Hi!
If your understanding and interpretation on your company's performance policy is correct, then you seem to have the right to raise the question that you shared with us here. The best approach and action for you is to discuss and clarify the matter with your top management, as this is a matter of policy interpretation.
Offhand, I could see a problem with the way the policy (as you say it) must have been formulated. Indeed, I have seen some companies adopt similar policies, and I have always advised them on the disadvantages/ implications of providing fixed entitlements to performance ratings.
As we all know, the financial performance of business organizations fluctuate year on year. Some years are good, while some are bad----or even very bad. But regardless of its financial performance, the company must conduct the annual appraisal, and provide rewards to those that performed well. But then, on a year where a company's financial performance is poor, it may not be in a position to provide a big budget for the appraisal reward. That's why, compensation managers are supposed to be properly guided by the 3rd and 4th basic compensation principles of "affordability" and "sustainability". Indeed, fixing the entitlement increment of 15% to a GM's salary for a rating of 4 (year on year) will compromise top management's decision making prerogative and discretion----- aside from the fact that it has a tremendous impact on a company's salary structure and financial bottom line!
As such, policies should be properly formulated and should be based on lots of foresight, experience, and analysis of its possible future implications, esp when it comes to salaries and financial rewards. The compensation principles are excellent guides in formulating good policies for an organization.
Best regards
Ed Llarena, Jr.
Managing Partner
Emilla International Consulting Services