Individual Assignment

Technology Park Malaysia

BM036-3.5-3 MANAGING PEOPLE AND PERFORMANCE (MPPM)

Name & TP Number

: VINOD KUMAR (TP033584)

Intake & Group

: UC3F1501 IBM

Name of Lecturer : MR. HAN KOK SIEW

Date Assign

: 4TH FEBRUARY 2015

Due Date

: 20TH MARCH 2015

Weightage

: 50 %

WORD COUNT

: 2022

TABLE OF CONTENTS
1.0 INTRODUCTION................................................................................................................1
2.0 REVIEW OF ADOBES PERFORMANCE MANAGEMENT SYSTEM AND REWARD
STRATEGY...............................................................................................................................3
2.1 PERFORMANCE APPRAISAL......................................................................................3
2.2 REWARD STRATEGY....................................................................................................4
2.2.1 SALARY INCREASE...............................................................................................4
3.0 EVALUATION OF ITS APPROPRIATENESS AND EFFECTIVENESS FOR REWARD
STRATEGY AND PERFORMANCE APPRAISAL SYSTEM................................................6
4.0 RECOMMENDATION........................................................................................................7
5.0 CONCLUSION....................................................................................................................8
6.0 REFERENCES.....................................................................................................................9
APPENDIX A: ADOBES FINANCIAL REPORTS FOR FISCAL YEAR 2014..................11
APPENDIX B: ADOBES TWO-SIDED REWARDS LEARNING REFERENCE CARD
(LRC).......................................................................................................................................15

BM036-3.5-3-MPPM

Individual Assignment
Vinod Kumar (TP033584)

1.0 INTRODUCTION

Figure 1.0 Adobe logo (Source: www.google.com/image )

Adobe System Incorporated is an international computer software developing company. Their
corporate headquarter is located in San Jose, California, United States, and they have
branches in North America, Europe and Asia/Pacific. Adobe firmly focused on serving their
customers creativity and designing needs, where it functions in three sectors: Digital Media,
Digital Marketing, Print and Publishing (Peel, 2015), as it is well known for their key
products such as Adobe Acrobat, Adobe Creative Cloud, Portable Document Format (PDF)
and Adobe Flash.
Adobe was found by John Warnock and Charles Geschke in 1982. Warnock and Geschke
have established Adobe in order to develop and sell PostScript page description language
which had been neglected by their previous company that they worked, Xerox PARC. The
present CEO and President is Mr. Shantanu Narayen who have led the company since 2007
and has annual revenues of $3 billion (Adobe.com, 2015).
Adobes vision is to transform how the world involves with ideas and information. Their
mission is as an organization they are committed to grow solid and stable the diversity of
their workforce. Adobes core values and beliefs are to be; 1) Genuine, 2) Exceptional, 3)
Innovative and 4) Involved.
As by November 2014, Adobe had 12,499 employees worldwide and majority of them are
from their North America branches and India branches which mainly focus on product and
software development. They had made revenue of $4,147,065,000 for the fiscal year 2014,

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Vinod Kumar (TP033584)

where they had a steady growth since 2008 in terms of annual revenues made (see Appendix
A for more financial information).
Adobe is currently one of the leading company in Software Industry with its vast innovation
in creative software development, as well as retaining itself as one of the 100 best companies
to work for by Fortune magazine (Fortune.com).

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Vinod Kumar (TP033584)

