compensation, staff-
ing, and development?
•	How does continuous performance
management lead to improved perfor-
mance review processes?
•	It’s important that HR professionals
know how changes are going to affect
the other processes they manage that
may have links to performance man-
agement.They are also likely to bear the
burden of change management efforts
related to continuous performance
management so they must understand
how to communicate its value.
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BUY-IN & MOTIVATION
Depending on what your performance manage-
ment process looks like today, adopting continu-
ous performance management may represent a
significant change that influences a range of HR
processes and business practices. If key stake-
holders are not on board, a smooth take-off and
transition to continuous performance manage-
ment will be more difficult. While it may be unre-
alistic to expect every person to be supportive of
the change, there are many things you can do to
increase organizational buy-in including:
•• Clearly define what you are going to change and
what it will take. Have candid discussions about
how continuous performance management will af-
fect managers, employees, business leaders, and
HR professionals.Table 2 includes a brief discus-
sion of the value continuous performance man-
agement provides to different stakeholders and
why their support is important. Define in clear be-
havioral terms what these people will be required
to do in the future that they may not be doing now.
Have open and honest discussions around why
people may resist the change, and what is needed
to enable and support the transition to a continu-
ous performance management model.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
8 / 22
Continuous Performance Management
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Table 2 continued
What they want to know… Why their support matters…
Managers •	Will continuous performance manage-
ment make my job easier or harder?
•	How will this change the current rela-
tionships I have with my direct reports?
•	How will I be rewarded for making the
effort required to implement continu-
ous performance management?
•	Managers are critical agents for change
given their unique position between
employees and senior leaders, and the
unique knowledge they possess about
organizational culture and employee
attitudes.
•	Continuous performance management
only works if managers invest time in
having ongoing conversations with em-
ployees. Continuous performance man-
agement affects managers more than
any other group in the organization.
Employees •	Will continuous performance manage-
ment make my job easier or harder?
•	How will I be rewarded or recognized
for making the effort?
•	How will continuous performance man-
agement enhance my career
opportunities?
•	Continuous performance management
asks employees to play a more proac-
tive role in seeking development input
than traditional performance manage-
ment approaches.
•	Employees must be open and willing to
engage in ongoing performance orient-
ed conversations for it to work.
•• Create a vision that provides justification for
continuous performance management. This
may include highlighting how continuous per-
formance management will address problems
with previous performance management sys-
tems. But it should also emphasize how contin-
uous performance management will add value
for employees, managers, and leaders beyond
past practices, and how it ties to broader orga-
nization values and business priorities. See Ta-
ble 3 for a short list of metrics that speak to the
value of continuous performance management
in terms of increased employee engagement.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
Continuous Performance Management
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One of the benefits of moving to continuous performance management is the ability to increase
employee engagement. The following statistics provide some sense of the value continuous perfor-
mance management can provide by creating more engaged employees.
Table 3. Employee engagement and the value of continuous performance management
Compared to low engaged
employees, highly engaged
employees:
•	Are 87% less likely to leaveii
•	Generate 2.5 times the revenueiii
•	Create 200% higher levels of customer satisfactioniv
Most organizations suffer from
low employee engagement
•	Historical research suggests that only 13% of all employees are
“highly engaged” and 26% are “actively disengaged”v
Continuous performance
management directly addresses
core issues impacting
engagement
•	Nearly 60% of employees say that they would like feedback on
a daily or weekly basis—72% of employees under age 30vi
•	98% of employees will fail to be engaged when managers give
little to no feedbackvii
•• Create “continuous performance management
advocate” role(s) and use these as change
agents to communicate and educate others on
the vision. Survey employees to gauge atti-
tudes around continuous performance man-
agement, and select those who score more on
the positive side. The ideal change champions
are business leaders and employees outside of
HR who are widely respected in the company
for their contributions and commitment to the
company’s success.
•• Identify skeptics of continuous performance
management and bring them into the decision
process. People who initially resist an idea are
often great advocates once they fully under-
stand the value, know how it will work and feel
their concerns have been listened to and act-
ed upon. In addition, these people are often
the most likely to identify potential mistakes
before you make them.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
10 / 22
Figure 1. Technology enabling the capture of
achievements at the time they occur. Employees
and managers can easily access a summary
achievements and view them either by month or
by goal. This type of visibility provides a sense of
accomplishment and allows for more real-time
recognition of employee contributions.
Continuous Performance Management
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FEEDBACK-RICH CULTURE
Continuous performance management is ulti-
mately about enabling, creating, and supporting
a “feedback-rich” culture. This is a culture where
people are comfortable having candid discus-
sions about the impact their actions are having
on group performance and company success,
and how they can be improved. Employees in
feedback-rich cultures not only accept and act on
feedback, but actively seek and expect it. Feed-
back-rich cultures do not emerge over night; they
represent collective habits and attitudes that
develop over time. They must be created and
nurtured through leadership role modeling,
access to tools and training that support the use
of effective feedback, policies and norms that
encourage feedback conversations, and environ-
mental cues that trigger feedback-related think-
ing. The following guidance can help organiza-
tions create a feedback-rich culture.
•• Leaders set the culture.viii People tend to manage
their employees the same way they are man-
aged by their own leaders. If you want your man-
agers to give feedback to employees, make sure
your leaders are giving regular feedback to their
managers.A good place to start is to have more
ongoing, constructive feedback and coaching
during leadership meetings and in one-on-one
discussions between senior leaders and their di-
rect reports. One of our customers shared how
they made sure the executive assistants of se-
nior leaders understood the value of continuous
performance management and incorporated
feedback meetings into the leaders’calendars.
•• Put up visual reminders that highlight the value
of regular feedback and coaching.These can in-
clude tips on how to give feedback, values
around the proper way to deliver and receive
feedback, and commitment to maintaining a cul-
ture that’s based on continuous improvement
and peer support. Note that there is a risk to this
technique if you take it too far too soon.Visual
reminders that are out of step with the existing
culture risk creating ridicule and cynicism rather
than constructive change.
•• Educate managers and employees to help them
understand the value of continuous perfor-
mance management for creating a well aligned,
engaged, and high performing workforce. People
probably know feedback is important, but they
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
11 / 22
may not realize how important it is or how much
it is missing from the current work environment.
•• Provide positive support for those who proac-
tively embrace feedback (e.g., ask for feedback,
provide ongoing feedback, etc.). Most compa-
nies say they value feedback and development
but many companies do not recognize and re-
ward it. Make sure managers are rewarded and
promoted based, in part, on their skill coaching
and developing those with whom they work.
Address, and if necessary, remove leaders from
senior positions if they display behaviors associ-
ated with destructive feedback or otherwise
demeaning behavior toward others.
Figure 2. Technology enabling coaching interac-
tions between an employee and their manager.
This screen shows how ongoing feedback can be
provided in a quick and simple manner.
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GOAL-ORIENTED CULTURE
The primary purpose of continuous performance
management is to create more effective, ongoing
coaching conversations and feedback between
employees, managers, and coworkers to drive
continuous performance improvement and de-
velopment. These conversations mainly focus on
activities and accomplishments associated with
the pursuit of job relevant goals. What goals
should the person be focusing on? What barriers
are they encountering as they pursue these
goals? How can they adapt their behaviors to
more successfully achieve these goals? What
learning and experiences can they gain from the
work they are doing related to these goals?
It is difficult to implement continuous perfor-
mance management if employees and managers
do not have clarity around their goals and how
those goals align with the goals of the company,
their teams, and their colleagues.
Goals are not only important for having more
structured ongoing performance oriented conver-
sations, they are also critical for providing effective
coaching and feedback. Feedback is not very ef-
fective when delivered by itself, as it tends to be in-
terpreted as an evaluation of a person’s perfor-
mance rather than as a suggestion to help them
be more successful. Feedback can be very effec-
tive when linked to a person’s goals.To illustrate
this point consider the following two examples:
•• Feedback not in the context of goals: “Wait
longer before you talk in customer meetings.”
