Why Can't an Employee in Their Notice Period Be Part of This Year's Appraisal?

An employee in our organization resigned on 3rd April 2014 and is serving a notice period of one month. As far as I know, this employee will not be eligible for appraisals as he has already resigned. However, the employee has a question for me: why shouldn't he be part of this year's appraisal when he has completed a year of service? Can anyone help me with this?

The issue is not serious, yet I need clarification for my understanding and to explain it to the employee.

Regards,
Sir HR

This depends on the policy of your company. Appraisal is for the motivation and retention of the employee, and if the employee is already on a notice period, then they cannot expect any such benefit.

Thank you for the response, MSR. We are a small organization, and I checked through our policy manual and the employment letter. There is no such clause related to the appraisal policy. However, the employee has genuine personal reasons to quit for further studies. How should I handle this matter in such a situation?

Regards

Impact of Resignation on Appraisals

If an employee has a genuine reason, it still may not have any effect because the employee will leave the company after the notice period.

For future reference, you can include all these terms and conditions in the appointment letter.

1. If the employee's resignation is prior to the scheduled date for performance appraisal and the resignation has been accepted by the concerned authority, he/she would not be eligible to be part of the organization’s PMS.

2. If the employee's resignation is dated post the scheduled date for performance appraisal, and if the terms and conditions mentioned in the company policy permit, only a performance review can be done, and a PMS rating can be shared with the resigned employee. This may help in the self-evaluation of his/her performance over the last year in the organization.

Though being in the notice period, he/she would not be eligible for any salary increments.

As the financial year ends on March 31st, 2014, the appraisal result of an employee should take effect in their role and salary from April 1st, 2014, onwards. If an employee submits their resignation just two days after April 1st, they are requesting an appraisal, which should be duly considered.

However, if your company conducts appraisals starting on April 1st and concludes them after April 3rd, then the employer is not obligated to consider the employee for the appraisal, as the resignation was submitted before the appraisal process concluded.

Thank you.

I am not approaching the issue from a technical point of policy and terms but from a practical point of spirit and objective of PMS. Here are my views:

1. You are already convinced that the employee is quitting for personal reasons.

2. You appraise an employee for his performance for the preceding year.

3. The employee, though resigned on 3rd April 2014, continued to work for one full month during the notice period, i.e., till the end of April 14 and thus completes the appraisal period technically.

4. You reward an employee after appraisal for the performance rendered by him during the past year which he has rendered but not for serving in the future. It means the rewards flow from PMS are for performance alone but not to be mistaken as a loyalty bonus.

5. Your policy is silent on the issue raised by you and thus does not prohibit you from granting him what is due under the PMS, taking a practical view.

6. It enhances your company's image and continues the relationship with him even after he leaves, which helps you rehire him again in the future since many ex-employees send feelers of rejoining the company.

Regards,
B. Saikumar
In-house HR & IR Advisor

I strongly second Mr. Saikumar. Apart from all the above views, what is the harm if the employee wants to be appraised? This can help the employer to rehire the candidate once he/she completes the studies.

I too support the statement and opinion of Mr. Saikumar. In fact, this may be the attitude of small companies that always look into the cost-benefit aspect of everything. However, all big and reputable companies do not exclude an employee from the appraisal process just because they have submitted a resignation.

In fact, I know of companies where employees, even after leaving the organization, have been paid arrears based on their performance appraisal from the previous year. There is no connection between these two matters, and only a hyperactive person (without any bona fide or benevolent reasons) would combine these two separate HR processes.

Performance Appraisal

Performance appraisal, as the term indicates, is an evaluation of performance. Of course, it is logical that no benefits will accrue after the employee has left the organization. But to deny an employee the chance to attend the appraisal process is a form of persecution.

Moreover, as rightly pointed out by Mr. Saikumar: What if the employee wants to rejoin after a few months? A positive appraisal report may facilitate an easy reentry and better management of the compensation package offered. Also, the employee's request or contention is correct and valid.

Imagine the impression he will carry. In good companies, ex-employees are considered ambassadors of their former companies. What will be the impression on existing employees when they learn how their management treats employees who might be excellent performers but have submitted resignations?

Only an impoverished management and negative HR would prevent such goodwill-generating activities and employee motivation without spending a penny. This is what distinguishes resourceful and good companies from small and mediocre ones.

Warm regards.

I echo our leaders. The employee worked throughout the year. Now, what stops you from appraising his last year's performance? Him leaving the organization is a different process and a choice of his own. Why should that affect the system? Please appraise him and treat it just as you would have treated any other employee. His actions do not direct the system; the process needs to remain agile.

Wish you all the best!

You can conduct a formal appraisal without any increments. Additionally, if the salary structure includes a year-end performance-linked bonus, it can be disbursed based on the individual's performance. This approach would ensure fairness for the employee.

Regards,
Ayush Pal

Salary Increments and Bonuses for Exiting Employees

We must remember that salary increments are given to retain an employee so that they can manage the increased cost of living while continuing to work with you. Similarly, a bonus is given for past performance. Please try to convince your management that you want to pay both an increment and a bonus for an exiting employee, and they will give you the above logic.

The concept of working with the employer's brand image in mind exists with very few organizations. Management will tell you that the money can be used in hiring and training a replacement. In this particular case, the personal reason is further studies—which is a planned activity. One doesn't decide to pursue further studies overnight. Once a decision is made, research into proper institutes, courses, costs, etc., follows, after which a final decision is made.

So, I agree with Ayush—conduct his appraisal, calculate, and release his bonus. It is fair to both the employer and employee, which is the line HR should always walk.

Thank you for all your valuable feedback. To clarify, I had included the employee for the bonus pay but not for the increment. However, after reviewing the responses, I have included her in the appraisal process this year. The increment and bonus will be paid as arrears next month. It is always beneficial to treat employees this way when they leave the organization.

Thanks for your guidance.