2.0 REVIEW OF ADOBES PERFORMANCE MANAGEMENT SYSTEM AND REWARD

STRATEGY
In this section we are going to look into Adobes way of conducting its performance appraisal
and what are its reward strategy.
2.1 PERFORMANCE APPRAISAL
Mishra and Roch (2013) stated that traditionally, the word performance appraisal referred to
the procedure of a manager concluding an annual report on an employees performance and
generally discussing it with the employee in an appraisal interview.
Adobe System Incorporated used to apply the traditional way of performance appraisal till
2011, where the managers will rate and rank their employees annually and will reward the
high ranked employees and punish the low ranked employees it is well known as Rank and
Yank system (Giumetti, Schroeder and Switzer, 2015).
However, Donna Morris, Senior Vice President at Adobe felt that the traditional method of
evaluation is inappropriate because performance reviews were an annual process, which is
too long for an employee to get their feedback and to develop, and even though Adobe deeply
believed employees were their most vital asset, yet once a year they had a process that pitted
person against person (Baer, 2014).
Therefore Donna Morris and her team had come up with a new appraisal system in 2012
called Check-in system (Kalman, 2015), which is more simplified and frequent system,
which be able to eliminate all the issues mentioned above. It is said so, because under checkin there are no more annual feedback but a frequent feedback. Where managers and
employees can meet up and have a check-in conversation anytime, which allows manager to
ensure of their employees progression towards the companys goals and give
feedback/recommendations that can improve employees performance frequently. Schraeder,
Becton and Portis (2007) stated that providing feedback to employees may result in various
benefits such as embrace employees focus, performance improvement and decreases
employees turnover rate. Therefore with frequent feedback Adobe is eventually building a
better environment that boost the employees commitment, contribution and performance.
Other than that under check-in there are no more rate and rank system, as the result this
eliminates the competition among colleagues and built a more collectivist environment rather
than individualistic, which is essential for creative company like Adobe.
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Last but not least, check-in is an open conversation between managers and employees, where
it reduces the employees perceived unfairness in the performance appraisal procedures that
may faced earlier with traditional performance appraisal, which according to Ann Rowland
and David Hall (2013) weakens the commitment and contribution of employees. Therefore
with check-in system employees have built more trust and commitment towards the company
and its goals.
2.2 REWARD STRATEGY
Rewards and performance appraisal have an interconnected relation, where performance
based rewards are an essential component of the reward system, whether these can be
extrinsic (pay raises, bonuses, and benefits) or intrinsic (training and development) in nature
that motivates employee and impact the performance level and job satisfaction of an
employee (Chomal and Baruah, 2014).
Therefore when Adobe abolished their traditional annual performance appraisal system with
new check-in system, it became obvious that managers would also need to change their way
to make decisions about employee rewards.
As the result Adobe had created a two-sided Rewards Learning Reference Card (LRC). LRC
is a quick-reference guide for managers where the front part of LRC is about making reward
decisions and the back part are ideas given on how to conduct rewards conversations with
employees (Hci.org, 2013) (see Appendix B for LRC sample).
According to LRC, managers will reward employees in two ways; 1) Salary Increase and 2)
Bonus and/or Company Equity.
2.2.1 SALARY INCREASE
Salary increment will be provided to those employees who had meet the certain expectations
such as, by successfully accomplished the companys goal. Other than that employees
relationship with their colleagues are taken into consideration in this matter because Adobe
encourages a more collectivist environment rather than individualistic. Finally their salary
range in relation to their peers are noted as well, because Adobe practice a fair play in order
to eliminate unnecessary misunderstanding and dilemmas among the employees.

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Individual Assignment
Vinod Kumar (TP033584)

`2.2.2 BONUS AND/ COMPANY EQUITY

Bonuses and company equity are annual based compensation which is given to employees
who had majorly contributed to the companys success. Any employees work which had
directly affected the companys growth will be awarded with company equity plan such as
Employee Stock Purchase Plan (ESPP), Equity Incentive Program and the 401(k) Plan
(Adobe.com, 2015).
From the review we can find that, Adobe had implemented a balanced reward system
associated with its check-in system, in order to evaluate the employees performance and to
decide which reward will be suited for them as well as how to improve their performance
towards the companys goal.