•• Feedback associated with goals: “The goal
of customer meetings is to learn from the
customers’ thoughts so we can deliver effective
solutions. Wait longer before you talk in
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
12 / 22
customer meetings as that will give the cus-
tomer more time to express their thoughts,
and the more you understand their thoughts,
the better we can tailor our solutions to meet
their needs.”
Research shows that goal setting works better in
the presence of regular feedback and coaching.ix
Research has also shown that feedback works
better when it’s linked to goals.x Feedback and
goals should go hand-in-hand
Figure 3. Technology connecting formal job
goals with informal, ongoing actitivities. This
screen shows features that enable employees
and managers to link ongoing tasks and activi-
ties to more formal job goals.
QUALITY RELATIONSHIPS
A continuous approach to performance man-
agement both relies on and helps foster better
quality employee-manager relationships. This is
because effective feedback depends on and
helps create mutual respect and trust. Employ-
ees must trust that managers are their advo-
cates, and that they possess the necessary skills
and expertise to provide effective coaching.
Trusting, quality relationships are built over time
through positive interactions where people show
support for one another.xi This is more than a
simple transaction where if I do something for my
manager, my manager does something for me. It
is about managers voluntarily taking action to
support the career interests of their employees,
and employees trusting the guidance and direc-
tion that they receive.
The more employees and managers can build
trust the more effective continuous performance
management will be. The following are activities
that can help foster these relationships:
•• Managers should express a belief in their em-
ployee’s ability to accomplish their goals. Show-
ing confidence in a person’s competence and
ability increases their willingness to accept and
utilize feedback.xii
•• Managers should reward and recognize positive
efforts their employees make toward goal ac-
complishment. Employees who feel appreciat-
ed, even in the face of failure are more likely to
continually apply effort. This doesn’t require
providing tangible rewards, such as gifts or spot
bonuses. In fact, providing tangible rewards can
undermine employee motivation if they are
over-used.xiii It does require letting people know
that their contributions and improvements have
been noticed and are appreciated.
•• Managers should make every effort to treat em-
ployees fairly when it comes to making deci-
sions related to pay, promotions, job assign-
ments, or other tangible career opportunities.xiv
This starts with transparent communication
about how these decisions are made.
•• Employees and managers should seek to
maintain a positive mood during their interac-
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© 2017 SAP SE or an SAP affiliate company. All rights reserved.
tions. It is okay, and to some degree even
healthy, to express honest frustration with the
situations we encounter at workxv, but it is not
okay to express frustration toward the individu-
als we work with, which can lead to lots of nega-
tive consequences.xvi
•• Employees should make genuine efforts to
reach the goals that they agree to, and be hon-
est with managers about challenges they face
along the way. Managers and employees should
establish expectations about sharing bad news
as well as good news.
•• Employees should be aware of their manager’s
goals, and make efforts to support those goals.
Managers should be as transparent as possible
with employees about the broader goals of their
team and the organization. This will enable em-
ployees to see the connection between their
success and the success of their manager and
company overall.
•• Organizations should recognize that establish-
ing high quality manager-employee relation-
ships and trust often takes time. Effort should
be made to minimize disruption to manager-
employee relationships created by excessive or-
ganizational restructuring and job transfers.
TRAINING ON HOW TO GIVE AND RECEIVE
FEEDBACK
For continuous performance management to
work, managers must be able to provide effective
feedback and coaching.xvii However, it is very
common for companies to place people in man-
agement roles for reasons other than their skills
for managing people (e.g., promoting someone
based on their technical expertise rather than
managerial expertise). As a result, it is common
to encounter managers who do not know how to
provide quality feedback or how to effectively
coach their employees. Many managers are re-
luctant to embrace continuous performance
management since it requires doing things they
don’t really know how to do. Delivering feed-
back, if done poorly, can significantly damage
existing relationships between managers and
their employees. Add to this challenge the fact
that many employees struggle with how to re-
ceive and/or use feedback.xviii
Figure 4. Technology used by employees to re-
quest feedback. This screen shows how an em-
ployee can request feedback from a manager or
peer, empowering the employee to play an ac-
tive role in their own development.
The effectiveness of continuous performance
management relies on managers and employ-
ees having regular feedback conversations.
Their willingness to have these conversations
depends largely on their competence giving and
receiving feedback. Research has shown that
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© 2017 SAP SE or an SAP affiliate company. All rights reserved.
Continuous Performance Management
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employees want feedback if it helps them
achieve their goals, helps them feel good about
their efforts, and enhances their professional
image.xix Similarly, managers are willing to give
feedback if they are confident that it will help
their teams, and subsequently, the managers
themselves to be more successful. Achieving this
level of confidence toward delivering
and requesting feedback usually requires
some investment in training managers and
empoyees on how to give and receive feedback.
Table 4. Feedback Training Considerations
Feedback
Training:
Learning
Objectives
After completing feedback training, managers and employees should understand:
• The different ways feedback influences engagement and performance. Feedback
can influence performance through supporting a) Goal accomplishment: using
feedback to help accomplish goals and learn new skills, and b) Ego enhancement:
using feedback to acknowledge and recognize one’s efforts. Both of these are valid
uses of feedback. It is important to understand when and how to deliver feedback
so it effectively supports one or both of these purposes.
• How the delivery of feedback affects relationship quality, leadership trust, business
performance, and organizational agility.
• How to use the tools, technology and methods deployed by the company to
support continuous performance management. This should include how to inte-
grate continuous performance management methods and tools into everyday
work routines.
• How to give, seek, and receive feedback. This includes:
– Providing behavioral based feedback that focuses on actions employees can
control.
– Allowing others to respond to feedback and discuss potential reasons for their
behavior.
– Recognizing and rewarding others more than you are criticizing and correcting
them in order to develop stronger manager-employee relationships.
Feedback
Training:
Learning
Approach
The most effective feedback training programs:
•	Allow for role modeling and practice of effective feedback conversations during the
training. Feedback training should be an interactive exercise.
•	Create periodic check-ins and opportunities to practice feedback conversations
over an extended period of time. Feedback training should happen more than once.
•	Incorporate technology and other tools used to support the feedback process.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
TRANSPARENCY AROUND DATA AND TALENT
DECISIONS
One of the advantages of continuous perfor-
mance management technology is its ability to
record and track performance data over time,
allowing managers to gain a more complete
picture of an employee’s performance. This is
important because individual performance can
fluctuate considerably over time.xx Performance
assessments that rely on data largely drawn
from one month or quarter may not accurately
reflect an employee’s true contributions. In
contrast, continuous performance management
technology enables companies to aggregrate
data across multiple quarters or even years.
Using continuous performance management
technology to track data also provides employ-
ees with a transparent view of their own
performance. Employees do not have to wait
to see performance data after it has been
used to make decisions that impact their
careers. Instead, they can be proactive in ad-
dressing potential performance concerns
well ahead of a mid-year or year-end formal
performance review.
It is no surprise that employees want to under-
stand how performance data will or will not be
used. Having a level of transparency surround-
ing what data are collected, how they are col-
lected, and how those data are used to make de-
cisions helps drive a sense of fairness and
increases acceptance of a more continuous per-
formance management process. In addition,
employees who are aware of factors that inform
talent decisions made about them are better
positioned to influence those factors to their ad-
vantage, leading to increases in motivation,
engagement, and performance.xxi Conversely, in
the absence of transparency around around data
and talent management decisions, employees
are less willing to openly engage in feedback dis-
cussions, more likely to question or resent deci-
sions made that they perceive to have negative
impact, less likely to feel motivated to perform at
their best, and more likely to have conflicts with
coworkers and supervisors.
