$1.$ Chapter $6$: Abolishing Performance Appraisals at Adobe

Adobe is one of the largest and most diversified global software companies. One of Adobe$$s core values is the belief that their people are their most important asset. But employee surveys showed that their annual performance reviews were decreasing employee motivation and turnover increased after the annual reviews. Adobe also realized that the entire process took nine months for senior employees to coordinate and approximately $80,000$ hours for managers to conduct, which was an excessive amount of time and money. So Adobe reinvented the performance review system to focus on frequent, informal check$-$ins that gave managers the freedom to coach their team members during the regular work process when the real$-$time feedback mattered the most for employee development.

The new approach has three steps. Each quarterly cycle begins with employees and their managers setting clear expectations to clarify employees$$ goals. The second step is ongoing real$-$time feedback from supervisors, peers, and other employees about how employees are performing relative to their goals. The third step happens near the end of each quarter, when employees discuss with their managers a summary of the areas where they performed well and those where they still have opportunities for development. Promotions are also given throughout the year as merited as well as during the quarterly reviews.

Because the new management approach toward performance has improved both accuracy and employees$$ perceptions of fairness, $78$ percent of employees now believe that their manager is open to feedback from them, engagement has increased, morale has gone up dramatically, and turnover has decreased. The administrative workload for managers has also considerably decreased, and the more$-$frequent performance discussions have helped improve productivity and agility. Many new hires have also mentioned that the unstructured performance review approach is a key differentiator that they prefer to other employers$$ formal performance review programs. Adobe believes that employees perform better when they know where they stand in the bigger picture, and the new system gives them both constructive criticism and positive reinforcement when they need it most.

Adobe initially changed its annual review process because of which of the following?

Consultant recommendation

Decreased employee motivation

Due to employee demands

Response to a lawsuit

What did Adobe identify as the problem with the annual review process?

Lack of employee engagement

The length of the process

The number of regulations

Manager bias

Adobe$$s performance system focuses on which of the following?

Real$-$time frequent feedback

Peer employee input

Quantitative analysis

A more formal, documented process

Adobe$$s new performance approach has resulted in which of the following?

Increase in applicants

Higher promotion rate

Improved perception of fairness

Greater staff diversity

Adobe$$s philosophy is that employees perform better when $\_\_\_\_\_\_\_\_.$

Customers are pleasant

They like their coworkers

They know where they stand in the bigger picture

They are highly compensated