Setting Up a Performance Appraisal System: Seeking Practical Advice and Insights on Salary Hikes in India

Hi everyone, I am working as an Executive in HR & Administration in a manufacturing firm with a 42+ employee strength. I joined a month ago, and prior to this organization, I was associated as a Recruiter and HR Trainer in a consultancy. I am a commerce graduate but am aware of most things in HR. Additionally, I have sound knowledge of various performance appraisal methods but haven't used them practically.

My current organization has no performance appraisal system, and I am in the process of setting up a new one. Could anyone please guide me on the easiest process and practical implications of performance appraisal?

Also, what is the minimum/maximum hike given or practiced in India?

Thank you.

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 informed about when their appraisal will take place. The salient features of the policy could be as follows:

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 October.

b) For employees who join in between, the timing of their first PA 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 business performance. For this, you need to have a well-designed policy on the Performance Management System (PMS). Earlier, I have clarified the difference between the two. You may click the following link to know the difference:

https://www.citehr.com/286426-kra-sh...ml#post1294358

While designing KRAs, please remember the following formula:

Job Description + SMART Principle = KRAs

Click on the hyperlink to know about the SMART Principle

In one of my posts, I have uploaded Sample KPI and KRA Manual. You may refer to the following link to download it:

https://www.citehr.com/520630-samle-...-download.html

Final Comments: Designing KPIs and KRAs is not that easy. To do this, you need to work with an expert, and to gain expertise, it takes years. I have seen professionals spending decades in the industry but were unable to develop KRAs for their department.

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

Thanks,

Dinesh Divekar

Understanding Rating Scales

If you are interested in learning about rating scales, read about Likert Rating scales (found on the internet, although it's best to find a book at the library). Marketing and brand managers are quite familiar with Likert scales.

Developing a Performance Appraisal System

As for developing your own performance appraisal system, you may want to read up on competencies assessment programs. Once you have decided on the factors to be used for different categories of employees, you may consider using SPSS software to validate and verify your rating factors. Get your IT experts to help you, as SPSS is a very powerful and useful tool for HR professionals.

Please tell me the procedures of appraisals. What are the techniques and steps?

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The procedures for conducting performance appraisals involve several key steps to ensure a comprehensive and fair evaluation of an employee's work. Firstly, setting clear objectives and expectations is crucial. This provides a benchmark against which an employee's performance can be measured. Secondly, regular feedback and communication are essential throughout the appraisal period to address any issues promptly and provide guidance for improvement. Thirdly, utilizing a mix of evaluation techniques such as self-assessments, peer reviews, and manager assessments can offer a well-rounded perspective on an employee's performance. Lastly, outlining a development plan based on the appraisal results is important to support the employee's growth and career progression within the organization.