Performance Reviews

Why Adobe got rid of performance reviews

For employees and managers alike, performance reviews are one of the most dreaded processes. Conducted once or twice a year with the often-failed goal of providing useful feedback to employees, this process is highly ineffective and does more harm than good regarding overall team morale and performance. That’s why Adobe, the global leader in digital marketing and digital media solutions, decided to stop using performance reviews for good.

CHALLENGE

Donna Morris, the Senior Vice President of People and Places at Adobe, was frustrated with the performance review system conducted at Adobe. Although the company delivered cutting edge technology and services to its customers in the creative industry, Adobe still relied on outdated performance reviews for gauging employee performance.

Besides the maintenance of the complex infrastructure, research revealed that annual performance reviews required a 80,000 hours of time from 2000 managers, which equals the full-time work of 40 employees. Internal surveys found out that all this effort was in vain. Every year in February, Morris would witness the leave of numerous valuable employees who are frustrated with competitive ranking system. Morris says:

We would go through this process, and despite the intention of giving information and giving performance feedback to individuals, we would see an increase in voluntary attrition, often by employees that were core to our success.
— Donna Morris, Senior Vice President of People and Places, Adobe

But what if there is no bottom 10 percent to let go and everybody is performing well, or if everyone just needs more opportunities to improve? Traditional HR practices encourage managers to determine a bottom 10 percent who would be let go each year in an attempt to promote better performance within the team. Called stack ranking, the system is designed to assign employees to different slots according to their performance. Apart from a bottom 10 percent, the system also identifies a top 20 percent and a middle 70 percent. The model required that while the top 20 percent would receive bonuses, the bottom 10 percent would be fire in an attempt to motivate the 70 percent into performing better.

But what if there is no bottom 10 percent to let go and everybody is performing well, or if everyone just needs more opportunities to improve?
— Donna Morris, Senior Vice President of People and Places, Adobe

Popularized by GE CEO Jack Welch, stack ranking system gained gained widespread criticism over the years. Stanford University business management professor Bob Sutton states that employee ranking creates an environment that feeds unethical competition and kills morale. What stack ranking brought to most workplaces was asking each employee to perform better than the person sitting next to them. And this competitive culture prevented employees from sharing ideas and collaborating.

Troubled with these questions, Morris and her team decided to quit performance reviews completely and replace it with a solution which would actually help their employees rather than demotivate them.

SOLUTION

After researching for a few months and asking employees for feedback, Morris and her team found a solution: Check-In. Not wanting their managers to sit behind computer screens and fill out forms without a conversation with their employees, Adobe used this new system to get rid of rankings or ratings.

Eliminating complex forms and questionnaires meant more time for managers to actually keep in touch with their teams. The new system required managers to convey what is expected from their employees clearly, give and receive feedback, and provide them with opportunities for personal and professional development. The form and the frequency of these check-ins were left completely in the hands of managers. Although Check In conversations were required once every quarter, some managers preferred to do it more often, and some chose to implement it into their regular one-on-one conversations, Morris said.

Managers were also required to be open to feedback with the new system. For this reason, Adobe 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 leaders.

In addition, 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 according to their performance, each manager were given a certain budget and they were left to decide on the distribution on it.

RESULTS

Morris explains that the new system required managers to have tough conversations with their employees right away, instead of waiting for the next round of performance review to come. Adobe reports that voluntary attrition decreased by 30 percent and involuntary departures increased by 50 percent.

Employees who are performing at the top of their games 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 weak managers into communicating what is expected from their employees.78 percent of employees stated that their managers were open to feedback from them.

On the other hand, the check-in system and the growth of employee engagement promoted a culture of ownership, where every employee felt like they had a stake in Adobe’s overall success story.

WHAT CAN IMPRAISE DO TO HELP?

Impraise helps managers set up 360-degree feedback sessions very easily. The data they gather empower them to better optimize their people management processes and let each manager take due ownership of their team outputs. The data can also be used for 1-on-1s, which promotes team communication.

Impraise’s feedback system makes it easy to give feedback to each team member on their specific skills. This simplified process takes away the fear behind the whole performance review process, enabling team members to focus more on the feedback rather than filling in forms.

Impraise’s mobile-first system makes it accessible from anywhere, anytime. Giving feedback on Impraise does not involve spirit-breaking rating systems and enables teams to identify true learning opportunities to grow together.

Image: Xathis