In order to provide transparency into talent man-
agement processes, clearly define and communi-
cate how continuous performance management
data will be used to guide workforce decisions
around compensation, staffing, and develop-
ment. Employees know that they will be evaluat-
ed in some manner by the organization. The
more clarity they have around how these
evaluations are conducted, the more open they
will be to openly discussing issues impacting
their performance, and the more motivated they
will be to successfully perform their roles.
Figure 5. Technology used to track and report
employee accomplishments. This screen illus-
trates features that provide employees and man-
agers with a transparent view into employee
achievements accomplished throughout the year.
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© 2017 SAP SE or an SAP affiliate company. All rights reserved.
WELL-DEFINED FEEDBACK SYSTEMS
For continuous performance management to
work, managers and employees must routinely
engage in feedback and coaching conversations.
These converations should not be long, time
consuming affairs. They may often be less than
30 minutes in length. What is critical is that man-
agers and employees remember to have the dis-
cussions, recall what they discussed in previous
check-ins, and keep track of things they want to
revisit in the future. This is where having a feed-
back system enabled by continuous perfor-
mance management technology can help. The
following are common elements found in these
feedback systems.
•• Triggering events. Managers who have several
direct reports or who have heavy non-manage-
rial task loads may struggle to remember to
hold check-in meetings regularly, or in the mo-
ment when they’re most needed. Having a trig-
gering event like a mobile alert helps managers
remember to meet with their employees on a
regular basis. These triggering events can be
time-based and occur at regular intervals (e.g.,
weekly or monthly), or they may be based on
transactional events such as completion of a
major tasks or following an action or event.
•• Data recording and access. It is useful to pro-
vide technology that allows managers and em-
ployees to share agendas for meetings, track
information discussed in previous sessions,
and record information to review in future dis-
cussions. Some companies also use these sys-
tems to allow managers to use feedback data
collected throughout the year to inform other tal-
ent management processes, and make more ac-
curate decisions around compensation, staffing,
and development.
•• Messaging. Messaging tools that allow employ-
ees and managers to request meetings, share in-
formation, and call attention to activities and
questions enables more effective ongoing feed-
back and dialogue between meetings. These tools
are particularly valuable for teams that span large
geographical areas.
Figure 6. Technology used to request feedback
from managers or peers. This screen shows how
employees can request feedback from their peers,
prompting an alert to their colleague.
Continuous Performance Management
16 / 2216 / 22
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
ONGOING PROGRAM EVALUATION AND
MANAGEMENT
Continuous performance management represents
a significant cultural change for most organiza-
tions, and as such should be viewed as something
that is maintained and developed, not something
that is“launched.”Table 5 lists a number of things
that companies should consider monitoring over
time to guide the ongoing development and matu-
rity of continuous performance management
methods.Tracking these and reporting on them
helps create an understanding of what is going
well, what isn’t working out, and where more work
is needed.
The items listed in Table 5 can be measured in a
variety of ways. Attitudes like satisfaction and
trust can be measured with questionnaires or
pulse surveys. Frequency and quality of coaching
conversations can be measured with data from
a coaching or continuous performance
Continuous Performance Management
17 / 2217 / 22
management application. Role information and
skills/expertise can be collected from HRIS sys-
tems or via survey instruments. For perfor-
mance data, you can rely both on data collected
from manager reports, calibration session data,
team performance, or objective measures of
performance (e.g., individual sales revenue).
When evaluating end user satisfaction and ef-
fectiveness of continuous performance man-
agement, also look at role information such as
position, job or career tenure, number of direct
reports, etc. This information provides insight
into who gives and seeks what type of feedback
and how often, which helps determine specific
use cases and scenarios where more or less fre-
quent feedback is necessary or helpful. It isn’t
necessary to track every measure in Table 5, but
it is generally a good idea to monitor some of
these markers to ensure continuous perfor-
mance management efforts are actively man-
aged and supported over time.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
Continuous Performance Management
18 / 2218 / 22
Table 5. Program Evaluation and Management Considerations
Consider evaluating… Reason… Action…
End-user satisfaction and trust
•	Employee satisfaction and trust
with manager, the process, the
tool, talent decisions, and the
feedback itself.
•	Manager satisfaction with em-
ployee relationships, the pro-
cess, the tool, the degree to
which feedback is used.
While satisfaction isn’t the
end-all metric of success, it
is a good idea to measure
whether end-users see the
process and the feedback
they receive as valuable. This
will help indicate level of en-
gagement and surface issues
that may be limiting the val-
ue of continuous perfor-
mance management.
If dissatisfied
•	Provide feedback/coaching
training
•	Increase transparency of eval-
uation and decision making
processes
•	Ensure that managers and se-
nior leaders are evaluated and
managed by the same pro-
cesses as their employees to
increase a sense of fairness
Frequency and content of
conversations
•	Frequency of formal and infor-
mal feedback sessions
•	Nature of feedback provided
(critical vs. positive; evaluative
vs. developmental; behavioral
and specific vs. vague, etc.)
Tracking the frequency and
content of coaching and
feedback conversations al-
lows a closer look at who
needs or wants coaching, the
reason(s) coaching conver-
sations are or are not taking
place, and their value.
If infrequent or low value
•	Reinforce the value of continu-
ous performance manage-
ment (see Table 2)
•	Provide training on weak areas
e.g., use of tool, integration
into work flow, how to provide,
seek, accept, and challenge
feedback.
•	Seek to learn what successful
managers and employees are
doing differently and why.
Levels of knowledge and skills
•	Behavior-based competencies,
esp. coaching and communica-
tion-based competencies
•	Technical skills
•	Expertise and knowledge
Because continuous perfor-
mance management is as
much a developmental pro-
cess as it is a performance
management process, track-
ing overall workforce knowl-
edge and skills may demon-
strate whether feedback
conversations are effective.
If stayed the same
•	Consider whether feedback
training is necessary as quality
coaching should lead to better
knowledge and skills
development.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
Continuous Performance Management
19 / 2219 / 22
Table 5 continued
Consider evaluating… Reason… Action…
Business and individual
performance
•	Employee performance and
engagement
•	Employee retention
•	Business or financial
performance
If continuous performance
management is effective, you
should see notable improve-
ments in employee perfor-
mance over time. It may also
be useful to compare busi-
ness performance metrics
with trends in continuous
performance management
adoption.
If stayed the same or decreased
•	Look at frequency of conversa-
tions (Are check-ins occur-
ring? Are managers/employ-
ees well enabled?).
•	Examine satisfaction metrics
and coaching skills. Provide
training and alter procedures
where necessary.
•	Remember that performance
naturally fluctuates over time,
so continue to track it. A sud-
den decrease is often expected
in the face of organizational
change but can rebound and
increase if supported properly.
Accuracy of performance
ratings
Given that continuous per-
formance management cre-
ates more frequent employ-
ee-manager interaction,
managers and HR leaders
should gain a more complete
and accurate picture of an
employee’s performance
over time.
If declined
•	Consider offering training to
managers on how to evaluate
employees.
•	Consider using calibration ses-
sions to protect against deci-
sion-making bias.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
The growing move to continuous performance
management represents one of the most signifi-
cant transformations in human capital manage-
ment to occur within the last 10 years. Continu-
ous performance management provides
substantive value over traditional annual perfor-
mance management methods, yet the benefits of
continuous performance management, while sig-
nificant, cannot be realized without some level of
effort. The good news is we largely know what it
takes to successfully implement continuous per-
formance management. Furthermore, many of
things required to achieve continuous perfor-
mance management are themselves enabled by
implementing continuous performance manage-
ment. This can create a virtuous cycle where over
time as more effort is put into supporting contin-
uous performance management, less effort is
required to make continuous performance
management successful.
Conclusion
Continuous Performance Management
20 / 2220 / 22
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
REFERENCES
i. Herold, D. M., Fedor, D. B., Caldwell, S.,  Liu, Y.
