Is Appraisal Based On The Company's Growth

Dear Members,

I want to understand if yearly appraisals are mandatory if the employees are performing well. Is it also that they get a hike based on the company's growth? Recently, I had a discussion with my MD, and he mentioned that it might not be possible to give a hike when the company is not growing. But I am concerned about the employees. Wouldn't they be discouraged about this? Instead of putting in their efforts and performing well, their salary wouldn't be increased. To me, it is really depressing when an organization is not recognizing the talents and hard work of people.

Being an HR Executive, how do you think I should approach the management? Also, I need to understand if we have to do their analysis on the performance, what kind of parameters would be set for accounts people because their work is kind of tricky. Kindly suggest.

Hello,

I refer to the conditionality contained in your question itself!

How would one know whether the employees are doing well at all except by appraising their performance? The appraisal may be INFORMAL (which I would not advise professionally for the fear of subjectivity creeping in), but it has to be there to decide if and how the employees may be rewarded by way of increments or otherwise.

Increments are additional costs and technically at least, attract affordability questions from the top management. In principle, this is correct because these are committed costs. One has to be careful. The decision of the organization will depend upon how short-sighted or far-sighted its policies are. In unfavorable times, you need not be as generous as you would be in favorable times, but to simply ignore the question of granting increments is UNFAIR. Organizations must consider increments in such times as "investments" in employees and NOT as an expense. In fact, this should be the view always, but one must not go overboard in good times just as one need not be cruel about such issues.

I suppose you are right but are reacting emotionally rather than rationally!

For all recognitions also there are costs to be considered. One cannot simply wish them away. Admittedly, even if the employees have worked well and the adverse situation, supposedly is due to factors other than employee performance, the organization cannot add to the adversity of the situation by granting exorbitant increments. By default, the employee fate is linked to organizational well-being, and that fact cannot be ignored.

As a policy, you may like to consider "modest" increments to all and "Performance Reward" to a few. Performance rewards are linked to the performance of the employee, and the same person may not qualify each year. If he does, so far so good as you have received good performance anyway, and your committed costs are controlled.

Lastly, Annual Salary increases have two components (whether recognized as such or not), namely, the "compensation for rising cost of living" and "recognition of good performance." You may like to deal with your superiors on the basis of such arguments!

Is the response helpful?

Regards,
Samvedan
April 1, 2011

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Dear Members,

I want to understand if yearly appraisals are mandatory if the employees are performing well. Is it also that they get a hike based on the company's growth? Recently I had a discussion with my MD, and he mentioned that it might not be possible to give a hike when the company is not growing.

But I am concerned about the employees. Wouldn't they be discouraged about this? Instead of putting in their efforts and performing well, their salary wouldn't be increased. To me, it is really depressing when an organization is not recognizing the talents and hard work of people.

Being an HR Exe., how do you think I should approach the management? Also needed to understand if we have to do their analysis on performance, what kind of parameters would be set for accounts people because their work is kind of tricky.

Kindly suggest.

Dear Mr. Samvedan,

Thank you for your prompt suggestion.

I would like to add a few points that I missed in the earlier post. Performance Appraisal has never formally been in practice in our organization. Also, I would like to mention that I joined this organization in October 2010. Since then, I have observed that the attrition rate of this organization is very high.

One reason I could identify is that the rules and policies of the organization exist only on paper and are not practiced. Employees who work hard have never been recognized or awarded, possibly due to a lack of cooperation from the management.

Having just an incentive structure for salespeople and nothing for employees in other departments does not justify the smooth functioning of the company or facilitate growth.

During a meeting, I pointed out that one reason for the company's lack of growth is the inadequate training provided to new employees. Training should last at least three months to ensure employees are well-equipped to perform. However, this effort is not recognized by the management, which only involves the proprietor. This lack of recognition leads to a loss of interest among employees, resulting in high turnover.

I am seeking concrete ideas to help me convince the boss.

Kindly guide.

Hello,

I refer to the conditionality contained in your question itself!

How would one know whether the employees are performing well without appraising their performance? The appraisal may be informal (which I would not advise professionally due to the risk of subjectivity creeping in), but it has to be present to determine how employees may be rewarded, whether through increments or otherwise.

Increments incur additional costs and, technically, raise affordability questions from top management. This is a valid concern as increments are committed costs. Organizations need to be cautious and consider their short-term and long-term policies. In unfavorable times, generosity may need to be curtailed, but completely disregarding increments is unfair. Organizations should view increments as investments in employees, even during challenging times. Recognitions also come with costs that cannot be ignored. It's essential to strike a balance between rewarding good performance and managing costs effectively.

As a policy, you may consider modest increments for all employees and performance rewards for a select few. Performance rewards should be tied to individual performance and may not be given every year. Annual salary increases typically address rising costs of living and acknowledge good performance. Present your arguments to your superiors based on these principles.

