How Do You Choose the Right Performance Appraisal Method for Small Companies?

Hello Friends, I hope you all are doing well. I am an HR Generalist in a small company where I am responsible for creating an appraisal form based on various parameters for performance evaluation. Can anyone suggest the best method of performance appraisal to use in small companies? Additionally, could you please mention the different parameters on which we can appraise employees in an organization?

Thank you.

Dear V Garg,

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

- **Appraisal Frequency:** 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 October.

- **New Employee Appraisal:** For employees who join in between, when their first PA will take place can be decided in the policy.

- **Salary Hike Percentage:** The percentage of salary hike should be linked to the score of 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. I have given a reply to this post. Click the following link to refer to the reply:

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

Though the heading of the link is for an IT company, the contents are applicable to all industries. In the above link, you will find several other links. Go through all the links patiently. It will improve your awareness of the subject.

For further doubts, you may call me on my mobile number [Phone Number Removed For Privacy Reasons].

Thanks,

Dinesh Divekar

Performance Appraisals: Methods and Applications

Performance appraisals are conducted in two ways: one is self-appraisal, and the other is appraisal by the Head of Department (HOD). Self-appraisal is mostly seen in software companies like WIPRO and INFOSYS. Appraisal by the HOD is common in public sectors.

The main reason for collecting appraisals in software companies is to grant annual increments or salary hikes based on the employee's contributions to their assignments. In public sectors, appraisals are more often obtained for promotions rather than increments, as increments are usually automatically sanctioned except in specific cases.

The formats for appraisals differ between public and private sectors and software companies. One can download the best appraisal forms from the internet. Nowadays, self-appraisal is gaining momentum as the superior has to agree or deny the entries made by the employee, which is transparent to the employee. Any negative remarks by the superior must be communicated to the employee to allow for self-correction, along with reasons for any decrease or increase in salary.