#HighGrowthMatters Spotlight: VP of People Melanie Naranjo on Creating a Trackable Performance Management Program

This interview with Melanie Naranjo, VP of People at Ethena, explores performance management, communicating about salary ranges, and current HR trends.

This conversation has been lightly edited for clarity and concision. 

Tell me about your background and what led you to Ethena.

Like many people I’ve had a somewhat winding path to where I am today, but the throughline has been exploring the intersection of HR and culture. And while every industry I have been in has been completely different — my early experiences included an internship in the fashion industry — each has taught me a lot and brought me closer to where I’m most excited to make an impact. I find that more and more people really care about having their personal values align with the mission and values of their employers. And I certainly was not passionate about fashion. 

After college, I took a year off to teach English in China and that was a really valuable experience because it made me realize how much I love teaching, which is sort of interesting because a lot of times, HR is like teaching for adults. You’re teaching people how to manage conflict effectively, how to chase after their own career, and how to be more inclusive in everything they do. 

When I came back, I worked for Insider, and was there for almost seven years. I started in a very junior generalist role but quickly became the go-to person for new assignments because I was constantly volunteering for projects that others on the team either were too busy to tackle or weren’t interested in pursuing. This ultimately ended up benefiting me in ways that still help me in the work I do to this day because not only was I able to very quickly work my way up as a result of taking on such a wide breadth of projects, it’s also given me an incredibly diverse set of tools and perspectives to lean on with every new project I take on, including the ability to quickly teach myself how to navigate new projects. 

By the time the opportunity to join Ethena came around, I was starting to more closely evaluate my personal values — like so many others, especially during the pandemic — and realizing that I wanted to align them with my work and the company I worked for. Ethena became the shining light that showcased exactly the kind of company mission and values I was looking to partner with. During the interview process, the team let me experience a sample module from our training product, our harassment prevention training. Most harassment prevention trainings look like they were made in the 80s and cover really outdated, bare-minimum-of-the-law examples that don’t actually resonate with or help employees in the real-life, day-to-day challenges they face. But not Ethena. 

I was a little starry eyed, to be honest. They had put together this beautiful comic strip created by a queer woman of color, and it was about a day in the life of a queer person of color, and it just struck me how inclusive it was from both the content and creator perspective. The story wasn’t just about what you shouldn’t do, but here’s what it feels like to be this person. Long story short, it was very clear to me that the company’s mission aligned with my own values, and that together we could make a huge impact.

What are you working on right now at Ethena? What's your top priority?

Like many other companies right now, our top priority is performance management, retention, and driving great outcomes for our customers and teams.  

We’re very big on talent density at Ethena. We have ambitious goals and we want to tackle all of them. Of course, as with any high performance culture, it’s important to pair high expectations with thoughtful resources and support. Are we training our managers on how to lead effective teams? Are we providing our teams with clear expectations about what high performance looks like and how to chase after it? We’re focused on building the infrastructure needed to support high performance and equipping our managers to have tough conversations with employees, if needed.

How do you track high performance, particularly given Ethena is a remote-first company? 

I have two thoughts on this. For the record, we do the usual twice per year, formal performance reviews. But on the other side of that — which I think is important for all companies,  especially small companies that may have limited resources and small teams — is a less complicated option. We actually measure performance in two very low-lift ways throughout the year outside of those formal reviews.

One thing that we do is we have Feedback Fridays. So on Fridays, managers and their direct reports meet with each other and are both required to give each other constructive and positive feedback. This way, employees and their manager can manage performance on an ongoing basis.

The other thing we do on a fairly regular cadence, let’s say monthly or bi-monthly, is we have managers ask temperature check questions. This is really important because the fact of the matter is, evaluating performance is tough. It’s easy to fall into bad habits over the course of your day-to-day work, including picking up the slack for an under-performer instead of identifying it as a performance management issue and challenging the person to stretch and grow. To combat this, we actually have very clear temperature check questions that force managers to lead more intentionally. Here are a couple examples:

1. If this role opened up today and you had to hire someone, would you hire this person again? 
2. Does this person make your job easier or harder? 