I hope this response is helpful.

Regards,
Samvedan
April 1, 2011

Hello,

Now we are talking! As I see the situation now, it is clear that:

1. You are new to the organization - just about SIX months.
2. The organization culture (HR) does not seem to have adopted consciously any particular orientation except the primitive!!
3. You naturally have a strong desire to improve things around.

Just remember:

1. All of us as employees are, in the final analysis, helpless against bosses who have made up their minds and are not receptive to new suggestions UNLESS they are shown a direct link between HR approach and increased revenues/profits.
2. Even if you are right (and in this case you are!), it takes time to convince the bosses about the validity of a new (your) approach.
3. You are in for considerable professional work, in terms of systematizing the HR policies and procedures. Review policies/practices where they exist and recommend, if necessary new ones. Evolve policies/practices where there are none. Document all these.
4. Attrition is a serious matter. Apart from any other thing you may try, if your organization does not have an "Exit Interview System," bring in one and ensure that HR will conduct the same. Make a report to your boss periodically about what you have learned from these.
5. Develop "Employee Engagement Programs." Rationalize wage/salary/emolument structure and install a proactive approach. I suppose you need to revamp your Performance Appraisal System too.
6. Conceptualize on establishing an "inclusive, supportive work atmosphere." Under the pressure of work, targets, and deadlines, do not let the human element suffer adversely. Ensure that each person is assured human dignity.

Look, there are plenty of things that we can establish, but our efforts are limited by the sanction of the top management. However, we must keep trying. One of our major obstacles is to convince the top management of the validity, relevance, and the dire need to adopt a dynamic, proactive HR orientation. In this area, TRAINING of decision-makers, availability of a local but good HR consultant who, being outside the organizational hierarchy, is able to speak plain truth and convince the management relying on his own previous experience from other organizations!

You could perhaps look one more (in addition to all above) intervention. This is called an "Organizational Climate Survey." Conducted by an external agency, guaranteeing anonymity to respondents, you would generate valuable insights into the REALITY of the organizational situation.

I trust the above will be "food for thought" and would spur appropriate actions. If you need more interaction, do not hesitate to raise topics again!

Cheer up, you have a lot of hard work ahead!!

Regards
Samvedan
April 5, 2011

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Dear Mr. Samvedan,

Thanks for your prompt suggestion. I would like to add a few points that I missed in the earlier post. Performance Appraisal has never formally been in practice in our organization. Also, I would like to mention that I have joined this organization in Oct' 2010. Since then, what I have found is the attrition rate of this organization is very high. One of the reasons that I could figure out is that the rules and policies of the organization are just on paper. They are not practiced. Also, people who work hard have not been awarded ever, and in this case, I assume it's because of the management not cooperating.

Just an incentive structure for salespeople and nothing at all for the people in other departments don't justify the smooth functioning of the company and also "Growth" in that case.

During the meeting, I pointed out one of the reasons for the company not growing was that when people join the organization, they need to be trained well, at least for 3 months, and then they get equipped well so that they can start performing. Once they do, it has to be recognized by the Management, whereas in this case, it's just the Proprietor. Because it has not been recognized in the company, people start losing interest and quit.

I need some concrete ideas that can help me convince The BOSS.

Kindly guide

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Dear Mr. Samvedan,

It has been more than a month since we discussed and now, while I was trying to work on a different situation to bring in results, I failed. Interaction with the only person, who I can refer to as the management or an entrepreneur, has brought in no fruits to the amount of things that were discussed. I would like to mention it in points.

1) The owner, "X," lacks leadership, and his way of working is solely focused on earning money or profits. Mr. X doesn't realize how important employees are and also that he cannot do it unless the employees are motivated and taken care of.

So there have been big talks all the time, saying I am open to ideas, but when it comes to implementing and taking a step further, it all comes back to zero. Mr. X says you analyze the problem and take a step, I will be on for it, but why doesn't it come from him that things need to change, and he would be losing if not others?

2) I might have mentioned earlier that people leave very quickly, whereas there have been cases where Mr. X has fired people also.

First of all, all the old employees are leaving, and the only reason is their issues in terms of salary or job responsibility have not been taken care of. Why doesn't he increase their salary?

He has involved each and everyone in everything, because of the insufficiency in manpower, whereas the new people who are being interviewed hardly join because he asks all of them to join at the same package at what they are currently working. In this case, how can I solve the problem being responsible for recruitments? How do I justify people when they are interviewed, because I know that it's not justified.

3) Other employees aren't happy because they have been involved and responsible for sales, operation, purchase, and what not. Now when they approach Mr. X with their problem, the blame is on me because I am responsible for recruitments. How can I work and recruit in this way?

