How Should We Handle Appraisals for New and Probationary Employees in a Growing Company?

Dear All, I work as an HR manager for a biotech company. Ours is a small organization with 50+ employees to its credit and is continuously growing. Our company was incorporated in 2007.

The company had a practice of giving increments to all employees during the middle of the year as well as upon completing 1 year of service. This was done as the organization was in the starting stage and wanted to retain the existing employees.

I'm a new joiner and I would like to standardize the procedure of increments. I have raised a proposal that increments will be given only during the annual performance appraisal and not after completing 1 year of service. However, I need some clarifications regarding the same.

1. Are all confirmed employees (after probation) eligible for the annual performance appraisal process or not?
2. Will employees after 1 year of service only be considered for the appraisal system?
3. If that's the case, then what if an employee joins in the middle of the month (as in our company, appraisals are calculated on a financial year from March - April), whether he/she is appraised or not?
4. What if an employee is on probation during the appraisal period?

Appreciating your valuable replies on the above-mentioned topic.

Thanks and Regards,
Durga.

1) All employees are eligible for the appraisal system. Contract employees may also be included.

2 & 3) You can have a cut-off period, i.e., appraisal may be considered for people who join before October, and the increment may be paid pro-rata.

4) Employees under probation are usually not considered. However, it depends on the company policy and can be done if they wish to encourage probationers.

Regards,
Pon

Eligibility for the Appraisal Process is set by the company. In normal instances, companies set the eligibility at a minimum of 1 year of service in the company as of the date of the appraisal. In your case, when the appraisal process is from April to March, completion of one year of service on or before 1st April can be applicable.

If the above one-year limit is not set, every confirmed employee can be included in the annual appraisal process. If an employee joins in the middle of a month or year (which is uncertain based on your question), the above explanations will address your query.

During probation, we assess the behavior and capabilities of employees in the new environment. This process itself serves as an appraisal, and most companies exclude probationary employees from the annual appraisal process.

I hope the information is clear.

Regards

Appreciate your reply. If an employee joins in May 2011, his one year of completion will be in May 2012. From your reply, I understand that since he won't complete one year by 1st April 2012, he is not eligible for the annual performance appraisal process if the company has set a one-year limit.

If the company hasn't set any specific time limit, then all employees confirmed before March can be included in the appraisal process. However, will those employees receive the same percentage of a hike as those who have already completed one year of service?

Kindly revert.

Regards,
Durga

Percentage of hike is based on the appraisal outcome, which in turn is based on various parameters set by the company in the process. An employee with one year of service will have higher deliverables/results compared to one with 6 months of service. If your annual appraisal system is crafted taking into account all these variables, the employee will get the desired hike matching his level of performance.

After understanding your company's profile, I suggest that you plan for two increment cycles in a year. For example, all joinings between January to June will be eligible for an increment in April next year, and all joinings between July to December will be eligible for increments in October next year. By doing this, you will bring everyone into one pipeline, and subsequent increment cycles will fall into place.

Regards,
Murali