“The sophistication of a performance system is irrelevant if the people at its center do not trust it. Feedback becomes performative, the link between performance and reward breaks down, and analytics inform reporting rather than the human conversations that actually change performance. Trust erodes review cycle by review cycle as people discover what the system was never able to guarantee.” Says Valentina Iturbe-LaGrave, Senior Advisor of Organizational Effectiveness and Employee Experience at Save The Children. 

The people at the center are employees, managers, and the leaders responsible for sustaining it. The promise to each of them is growth, development, and the conditions to do great work, yet the terms of that promise are shaped far more by organizations than by the people who live them. 

To Valentina, the gap between what performance systems imply and what they can actually deliver has never been more visible. Across sectors, volatility is exposing the limits of systems built for a more stable era, and people at every stage of their career are absorbing the consequences. Rethinking these systems starts with honesty about what performance can and cannot guarantee, not as a design feature but as a foundation of genuine human-centricity. 

In our most recent Thought Leadership conversation, Valentina shared three key themes for building a performance system that people can actually trust.  

Building Engagement Through Trust

Trust is a precondition for employee engagement, and few organizational systems make or break it more visibly than performance management. 

As Valentina points out, “when people are engaged, committed to the work and to each other, the business outcomes flow. You get better products, faster cycles, and stronger impact.” Gallup research shows that business units in the top quartile of employee engagement see 23% higher profitability and 18% higher productivity compared to those in the bottom quartile. 

But this type of engagement requires trust, and trust means employees see a credible link between their performance, their development, and their future. When that link is clear and consistently honored, people invest fully. The result is the kind of discretionary effort that drives innovation, impact, and measurable business outcomes. When it breaks down, no culture initiative or engagement program can substitute for it. Gallup’s 2026 State of the Global Workplace report found that only 20% of employees worldwide were engaged in 2025, its lowest level since 2020. 

Rebuilding that engagement requires organizations to start from a more honest place because people navigating uncertainty need performance management systems that are transparent about what they can and cannot deliver, no matter how uncomfortable that honesty may be.

Work Is What You Do, Not Who You Are

Work is a very meaningful part of life but isn’t and shouldn’t be a defining measure of who someone is. 

For years, companies have deliberately conflated their brand with their employee’s sense of identity, and in a stable labor market that might have driven commitment and engagement. But today’s environment, defined by constant and compounding change, has outpaced the systems built to support that promise.

The data makes the gap clear. According to the Bureau of Labor, employees are navigating a far less stable career environment than a decade ago: median job tenure has fallen 15% since 2014, while layoffs and discharges rose more than 12% from 2022 to 2023. When the average job tenure is around four years, it is intentionally misleading to push a narrative of employee belonging.

As Valentina puts it, “employees know when a system is performing career rather than practicing it. They are being told that their development matters, that they belong, that they are valued, while the psychological contract is being quietly rewritten above them. When trust breaks, employees disengage, institutional knowledge walks out the door, and the employment brand begins to unravel.”

When organizations build engagement on identity rather than honesty, they are making a promise the psychological contact was never designed to keep. When the promise breaks around performance, development, and security, the damage is not just professional. It is personal, disorienting, and falls entirely on the employees who must now rebuild the link between their performance, their development, and their future. People deserve organizations honest enough to prevent the psychosocial damage that spills beyond the workplace and into a person’s life. 

Three Things to Rethink Before Your Next Performance Redesign

To Valentina, the path forward is about fundamentally redesigning systems around a more honest and reciprocal psychological contract. Throughout our conversation, she shared three places to start:

1. Audit the Shadow System First

“The principle I return to again and again is nothing about us, without us. It comes from participatory action research, and it’s as relevant to performance management system design as to any other field where experts make decisions that affect people who had no part in making them. A perfect system designed without genuine understanding of what employees actually need isn’t human-centric. And in today’s environment, genuine human-centricity requires that the terms of the psychological contract be made clear and unambiguous from the very beginning. As the saying goes, clear is kind. And what employees want is clarity, not theatrics”, says Valentina.

When the performance system itself is performative, the feedback it collects becomes performative too. Employees learn quickly what the system rewards and what it punishes, and they respond accordingly. What leaders are left with is not honest feedback about performance, development or culture, but managed input carefully calibrated to navigate a system people don’t trust. 

