Navigating Appraisal Policies: How Should Companies Handle Yearly Reviews and Mid-Year Joinees?

Understanding Appraisal Policies

What is an appraisal policy? Is it compulsory to give an appraisal after one year? What should be the percentage? If a company gives appraisals after one year, it becomes a headache for the company when there are 2-3 staff increments every one or two months. Would it be better to conduct everyone's appraisals at one time in April? How should the company manage individuals who join in between any month?

I would appreciate it if experts could shed light on the above questions in detail. Thank you in advance!

Regards,
Jamith

You can establish a cut-off period, for example, 8 months, so that any employee who joins before July 31st can be considered for an appraisal, while those joining after July 31st would be excluded from the appraisal for that year. This information should be clearly communicated in the policy/employee handbook and provided to employees upon joining.

We will have to do appraisals every six months, such as in April and September. They will come into effect every 8 months or once a year. For example, anyone joining from January to March will be eligible in September, and those joining between April and September will be eligible in April.

You raised the right point, "If the company gives appraisals after 1 year, then it is a headache for the company to have 2-3 staff increments every one or two months." Some companies opt for a bi-annual appraisal method to address this issue. However, I would recommend not doing that and instead fixing the appraisal period in your company.

Choosing the Right Calendar System

What calendar system does your company follow, the Fiscal year or Calendar year? Using December for the Calendar year and February (March could be cumbersome due to year-end processes and TDS settlements) for the Fiscal year would be more suitable. It's advisable to align the appraisal and budgeting processes in the same period to avoid discrepancies.

Eligibility and Prorated Appraisals

Establish a threshold for new hires in your organization, making employees eligible for the Performance & Compensation appraisal program after completing their probation and serving six to eight months. Consider prorated appraisals for employees who have not completed one year of service in your organization. This approach can help resolve the issue efficiently.

Please let me know if you need any further clarification or assistance.

Best regards,