How Can I Improve Our New Performance Appraisal System and Salary Structure? Seeking Advice!

Dear All,

I am working in Fabrication and Erection company since 3 years.

For this year i had taken initiative to start Performance Appraisals.

Previously it was like i have make list of the staff and two of the directors were use to increase the staff salary by 1000/2000/5000/ etc and promotions also.

Now i started PMS by using rating system.

I made the site wise list and i had sent to all site in charges to rate them.

after receiving from site in charge i had forwarded to reviewing officer then i made one consolidated list and i will be giving it to management committee.

Management committee will be doing final ratings.

i fixed up the % of the increment like

0 t0 1 0%
2 t0 3 5%
4 to 5 10%
5 to 6 15 %
6 to 7 20 %
8 to 9 30 %
10 40%

1. i explained you all how i did PMS but would like to know from all of you is this will work?

2. we work on Gross Salary we don't have CTC system. i would like to organize our compensation.

our salary structure is based on gross salary like
e.g 20000/- gross salary then

Basic=35% of GS
Company Allowance=25% of GS
Edu Allow= 5% of GS
Conveyance Allow= 10% of GS
HRA = 25% of GS

want to ask is this structure will help for higher salary for Tax?

3. now management had decided to give 12 k to the BE fresher, previously we used to give 8k. now my question if we give 12k to fresher then our engs those who are working with 1 yrs exp they are having 10k salary then how to fill this gap?

please guide me

Dear Khusro Patel,

Firstly, it’s good to note that you have started Performance Appraisals in your company, but it seems there is confusion between Performance Appraisal and Performance Management System. The former is a part of the latter.

Performance Management System (PMS) includes identifying Key Performance Indicators (KPIs) for your business, setting Key Result Areas (KRAs) for every department/position, and then measuring the performance. Giving salary increments is the final part of it.

There was an extensive discussion on PMS earlier. Please click the following link and read all the posts by various members (including my three posts): https://www.citehr.com/259167-pms-workers.html

To understand the practices of PMS, click the following link: https://www.citehr.com/278588-pms-pr...ml#post1255255

Thanks,

Dinesh V Divekar

Dear Seniors,
It is almost 15 days no reply from any senior. no one can reply or help me.

I wonder why you chose a steep curve! What does a person that gets a rating of between 7 and 8 get? It is always a dilemma when existing staff get less than new starters. It happens all the time. I am no HR expert. Have a lovely day. Simhan A retired academic in the UK.