For Employee completing One year in the month of Annual Appraisal, you have to take feedback from their respective managers about their performance and also get increment rating. Increment rating can be taken on a scale of 1 to 5 (1 being the lowest and 5 being the highest), once you get the increment ratings, Management can decide upon % increment for each rating. Ideally it is as follows:
1 - No hike
2 - 3 - 5 % hike
3 - 10% hike
4 - 12 - 13 % hike
5 - 15 to 18 % hike.
You can change the above figures as per your company's profit for last year.
Now, employee who have not completed 1 year at the time of Appraisal, you can still take the ratings as said above and pay them pro rated basis as per ratings received.
Let me know if you still need further clarification or any help. Thanks....