Performance Appraisal Plans For A Startup With 10 People

Hi,

I am working with a startup firm and looking for a performance appraisal plan. March 2015 will be the first cycle for our employees. Currently, based on employees' performance, the company has provided a raise in their salary individually within 4 months of their joining. In such a case, a few employees are at a higher pay than the others. How can we plan an appraisal cycle in such a scenario?

Also, the management is suggesting having an annual appraisal individually following the employees' date of joining. For example, if an employee joined in August, the appraisal will be in August of the following year for that employee. Similarly, if they joined in November, the appraisal will be in November.

Is this approach correct? Will we keep having appraisal cycles for employees individually throughout the year if we do it this way?

Thank you.

Dear Sowmya,

It appears that you do not have a proper policy on Performance Appraisal (PA) well in place. When employees join the company, during induction itself, they should be told when their appraisal will take place. The salient features of the policy could be as below:

a) Appraisal may be done quarterly. An appraisal cycle of one year is too long. Nevertheless, a salary hike may be done on 1st April or 1st Oct.

b) For employees who join in between, their first PA date can be decided in the policy.

c) The percentage of salary hike should be linked to the score of the PA.

The important point is that PA concentrates only on individual performance. We need to go beyond and measure the business performance. For this, you need to have a well-designed policy on Performance Management System (PMS). There was a query in this forum on PMS to which I have replied. Click the following link to refer to the reply:

https://www.citehr.com/511936-pms-company.html

For further doubts, you may call me on my mobile number.

Thanks,

Dinesh V Divekar

Dear friend,

Performance appraisal is the most important aspect in an organization to assess an employee. Ninety days are not enough for an employee to showcase their full potential. Therefore, a thorough performance appraisal should be conducted before the commencement of any financial year or the increment date of the next annual enhancement. For instance, if an employee joins in any month, such as January, it may not be appropriate to provide an increment within a year; however, in sales roles where performance is directly tied to extra sales and commissions, adjustments may be necessary before the year-end. It is advisable to conduct individual performance appraisals for each employee, as mass production may not exhibit variation, unlike other categories where differences are more noticeable.

There are various types/methods of performance appraisal including Traditional/Modern, Behaviour rating scale, Assessment Centre, MBO, Psychological appraisal, 360-degree appraisal, Graphic method, Group appraisal, Confidential Report (Annual Confidential Report), Ranking methods, and more. Appraisal methods may vary based on job designations. The questionnaire method can provide a clear picture of the employee's performance.

Key factors in performance appraisal include the ability to plan, delegate, control, and coordinate, decision-making skills, job knowledge, adherence to quality policy, leadership qualities, cost consciousness, effective written and oral communication, resourcefulness for the organization, cooperation, interpersonal relationships with seniors and juniors, willingness to disagree and provide reasoning, initiative, and original thinking.

If you have any suggestions for the best performance appraisal method, feel free to share. Demonstrate your capabilities and good luck in your endeavors.

Best of luck...

I am an HR Consultant, and I provide complete HR support for startups, small, and medium-sized companies. In the past four years, more than a dozen companies have benefited from my HR experience.

If interested, please get back to me.

Best wishes

'Anniversary Appraisal' relates to a performance review after a year of joining. Though tedious for HR to manage the process, it does ensure that each employee has enough time to provide a 'capability demonstration' and be rewarded accordingly in terms of salary increments. It has the advantage of removing inter-employee comparisons and grudges, besides reducing the load on HR as well as the reporting managers if they were to do appraisals in one go as an annual ritual.

A software solution like 'EmpXtrack' has helped many small and large companies whose managements preferred 'Anniversary Appraisals' for increment planning. You may like to visit the EmpXtrack website and have a dialogue with them.