(2008). The effects of transformational and
change leadership on employees’ commitment to
a change: a multilevel study. Journal of Applied
Psychology, 93(2), 346.
ii. Corporate Executive Board. (2004). Driving
performance and retention through employee
engagement.
iii. HayGoup. Are you missing something?
Engaging and enabling employees for success.
iv. Forbes. (2012). Why employee engagement?
v. Gallup. (2013). State of the Global Workplace.
vi. PwC. (2011). Millenials at Work: Reshaping
the Workplace.
vii. Gallup. (2010). Impact of Manager Feedback
on Employee Engagement.
viii. Herold, D. M., Fedor, D. B., Caldwell, S.,  Liu,
Y. (2008). The effects of transformational and
change leadership on employees’ commitment to
a change: a multilevel study. Journal of Applied
Psychology, 93(2), 346.
ix. Neubert, M. J. (1998). The value of feedback
and goal setting over goal setting alone and po-
tential moderators of this effect: A meta-analysis.
Human Performance, 11(4), 321-335.
x. Kluger, A. N.,  DeNisi, A. (1996). The effects of
feedback interventions on performance: A histor-
ical review, a meta-analysis, and a preliminary
feedback intervention theory.
xi. Cropanzano, R.,  Mitchell, M. S. (2005). So-
cial exchange theory: An interdisciplinary review.
Journal of management, 31(6), 874-900.
xii. Judge, T. A.,  Bono, J. E. (2001). Relationship
of core self-evaluations traits—self-esteem,
generalized self-efficacy, locus of control, and
emotional stability—with job satisfaction and job
performance: A meta-analysis. Journal of Applied
Psychology, 86(1), 80.
xiii. Deci, E. L., Koestner, R.,  Ryan, R. M. (1999).
A meta-analytic review of experiments examining
the effects of extrinsic rewards on intrinsic
motivation.
xiv. Colquitt, J. A., Conlon, D. E., Wesson, M. J.,
Porter, C. O.,  Ng, K. Y. (2001). Justice at the
millennium: a meta-analytic review of 25 years of
organizational justice research.
xv. Grandey, A. A. (2003). When “the show
must go on”: Surface acting and deep acting as
determinants of emotional exhaustion and peer-
rated service delivery. Academy of Management
Journal, 46(1), 86-96.
xvi. Tepper, B. J. (2000). Consequences of
abusive supervision. Academy of Management
Journal, 43(2), 178-190.
xvii. Steelman, L. A., Levy, P. E.,  Snell, A. F.
(2004). The feedback environment scale: Con-
struct definition, measurement, and validation.
Educational and psychological measurement,
64(1), 165-184.
xviii. Kluger, A. N.,  DeNisi, A. (1996). The effects
of feedback interventions on performance: A his-
torical review, a meta-analysis, and a preliminary
feedback intervention theory.
xix. Ashford, S. J., Blatt, R.,  Walle, D. V. (2003).
Reflections on the looking glass: A review of re-
search on feedback-seeking behavior in organiza-
tions. Journal of Management, 29(6), 773-799.
xx. Reb, J.,  Cropanzano, R. (2007). Evaluating
dynamic performance: The influence of salient
gestalt characteristics on performance ratings.
Journal of Applied Psychology, 92(2), 490-499.
xxi. Colquitt, J. A., Conlon, D. E., Wesson, M. J.,
Porter, C. O.,  Ng, K. Y. (2001). Justice at the
millennium: a meta-analytic review of 25 years of
organizational justice research.
Continuous Performance Management
21 / 2221 / 22
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
Continuous Performance Management
22 / 2222 / 22
ABOUT SAP SUCCESSFACTORS
SAP SuccessFactors provides the leading
cloud-based HCM suite, which helps HR drive
business execution with solutions that are com-
plete, beautiful and flexible enough to start any-
where — optimizing your workforce today and
preparing them for tomorrow. SAP SuccessFac-
tors solutions are supported by a global partner
ecosystem and the experience and commit-
ment of SAP. With approximately 45 million
subscription seats globally, we strive to delight
our customers by delivering innovative solu-
tions, content and analytics, process expertise
and best practices insights from serving our
broad and diverse customer base. Today, with
more than 6,000 customers, we serve organi-
zations of all sizes across more than 60 indus-
tries in more than 177 countries using our appli-
cation suite in 42 languages.
ABOUT SAP
As market leader in enterprise application soft-
ware, SAP (NYSE: SAP) helps companies of all
sizes and industries run better. From back of-
fice to boardroom, warehouse to storefront,
desktop to mobile device — SAP empowers
people and organizations to work together
more efficiently and use business insight more
effectively to stay ahead of the competition.
SAP applications and services enable more
than 253,500 customers to operate profitably,
adapt continuously, and grow sustainably. For
more information, visit www.sap.com.
VQ217 © 2017 SAP SE or an SAP affiliate company. All rights reserved.
1 / 1
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
No part of this publication may be reproduced or transmitted in any
form or for any purpose without the express permission of SAP SE or
an SAP affiliate company.
The information contained herein may be changed without prior notice.
Some software products marketed by SAP SE and its distributors
contain proprietary software components of other software vendors.
National product specifications may vary.
These materials are provided by SAP SE or an SAP affiliate company for
informational purposes only, without representation or warranty of any
kind, and SAP or its affiliated companies shall not be liable for errors or
omissions with respect to the materials. The only warranties for SAP or
SAP affiliate company products and services are those that are set forth
in the express warranty statements accompanying such products and
services, if any. Nothing herein should be construed as constituting an
additional warranty.
In particular, SAP SE or its affiliated companies have no obligation to
pursue any course of business outlined in this document or any related
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This document, or any related presentation, and SAP SE’s or its affiliated
companies’ strategy and possible future developments, products, and/or
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Getting People to Talk : Creating a Culture of Continuous Performance Management

  • 1. SAP White Paper Continuous Performance Management Getting People to Talk: Creating a Culture of Continuous Performance Management ©2017SAPSEoranSAPaffiliatecompany.Allrightsreserved. 1 / 22
  • 2. 2 / 222 / 22 Table of Contents Joe Sherwood and Steven Hunt SAP SuccessFactors HCM Research 4 Introduction 5 Studying the Conditions that Make Continuous Performance Management Work 20 Conclusion © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 3. Continuous Performance Management 3 / 223 / 22 The need to more effectively engage employees coupled with advances in social, mobile, and cloud technology have created an explosion of innovation in continuous performance management methods. The primary goal of continuous performance management is to create effective ongoing conversations and feedback between employees, managers, and coworkers to drive agile and continuous performance improvement and development. Putting continuous performance management into practice involves much more than creating a new process or deploying a new application. © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 4. 4 / 22 Continuous performance management requires changing the behavioral habits of managers and employees to engage in conversations that other- wise might not happen. SAP SuccessFactors has a growing number of customers who are actively pursuing a continuous performance manage- ment model. They are learning through real-world experience what it takes to make continuous per- formance management successful. This paper shares insights gained from working with these customers on what it takes to make continuous performance management work. WHAT MAKES CONTINUOUS PERFORMANCE MANAGEMENT DIFFICULT? The idea of continuous performance manage- ment is not new. For decades, companies have advised managers that performance manage- ment conversations should be ongoing through- out the year. However, managers were rarely held accountable or recognized for engaging in ongoing coaching discussions. As a result, many performance management systems developed into an annual exercise in completing forms and having uncomfortable conversations centered around vague recollections of past performance. In contrast, a continuous approach to perfor- mance management embraces processes that encourage more frequent feedback conversa- tions and proactive discussions about develop- ment. These processes downplay, and in some cases totally eliminate, the use of backward-fo- cused performance evaluations and annual ratings peformed by managers. Instead, manag- ers and employees benefit from technological ad- vances and applications that facilitate more fre- quent coaching conversations. These tools can also collect data throughout the year to simplify and increase the accuracy of assessments that help guide total workforce management decisions related to compensation, staffing, and development. The success of continuous performance man- agement hinges on managers and employees actively engaging in effective ongoing dialogue about performance and development. Most managers and employees know they should have these sorts of ongoing feedback discus- sions, but many fail to do so. This is one of the primary challenges associated with continuous performance management. Feedback conversa- tions do not come easily for many people. Estab- lishing new patterns of behavior can be difficult, and often people lack the necessary skills or motivation. Implementing continuous perfor- mance management is much like changing health habits. It is one thing to recognize that a healthy diet and regular exercises are important, or even to join a gym and buy vegetables; it is another to actually live a healthy lifestyle. Like managing one’s health, the main challenge with continuous performance management is often not a lack of knowledge or resources, but in changing daily habits so that the understanding of how performance should be managed aligns with how it is managed. Continuous Performance Management 4 / 22 Introduction © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 5. 