Performance Appraisal Insights: How Does It Impact Salary Increments in Your Organization?

I am working as an HR Executive and I am looking for which points are considered in Performance Appraisal. How does it work in the organization for the salary increment process for employees?

1. Set Roles & Responsibilities

2. Define KRA - Should be mutually agreed.

3. Based on KRA, define KPI - Should be mutually agreed.

4. Monitor performance month-wise.

5. Review with top management if required once every 3 months or quarterly.

6. Based on the 12-month performance, you can conduct the appraisal.

While agreeing with Mr. Prashant, the addition is that you can link those monthly monitored reports of KRAs and KPIs, club them into an annual report, and then decide on the salary increments. Top management can also be advised to have salary grids to link them to the annual appraisal reports collected.

Going a step ahead, when the quarterly review of employee performance by these set KRAs is done, you can discuss with employees to make them aware of their score/performance. The quarterly review helps to assess their achievements and shortfalls.

You can even reward on a quarterly basis if your budgets permit.

Performance Appraisal Components

For performance appraisal, you can divide this into three parts to assess performance:

1. Task and Assignment
- This includes the number of projects and assignments given to employees and scores based on their performance.

2. General Knowledge
- You can evaluate their performance based on job knowledge, quality of work, responsibility, attendance, interpersonal relations, etc.

3. Inner Strengths and Contributions
- Lastly, you can assess their inner strengths, weaknesses, and any special contributions.

I hope this will assist you in conducting employee performance appraisals.

Thanks,
Arvind