Starting a New Job: How Does Your Company Handle Performance Linked Pay and Appraisals?

Hi there!

I have started my career with a new company and I have certain queries regarding the performance appraisal system.

1. How appropriate is it to communicate PLP (Performance Linked Pay) during the interview? If there is a minimum percentage increase in CTC, should that be a part of CTC and communicated at the beginning?

2. After rating the individual on a scale, the total score defines the percentage increase in salary. Could you provide insights into how your company defines this and the salary increase for employees who outperform?

3. Does your company have a threshold limit in place when designing the performance appraisal process?

Thank you.

Generally, in most companies, PLP is included in the Annual CTC figure in the following manner:

a) In companies where the PLP is linked to a graded system of A, B, and C gradings, the PLP amount considered for CTC would generally be the mid-point - that is, the PLP amount of B grade.

b) By indicating the maximum PLP possible (A grading) in the CTC calculation, the company may be implying the maximum amount possible for that particular position/candidate. However, this gives a wrong impression since it is generally a 50-50 chance that the candidate always ends up with the maximum rating.

c) Hence, indicating the mid-point of the PLP would be an ideal way to compute CTC for a position.

Regards,
P. Arun Kumar