How One Small Change Led to a 30 Percent Drop in Turnover

In 2011, software company Adobe  realized that in order to transform its business, certain things needed to change. Annual performance reviews were at the top of the list. 

 

“It was like a dreaded dental appointment, where once a year we would give people feedback,” says Donna Morris, senior vice president, people and places, at Adobe. “While our intent was for that review to be reflective of the whole previous year, in reality it was based on the most recent events.”

The performance review process also pitted employees against each other in order to get raises, took managers almost nine months to prepare for, and, at the end of the day, was more like a “rearview mirror”—it had nothing to do with the person’s progress forward.

After months of brainstorming, Adobe landed on the solution of replacing the annual performance review with frequent “check-ins.” In the new three-step process, employees propose their expectations or goals to their managers on a quarterly or monthly basis depending on the nature of the work, and managers discuss the expectations with the employee to find the right balance between achievable and challenging. Throughout the year, managers provide ongoing feedback to employees on the progress of their expectations, and employees review their expectations, discuss with their managers the feedback received, and adjust their expectations.

Managers make annual adjustments in employee compensation using market rates and how well each employee met their goals to determine compensation. With managers having more accountability in terms of checking in with their employees and deciding their compensation, the old excuse “you deserve a bigger raise, but HR would not let me” does not apply anymore.

As a result of moving toward check-ins, Adobe has seen voluntary attrition drop by 30%, and an employee survey revealed that managers and employees find the new system less cumbersome and more effective.

Donna Morris admits that not every organization can or should abolish performance reviews, but she encourages HR people to start getting out of their comfort zone and find ways to revolutionize their performance management process. “People are most effective when they know where they stand. Then there’s no mystery.”