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3.0 EVALUATION OF ITS APPROPRIATENESS AND EFFECTIVENESS FOR REWARD

STRATEGY AND PERFORMANCE APPRAISAL SYSTEM
Adobes check-in is one of the most effective methods of performance appraisal because
unlike traditional method through check-in managers are giving out their actual expectation
from the employee and employees are providing what they expect in return, therefore a clear
expectation of both parties will be enclosed through this check-in conversation. Other than
that by frequently having feedbacks employees will improve their performance and
understanding towards the companys goal. According to O. Longenecker and S. Fink (2006)
researches stated that the presence of ongoing informal feedback and instructing employees
between formal evaluations is where the actual performance improvement will form (as cited
in O. Longenecker, S. Fink and Caldwell, 2014).
Furthermore, check-in will enhance the performance of employees throughout the year rather
than four weeks before their appraisal as can be found in the traditional way of appraising.
Kumari (2012) asserts that in general many employees are well aware of their date of
evaluation, as the result theyll put extra effort few week earlier so that their work would be
visible and remarked in many positive ways. Thus, this will not be a consistent growth for an
employee and the company might lose some potential employees due to its rank and yank
system, however with frequent feedback like check-in it encourages employees to be
consistent and enhance their performance throughout the year as well as enables the manager
to identify the potential employees.
Adobe have a clear reward strategy that collaborates with their performance management
where employees will get rewarded not only based on how they perform but also how they
collaborate with other team members which is essential for companies that strive innovation.
West, Tjosvold and Smith (2005) asserts in their book that teamwork and cooperation are
essential for an innovation to be implemented efficiently and effectively.
Other than that Adobe is building their own future leaders by providing company equity as
bonus for those who have contributed to the growth and success of the organization. By
providing company stock to employees, it will eventually makes employees to think as
stockholders and theyre work will eventually grow towards increasing the value of the
company. Gamble, Culpepper and Blubaugh (2002) found that Employee stock ownership
plan (ESOP) have an impact on the improvement of employees performance and

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Vinod Kumar (TP033584)

contribution. Therefore Adobe is intelligently using its reward strategy to enhance their
performance management to a greater extend.
4.0 RECOMMENDATION
Although check-in is an appropriate system, it still has some traditional context where it is
still based on managers valuation which limits the feedback viewpoint of an employee.
Therefore it should be improved with 360 performance appraisal where it receives feedback
from all perspectives such as employees, manager, customers and other stakeholders (Banu
and Umamaheswari, 2009). Thus forming a frequent feedback from every angle will improve
the performance of an employee as well as it allows managers to identify even a minor flaw
in employees performance and helps them to overcome it.
Rewards should be more focused on what is expected from employees, since Adobes have
been practice a basic monetary benefits, however some employees might be interested in
intrinsic rewards rather than extrinsic rewards, where they want training and internal
satisfaction. Spears and Parker (2012) proclaims employees satisfaction can be enriched by
having a system which have enhanced training programs joint with effective feedback.
Through this Adobe can reduce turnover costs by using training and performance appraisal
practises to rise employees satisfaction and commitment towards the companys goal.
The prime objectives of performance appraisal is to improvise the employees performance
and commitment towards the organisations success, therefore it is necessary for Adobe to
build a more

friendlier environment and a place where full of opportunities for the

employees. Zhang and Begley (2011) have stated that power distance influences the
empowerment and team participation of employees, where both are essential to innovative
performance in R&D companies, therefore reducing the power distance and by building a
friendlier environment will gradually improvise the performance of an employee. Adding to
this Adobe should also give a better opportunity for the exceptional performer with high
promotions and appreciations, which motivates employees to engage better in performance
management system.

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5.0 CONCLUSION
The overall conclusion made from this assignment, is that performance management system
and reward strategy are highly connected as well as both plays a major role in improvising
and motivating an employees performance. From analysing Adobes new check-in appraisal
system along with its reward strategy, it became clear of the earlier statement. By improving
the performance appraisal system from yearly once to frequent feedback we can have a more
effective and efficient results that increases the productivity and quality of an employee.
Where with frequent evaluation employees are getting better idea of their work and able to
reduce their mistakes from their managers feedback. Furthermore a good training comes with
effective performance evaluation can gradually motivates an employee and makes him/her
progressive in their next assignments. As it comes to rewards, it should work together with
performance management system, because rewards can only be given based on the
evaluation, and rewards are the tools used by managers to motivate employees so that they
can perform accordingly with the performance management system. Other than that rewards
can also be used to influence employees to work according the companys core value, as we
see from Adobe where they provide salary increment for those who had more collectivist
behaviour which Adobe believes is necessary for the growth of the company. Therefore with
an effective performance appraisal system and reward strategy we can improve an
employees commitment, contribution and performance towards achieving the companys
goal.

