As per your post,firstly KRA of employee should be SMART.
A Smart Goal (KRA)
1.Specific : Clearly stated what to do and how to do?
2.Measurable: States how the performance will be measured.
3.Agreed: Goal targets are agreed between the manager and employee.
4.Realistic: Is relevant to the employees job role and to the organization.
5.Time Bounded: States a time frame.
Enclsoed KRA 1st sheet for the more clearity.
Based on the information shared, I find that you have adopted a decently professional approach.
However since you are into KPA based Performance Appraisal System I suggest you look at following suggestions.
1) Are detailed "job profiles" for each job in place?
2) Normally we ensure the each KPA is aided by "targets", "performance indicators" and then "weightages".
3) I suppose KRAs, Targets and the Performance Indicators are decided jointly by the Appraiser and the Appraisee.
4) I also suppose "measurability" of performance is a settled issue in your system.
5) How about "identification of training needs"?
6) And one off excellent performance on a special assignment?
This is just by way suggestions. Need clarification. do not hesitate to take contact.
January 16, 2015
I understand from your question that you are seeking guidance on distribution of increments or rewards and not the overall performance management process.
Your approach is good to arrive at the performance indicators.
In my experience, increments are a function of budget which vary from year to year and depends on number of people who are rated in each category. In all organizations, the increment is communicated separately so that affordability can be determined by CEO, CFO and HR head. Once it is finalized then you can decide to publish gradewise, performance indicatorwise increment matrix to all or just to managers. Typically, you will have to create a grid and apply to salaries of all to compute total impact of increment for the whole company. So delink the increment with performance indicator