Questions

Why did Adobe need a new performance management system? What drawbacks might there be to the company's check-ins?

Are formal performance reviews always bad? Why or why not?

CASE STUDY (1) Adobe Ditches Formal Performace Reviews - And Wants to Help Other Companies: Do So Too As we explained in the chapter, an increasing number do their jobs ( 59 percent) and are a needless HR of companies are no longer conducting formal per- requirement ( 58 percent). formance reviews. However, most still do. In a recent - Eighty percent of office workers would prefer survey of 1,500 U.S. office workers, 88 percent of them feedback in the moment rather than a progress reported receiving formal written reviews-often with review after a certain number of months. rankings-usually on an annual basis. The survey, which was conducted by Adobe Sys- - Performance reviews are extremely stressful for tems, the maker of Acrobat, Photoshop, and Flash both managers and employees. Rankings and software, also revealed the following bad news about ratings create competition among employees and formal performance reviews: result in even more stress. - More than half of office workers feel that formal - A surprisingly large number of workers, both performance reviews have no impact on how they male and female, reported actually crying after a 311 Copyrighli 2019 Congage Learning, All Rights Resorved, May not be coplod, scanned, or dupticatod, in whole or in part. WCN 02-200-203 performance review and either looked for another hard for Adobe to retain talent, especially because it's job or quit their jobs shortly afterward. located in Silicon Valley, where the demand for tech - Nearly two-thirds of millennials (61 percent) employees is high. would switch jobs to a company with no formal Instead of formal performance reviews, today performance reviews even if the pay and job level Adobe employees have periodic "check-ins" with their were the same. managers who offer them feedback, help with on-theFor reasons such as these, Adobe stopped doing ment. No written review is required. formal reviews in 2012 . The effort to ditch them began So does the new check-in system work? Yes. In somewhat haphazardly: Donna Morris, then a senior surveys, employees say the check-ins make perforvice-president of human resources for Adobe, believed mance conversations easier, and less stressful, and the firm's 360 employee reviews and ranking process that they get better feedback. Voluntary turnover has was too complex, bureaucratic, and ate up massive dropped dramatically. amounts of time for which the company saw little or In fact, Adobe believes its check-in system works no return. She also believed they created barriers to so well it is helping other companies adopt it-for teamwork and innovation because being ranked for free. No software purchase necessary. The company compensation seemed to pit employees against one has posted information about the system and all of its another. associated documents available on its pubic website. The problem was something Morris had been Among the items posted are worksheets and discusthinking about at Adobe's offices in India while being sion guides for managers and employees and FAQs interviewed for a major business publication in the (frequently asked questions) about how the check-in country. The reporter conducting the interview asked process works and how to implement it. Morris what new cutting-edge HR practices Adobe "We love talking to other companies who are conwas implementing. Suffering from jetlag, offhandedly sidering a move away from structured performance she responded: "We plan to abolish the annual perfor- reviews, and many have adopted some form of checkmance review format." in already," says Morris. "Now we want to make it Quickly Morris's announcement made headlines. easier to share our experience with people who are There was just one problem with it: She had only been exploring a model like this-whether they're in techcontemplating ending formal performance reviews. nology or a totally different industry." She hadn't actually cleared the idea with her CEO. Needless to say, when she got back to Adobe's office Questions in the United States, she had some explaining to do. Morris wrote her case for ending performance reviews and posted it on the company's intranet. She agement system? What drawbacks might there be encouraged employees and managers to examine to the company's check-ins? Adobe's current review practice to figure out how to improve it, which they subsequently did. What 2. Are formal performance reviews always bad? they discovered was troubling. Adobe's managers were spending in excess of 80,000 hours annually Sources: David Burkus, "How Adobe Scrapped Its Performance Review on the reviews. Worse yet, feeling demoralized by "Twenty-five Percent of Men Cry after a P. Progress Review, Study Shows:" their reviews and rankings, a high number of Adobe Forbes (January 13, 2017); "Adobe Study into Performance Reviews employees quit after having them. That was making it Shows Offlce Workers Waste Time and Tears," Which-50, https://which