4) Being hired in a generalist profile, so far, all I have been doing is recruitments and recruitments. Whoever joins leaves in 3-4 months, and we are back to zero. I haven't been able to justify the role, and I feel I am stuck. Do you think my efforts are going in vain?

I am seriously thinking of changing, but I don't want to keep hopping my job, and this might not create a good impression. Kindly suggest because I feel strongly that this is not the right place for me. A single man show, who is responsible for the entire business and employee, when do pay heed to such issues due to his inabilities might not be successful forever. Guidance is what I seek!!

Regards, samvedan April 5, 2011

Hello, Kindly see my in-line comments/observations/suggestions (in blue).

Regards,
Samvedan
May 11, 2011

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Dear Mr. Samvedan,

Thanks for your suggestion and continuous follow-up. I am so grateful to you. I have received an offer from an MNC, but it's on a contractual basis, not under the payroll of the MNC, but the staffing company for a year. After a year, it can be extended or could also be under the MNC's payroll.

What should I do? I am apprehensive because of the experiences that I have had in the past and with the current company. What do you suggest?

Thank You

Regards,
samvedan
May 11, 2011

Hello,

I thought I had almost lost you!!

While changing present employment is a certainty, we cannot, however, change in a given timeframe or accept any first opportunity that comes our way. My first response is NO. I have learned that a bird in hand is worth two in bushes. There are NO guarantees on what will happen after one year. The concerned MNC will not give any guarantee, and the staffing company has no authority to commit the MNC. Where does that leave us?

I think you should speak your mind to both the staffing company and, if possible, to the MNC itself. If the present agony has to continue for some more time, so be it, but it is not right to choose between, "frying pan to fire" or between the "devil and the deep blue sea"! It is not worth it anyway. Also, a known devil is any day better than an unknown friend (and you don't know if this new employer proves to be a "friend" at all!)

My advice, therefore, is to WAIT. Change for an acceptable company even if you have to compromise on compensation (within reason, of course) if you indeed get a good employer. Reduction in compensation may be a cost, and we must accept it as such!

Finally, HR is a prime function and cannot be outsourced. I am convinced of this, even if my opinion sounds conservative and old-gen! A child can be looked after best by a biological mother and not by a surrogate mother! Honourable exceptions apart, I am simply stating a common observation.

I would be grateful for your response.

Regards,

Samvedan

May 23, 2011

[QUOTE=samvedan;1562899]

Hello,

I thought I had almost lost you!!

While changing present employment is a certainty, we cannot, however, change in a given timeframe or accept any first opportunity that comes our way. My first response is NO. I have learned that a bird in hand is worth two in the bush. There are NO guarantees on what will happen after one year. The concerned MNC will not give any guarantee, and the staffing company has no authority to commit the MNC. Where does that leave us? I think you should speak your mind to both the staffing company and, if possible, to the MNC itself. If the present agony has to continue for some more time, so be it, but it is not right to choose between the "frying pan to fire" or between the "devil and deep blue sea"! It is not worth it anyway. Also, a known devil is any day better than an unknown friend (and you don't know if this new employer proves to be a "friend" at all!).

My advice, therefore, is to WAIT. Change for an acceptable company even if you have to compromise on compensation (within reason, of course) if you indeed get a good employer. Reduction in compensation may be a cost, and we must accept it as such!

Finally, HR is a prime function and cannot be outsourced. I am convinced of this, even if my opinion sounds conservative and old-gen! A child can be looked after best by a biological mother and not by a surrogate mother! Honourable exceptions apart, I am simply stating a common observation.

I would be grateful for your response.

Regards,

samvedan

May 23, 2011

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Dear Samvedan,

It is so kind of you to help me in my decision-making process. Someone senior and experienced mentoring people like us in the early stage of career building helps a lot. Thanks a lot for your help.

I would love to share the MNC's and the 3rd party name, but I am not sure if I am allowed to share it here or not. Anyway, I have also not been very sure about this proposal, though the working hours from 9.00-5.00 and Mon to Sat, which was the most attractive offer for me but not at the cost of compromising with my career. Moreover, they aren't paying very well. Just average..20% hike they say, which makes just 2k more.

I have been getting calls from other companies also, but I think they aren't organizations with strong values and clear objectives.

This stage of finding out the right company is so difficult. Any suggestions or tips on how I can make the process simpler?

I really respect the fact of you taking out time for me amidst this difficult situation.

So, I wouldn't take this offer. Decided.

Thanks a lot, Sir :)

Hello,

Congratulations!

Making up your mind on such tempting but critical issues is NOT easy, and I speak from personal experience! It takes a lot of courage, and you have demonstrated that you are courageous!

One thing, never regret a decision even if it goes wrong. There are always more opportunities to capitalize on, and if we keep learning from mistakes, we are honing skills to eliminate mistakes.

