There is a short cut. It is also available as correction layer. I think it is called 'threshold' (in Dutch it is called 'drempel', nice eh?) It does the same as posterizing, but then with a nice slider. The transition will be harsh. Stuff like this tend to look better when you do it via Streamline (also Adobe), which converts your photographs into nice vectors. In combination with Illustrator you are on the way to annoy another pack of teeth-grinding artists that used to do this kind of stuff for a living. By hand. Recoloring it is even more fun.