I want to be clear for the record that when managers answer these questions, the immediate response is not to go out and terminate the employee. That’s not the kind of company we are. What we’re looking for is for managers to build awareness and intentionality so that we can begin addressing the issue – whether that’s exploring underlying challenges, clarifying role expectations, empowering someone to embrace feedback more effectively, etc.

I’ll also add that we’re very transparent with our employees about this. Our employees know our temperature check questions. It’s not a secret, and employees are equally empowered to ask themselves these questions and if they feel iffy then they can talk to their managers about it. Our whole intent is to support our teams so that we can get everyone to high performance.

The sharing of salary ranges in job postings is now law in many states and municipalities. What advice do you have for management teams who will likely be facing more questions from employees about their compensation? 

For a long time, there’s been a lack of pay transparency in the HR field. In the past, when HR professionals have been faced with employee questions around compensation, they may have given a vague response, something like “you know, the market is very complicated, there are a series of factors that go into these numbers, etc.” Salary ranges weren't a thing.

That doesn’t work anymore. With salary ranges now made public in several high-stakes states (i.e., California and New York), employees are demanding more clarity around the thought process behind these numbers. If employers continue to lean on cryptic non-answers, they’re only going to exacerbate the issue by forcing employees to come to their own — possibly incorrect — conclusions about the company's compensation values and approach to equity. 

Instead, employers should be providing a clear compensation philosophy so the employees and employers alike can work off the same baseline understanding of the company’s approach to compensation that informs salary ranges. Rather than, for example, having an employee find a random job posting from another company and insist that the company needs to match that salary band — all without understanding the ways in which compensation philosophy, industry, field, job level, and more actually impact the unique salary bands each company decides on. 

Employers should also educate employees and managers alike on how salary ranges work. What does it mean to be at the bottom of the band? The middle? The top? The more you educate your employees, the fewer questions you’ll have to field and the better equipped managers will be to handle these discussions themselves.

What advice do you have for companies that are navigating difficult times, having to deliver bad news, or recovering from letting folks go? 

Always be as human as possible. Be as transparent as you can be. Make sure before you take any action that you’ve really thought it through, that this is the right business decision and there are no alternatives that could work. Then, be as generous as you can be in your severance packages and make sure that you communicate effectively with the remaining team. 

There are always three pieces to layoffs. The first is the people who are impacted, that are laid off. The second is the people who get left behind who are still at the company who are reeling and now have insecurity about their own roles. Here, it’s important to follow-up with these folks and have individualized, intimate discussions. Don’t just rely on a company-wide announcement. Take time to provide context of what brought you to this place and be as transparent as possible. 

And then finally, don’t forget about your HR team and the managers of the people impacted. They are struggling, too. It’s important that companies check in with them and make sure they have support resources as well.

Is there a current trend you see in the HR space that you disagree with?

I think we’re still a little behind the times in the HR world in how we measure engagement. I see a lot of companies measuring engagement by how many people attended the company holiday party, or how many people have their cameras on at the company all-hands. 

I think that we’re in a new world and some of those metrics don’t apply anymore and they could even be a little bit inadvertently exclusive. You don’t know if someone has their camera off because they need to breastfeed. You don’t know if you have someone that doesn’t celebrate the winter holidays or just has social anxiety and doesn’t want to go to the holiday party. 

I’d love to see companies finding different ways to measure engagement. Maybe it’s performance, maybe it’s looking at how many people are leveraging your company’s perks and benefits, how many people are being vulnerable with their managers, etc. I just think there’s more to engagement than how many people have their cameras on or attended a certain event.

About Ethena: 

Ethena is a compliance training platform with intuitive and powerful admin tools, built to make training easy, engaging, and effective.

Ethena's training is trusted by top tech and professional services firms including Netflix, Zendesk, Figma and others. We're backed by GSV, Homebrew, Neo, Village Global, and other aligned investors, and were profiled in Tech Crunch and Forbes. Their advisory team includes Frances Frei, and top Legal and People Ops professionals.

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Lexie Sirak is a Senior Campaigns Coordinator at OpenComp and previously worked at JPMorgan Chase & Co. She pens the monthly High Growth Matters Spotlights. Connect with her on LinkedIn here.