5 / 22 SAP SuccessFactors has more than 3500 custom- ers using our performance management technol- ogy. Many of our customers have invested consid- erable energy to transition to more continuous performance management. Starting in 2017, we began a series of ongoing interviews with many of these customers, representing a mix of indus- tries, geographies, and size, to identify what con- ditions are associated with a successful move to continuous performance management. A num- ber of these customers are making extensive use of technology recently developed by SAP Suc- cessFactors specifically designed to stimulate more continuous performance conversations and feedback. Aptly named Continous Perfor- mance Management (CPM) and delivered as part of SAP SuccessFactors Performance and Goals, these capabilities enable and facilitate the move to continuous performance management pro- cesses. Throughout the paper we provide illustra- tive examples of how this technology is playing a role in enabling companies to implement contin- uous performance management. This paper is not about technology per se, but many of the continuous performance management methods discussed in this paper could not be deployed in a scalable and sustainable fashion without the use of modern, cloud-based technology solu- tions. This report provides real-world insights from customers who are on the path toward con- tinuous performance management. Customers vary considerably in their approach to continuous performance management based on their unique needs and organizational cultures. However, we discovered several common themes associated with companies that are successfully deploying continuous performance management programs. By coupling these patterns with find- ings drawn from empirical research studying em- ployee feedback and performance, we have iden- tified a list of conditions that influence the success of continuous performance manage- ment programs. Table 1 lists eight conditions that are associated with more effective continuous performance management processes. The effort needed to implement continuous performance management and the value it provides are both influenced by the degree to which these condi- tions exist in an organization. Note that these conditions represent an ideal. None of the cus- tomers we interviewed, including some with very effective continuous performance manage- ment processes would claim to have fully ad- dressed all eight conditions. With that said, the more these conditions exist, the more value com- panies receive from continuous performance management processes and tools. Conversely, the more companies invest in continuous perfor- mance management, the more likely they are to create the conditions in Table 1. Most of these conditions are outcomes of using continuous performance management over time. Not meet- ing some of these conditions is not a reason to back away from pursuing continuous performance management. Rather, it’s likely that the more a company fails to create these conditions, the more time and effort it will require to achieve the trans- formation necessary for realizing significant value. The remainder of this document discusses each of the conditions in Table 1 in more detail, and provides suggestions on how to create and strengthen them over time. Studying the Conditions that Make Continuous Performance Management Work Continuous Performance Management 5 / 22 © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 6. 6 / 22 Continuous Performance Management 6 / 22 Table 1. Summary of conditions facilitating a successful move to continuous performance management Buy-in and Motivation Continuous performance management only works when leaders in the organization and process stakeholders have a strong commitment to its value. They must per- ceive the cultural and business benefits associated with continuous performance management as worthy of their time, energy and resources. Feedback-rich Culture Continuous performance management is easier in companies where people are al- ready accustomed to regularly giving, seeking, and receiving feedback. Goal-Oriented Culture Continuous performance management is easier in companies where goals and roles are well-defined and communicated, and people are held accountable. People should have a clear sense of shared purpose and commitment toward organization- al objectives. Quality Relationships Continuous performance management is more effective when there is a strong level of trust between managers and employees. People are more willing to give and re- ceive feedback from those they know and believe are committed to their success. Training on Giving and Receiving Feedback Continuous performance management only works if managers and employees know how to give and receive feedback. Feedback must be delivered appropriately to maximize performance and engagement. Poorly delivered feedback can seriously hurt performance and commitment. Transparency of Data and Talent Decisions Continuous performance management works better when people understand how talent decisions are made.The better they understand how these decisions are made, the more comfortable they will be with openly talking about their performance. Feedback Systems Continuous performance management depends on regular feedback conversations. It is important to have triggers that encourage routine dialogue and feedback, and maintain an accessible record of what is discussed. Program Evaluation and Management Continuous performance management often requires creating and nurturing a spe- cific type of organizational culture. This process is aided by careful measurement of core metrics and strategic action based on continual program observation and learning. © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 7. 7 / 22 Table 2. Differentiated value of continuous performance management by job role What they want to know… Why their support matters… Senior leaders • How is continuous performance man- agement linked to business performance? • How does continuous performance management align with the competi- tive strategy of the business? • Employees take cultural cues from their managers, who in turn take cues from their leaders. • Support from senior leaders demon- strates how seriously the organization takes the change. HR professionals • How does continuous performance management positively impact other HR processes like compensation, staff- ing, and development? • How does continuous performance management lead to improved perfor- mance review processes? • It’s important that HR professionals know how changes are going to affect the other processes they manage that may have links to performance man- agement.They are also likely to bear the burden of change management efforts related to continuous performance management so they must understand how to communicate its value. Continuous Performance Management 7 / 22 BUY-IN & MOTIVATION Depending on what your performance manage- ment process looks like today, adopting continu- ous performance management may represent a significant change that influences a range of HR processes and business practices. If key stake- holders are not on board, a smooth take-off and transition to continuous performance manage- ment will be more difficult. While it may be unre- alistic to expect every person to be supportive of the change, there are many things you can do to increase organizational buy-in including: •• Clearly define what you are going to change and what it will take. Have candid discussions about how continuous performance management will af- fect managers, employees, business leaders, and HR professionals.Table 2 includes a brief discus- sion of the value continuous performance man- agement provides to different stakeholders and why their support is important. Define in clear be- havioral terms what these people will be required to do in the future that they may not be doing now. Have open and honest discussions around why people may resist the change, and what is needed to enable and support the transition to a continu- ous performance management model. © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 8. 8 / 22 Continuous Performance Management 8 / 22 Table 2 continued What they want to know… Why their support matters… Managers • Will continuous performance manage- ment make my job easier or harder? • How will this change the current rela- tionships I have with my direct reports? • How will I be rewarded for making the effort required to implement continu- ous performance management? • Managers are critical agents for change given their unique position between employees and senior leaders, and the unique knowledge they possess about organizational culture and employee attitudes. • Continuous performance management only works if managers invest time in having ongoing conversations with em- ployees. Continuous performance man- agement affects managers more than any other group in the organization. Employees • Will continuous performance manage- ment make my job easier or harder? • How will I be rewarded or recognized for making the effort? • How will continuous performance man- agement enhance my career opportunities? • Continuous performance management asks employees to play a more proac- tive role in seeking development input than traditional performance manage- ment approaches. • Employees must be open and willing to engage in ongoing performance orient- ed conversations for it to work. •• Create a vision that provides justification for continuous performance management. This may include highlighting how continuous per- formance management will address problems with previous performance management sys- tems. But it should also emphasize how contin- uous performance management will add value for employees, managers, and leaders beyond past practices, and how it ties to broader orga- nization values and business priorities. See Ta- ble 3 for a short list of metrics that speak to the value of continuous performance management in terms of increased employee engagement. © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 9. Continuous Performance Management 9 / 229 / 22 One of the benefits of moving to continuous performance management is the ability to increase employee engagement. The following statistics provide some sense of the value continuous perfor- mance management can provide by creating more engaged employees. Table 3. Employee engagement and the value of continuous performance management Compared to low engaged employees, highly engaged employees: • Are 87% less likely to leaveii • Generate 2.5 times the revenueiii • Create 200% higher levels of customer satisfactioniv Most organizations suffer from low employee engagement • Historical research suggests that only 13% of all employees are “highly engaged” and 26% are “actively disengaged”v Continuous performance management directly addresses core issues impacting engagement • Nearly 60% of employees say that they would like feedback on a daily or weekly basis—72% of employees under age 30vi • 98% of employees will fail to be engaged when managers give little to no feedbackvii •• Create “continuous performance management advocate” role(s) and use these as change agents to communicate and educate others on the vision. Survey employees to gauge atti- tudes around continuous performance man- agement, and select those who score more on the positive side. The ideal change champions are business leaders and employees outside of HR who are widely respected in the company for their contributions and commitment to the company’s success. •• Identify skeptics of continuous performance management and bring them into the decision process. People who initially resist an idea are often great advocates once they fully under- stand the value, know how it will work and feel their concerns have been listened to and act- ed upon. In addition, these people are often the most likely to identify potential mistakes before you make them. © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 10. 