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6.0 REFERENCES
Adobe.com, (2015). Locations | Adobe - Career opportunities. [online] Available at:
http://www.adobe.com/careers/locations.html [Accessed 18 Feb. 2015].
Ann Rowland, C. and David Hall, R. (2013). Perceived unfairness in appraisal: engagement
and sustainable organizational performance. EuroMed Journal of Business, 8(3),
pp.195-208.
Baer, D. (2014). Why Adobe Abolished The Annual Performance Review And You Should,
Too.

[online]

Business

Insider

Australia.

Available

at:

http://www.businessinsider.com.au/adobe-abolished-annual-performance-review2014-4 [Accessed 20 Feb. 2015].

Banu, C. and Umamaheswari, P. (2009). A Study on 360 Degree Performance Appraisal
Systems in Reliance Life Insurance, Udumalpet. ICFAI Journal of Management
Research, 8(7), pp.65-78.
Chomal, N. and Baruah, P. (2014). Performance Linked Reward and Job Satisfaction:
Banking
Fortune,

Sector.SCMS Journal of Indian Management, 11(4), pp.53-60.

(2014). Best

Companies

to

Work

For 2014.

[online]

Available

at:

http://fortune.com/best-companies/ [Accessed 23 Feb. 2015].

Gamble,

J.,

Culpepper, R.

attitudes. Personnel

and

Blubaugh,

M.

(2002).

ESOPs

and

employee

Review, 31(1), pp.9-26.

Giumetti, G., Schroeder, A. and Switzer, F. (2015). Forced distribution rating systems: When
does rank and yank lead to adverse impact?. Journal of Applied Psychology, 100(1),
pp.180-193.
Hci.org, (2013). Adobes Check-in Framework: Rewards Learning Reference Card - Human
Capital Institute. [online] Available at: http://www.hci.org/lib/adobe-s-checkframework-rewards-learning-reference-card [Accessed 20 Feb. 2015].
Kalman, F. (2015). Adobe Checks in With Performance Conversations. [online]
Talentmgt.com. Available at: http://www.talentmgt.com/articles/6719-adobe-checkins [Accessed 17 Feb. 2015].

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Kumari, S. (2012). A Study on Performance Appraisal Errors of Telecom Managers in Navi

Mumbai Region. SIES Journal of Management, 8(2), pp.3-12.
Longenecker, C., Fink, L. and Caldwell, S. (2014). Current US trends in formal performance
appraisal: practices and opportunities Part II. Industrial and Commercial Training,
46(7), pp.393-399.
Mishra, V. and Roch, S. (2013). Cultural Values and Performance Appraisal: Assessing the
Effects of Rater Self-Construal on Performance Ratings. The Journal of Psychology,
147(4), pp.325-344.
Peel, A. (2015). Adobe Photoshop Celebrates 25 Years Of Creativity. [online]
Valuewalk.com.

Available at: http://www.valuewalk.com/2015/02/adobe-photoshop-

celebrates-25- years-of-creativity/ [Accessed 17 Feb. 2015].

Schraeder, M., Becton, J. and Portis, R. (2007). A Critical Examination of Performance
Appraisals.Journal for Quality & Participation, 30(1), pp.20-25.
Spears, M. and Parker, D. (2012). A Probit Analysis of the Impact of Training on
Performance Appraisal Satisfaction. American Business Review, 20(2), pp.12-16.
West, M., Tjosvold, D. and Smith, K. (2005). The essentials of teamworking. Chichester,
England: Wiley, pp.257-258.
Zhang, Y. and Begley, T. (2011). Power distance and its moderating impact on empowerment
and team participation. The International Journal of Human Resource Management,
22(17), pp.3601-3617

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APPENDIX A: ADOBES FINANCIAL REPORTS FOR FISCAL YEAR 2014

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APPENDIX B: ADOBES TWO-SIDED REWARDS LEARNING REFERENCE CARD

(LRC)

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