Ashwini Dharme

Asst HR Manager
Hello all HR Team Members,
I am Ashwini, Asst HR Manager of an IT Company. Management of the company is thinking of doing increment on the
Financial Year End. What will be the criteria/parameters for the increment of the employees? What will be the parameters in
case non-increment?
Also suggest me some performance appraisal criteria, that I can add to the Monthly Performance Appraisal.
Thanks to all in advance....!!!

From India, Nagpur

Director of Company
For the purpose of planning annual increments in a mid/ small size IT company, the following factors could be considered:

1. Giving a minimum of 3 - 5 % increase in CTC to all employees, to compensate for the increase in cost of living.

2. Some increase based on Performance Rating (evaluate on a scale as per your current PMS). Low performers may not be considered for performance linked increase. This sends a clear message that the organization is performance driven. Be sure that the exit of these employees should be acceptable to their Heads of departments.

3. Some compensation based on market salaries vis-a-vis the current CTC of employees. This is to remove existing aberrations, if any, especially for those employees who are considered valuable and need to be retained. Please note that this clause should be selectively applied.

4. May be 1% extra incentive for long & dedicated service. This is to encourage those who have served the company for 5 years or more. Some organizations call this as a loyalty component of the increment.

Please note that after estimating the total cash value of employee increments, based on the above factors, these have to be further regulated by the salary budgets for the next financial year. Nothing should be announced till signed off by the management.

If at any stage, you decide to introduce automation in your environment, search for 'EmpXtrack' on the web which has helped many organizations to introduce objectivity in their increment planning system based on performance evaluation. Need based solutions are provided based on best practices in the industry.

From India, Delhi
kanika kapoor

Soft and Behavioural Skills Trainer
Hi Ashwini,
Next year on wards, please have well defined KRA's for all designations/departments so that the performance could be quantified easily and employees are satisfied with the same.
For this year you can rate employees on some basic responsibility and behv (like target vs achievement, deadlines, Punctuality etc)
Hope it helps!

From India, Delhi
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