Thought Leadership
The software group SAP has begun implementing its controversial employee evaluation system. The new procedure, which covers both performance and behavioral aspects, has met with considerable resistance – but will nevertheless be introduced as planned.
Three-zone system for SAP employees
The assessment model, originally known as “Winning Culture”, categorizes employees into three clearly defined performance zones, as Südwest24 explains: the “Exceptional Zone” (blue) for top performers, the “Achievement Zone” (green) for employees with solid performance and the “Improvement Zone” (yellow) for people with potential for improvement. The latter are to receive targeted support measures.
A special feature of the system is the additional assessment of social behavior which reminds critics of assessment methods from school. The parallels with personnel management concepts from the 1980s, such as “stack ranking”, which were thought to be long gone, are obvious. Stack ranking (also known as “forced ranking”, “relative ranking” or “performance ranking”) is a personnel assessment method in which employees in an organization are ranked hierarchically based on their performance. It was particularly popularized by General Electric under Jack Welch in the 1980s. Microsoft also used this method for many years.
Works council and trade unions see considerable risks
Organized resistance to the project has been forming since it was announced at the end of 2023. Employee representatives fear a significant increase in pressure to perform and warn of a cultural regression.
Group CEO Christian Klein vehemently defends the introduction of the new system. In his opinion, an open feedback culture is essential for the further development of the company. “If everyone pats each other on the back, it doesn’t help anyone,” says Klein. Instead, the new evaluation method should promote team spirit and at the same time create individual performance incentives.
