Dinesh Divekar
Business Mentor, Consultant And Trainer
+2 Others

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Dear all,

I am working in an IT company with around 70 employees for 1.5 years now.

I need some help and advice on effective appraisal system.
Please find below the scenario of my company:

We used to have yearly appraisal only. (Self rating, Supervisor Rating, PM's Rating and then final Review committee rating). This would evaluate their performance throughout the year and give them salary review too.

After I joined, I have developed a system for monthly evaluation. Developers/team are divided into groups and PM's are evaluation them monthly. 10 Competencies are defined (same for all) and ratings are done on those.
0-1.4: Poor- Does not meet expectation PM's and HR to sit for meeting and discuss on action plan for improvement
1.5-2.4: Average- Meets expectation PM's and HR to sit for meeting and discuss on improving performance further
2.5-3.0: Excellent-Exceeds performances Appreciate and help in developing further skills/promotion

But what I have seen is, only competency based evaluation is not as effective as expected.
Then, I suggested on defining KRA's/or Goal setting(SMART) for the team and discussed the same with the PM's. but it seems that we are lacking the ability to define those specifically for each members. I am from non-technical background (MBA-HR) and it seems PM's are also struggling in offering any concrete set of KRA's .

I would be much delighted if you respected seniors help me on effective ways to set goals for the members so that this would help them progress in their career(continuous learning) as well as motivate them further.


From Nepal, Kathmandu
Dear Santoshi,

It appears that you do not have proper Policy on Performance Appraisal (PA) well in place. When employees join the company, during induction itself they should be told that when their appraisal will take place. The salient features of policy could be as below:

a) Appraisal may be done quarterly. Appraisal cycle of one year is too long. Nevertheless, salary hike may be done a son 1st April or 1st Oct.

b) Employees who join in between, when their first PA will take that can be decided in the policy.

c) % of salary hike should be linked to the score of PA.

The important point is PA concentrates only on the individual performance. We need to go beyond and measure the business performance. For this you need to have well-designed policy on Performance Management System (PMS). There was query in this forum on PMS. I have given reply to this post. Click the following link to refer the reply:


Though the heading of the heading is for IT companies, the reply is applicable to all the type of industries. In the above link, you will find several other links. Go through all the links patiently. It will improve your awareness of the subject.

Sample KPI and KRA Manual: - If you wish to know the structure of format of the KPI and KRA Manual, then you may click the following link. The Excel Workbook has multiple sheets. Each sheet has KRAs for various functions. Though these are not related to your industry, overall these will give you idea the format, structure and design of the manual.


For further doubts, you may call me on my mobile number.


Dinesh Divekar

From India, Bangalore
Respected Dinesh Sir, Thank you for you response. I will definitely go through the links and hopefully learn from it. I will be getting in touch with you if I am stuck in between. Regards, Santoshi
From Nepal, Kathmandu
Dear Santoshi,
We are Sarda Solutions and Technologies Pvt Limited, developed our PMS system for 100 to 3000 and above employees, Kaushal software, kindly look into our website www.sstpl.co.in and look into Kaushal PMS software demo.

From India, Raipur
Also, I would be much delighted to know of the existing Salary review practices in the It company (size similar to my company).
Yearly reviews are done in % in some companies. What is the acceptable range increment provided to the developers based upon their evaluation ratings?

From Nepal, Kathmandu
Does anyone have a better idea or suggestion for an Appraisal system . I have been using the 360 degree appraisal process in my current organization and that works best. However, I would definitely like to explore something new, that is interesting and involves fun with seriousness.
Is there anything apart from the traditional method of appraisals that anyone has been using.
Kindly suggest

From India, Mumbai
Its pretty normal if Managers are also struggling with giving Performance Objectives for their employees. This makes your task cut out.
Now not only you have to implement a system of Performance Management, but have to get a culture of performance reviews in your organization.
To begin with, ask your Founders to define broader objectives, ask PMs to set expectations to those objectives and break it one by one.
A lot of GroSum (Performance Management System) clients have done that and has helped them.
If you still looking at a detailed methodology, you can look at this document : https://grosum.com/blog/15_Best_Ques...eviews_Part_1/
Your rating scales are decent, you can look to make the rating scales subjective to employees and then connect them to numbers later.
Let us know your take on this and how it went.

From India, Howrah
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