Let's say we have two L4 devs at Google/some other top company. Person B, an externally hired L4, earns way more than person A(an existing L3 who was promoted). Is B expected to perform way better then A just because he/she earns more? I imagine a manager would compare salary with performance, but am not entirely sure.
Not at all. People are compared by levels and the people doing the evaluation don’t know someone’s position within the salary bands.
The reason I disagree is because when managers do perf evaluations and disclose your bonus + raise + stock refreshers they give numbers relative to your current TC. This means they know what you're currently getting paid.
Your manager knows it. The other people at calibration / stack ranking don’t