CASE STUDY 1: Adobe Ditches Formal Performance Review

HRM533

HUMAN RESOURCE MANAGEMENT

CASE STUDY 1: Adobe Ditches Formal Performance Reviews—And Wants to Help Other Companies Do So Too

After researching for a few months and asking employees for feedback, Morris and her team found a solution which is regular performance check-ins. Instead of having their managers’ sit behind computer screens and fill out forms, check-ins encourages managers to have actual conversations with each employee about their performance, professional goals and concerns. Eliminating complex forms and questionnaires meant more time for managers to actually get to know their team members. The new system requires managers to set clear expectations, give and receive feedback, and provide employees with opportunities for personal and professional development. The form and the frequency of this check-ins are left completely in the hands of managers. Although check in conversations are required once every quarter, some managers prefer to have them more often, and some chose to implement it into their regular one-on-one conversations, Morris said. Adobe also organized organization-wide leadership workshops where managers were trained on how to deliver constructive feedback and how to receive feedback about their own performance as team leads. In addition, the abolition of rankings meant that employees were compensated against how well they accomplished their developmental goals. Instead of providing each manager with guidelines on how to compensate their employees, each manager is given a certain budget and left to decide on the best way to distribute it.

Employees who were performing at the top of their game reported feeling valued and employees who have more room to improve are supported and encouraged with the new system. Managers are now able to make their own decisions about salary increases and are trained on the most effective ways to coach their teams. The new check-in system enabled managers to hone their communication and leadership skills by interacting with their employees more frequently, and forced managers to improve their communication skills. On the other hand, the check-in system and the growth of employee engagement promoted a culture of ownership, where every employee feels they have a stake in Adobe’s overall success story.

Adobe is an interesting case to look at from a performance management perspective. Adobe famously removed all formal performance management from the company, producing the labor-intensive nature of annual reviews and the copious time performance management takes as the reasons for its abandonment of traditional performance management. Following the failed experiment of the removal of performance management, Adobe realized that no performance management was not working and that it needed some kind of solution. There are a lot of reasons that Adobe must get rid of their performance review. First is annual performance reviews are not based on data. Too often, a performance review is something that a manager has to recall by memory without looking at any actual data to back up what they’re saying. Also, too often the performance they’re reviewing isn’t actual performance, they will judge on things like attendance, which honestly has no real impact on your performance. This is a really flawed process because it relies on opinion and it is usually one person’s opinion. The second is annual performance reviews are often tied to salary. This makes the whole process very sensitive. If an employee’s raise or salary for the following year is somehow tied to the performance review, the manager might feel bad giving the employee a negative review. If an employee gets a bad review and knows that it is tied to their salary, they might get defensive and start arguing with their manager about the comments made. Lastly, managers often wait to deal with feedback. A lot of the time, managers might wait to give feedback to an employee that needs it. Instead of tackling an issue head on, right in that moment, they’ll choose to deal with it once the performance review comes up. This could be really negative effect on team morale and company culture because during that waiting time, the poor performer is demoralizing the rest of the team.

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