10 / 22 Figure 1. Technology enabling the capture of achievements at the time they occur. Employees and managers can easily access a summary achievements and view them either by month or by goal. This type of visibility provides a sense of accomplishment and allows for more real-time recognition of employee contributions. Continuous Performance Management 10 / 22 FEEDBACK-RICH CULTURE Continuous performance management is ulti- mately about enabling, creating, and supporting a “feedback-rich” culture. This is a culture where people are comfortable having candid discus- sions about the impact their actions are having on group performance and company success, and how they can be improved. Employees in feedback-rich cultures not only accept and act on feedback, but actively seek and expect it. Feed- back-rich cultures do not emerge over night; they represent collective habits and attitudes that develop over time. They must be created and nurtured through leadership role modeling, access to tools and training that support the use of effective feedback, policies and norms that encourage feedback conversations, and environ- mental cues that trigger feedback-related think- ing. The following guidance can help organiza- tions create a feedback-rich culture. •• Leaders set the culture.viii People tend to manage their employees the same way they are man- aged by their own leaders. If you want your man- agers to give feedback to employees, make sure your leaders are giving regular feedback to their managers.A good place to start is to have more ongoing, constructive feedback and coaching during leadership meetings and in one-on-one discussions between senior leaders and their di- rect reports. One of our customers shared how they made sure the executive assistants of se- nior leaders understood the value of continuous performance management and incorporated feedback meetings into the leaders’calendars. •• Put up visual reminders that highlight the value of regular feedback and coaching.These can in- clude tips on how to give feedback, values around the proper way to deliver and receive feedback, and commitment to maintaining a cul- ture that’s based on continuous improvement and peer support. Note that there is a risk to this technique if you take it too far too soon.Visual reminders that are out of step with the existing culture risk creating ridicule and cynicism rather than constructive change. •• Educate managers and employees to help them understand the value of continuous perfor- mance management for creating a well aligned, engaged, and high performing workforce. People probably know feedback is important, but they © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 11. 11 / 22 may not realize how important it is or how much it is missing from the current work environment. •• Provide positive support for those who proac- tively embrace feedback (e.g., ask for feedback, provide ongoing feedback, etc.). Most compa- nies say they value feedback and development but many companies do not recognize and re- ward it. Make sure managers are rewarded and promoted based, in part, on their skill coaching and developing those with whom they work. Address, and if necessary, remove leaders from senior positions if they display behaviors associ- ated with destructive feedback or otherwise demeaning behavior toward others. Figure 2. Technology enabling coaching interac- tions between an employee and their manager. This screen shows how ongoing feedback can be provided in a quick and simple manner. Continuous Performance Management 11 / 22 GOAL-ORIENTED CULTURE The primary purpose of continuous performance management is to create more effective, ongoing coaching conversations and feedback between employees, managers, and coworkers to drive continuous performance improvement and de- velopment. These conversations mainly focus on activities and accomplishments associated with the pursuit of job relevant goals. What goals should the person be focusing on? What barriers are they encountering as they pursue these goals? How can they adapt their behaviors to more successfully achieve these goals? What learning and experiences can they gain from the work they are doing related to these goals? It is difficult to implement continuous perfor- mance management if employees and managers do not have clarity around their goals and how those goals align with the goals of the company, their teams, and their colleagues. Goals are not only important for having more structured ongoing performance oriented conver- sations, they are also critical for providing effective coaching and feedback. Feedback is not very ef- fective when delivered by itself, as it tends to be in- terpreted as an evaluation of a person’s perfor- mance rather than as a suggestion to help them be more successful. Feedback can be very effec- tive when linked to a person’s goals.To illustrate this point consider the following two examples: •• Feedback not in the context of goals: “Wait longer before you talk in customer meetings.” •• Feedback associated with goals: “The goal of customer meetings is to learn from the customers’ thoughts so we can deliver effective solutions. Wait longer before you talk in © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 12. 12 / 22 customer meetings as that will give the cus- tomer more time to express their thoughts, and the more you understand their thoughts, the better we can tailor our solutions to meet their needs.” Research shows that goal setting works better in the presence of regular feedback and coaching.ix Research has also shown that feedback works better when it’s linked to goals.x Feedback and goals should go hand-in-hand Figure 3. Technology connecting formal job goals with informal, ongoing actitivities. This screen shows features that enable employees and managers to link ongoing tasks and activi- ties to more formal job goals. QUALITY RELATIONSHIPS A continuous approach to performance man- agement both relies on and helps foster better quality employee-manager relationships. This is because effective feedback depends on and helps create mutual respect and trust. Employ- ees must trust that managers are their advo- cates, and that they possess the necessary skills and expertise to provide effective coaching. Trusting, quality relationships are built over time through positive interactions where people show support for one another.xi This is more than a simple transaction where if I do something for my manager, my manager does something for me. It is about managers voluntarily taking action to support the career interests of their employees, and employees trusting the guidance and direc- tion that they receive. The more employees and managers can build trust the more effective continuous performance management will be. The following are activities that can help foster these relationships: •• Managers should express a belief in their em- ployee’s ability to accomplish their goals. Show- ing confidence in a person’s competence and ability increases their willingness to accept and utilize feedback.xii •• Managers should reward and recognize positive efforts their employees make toward goal ac- complishment. Employees who feel appreciat- ed, even in the face of failure are more likely to continually apply effort. This doesn’t require providing tangible rewards, such as gifts or spot bonuses. In fact, providing tangible rewards can undermine employee motivation if they are over-used.xiii It does require letting people know that their contributions and improvements have been noticed and are appreciated. •• Managers should make every effort to treat em- ployees fairly when it comes to making deci- sions related to pay, promotions, job assign- ments, or other tangible career opportunities.xiv This starts with transparent communication about how these decisions are made. •• Employees and managers should seek to maintain a positive mood during their interac- Continuous Performance Management 12 / 22 © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 13. tions. It is okay, and to some degree even healthy, to express honest frustration with the situations we encounter at workxv, but it is not okay to express frustration toward the individu- als we work with, which can lead to lots of nega- tive consequences.xvi •• Employees should make genuine efforts to reach the goals that they agree to, and be hon- est with managers about challenges they face along the way. Managers and employees should establish expectations about sharing bad news as well as good news. •• Employees should be aware of their manager’s goals, and make efforts to support those goals. Managers should be as transparent as possible with employees about the broader goals of their team and the organization. This will enable em- ployees to see the connection between their success and the success of their manager and company overall. •• Organizations should recognize that establish- ing high quality manager-employee relation- ships and trust often takes time. Effort should be made