With active patience, you will be in for better opportunities, I feel sure of!

Finally, I am doing no favor to you. I could help and inferred that you need someone to brainstorm with! I am GLAD to be of assistance!

In the future also, do not hesitate to sound off ideas or throw questions at me!

Cheer up. Best of luck.

Regards,
Samvedan
May 24, 2011

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Hello,

This is what I had advised in another thread. In case you have not read it, I am quoting:

"My advice is to look for an organization where culturally HR is an established and accepted function. Then sharpen your focus to seek a position to work under an experienced, knowledgeable superior who will take you under his wings, as it were, and it is in this manner you will have a lot of opportunities to learn the trade in a real sense. A few years like this, and you will be ready to fly solo in this profession.

To achieve this, do not worry too much if you have to take some beating on the remuneration aspect (if you have to but within reason). I am saying this as I see your keenness in being a good HR. But for heaven's sake, do NOT be tempted with opportunities as the head of the function, even in a small firm. It seems you are not ready to play the top role as yet!"

Now, how to look for such an organization is the question!

Remember, when you are being interviewed, you should also be interviewing the interviewer without seeming to be doing so! During the interview, find out more about the company culture, its HR practices, its history in interpersonal relationships, the extent of free communication possibilities, and the like.

While you could get some information from the company's website, it would be more beneficial to make innocent, casual inquiries in the profession with seniors, placement agencies, and the best would be the professional association. All these you have to handle with extreme care and skill, but it can be done.

And finally, you can of course send a private message to professionals you would trust or take up the matter on the message board, if you would like!

I suppose this approach will be helpful!

Cheer up, every day is a new day, and it brings with it new opportunities!!

Regards,

Samvedan

June 4, 2011

Hi,

Thank you for keeping in mind my case. I really appreciate it. Recently, I had been interviewed by someone who was hiring for an HR Executive. Keeping in mind that the organization was in the same industry, I went for the interview. I asked the interviewer, the HR Manager, what is the vision and mission of the company? The HR person thought perhaps I might be speaking bookish, but when clarified, I told him that I wanted to know what does the organization want to be, what core values it has, and how is it different from other companies. His reply was that the company wants to earn more and more profits. I was shocked to hear that, but I knew it was something of the same kind where I am stuck, no leadership roles and no scope of growth. Someone had said it so true, you learn through your experiences.

Kindly let me know if you come across any job openings in Delhi/NCR. Would be grateful.

Hello,

I was undecided whether to respond to your latest post or to let it go (for the reason that you may feel I am nitpicking!). However, better sense prevailed, prompting me to respond.

This is about your experience of the recent interview. I think this interview has exposed a harsh reality of the HR function to you. Painful as it may sound, the truth is that many of us simply use good words but are conceptually weak. When it comes to implementation, we are even more lacking.

As HR professionals, we demand significant involvement in all organizational matters but often forget that involvement is not granted by demanding it but by proving it, which requires time and performance.

In the majority of cases, we have to face unacceptable realities and through skillful conduct and performance, transform them into the realities we dream of or have learned about in books and institutions.

If you actually used the words mentioned during the interview in your post, I am afraid the interview may have become complex, realized his own inadequacy, and taken a wrong turn. If an interviewer feels insecure, they are unlikely to select candidates - another reality of our professional life. Few possess the art of interviewing, and even fewer have the courage to select a candidate who appears better equipped than themselves professionally. For these reasons, candidates must be selective about the words they use, tactful enough not to remind the interviewer of their own limitations, yet confident enough to win the interview and get selected. After entering the organization, you encounter a more diverse set of people, many of whom you can relate to. This is where and how one may initiate a process of change.

I apologize for the sermonizing, but I have a lot to say on these subjects, having fully experienced professional life.

As always, you are free to interact.

Finally, I wish I could help secure employment for you in your area, but I operate out of Pune, Maharashtra, and do not have consultancy work up north. We can continue to interact on the message board if you find it worthwhile.

Regards,
Samvedan
June 8, 2011

Hi,

Thank you for considering my situation. I really appreciate it. Recently, I was interviewed for an HR Executive position by someone hiring in the same industry as the organization. I asked the HR Manager about the company's vision and mission. The HR person thought I might be speaking in theoretical terms, but when I clarified, I explained that I wanted to understand what the organization aspired to be, its core values, and what set it apart from other companies. His response was that the company aimed to maximize profits. I was shocked to hear that, realizing it was a similar situation where I felt stuck with no leadership roles or growth opportunities.

It's true that you learn through experiences. Please let me know if you come across any job openings in Delhi/NCR. I would be grateful.

[QUOTE=Paul Preeti;1576972]

Kind regards,
Paul Preeti