Dear Nagarjun,
The method of salary hike that you have adopted in your company dates back to 19th century or early 20th century. Alas you could have entered in 21st century!
If you wish to give salary hike based on the performance then what you need to do is to devise sound Performance Management System (PMS). The primary objective is to capture the performance of each employee accurately. To do this, you need to measure the performance scientifically and also create performance slabs. Later communicate these measures to the employees and tell them when their performance will be measured. Thereafter, measure the performance and find out in which slab the employee fits in. Thereafter, depending on the company's financial performance, you may allot percentage increase to each slab.
Not just for salary hike, but measures of performance are also used for recruitment, employee training, career advancement etc. I have been giving replies on the subject related to PMS for the years together. Click the following link to refer my reply on the past post:
https://www.citehr.com/563388-re-abo...ml#post2306729
In one of my posts, I have uploaded
Sample KPI and KRA Manual. You may refer the following link to download it:
https://www.citehr.com/520630-samle-...-download.html
Thanks,
Dinesh Divekar