The beginning of the year is a great time to review and update business practices and procedures. HR is no different.

So we asked Michelle Goodwin, the Chief People Officer at Teikametrics, to share her opinion on a handful of HR topics we know are top of mind for fellow people-people.

At Teikametrics, Michelle leads the global People Team, which includes all things human resources, talent acquisition, people operations, employee engagement, and culture. Teikametrics employs ~300 people and is an AI-powered platform to optimize and grow eCommerce businesses on Amazon and Walmart.com.

Performance Review

What are the primary tenets of a successful performance review program?

In my opinion, providing regular, open, and honest feedback is the most important part of a performance review program. People want to know how they are doing and what they can do to improve. If they want to grow in their career, they also want feedback about what they need to do to get to that next step.

Reviews should include questions regarding the employee’s development and career goals. You should provide specific feedback regarding their career aspirations and provide areas of growth opportunity.

As long as employees receive all of this and it is documented in some way, I don’t believe the review format or tool is important. I have worked with many different systems and haven’t found one to be better than another. They are all very similar, and most can be customized to fit the company’s needs.

How does Teikametrics structure its performance reviews?

We use an annual and semi-annual performance review with a system (Quantum) and have used it for a couple of years. We ask the staff and their managers to answer a few questions related to their objectives – performance impact and improvement areas. This year, we plan to adjust the review to include questions related to our company values.

We’re adding these questions because values act as guiding principles for the company, and we want to ensure employees are acting in accordance with our values. The new questions are meant to tie back values to employee performance reviews to help us ask, “does this person work in accordance with our company values?”

I’d also suggest companies consider adding value questions to the interview process; it helps to hire people who align with company values.

How do you prepare your managers to conduct successful performance reviews?

I typically conduct feedback training for managers and staff, so they know how to give and receive feedback. It is important that everyone knows how to do both.

Positive feedback is super easy, but many managers have difficulty giving “negative” feedback. It’s the “area of improvement” question that is powerful. It is meant to help, not to harm. It’s about giving employees the tools they need to improve and progress. So we make sure managers are prepared to do that.

Merit Increase vs. cost of living vs. inflation

Many companies are grappling with the economic outlook, much as employees are grappling with rising costs. Should pay increases match inflation? That may not be feasible, so then what is the next best thing?

No, I don’t think increases should match inflation. I always use my network or survey data to guide what salary increases should look like. I’ve been hearing 4% recently regarding the overall budget for increases.

But you have to look at performance and where employees are in the market. Align with the market, align with performance. In example, if we have a top performer who is below market, their increase *should* be higher (if the budget allows).

Are you planning on offering other benefits since pay increases may not reflect previous years?

We review benefits annually and benchmark accordingly. I like to see if there is anything new that we should be looking into. I haven’t seen anything that’s unusual or different right now. When we review benefits, we look at the utilization rate to determine whether it’s the right fit.

If we offer a training benefit, I want to ensure our employees will use it, not just a handful of employees.

A small but mighty benefit – at a previous company I worked at, we bought lunch for employees on Tuesdays and Thursdays. Incidentally, those were the two days most everyone came to the office.

What do you see in the industry that companies are offering to employees?

Parental Leave and training budgets are always big requests from employees. 401K match/pensions for international companies are also often requested if the company doesn’t have that already set up. Depending on the country, international companies must provide a pension, but it’s not required in the US, so offering the benefit is competitive. A 401K match will also increase participation in the program as well.

Headcount planning

In the current environment, how are you approaching headcount planning in 2023?

Slow and steady growth. No huge headcount increases are planned for 2023.

Does the current environment provide an opportunity to pick up rarely available talent?

Absolutely, especially in R & D. We have been looking at the companies with known reductions and are reaching out to candidates in the areas we are trying to backfill and bring on new talent.

In this environment, we see daily posts about lay-offs, so our recruiting team is regularly sourcing there.

Do you anticipate incoming salaries to decrease in the face of economic headwinds?

I don’t think we will see any decrease, but perhaps there will be a hold on increasing salaries at the rate we’ve seen them increase in recent years.

Are there any year-end practices you consider a best practice?

The year-end is a time to look at compliance. For example, annual harassment training is something many companies do every year at this time. Also, many companies have annual notices for medical benefits and 401K plans that go out to employees this time of year. Additionally, this is a time for open enrollment for benefits, as many companies have a January 1^st renewal date.

Consequently, this is a good time to look at what other companies have in place and review changes to benefit plans if the company receives unusually high premium increases. Anything in the double digits is worth looking at changing plan design – high deductible plans and HSAs can provide huge cost savings, increasing coverage tiers – if only family or individual coverage, you can add two-person or employee plus child coverage, you can also increase co-pays. I’ve also heard some companies are trending toward self-funding. Self-funding can be the less expensive option for a company (allegedly). When a company traditionally pays for benefits, you’re funding the “what-if” scenarios, whereas “self-funding” is when a company essentially pay for every claim that goes through. In a traditional insurance plan, the premium covers all that. You pay the premium no matter the use. If self-funded, you’re paying for everything as the participants utilize the services.

Insurance brokers can help with this to determine if this is an avenue for your company.

Finally, companies may also conduct annual (anonymous) engagement surveys at year-end or the beginning of the year. This is a good practice to see how employees feel about the senior leadership team and their direct managers, the company direction, the product performance, and the company in general. We currently do these surveys every quarter but once or twice a year is a good practice, at a minimum, to check in to see how employees feel.

Successful engagement surveys should have a 60%+ answer rate, but I think we’re getting survey fatigue, so we’re pulling back. We get the greatest feedback when we provide open-ended text – people write in comments often. It’s great feedback, allows you to look at trends and track crowd sentiment on benefits, etc. So if everyone mentions that insurance could be better – we know that’s an action item.

Often employees worry that engagement surveys are anonymous but survey companies take steps to ensure anonymity and in some cases, won’t provide employee answers to questions if there are fewer than 6 responses – to protect employee anonymity.