- The Missing Link After Performance Reviews
We continue to value performance conversations. In fact, many companies I work with still treat them as formal events—once or twice a year—and when the meeting ends, everyone seems to breathe a sigh of relief: “Whew, glad that’s done.”
But here’s the problem: the pay portion is often completely decoupled. The conversation can sound like this:
“Your increase this year is 3.5% based on your rating.”
End of conversation.
- And employees leave wondering:
- How did I really do?
- What does this mean for my growth?
- How is this number connected to my contributions?
- I see pay ranges posted online—where do I fit?
This gap—between feedback and pay clarity—is where trust breaks down.
The Conversation After the Review
Even if you don’t assign a rating or directly tie scores to pay, there still needs to be a link: How did I do? How does the company view my contributions? And how am I paid or recognized as a result?
If managers skip this, employees fill in the gaps themselves—and that’s often when they compare notes with peers or scan job postings.
Managers must create the red thread—connecting performance feedback to pay philosophy, goals, and growth. When they do:
- Employees see how their contributions are recognized.
• They understand what behaviors and results lead to stronger rewards.
• The increase, bonus, or promotion has ongoing meaning.
• It opens the door for feedback—both positive and constructive.
Example of a missed connection:
“Your increase is 3.5%.”
Example of a stronger connection:
“This year’s increase is 3.5%. That reflects how you consistently met expectations, delivered projects on time, and supported your team. The impact you made on client deliverables was recognized, and continuing that consistency will help you move higher in the range over time.”
Taking the time to explain the why—and giving real examples—transforms a transactional update into a meaningful conversation about performance and growth.
How to Bridge the Gap in Conversations
Managers don’t need memorized scripts. They need a framework to make performance-pay conversations clear, confident, and developmental instead of transactional. Four simple moves help:
- Explain the why. Link the pay outcome to specific performance contributions.
“This increase reflects your leadership on the system upgrade and your ability to keep the project on track.”
- Reinforce pay philosophy and role value. Employees need to know how the company determines pay. That means recognizing their contributions while also being honest that pay is tied to the worth of the role in the market. This balance is tricky but critical.
Manager’s Playbook: Talking About Market Alignment Without Shutting the Door
Even if exact ranges aren’t shared, every company is at a different stage of its compensation journey. What matters is helping managers feel confident explaining how pay decisions are made and what they mean.
Here are go-to messages managers can use—especially when someone is performing well but already paid competitively for their role:
• Recognize the person’s value – “We see the impact you’re making, and your pay reflects that.”
• Clarify the job’s worth – “We benchmark roles to the external market to keep pay fair and consistent.”
• Balance both messages – “Because your pay is already high compared to the market, future increases may be smaller. That doesn’t take away from your contributions—it reflects how the role is priced.”
• Open the door to growth – “Let’s talk about your aspirations and how we can align opportunities for development or promotion.”
- Clarify expectations. Help employees understand which goals have the biggest impact.
“When we evaluate bonuses, client retention goals carry the most weight. Your contributions there are critical.”
- Set a next step. Let them know when you’ll talk again.
“We’ll revisit this mid-year to see how your new responsibilities are shaping your development and pay opportunities.”
This is more than a “nice to have.” Lack of pay clarity directly fuels turnover. Employees who feel their pay is unfair are 45% more likely to look for a new job—even if their pay is competitive. By contrast, in organizations with higher levels of pay transparency, employees are 59% less likely to leave (HR Dive, 2024).
Engaging in these conversations sets the stage for trust and connection—moving the discussion from “numbers only” to one that shows growth, meaning, and mutual understanding.
Normalizing Pay Conversations Year-Round
The conversation shouldn’t end after the review. Pay should show up naturally in:
• Quarterly check-ins – tie progress back to compensation philosophy.
• Mid-year reviews – it’s perfectly fine to ask, “Given where things stand right now, here’s how I see your progress and opportunities.”
• Career discussions – explore how skills, goals, and aspirations influence future opportunities.
Yes, it can feel like opening Pandora’s box—but inviting employees to share their questions and aspirations creates alignment and can uncover hidden blockers.
This is where the CompAware ENGAGE™ model helps managers feel confident.
Using ENGAGE™ to Create Pay Clarity
ENGAGE™ is a practical model that helps managers structure conversations about performance and pay—not just to explain a number, but to connect it to the bigger picture of how the company manages compensation and growth.
E – Explore their perspective: “How are you feeling about how your performance this year connects to rewards?”
N – Naturally honor something good they’ve done: “Your leadership on the product launch had a direct impact on our bonus pool results.”
G – Ground in goals: “When we evaluate bonuses, hitting client retention targets carries the most weight. Your work ties directly into that.”
A – Acknowledge their feelings: “I hear your concern about being at the top of the range. That does mean smaller increases, but it also reflects that your pay is competitive for this role.”
G – Guide the conversation forward: “Let’s look at how you can build experiences that prepare you for the next level, where there’s greater earning potential.”
E – Explain next steps: “Let’s check in on your goals and progress next quarter. Please bring any questions about pay or development so we can keep the conversation going.”
FAQ: Making Pay Conversations Easier
Q: What if I can’t share exact pay ranges?
A: You can still explain your company’s pay philosophy—how you benchmark roles, review market data, and ensure fairness. Clarity builds trust, even without numbers.
Q: How can SimplyMerit help?
A: SimplyMerit gives managers and HR clear, data-backed visibility into how pay decisions align with performance, budget, and market positioning. It helps keep conversations factual and consistent.
Q: What if my managers feel unprepared for pay conversations?
A: That’s where CompAware™ comes in—our interactive learning program designed to help managers gain confidence, language, and frameworks to handle tough pay and performance conversations.
Q: What if employees expect full transparency?
A: It’s about progress, not perfection. Transparency can mean sharing the process and philosophy, even if specific numbers aren’t public. HR Dive reports that employees who feel their pay is fair are 59% less likely to leave—so any clarity you create matters.
Quick Implementation Checklist
- ✅ Don’t just announce numbers—explain the “why” behind them.
- ✅ Help employees understand the company’s pay philosophy and how performance connects to rewards.
- ✅ Add pay context to quarterly check-ins, not just annual reviews.
- ✅ Use ENGAGE™ to bring clarity on goals, bonuses, and development opportunities.
- ✅ Always end with clarity and a next step.
Key Takeaways
• Formal performance conversations still matter, but so does giving employees context about how performance connects—directly or indirectly—to pay and total rewards.
• Simply announcing “3.5%” leaves employees with questions. Taking the time to explain the why builds understanding and trust.
• The ENGAGE™ model helps managers discuss both pay and performance with confidence and empathy.
• Tools like SimplyMerit and CompAware™ can help managers make pay clear, consistent, and connected to growth.
• Managers who create the red thread between performance and pay reduce confusion, increase engagement, and strengthen retention.
Ready to make pay clear and consistent?
- Explore SimplyMerit for transparent pay decisions.
- Build manager confidence with CompAware™ learning programs.