“We need to know what we do matters,” Janet Ahn, president of Americas and chief behavioral science officer of MindGym said with regard to employee needs and the evaluation of their work. “How does my personal purpose grow and align with the wider organization's purpose?” 

Ahn introduced the panel session titled “Performance Management in an Era of Rising Worker Expectations” at From Day One’s Silicon Valley conference. Steve Koepp, co-founder and chief content officer at From Day One moderated the panel of four expert leaders to discuss the changing landscape of reviews, compensation, feedback, and employee wellness.

Swati Sarupria, the senior director of talent and organization effectiveness at Splunk, said that many companies are creating clearer guidelines with more structure and transparency around performance management, and embracing employee feedback. 

“When I hear about the feedback from the employees, it's welcoming because it has always been this black box,”  Sarupria said. “I think the structural changes and the transparency are also welcome.”

Laura Lomelí, Ph.D. the area vice president of people insights at BetterUp said she is pleased with what she and her colleagues see in their partners. “Our partners are spending a lot of energy on up-leveling their managers and their skill sets to provide effective and kind feedback,” she said. “This investment reinforces a culture of feedback, which ultimately makes these performance conversations a lot easier.”

Leah Pimentel the director of diversity, equity, and inclusion (DEI), and culture with the University of California (UCSF) said that a performance review should not be the first time an employee gets feedback.

“You should be getting feedback at every one-to-one with your manager, and they should be very clear about your goals, where you want to go, and how you get there?” she said. Pimentel said the review is a partnership and that managers should look at how to help their employees grow, achieve in their job, and assess what training and resources they need to excel. 

“I believe the pandemic renewed these conversations with a breath of fresh air,” Pimentel said. “It allowed us to pivot in a new direction, make sure that our managers have enough training, and look at how we were equipping our managers to be better performers and better givers.”

Having consistent feedback is vital, Pimentel said, and having a six-month check-in on an employee's career path is also helpful, so no one is blindsided. “Having employees feeling empowered with the ability to paint their own career is something that can inspire people,”  she said. “Asking them, ‘what do you want to do? How do you get there? How can we work together to achieve it?’”

Rekha Gurnani Chowdhury, senior director of global compensation and people analytics at Box said that the future of performance management will be the transparency between pay and performance. “Ultimately what employees want is a feeling of control,” Chowdhury said. “They want to know that they have a way to influence their outcomes, whether it is pay related, or other organizational outcomes.”

The way to do this is to make the outcome very clear, Chowdhury said, and that there is an assumption we don't know how compensation is determined or that these decisions are being made somewhere in secret. 

“If anything, we're actually getting more clear with how we think about performance, how we make the connection between your position and range and how your performance for the year is,” she said. “We are enabling managers to have these conversations and to make that link.”

Creating a Safe Space in Your Workplace

As for the question of employees asking for empathy in the workplace balanced with the need for managing employee evaluations, Lomelí with BetterUp was happy to lean into the challenge. “I love this question. So recently, the U.S. Surgeon General put forward workplace well-being as a top priority. And one of the components of workplace well-being is mattering at work,” she said. “And, I think that compassion and empathy are really critical for people to feel that they matter at work.” Lomelí said it’s important when we think about performance management systems and the process when assessing how we deliver feedback. 

“If you think about the system that you might be developing, it’s important to ask, ‘how do I actually deliver the feedback within that system?’” she said. “It’s about appreciative feedback, and appreciative feedback doesn't mean you only say good things. It's actually clear, very prompt, and kind.”

Pimentel said that oftentimes people are worried about how they will be perceived or are fearful of speaking up because of possible retaliation. She said she and her counterpart worked on creating psychological safety with confidential safe spaces for staff, faculty, and residents of the University of California (UCSF) to address the issue.

“You can come and say what you wish, come up with ideas and we can implement them,” she said. “We take all of that data and we share it with the chair of the department, and we work to use my budget to implement solutions.” With a rising competitive job market, Pimentel added that giving new hires welcome kits to understand their brand and feel appreciated is helpful. “You spend more time at work than you do at home,” she said. “And with this competitive market, you want people to realize why they are working with you, and that you care about them and value them.”

DEI Efforts in a Changing Work Setting

As for the hot button regarding diversity, equity, and inclusion, Sarupria said that as companies are acquiring people to come back into the office more, there will be an impact of diverse representation and that in the context of performance management, the missing element in traditional practices has been the appropriate conversation about equity and talent, and not ratings. 

“The conversation between managers and their peers and the conversation between managers and their senior leaders needs to provide equal access and visibility to talent,” Sarupria said. “And typically under ratings, the quality gets masked because you're just talking about numbers and who needs to go where.”

Sarupria said at Splunk they are working through a structured guide overlaid with data to highlight certain pools for what these review conversations look like. “I think the more we can overlay data and the more we can provide structure, there is going to be equity naturally in the process itself,” she said.

