Why Adobe Abolished The Annual Performance Review And You Should, Too!
When Donna Morris joined Adobe in 2002 as a senior director of global talent management, she noticed that the annual performance review, such a central part of the human resources job she had been hired to do, wasn’t much of a resource to the humans it served.
“At one point, the planning alone took nine months,” she says. “It was like preparing to give birth to a child. It was like, ‘why does this take so long? Does this really drive the business return?’”
Five years later, she was promoted to Senior Vice President of People and Places. She came to realize that the most important part of her job — and the success of the company — was to invest in people and not a months-long process.
So, two years ago, she abolished the software giant’s performance review system.
This went against corporate orthodoxy. Performance reviews have been a part of institutional life since formative Harvard Business School studies of the 1930s. Professor Elton Mayo found that “happiness and productivity were directly related to the social structure of the workplace,” Businessweek reports. “Suddenly it wasn’t enough to just hire someone to do a job; bosses had to manage and mentor people, too. They did that, usually, with formal meetings.”
Then, in 1950, the performance review was enshrined in law. The Performance Rating Act of 1950 mandated the annual review of federal workers. Additional laws tethered bonuses and salaries to the grades given in those evaluative meetings, setting a nationwide precedent of annual performance reviews.
As Morris explained to us in the below interview, the performance review is a “dreaded dental appointment” for manager and employee alike. What’s more, it’s inherently adversarial in the way it sets manager against employee, terrible for a company that’s trying to be creative by way of collaboration. Swapping out the annual review in favor of regular check-ins allowed Adobe to have a lightweight process that served — rather than distracted from — people doing their best work. Here’s how.
Business Insider: What was wrong with performance reviews, and when did you realize it?
Donna Morris: At the end of 2011 we were transforming our business. We were declaring that we really were going to be the company that wanted to enable creativity, but our people processes were stuck in a time warp.
There were three things that need to be disrupted.
One was that performance reviews were an annual process. It was like a dreaded dental appointment, where once a year we would give people feedback. 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 second was that the performance review was like a rear-view mirror — it had nothing to do with the person’s progress forward.
The third, probably most important element was that we fundamentally believed people were our most important asset, yet once a year we had a process that pitted person against person.
In 2012, you initiated the check-in over the annual performance review. How’s that different?
Donna Morris: The check-in is far more informal. While the check-in process is regular and on-going, it starts at the beginning of the year, since it’s tied to people having yearly expectations.
At the beginning of the year, we outline what our priorities are across Adobe. That’s done at the leadership level. For a manager, you’re already in regularly scheduled one-on-one meetings. You’re taking time out of one of those meetings and having a discussion with your respective employee on what’s expected for the year.
As an employee, I would actively participate in that. Many employees are driving those discussions themselves, saying, ‘Here’s what I believe I should be held accountable for this year.’ That’s scene one, setting expectations.
Setting expectations is a mutual process?
Donna Morris: Think of it as jointly setting the frame of what the focus should be for the year, making a to-do list for the year.
Donna Morris: Scene two would be ongoing feedback. Now I set my expectations and my manager knows what I’m being held accountable for. As the employee, I’m looking for feedback relative to my performance against those expectations. That could be from my manager; it could be with my peers; it could be with other partners across the company.
You’ve said before that you believe that overall success is shaped by feedback. Why is that?
Donna Morris: The more people receive recognition of what they’re doing in real time, that directs their performance — whether that be constructive criticism or feedback that reinforces what somebody is already doing.
At the end of the day, people have emotions. I think some of the traditional approaches to performance management frankly didn’t take into consideration that everybody receives feedback differently.
Another part is building strong relationships with employees across the company. Do they feel like they are emotionally tied to the company? How do they feel like they are recognized for what it is that they contribute?
And how does the check-in system help with that?
Donna Morris: People are most effective when they know where they stand. Then there’s no mystery.
We want people to be getting feedback on their performance against those expectations in real time. We don’t want to be policing it at a certain time of the year. We want it to meet the expectations of what is most appropriate for that business cycle.
For instance, in our field organization, it’s very quarterly driven because many of the individuals are on sales incentive plans. At the beginning of the actual quarter they’ll know what their goals and objectives are. Throughout the quarter they’ll be getting feedback and then at the end of the quarter they’ll get an overall recap of areas in which they were really strong and where they had opportunities for development.
Is there anything you wished you’d known at the start of this process?
Donna Morris: I would say that people should have the courage to disrupt a process that might no longer be providing the company with value.