How Do You Handle Discretionary Incentive Appraisals Without Clear Guidelines?

Dear HR Friends,

I am working in a multinational company, and every year we have two kinds of appraisals - one in April for salary and allowances and another one in December for the payment of incentives, which normally runs on a calendar year basis (because our budgets are on a calendar year basis). Currently, the appraisal for incentives is discretionary on the MD, and nothing in writing or any measurement is done.

If anyone has any suggestions on the same, please advise.

Regards,
Rohit Kapoor

See, there are 3 different practices across the industry:

1. Incentives against MD/Director's recommendations.
2. Incentives against systematic performance appraisal.
3. No incentives.

If your MD is interested, you can go for 2, but it's better to have a discussion with him before initiating anything further. Before meeting him, do some homework and prepare a presentation on "benefits to the organization if you go for performance appraisal for incentives + cost."