to minimize disruption to manager- employee relationships created by excessive or- ganizational restructuring and job transfers. TRAINING ON HOW TO GIVE AND RECEIVE FEEDBACK For continuous performance management to work, managers must be able to provide effective feedback and coaching.xvii However, it is very common for companies to place people in man- agement roles for reasons other than their skills for managing people (e.g., promoting someone based on their technical expertise rather than managerial expertise). As a result, it is common to encounter managers who do not know how to provide quality feedback or how to effectively coach their employees. Many managers are re- luctant to embrace continuous performance management since it requires doing things they don’t really know how to do. Delivering feed- back, if done poorly, can significantly damage existing relationships between managers and their employees. Add to this challenge the fact that many employees struggle with how to re- ceive and/or use feedback.xviii Figure 4. Technology used by employees to re- quest feedback. This screen shows how an em- ployee can request feedback from a manager or peer, empowering the employee to play an ac- tive role in their own development. The effectiveness of continuous performance management relies on managers and employ- ees having regular feedback conversations. Their willingness to have these conversations depends largely on their competence giving and receiving feedback. Research has shown that Continuous Performance Management 13 / 2213 / 22 © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 14. Continuous Performance Management 14 / 2214 / 22 employees want feedback if it helps them achieve their goals, helps them feel good about their efforts, and enhances their professional image.xix Similarly, managers are willing to give feedback if they are confident that it will help their teams, and subsequently, the managers themselves to be more successful. Achieving this level of confidence toward delivering and requesting feedback usually requires some investment in training managers and empoyees on how to give and receive feedback. Table 4. Feedback Training Considerations Feedback Training: Learning Objectives After completing feedback training, managers and employees should understand: • The different ways feedback influences engagement and performance. Feedback can influence performance through supporting a) Goal accomplishment: using feedback to help accomplish goals and learn new skills, and b) Ego enhancement: using feedback to acknowledge and recognize one’s efforts. Both of these are valid uses of feedback. It is important to understand when and how to deliver feedback so it effectively supports one or both of these purposes. • How the delivery of feedback affects relationship quality, leadership trust, business performance, and organizational agility. • How to use the tools, technology and methods deployed by the company to support continuous performance management. This should include how to inte- grate continuous performance management methods and tools into everyday work routines. • How to give, seek, and receive feedback. This includes: – Providing behavioral based feedback that focuses on actions employees can control. – Allowing others to respond to feedback and discuss potential reasons for their behavior. – Recognizing and rewarding others more than you are criticizing and correcting them in order to develop stronger manager-employee relationships. Feedback Training: Learning Approach The most effective feedback training programs: • Allow for role modeling and practice of effective feedback conversations during the training. Feedback training should be an interactive exercise. • Create periodic check-ins and opportunities to practice feedback conversations over an extended period of time. Feedback training should happen more than once. • Incorporate technology and other tools used to support the feedback process. © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 15. TRANSPARENCY AROUND DATA AND TALENT DECISIONS One of the advantages of continuous perfor- mance management technology is its ability to record and track performance data over time, allowing managers to gain a more complete picture of an employee’s performance. This is important because individual performance can fluctuate considerably over time.xx Performance assessments that rely on data largely drawn from one month or quarter may not accurately reflect an employee’s true contributions. In contrast, continuous performance management technology enables companies to aggregrate data across multiple quarters or even years. Using continuous performance management technology to track data also provides employ- ees with a transparent view of their own performance. Employees do not have to wait to see performance data after it has been used to make decisions that impact their careers. Instead, they can be proactive in ad- dressing potential performance concerns well ahead of a mid-year or year-end formal performance review. It is no surprise that employees want to under- stand how performance data will or will not be used. Having a level of transparency surround- ing what data are collected, how they are col- lected, and how those data are used to make de- cisions helps drive a sense of fairness and increases acceptance of a more continuous per- formance management process. In addition, employees who are aware of factors that inform talent decisions made about them are better positioned to influence those factors to their ad- vantage, leading to increases in motivation, engagement, and performance.xxi Conversely, in the absence of transparency around around data and talent management decisions, employees are less willing to openly engage in feedback dis- cussions, more likely to question or resent deci- sions made that they perceive to have negative impact, less likely to feel motivated to perform at their best, and more likely to have conflicts with coworkers and supervisors. In order to provide transparency into talent man- agement processes, clearly define and communi- cate how continuous performance management data will be used to guide workforce decisions around compensation, staffing, and develop- ment. Employees know that they will be evaluat- ed in some manner by the organization. The more clarity they have around how these evaluations are conducted, the more open they will be to openly discussing issues impacting their performance, and the more motivated they will be to successfully perform their roles. Figure 5. Technology used to track and report employee accomplishments. This screen illus- trates features that provide employees and man- agers with a transparent view into employee achievements accomplished throughout the year. Continuous Performance Management 15 / 2215 / 22 © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 16. WELL-DEFINED FEEDBACK SYSTEMS For continuous performance management to work, managers and employees must routinely engage in feedback and coaching conversations. These converations should not be long, time consuming affairs. They may often be less than 30 minutes in length. What is critical is that man- agers and employees remember to have the dis- cussions, recall what they discussed in previous check-ins, and keep track of things they want to revisit in the future. This is where having a feed- back system enabled by continuous perfor- mance management technology can help. The following are common elements found in these feedback systems. •• Triggering events. Managers who have several direct reports or who have heavy non-manage- rial task loads may struggle to remember to hold check-in meetings regularly, or in the mo- ment when they’re most needed. Having a trig- gering event like a mobile alert helps managers remember to meet with their employees on a regular basis. These triggering events can be time-based and occur at regular intervals (e.g., weekly or monthly), or they may be based on transactional events such as completion of a major tasks or following an action or event. •• Data recording and access. It is useful to pro- vide technology that allows managers and em- ployees to share agendas for meetings, track information discussed in previous sessions, and record information to review in future dis- cussions. Some companies also use these sys- tems to allow managers to use feedback data collected throughout the year to inform other tal- ent management processes, and make more ac- curate decisions around compensation, staffing, and development. •• Messaging. Messaging tools that allow employ- ees and managers to request meetings, share in- formation, and call attention to activities and questions enables more effective ongoing feed- back and dialogue between meetings. These tools are particularly valuable for teams that span large geographical areas. Figure 6. Technology used to request feedback from managers or peers. This screen shows how employees can request feedback from their peers, prompting an alert to their colleague. Continuous Performance Management 16 / 2216 / 22 © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 17. ONGOING PROGRAM EVALUATION AND MANAGEMENT Continuous performance management represents a significant cultural change for most organiza- tions, and as such should be viewed as something that is maintained and developed, not something that is“launched.”Table 5 lists a number of things that companies should consider monitoring over time to guide the ongoing development and matu- rity of continuous performance management methods.Tracking these and reporting on them helps create an understanding of what is going well, what isn’t working out, and where more work is needed. The items listed in Table 5 can be measured in a variety of ways. Attitudes like satisfaction and trust can be measured with questionnaires or pulse surveys. Frequency and quality of coaching conversations can be measured with data from a coaching or continuous performance Continuous Performance Management 17 / 2217 / 22 management application. Role information and skills/expertise can be collected from HRIS sys- tems or via survey instruments. For perfor- mance data, you can rely both on data collected from manager reports, calibration session data, team performance, or objective measures of performance (e.g., individual sales revenue). When evaluating end user satisfaction and ef- fectiveness of