Most people know Adobe Systems for its Photoshop software and the Acrobat and Adobe Reader programs for creating and viewing its portable document format (PDF) files. Recently, Adobe has been shifting its focus from packaged software programs to online software. During that transition, Adobe’s senior vice president of people resources, Donna Morris, wondered whether its HR systems—particularly performance management—also needed a new strategy. Evidence signaled a need for change at the 11,500-employee company. Adobe was using a process of annual reviews that ranked employees. Morris’s team calculated that Adobe’s managers spent 80,000 hours per year on the process, equivalent to the time of 40 full-time employees. Was the effort improving performance? Probably not. Every year, immediately following the feedback sessions, voluntary departures by employees spiked. On the corporate blog, Morris wrote a piece about her desire to eliminate formal performance appraisals. It became one of Adobe’s most popular blog posts, and comments poured in from employees who were delighted with the idea and disappointed in managers’ apparent lack of recognition of their accomplishments and failure to support their career development. Morris determined that she had to act. She announced that Adobe would go forward with abolishing performance appraisals, along with related schedules and forms. Instead, the company would prepare managers to carry out a practice called the Check-In, through which they provide ongoing feedback and coaching. The timing of the feedback is up to the managers, consistent with Adobe’s strategy of encouraging managers to act as "business owners" of the group they lead. Managers were trained to focus on goals, objectives, and career development. Instead of tying pay increases to rankings, managers relate them to employee achievement of their goals. Instituting a less formal system poses some challenges. For example, without a schedule for conducting performance reviews, Adobe needs a way to ensure that managers are engaging in performance-related discussions. For this, Adobe has employees meet with managers two levels above (their boss’s boss) to discuss whether they have the support they need for their team to meet its goals. The HR department emphasizes training managers in the skills needed for providing feedback. Reactions to the changes have been overwhelmingly positive. In annual surveys, employees say the Check-ins are easier and more effective than the old system, and that their managers are getting better at helping them improve. Also telling are the rates at which employees leave. Involuntary departures are more common, suggesting that managers are having franker conversations with employees who do not improve. Voluntary departures have dropped by 30%, and a larger share of these are what Adobe calls "non-regrettable" departures.

Questions must provide detailed answers.

How can managers at Adobe ensure that the feedback they provide during check-ins is effective?

In terms of the criteria for effective performance management, what advantages does Adobe gain and lose by shifting its methods from rating individuals to measuring results?