Reference no: EM133041372

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?