continuous performance man- agement, also look at role information such as position, job or career tenure, number of direct reports, etc. This information provides insight into who gives and seeks what type of feedback and how often, which helps determine specific use cases and scenarios where more or less fre- quent feedback is necessary or helpful. It isn’t necessary to track every measure in Table 5, but it is generally a good idea to monitor some of these markers to ensure continuous perfor- mance management efforts are actively man- aged and supported over time. © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 18. Continuous Performance Management 18 / 2218 / 22 Table 5. Program Evaluation and Management Considerations Consider evaluating… Reason… Action… End-user satisfaction and trust • Employee satisfaction and trust with manager, the process, the tool, talent decisions, and the feedback itself. • Manager satisfaction with em- ployee relationships, the pro- cess, the tool, the degree to which feedback is used. While satisfaction isn’t the end-all metric of success, it is a good idea to measure whether end-users see the process and the feedback they receive as valuable. This will help indicate level of en- gagement and surface issues that may be limiting the val- ue of continuous perfor- mance management. If dissatisfied • Provide feedback/coaching training • Increase transparency of eval- uation and decision making processes • Ensure that managers and se- nior leaders are evaluated and managed by the same pro- cesses as their employees to increase a sense of fairness Frequency and content of conversations • Frequency of formal and infor- mal feedback sessions • Nature of feedback provided (critical vs. positive; evaluative vs. developmental; behavioral and specific vs. vague, etc.) Tracking the frequency and content of coaching and feedback conversations al- lows a closer look at who needs or wants coaching, the reason(s) coaching conver- sations are or are not taking place, and their value. If infrequent or low value • Reinforce the value of continu- ous performance manage- ment (see Table 2) • Provide training on weak areas e.g., use of tool, integration into work flow, how to provide, seek, accept, and challenge feedback. • Seek to learn what successful managers and employees are doing differently and why. Levels of knowledge and skills • Behavior-based competencies, esp. coaching and communica- tion-based competencies • Technical skills • Expertise and knowledge Because continuous perfor- mance management is as much a developmental pro- cess as it is a performance management process, track- ing overall workforce knowl- edge and skills may demon- strate whether feedback conversations are effective. If stayed the same • Consider whether feedback training is necessary as quality coaching should lead to better knowledge and skills development. © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 19. Continuous Performance Management 19 / 2219 / 22 Table 5 continued Consider evaluating… Reason… Action… Business and individual performance • Employee performance and engagement • Employee retention • Business or financial performance If continuous performance management is effective, you should see notable improve- ments in employee perfor- mance over time. It may also be useful to compare busi- ness performance metrics with trends in continuous performance management adoption. If stayed the same or decreased • Look at frequency of conversa- tions (Are check-ins occur- ring? Are managers/employ- ees well enabled?). • Examine satisfaction metrics and coaching skills. Provide training and alter procedures where necessary. • Remember that performance naturally fluctuates over time, so continue to track it. A sud- den decrease is often expected in the face of organizational change but can rebound and increase if supported properly. Accuracy of performance ratings Given that continuous per- formance management cre- ates more frequent employ- ee-manager interaction, managers and HR leaders should gain a more complete and accurate picture of an employee’s performance over time. If declined • Consider offering training to managers on how to evaluate employees. • Consider using calibration ses- sions to protect against deci- sion-making bias. © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 20. The growing move to continuous performance management represents one of the most signifi- cant transformations in human capital manage- ment to occur within the last 10 years. Continu- ous performance management provides substantive value over traditional annual perfor- mance management methods, yet the benefits of continuous performance management, while sig- nificant, cannot be realized without some level of effort. The good news is we largely know what it takes to successfully implement continuous per- formance management. Furthermore, many of things required to achieve continuous perfor- mance management are themselves enabled by implementing continuous performance manage- ment. This can create a virtuous cycle where over time as more effort is put into supporting contin- uous performance management, less effort is required to make continuous performance management successful. Conclusion Continuous Performance Management 20 / 2220 / 22 © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 21. REFERENCES i. Herold, D. M., Fedor, D. B., Caldwell, S., Liu, Y. (2008). The effects of transformational and change leadership on employees’ commitment to a change: a multilevel study. Journal of Applied Psychology, 93(2), 346. ii. Corporate Executive Board. (2004). Driving performance and retention through employee engagement. iii. HayGoup. Are you missing something? Engaging and enabling employees for success. iv. Forbes. (2012). Why employee engagement? v. Gallup. (2013). State of the Global Workplace. vi. PwC. (2011). Millenials at Work: Reshaping the Workplace. vii. Gallup. (2010). Impact of Manager Feedback on Employee Engagement. viii. Herold, D. M., Fedor, D. B., Caldwell, S., Liu, Y. (2008). The effects of transformational and change leadership on employees’ commitment to a change: a multilevel study. Journal of Applied Psychology, 93(2), 346. ix. Neubert, M. J. (1998). The value of feedback and goal setting over goal setting alone and po- tential moderators of this effect: A meta-analysis. Human Performance, 11(4), 321-335. x. Kluger, A. N., DeNisi, A. (1996). The effects of feedback interventions on performance: A histor- ical review, a meta-analysis, and a preliminary feedback intervention theory. xi. Cropanzano, R., Mitchell, M. S. (2005). So- cial exchange theory: An interdisciplinary review. Journal of management, 31(6), 874-900. xii. Judge, T. A., Bono, J. E. (2001). Relationship of core self-evaluations traits—self-esteem, generalized self-efficacy, locus of control, and emotional stability—with job satisfaction and job performance: A meta-analysis. Journal of Applied Psychology, 86(1), 80. xiii. Deci, E. L., Koestner, R., Ryan, R. M. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. xiv. Colquitt, J. A., Conlon, D. E., Wesson, M. J., Porter, C. O., Ng, K. Y. (2001). Justice at the millennium: a meta-analytic review of 25 years of organizational justice research. xv. Grandey, A. A. (2003). When “the show must go on”: Surface acting and deep acting as determinants of emotional exhaustion and peer- rated service delivery. Academy of Management Journal, 46(1), 86-96. xvi. Tepper, B. J. (2000). Consequences of abusive supervision. Academy of Management Journal, 43(2), 178-190. xvii. Steelman, L. A., Levy, P. E., Snell, A. F. (2004). The feedback environment scale: Con- struct definition, measurement, and validation. Educational and psychological measurement, 64(1), 165-184. xviii. Kluger, A. N., DeNisi, A. (1996). The effects of feedback interventions on performance: A his- torical review, a meta-analysis, and a preliminary feedback intervention theory. xix. Ashford, S. J., Blatt, R., Walle, D. V. (2003). Reflections on the looking glass: A review of re- search on feedback-seeking behavior in organiza- tions. Journal of Management, 29(6), 773-799. xx. Reb, J., Cropanzano, R. (2007). Evaluating dynamic performance: The influence of salient gestalt characteristics on performance ratings. Journal of Applied Psychology, 92(2), 490-499. xxi. Colquitt, J. A., Conlon, D. E., Wesson, M. J., Porter, C. O., Ng, K. Y. (2001). Justice at the millennium: a meta-analytic review of 25 years of organizational justice research. Continuous Performance Management 21 / 2221 / 22 © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 22. Continuous Performance Management 22 / 2222 / 22 ABOUT SAP SUCCESSFACTORS SAP SuccessFactors provides the leading cloud-based HCM suite, which helps HR drive business execution with solutions that are com- plete, beautiful and flexible enough to start any- where — optimizing your workforce today and preparing them for tomorrow. SAP SuccessFac- tors solutions are supported by a global partner ecosystem and the experience and commit- ment of SAP. With approximately 45 million subscription seats globally, we strive to delight our customers by delivering innovative solu- tions, content and analytics, process expertise and best practices insights from serving our broad and diverse customer base. Today, with more than 6,000 customers, we serve organi- zations of all sizes across more than 60 indus- tries in more than 177 countries using our appli- cation suite in 42 languages. ABOUT SAP As market leader in enterprise application soft- ware, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back of- fice to boardroom, warehouse to storefront, desktop to mobile device — SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 253,500 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com. VQ217 © 2017 SAP SE or an SAP affiliate company. All rights reserved.
  • 23. 1 / 1 © 2017 SAP SE or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. The information contained herein may be changed without prior notice. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, and they should not be relied upon in making purchasing decisions. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. All other product and service names mentioned are the trademarks of their respective companies. See http://www.sap.com/corporate-en/legal/copyright/index.epx for additional trademark information and notices. www.sap.com/contactsap