How To Start Increment System Based On Efficiency - XLS Download

Dear all,
As HR Incharge of my company I want to start new increment system which will totally depends on efficiency of employee. Presenty we are giving same percentage of incrementto all.But I think if it depends on efficiency it will perform as a tool of motivation & also will be beneficial for company growth.So, I want suggession from you for the implementation of the idea.

Hi ,
It will be better that you think of starting Performance management system based on effectiveness of an individual than efficiency.

Fist of all list out KRA for all positions and also comapre with standards in terms of performance measured. You can rank or rate on the basis of scores and can take promptly decision abt increments. It also depends which type of apprisal system you want to use.
Regards
P K Mishra

Merit allocations can involve more than raises—particularly when budgets are tight.
When rewarding your employees for their hard work, consider offering stock options or
one-time financial bonuses instead of simply increasing base salaries. And remember: money is
not the only motivator for engaging and retaining your workforce. Look for other development
opportunities, such as training or an increase in responsibilities. These alternatives reflect your
faith in key employees while defining clear conduits for career growth.

First of all you need to study which industry you are catering which are the important departments within your organisation, which type of employment your organisation has engaged i.e. the ratio of blue colar & white colar. The most important is your management budget and what percentage of profits will be shared to employees.
Warm Regards,
Nikhil

Hello fren,
For this you need to have updated JD of all employees. Employees can divide the contents of JD into 3-5 performance targets in consultation with the supervisor. Besides this you can have separate section for behavioural attributes to rate on. Certain weightage needs to be given to performance target and rest to the behavioural attributes. The performance targets can be reveiwed twice a year to see if it is in line. You need to have predetermined range of scores and which scores falls into what category of increment. for eg, 0-10 =2% increment, 10-20 = 4% etc. These are few tips to start with. Hope it helps

Dear all,
I am producing a format for your observation any modifications if any, you may improve the format.

Just a single factor 'efficiency' cannot be a base to decide increments unless you cover all the related things under this single factor. If you cover the overall performance (KPIs) of employees under 'efficiency' you may develop some good system. As suggested by some members above, you need to consider many things and money is not only the motivator towards efficiency.
Elearner