CASE #4

CASE STUDY – EVIDENCE-BASED HRM

Encouraging Frequent and Productive Performance Conversations

Adobe Systems Inc. provides multimedia and creativity software products including Photoshop, Adobe
Acrobat, an Adobe Acrobat Reader. Adobe was experiencing an increase in turnover, which it
discovered was related to employee’s dissatisfaction with the performance review process, a lack of
recognition, and the lack of regular feedback about their performance. Like other companies, Adobe
used a performance review system in which managers provided an overall rating of each employee on a
scale from 1 to 4, based on how the employee’s performance compared to that of other employees.
This created a competitive work environment, rather than the collaborative one that Adobe values.
Each year after employees received their reviews, HR saw a spike in voluntary turnover, which was
especially concerning because Adobe was losing good employees.

To improve performance management, Adobe decided to abandon annual ratings and introduced a
new system called Check-in. Check-in emphasizes ongoing feedback. Instead of managers discussing
performance with employee only during the formal performance review as tended to occur in the old
system, Check-in encourages managers and employees to have informal performance discussions at
least every other month. Managers are asked to focus performance discussions around employees’
performance objectives or goals and what resources they need to succeed. Also, employees’ career
development needs are part of the conversations. Managers are given complete freedom to decide
how often and in what ways they want to set goals land provide feedback. The discussion is future
focused. That is, both the employee and the manager consider what to change to increase the
likelihood that performance will be effective. Employees are evaluated on the basis of how they have
performed against their goals rather than how they compare to other employees. More frequent
performance feedback is especially important to Millennial employees, who are used to real-time
communications through texting and postings.

Managers no longer have to complete lengthy performance evaluation forms and submit them to
HR. HR’s role is to provide managers with consulting and tools to help with performance discussions
rather than policing to see if reviews are completed or discussions have occurred. Both managers and
employees can access a resource center that provides materials about coaching, giving feedback and
personal and professional development. For example, managers might use the resource center to help
them with tough performance conversations such as those involving giving employees difficult feedback.
HR relies on what is known as a skip-level process to ensure that performance discussions are occurring
throughout the year. This means that the manager’s own boss holds the manager accountable for
having performance discussions. The boss asks employees if discussions are occurring and if they have a
development plan.

There are several indications that Check-In is effective HR includes questions about performance
management in its annual employee survey. Survey results show that 80 percent of employees
responded that they had regular performance meetings with their managers and felt supported by
them. Since Check-In was introduced, voluntary turnover has decreased by 25 percent. Also, it is
estimated that Check-In saves Adobe managers 80,000 hours each year that were previously spent
completing employee performance evaluation forms.

Questions

1. What steps should managers take to ensure that performance discussions are effective?
2. What are the benefits and potential disadvantages of more frequent performance discussions
between managers and employees?
3. Which purpose of performance management will be more difficult to achieve for companies like
Adobe that decide to eliminate ranking or rating employee performance?