How Should We Decide Salary Increases for a 50-Person Team Using Ratings?

I am working as an HR for a small-sized company of around 50 employees. My question is regarding the appraisal and increment of the employees. We follow a yearly appraisal system and want to know how to decide the increment percentage of the entire team. Is it flat for all team members irrespective of the current salary, or does it vary accordingly? What appraisal procedure can be followed for a team of 50 members? If we follow a rating system, how are ratings linked with the hike percentage? Please guide.

Linking Compensation Policy with Company Growth

All these are linked to the company policy on compensation. Since you have reached the 50-employee level and are on a growth trajectory, it would be better if you evolve the rules and regulations of the compensation policy rather than taking a part-by-part approach. Generally, a uniform percentage or fixed amount as an increment is not provided, and it varies from grade to grade, with the higher grades receiving a higher quantum.

Linking Ratings with Hike Percentage

Linking the rating with the hike percentage has to, first of all, depend on the quantum of amount allowed for the purpose and divide it in an equitable manner.

Hi!

The best strategy for you is to create a policy and a guide chart that will help you implement salary adjustments consistently, fairly, and transparently. There is a popular tool called "Rainbow Chart" that provides a detailed guide on the entitlement for every performance rating that an employee will get year on year. If you need help on the matter, let me know. But, I charge fees for my consulting services.

Best regards.