Why Adobe Abolished the Annual Performance Review
In the wake of Adobe’s radical shift of replacing annual performance reviews with a continuous feedback plan for employees, should other companies follow suit? To answer that question, it’s crucial to first understand why Adobe made this choice, how their alternative works and what the associated results of that dramatic change are.
Serious problems caused by the annual performance review
The four main reasons why Adobe killed annual performance reviews are easy to understand.
First of all, employees dreaded these review meetings because they only happened once a year. The suspense in the long months between review sessions created a highly tense and negatively competitive workplace. Consequently, employees weren’t positively receptive to their yearly feedback.
From the perspective of a manager, it was nearly impossible to remember and track employee behaviors from earlier in the year, so most of a manager’s feedback came from recent events rather than progress made over the entire year. As such, employees were given feedback that didn’t accurately reflect their performance over the whole year.
Secondly, the performance review was similar to a rear-view mirror. It was focusing solely on the past instead of the employee’s growth and development going forward.
Thirdly, among Adobe’s core values is the belief that people are their most important asset. However, the surveys Adobe took after their annual reviews showed how their annual reviews were actually very destructive to this ideal. The staff became less motivated to work after their reviews, and more employees ended up voluntarily quitting around this time.
Finally, the annual performance reviews cost Adobe an excessive amount of time and money. The entire process took nine months for senior directors to coordinate and a total of 80,000 hours collectively for managers to conduct every year.
In lieu of annual reviews, Adobe welcomes the quarterly check-in
Adobe re-invented the review system by starting what they called the “check-in approach”. The goal was for leaders to give constructive comments to workers naturally and consistently with real-time feedback so that each person remained aware of how to improve every day, not just once a year. The informal check-in allows managers the freedom to coach their team members at more relevant, “teachable” moments during their personal working schedules, times when their feedback matters most for employee development. While check-in dialogues must happen at least once each quarter, managers can decide to give real-time feedback more frequently as needed.
“This is an opportunity for us to not just say that our people are our most important asset, but to actually live those words.”
Donna Morris, Senior Vice President of People and Places, Adobe
“Check-in approach” in practice
The first step, or check-in, starts the quarterly cycle off by setting clear expectations with employees so that they understand what to focus on and what their goals are.
The second step is ongoing feedback from managers, peers or other partners about how employees are performing in relationship to their goals. The flexibility of this stage allows supervisors to address people more personally according to their needs so that they’re more receptive to constructive feedback.
The third step of the check-in approach happens near the end of each quarter. At this time, each employee and their manager discuss the overall summary of the areas they performed well in and the areas where they still have opportunities for further development.
Impact on employees
Adobe’s Senior Vice President of Global People Resources Donna Morris shared with writer Bob Sutton that now 78 percent of employees believe that their manager “is open to feedback from them,” which is a substantial increase compared to earlier surveys. Moreover, since this new approach had added elements of fairness and accuracy to Adobe’s performance review, engagement increased and the overall employee morale drastically went up.
Impact on managers
The continuous feedback method has also significantly lightened the administrative workload of the performance appraisal for managers by gathering relevant data all year. Furthermore, the more frequent discussions allowed managers to share more timely and relevant feedback to impact their employee’s performance in a more agile fashion.
Impact on the business
Adobe’s organization as a whole has become much more productive. Adobe’s principle that each person performs better when they know “where they stand” in the bigger picture has created a flexible system of real-time feedback to give all employees both constructive criticism and positive reinforcement when they need it most. Therefore, you can see why Adobe reports that 30 percent less employees now leave the company voluntarily. Furthermore,the number of employees leaving involuntarily increased by 50 percent because managers could now have the “tough discussions” necessary to deal with employee issues without waiting until the end of the year like before.
The result: Not only does Adobe now have more people who really enjoy working there, but they also have more people who they greatly value as strong assets to their company.
The good news is that your company can get similar results with the help of our cloud-based application that enables actionable, 360-degree feedback among employees throughout the year.