Lomelí added that focusing on teaching managers how to lead inclusively and being cognizant of cultural differences are also important when focusing on DEI practices. “So what are those key behaviors and mindsets that managers need to be working on in order to be inclusive, how they provide those ratings, and how they're providing that feedback?” She said it is also key to prepare employees for these conversations, so both parties are set up for success. 

Koepp asked the panel about compassionate feedback and Lomelí said that in the gathered metrics at BetterUp, they have more than 2 million coaching sessions added to partner data. The metrics show that in times of uncertainty, having a strong culture of feedback and a well-built coaching structure, employees feel more supported by their manager, peers, and their organization. “And because employees feel more supported, we see improvements in team innovation, agility, resilience, and performance,” she said. 

When it comes to burnout and highly motivated people such as healthcare workers, Pimentel said UCSF saw a great deal of disengagement from their faculty during the pandemic. Her team’s solution in addressing the issue was offering appreciation and increased communication about employee needs such as pay. “We started having different cultural events with the faculty and residents to show them our appreciation,” she said. “We did an underrepresented minority bowling event so people could meet one another and feel that there are resources, and others that care about them.”

Transparent and Contextualized Compensation 

With the goal of increased transparency and reducing gender and racial pay gaps, new laws in California and other states require the position’s salary or hourly wage range to be posted in any internal or external job announcement.

As the compensation expert based in a public company in California, Chowdhury said this conversation has been her focus for the last few months. There are different ways companies are sharing their pay structures, some upon request, others publishing on an accessible shared site. “Most companies have really embraced this change, it’s the way of the future,” she said. Chowdhury said Box has decided to share their salaries globally, not just in the states where mandated.

“We wanted to have consistent treatment,” Chowdhury said. “We didn't want employees in California to feel like they had to ask to get that information, and then if you're in New York or Poland you can't.”

Additionally, conversation and context are important before sharing numbers, Chowdhury said. “You have to help people understand how these ranges are developed and what their position and range is,” she said.

Although it can be tricky to communicate about pay without sharing performance ratings, Box’s process with employees is about sharing feedback, sharing the message behind the rating, and avoiding labels. 

“I feel like more and more, we will have to be very transparent,” Chowdhury said. “We are going to have to share that if you have this specific performance rating, this is the kind of increase you're gonna expect to get, with this as the multiplier.”

Chowdhury said she believes we are also going to start seeing leaders and managers being more regimented in their compensation decisions. “They have to own those decisions, be able to talk about it, and explain it to their employees,” she said.

The concept of pay parity, ensuring that employees in the same job and location are paid fairly to one another regardless of gender and ethnicity, is also being added to the conversation. 
“I think there's gonna be more discipline and more focus on the internal parody of making compensation decisions,” Chowdhury said. “ I see it as a positive thing with pay transparency. The more knowledge we can share, the more we're all on the same page, the better.” Chowdhury said this will all take some time but that she was interested in how other companies are managing these conversations and enabling managers.

Sarupria said Splunk uses segmentation (a tool in performance management that defines different groups of employees) for their talent acquisition decisions, which does affect an employee’s goals and compensation. “People do not know where they stand relative to certain individuals, but they do know what percentage of the work they're getting right,” she said. “So from there, they can gauge how they're performing.” 

Compensation is intricate and involved, Sarupria said, adding the whole pay-for-performance branding needs a refresh.

Chowdhury agreed and said there are multiple elaborate factors that play a role in determining how someone is paid but that the future of compensation will be market driven. “Payment decisions are not just made on performance, it's about location, relocation, and even a company’s tier system,” she said. “I think we will see that base pay will just be market driven. Performance is going to be removed from this whole conversation.”

Chowdhury said companies may reward performance somewhere else, like with bonus scales and perhaps will be based on equity. However, the conversation and debate are ongoing with pay transparency laws and inflation in play. “The conversation is shifting,” Chowdhury said. “We all need to get on the same page and have enough data to make these decisions.”

Focusing on a Flourishing Workforce

Nearing the end of the discussion, Lomelí was asked to define well-being as opposed to wellness. “That is a wonderful question,” she said. “The way I would think about it is that well-being is something that we can drive to and there are different predictors for it. It's your physical wellbeing, your emotional cognitive wellbeing, all of those striving behaviors impact your wellbeing.”

Wellness is more of a driver of well-being, Lomelí said.

“What's most important is that being well and flourishing has a huge impact on your performance, your ability as a manager, and your team's performance innovation,” Lomelísaid.  “And, it serves as a buffer, especially in the environment that we're living in today, especially here in Silicon Valley.”

Krista Sherer is a strategic communications consultant with a background in journalism and corporate communications. She resides in Sebastopol, Calif.