The consequences reach far beyond engagement scores and pulse survey results. When performance systems fail, people find workarounds and shadow systems emerge alongside the official one: informal influence networks, back-channel conversations, undocumented advancement criteria, and toxic organizational gossip that fills the vacuum performative systems leave behind. The official performance system becomes a formality because the real one operates in the shadows, and it is biased, ungovernable, inequitable, and corrosive by nature. This is not incidental but structural, because shadow systems run on proximity, affinity, and access, which means they disadvantage the same people every time: those who are outside the dominant network because they are remote, on leave, or simply doing the work without performing visibility. These shadow systems become actively destructive the minute leaders begin drawing on their input to make people decisions.

So before you redesign anything, audit not just the official system but the shadow one as well. The gap between the two is your most honest diagnostic. Where people built workarounds and informal networks, that’s where the official system has failed to deliver clarity, fairness, trust, and accountability. 

2. Have the Real Development Conversations

Auditing the shadow system is one way to reveal where trust has broken down. But rebuilding trust requires having honest conversations about marketability, career trajectory, and even offboarding. Those conversations are not a threat to retention, the absence of them is. 

With turnover rising and tenure shrinking, Valentina advocates for a more honest type of employee-manager relationship, one that embraces development beyond the current role and signals clearly to employees that their leaders see the full picture, understand the realities of today’s labor market, and are willing to talk about them openly. 

“We need to meet people where they are and talk candidly about their transferable capabilities and their future, even when it leads beyond their current role. How is your network? How is your CV? Does your LinkedIn reflect who you are becoming, not just the role you currently hold? Do you understand how the market sees you right now? These are not disloyal questions, they are the most honest ones a manager can ask today. And until we are willing to ask them openly, we are not really investing in the person but in the role they fill for us, and that’s a very different thing.”

When leaders are willing to have those conversations with employees who are anxious about job loss, the protective mindset that drives people to hold back, self-censor, and perform rather than contribute begins to dissolve. And with it, so does the distrustfulness that corrodes collaboration, communication, innovation, and org health from the inside out. 

So before you have another development check-in, ask yourself whether you are having the real conversation or a performance of it. Are you talking about the role or the person? Are you framing it within our current context of compounded uncertainty and volatility? 

3. AI Does Not Fix a Broken System

Auditing the shadow system tells you where trust has broken down. Honest development conversations begin to rebuild an aspect of it. But neither is sustainable at scale without the third commitment: using technology not to amplify performance theater, but to build the clear, transparent systems that today’s psychological contract actually requires. 

As Valentina puts it,

“We are at an inflection point in performance management. AI gives us the ability to see the employee experience at a depth and scale we haven’t had before. But AI doesn’t make a broken system better, it makes it faster. And when people have stopped trusting their leaders and the culture, they’re not going to trust the technology. Organizations really need to use AI to increase transparency and accountability in how people decisions are made, not to add sophistication to a system people have stopped trusting altogether.”

But because technology is only as trustworthy as the leaders who deploy it, it can add a layer of distrust when employees already question transparency and fairness. When it makes the connection between performance, development, and reward transparent, it gives leaders the data they need to make people decisions from a place of shared clarity and accountability. The problem arises when that data is ignored or bypassed in favor of the informal shadow system input that is easier to act on but impossible to trace back to any documented feedback. At that point the technology becomes decoration, and the psychological contract breaks in the most avoidable way possible, not because the data was absent, but because the leaders chose not to use it. 

So before you deploy another AI tool, ask what it is making more transparent and who it is holding more accountable. If the data it generated is not changing how people decisions are made, the tool is not solving the problem but decorating it. 

Finding the ‘Human’ in Human-Centeredness

Human-centricity in today’s environment means designing performance systems that are honest about their limits, transparent in their decisions, and genuinely accountable to the people at the center. The psychological contract between organizations and their people is not broken beyond repair, but rebuilding it to meet today’s environment starts with the willingness to be honest, with every employee at every stage of their career, about what the system was built to deliver and what it was not. 

As Valentina reminds us, “we all bring our intersecting social identities, experiences, expectations, and fears into work every single day. The challenges we may be experiencing outside of work don’t stay at the door. They shape how we take feedback, how we interpret silences, how safe we feel to contribute and whether we believe the system will treat us fairly and with dignity. It’s the real context within which all performance happens.” A performance system that ignores that is not human-centric, it is human-shaped, and there’s a difference. One is designed around the complexity of real people navigating real uncertainty, and the other is designed around the idea of them. The work starts with knowing which system you have, and having the courage to close the gap.