APPOINTMENT LETTER - clauses regarding the appraisal cycle, which would specify the appraisal cycle of an employee

Dear Seniors,

I want to add a few points or clauses regarding the appraisal cycle, which would specify the appraisal cycle of an employee, when he or she will be eligible for it, and how the clause should be stated in the appointment letter. Please suggest.

Hello,

Regarding your query, my suggestion is that you need not include details of "appraisal", salary review, revision, anniversary date, etc. in the appointment letter. You can explain this and provide information on these aspects on the joining day of the employee as an HR person.

In the appointment letter, at best, you can add the following clause:

"You shall be placed on probation for a period of --- months from your date of joining the company. After the completion of -- months from your date of joining, you shall be confirmed in the services of the company. On confirmation, your salary shall be increased by -- (Rupees ----) to Rs.xxxxx.xx (Rupees -------- only).

Further hikes in your salary shall be purely dependent on your work performance, attendance, and punctuality, your behavior at work, and other parameters set by the company in this regard."

Hi, Mr. Radhakrishnan,

When the hike after probation is subject to performance (and other criteria) of the employee, how can the numbers be shared in advance? If we mention the increment amount in number writing in advance, the employee will take it as a right and will demand the same irrespective of his/her performance. No company will add such a clause in their appointment letter; it will not be wise.

Rather, a general clause may be added:

"You will be eligible for a performance appraisal review after successful completion of ______ (one year or six months) subject to your performance and the performance of the company as a whole. This is purely at the discretion of the management."

Hi, Mr. Lakshmi Narayan,

Your observation is quite okay. However, all these are subject to the discretion of management and depend upon the policy of the company. Companies like ours would put a newcomer on probation for only three months, and upon completion of this period, they shall be confirmed. Upon confirmation, their salary shall be increased by Rs. 1000 (a flat amount - whether they are a workman, clerk, or executive). This will help the newcomer settle in for the first six months before being assigned tasks.

I have written this based on our company policy. The increase is unrelated to the individual's performance in the job. I trust that you have now understood.

Hi, Mr. Radhakrishnan.

Okay, you are referring to a standardized hike. By virtue of completing a three-month period, the employee will automatically become eligible for the hike. So, completion of the stipulated months is the criteria. Performance will not be considered as a scale to become eligible.

Here's an example of a clause that could be added to an appointment letter to specify the appraisal cycle and eligibility for appraisal:

"Appraisal Cycle and Eligibility: The employee will be eligible for an annual performance appraisal, conducted on a [specify time frame, e.g., calendar year] basis. The initial appraisal will be conducted after completion of [specify time frame, e.g., one year] of continuous employment with the company. Subsequent appraisals will be conducted annually thereafter. The specific dates and timelines for the appraisal cycle will be communicated to the employee by the Human Resources department. The appraisal process will assess the employee's performance, achievements, and contributions to the organization during the specified evaluation period. The results of the appraisal may be used as a basis for performance-related decisions, including compensation adjustments, promotions, and employee development plans."

It's important to note that this is just an example, and you may need to tailor it to suit your organization's specific policies and practices. Additionally, you should consult with legal and HR professionals to ensure compliance with local laws and regulations.