Struggling to Set Up a Fair Appraisal System in a Small Software Company – Any Advice?

Hi,

I am the HR of a small software company. Prior to my joining, there was no HR in the company. The process used by the company before my joining was as follows:

1) Depending on the experience (after, let's say, 9 months completed in the company), raise the payment of that person.
2) No skill-based increments.
3) Bonuses were given to a few employees.

Now, it's a big task for me to establish a standard appraisal scheme.

My question is:

Is there any standard process for performance appraisal? Does anyone have a standard document for the same? Please help.

Regards,
Vikram.

Hello Friend,

Yes, there are standard formats available in companies that have established the Performance Appraisal System. However, these formats can be used as reference documents to design your performance appraisal system. I am attaching a performance appraisal format for your ready reference, and you may find more such forms on the CiteHR site.

If you read the first sheet, which is a flow chart of the process, you will realize there are basically following major stages in the process:

1. Target setting by the superior and subordinate - targets should be in line with company/department objectives.
2. Coaching and guiding by the superior at regular intervals so that the employee performs.
3. Performance review at the end of the quarter to evaluate the performance jointly by the superior and the employee - assigning a value to the performance - that is what the word "appraisal" means, say, 7 out of 10 or 85%, etc.
4. Set mutually agreed targets for the next quarters in line with company targets/goals.

The process of appraisal ends here, but there are more important actions still to be done - understand "how the performance for the next quarter can be improved" and how the results have been achieved - did the employee display qualities like teamwork, initiative, cooperation, cost-consciousness, etc. A certain percentage is assigned to the traits displayed, and how to develop these traits further is discussed. This process is "Performance Management."

When it comes to salary, this aspect is slightly complex. Logically, we feel that salary rise should be linked to performance, but that is not the only factor. We also need to give salary increases for the following reasons:
a. What is the market value of the job - if you do not pay adequately, the person may leave.
b. Criticality of the person - if a person has expertise that is not easy to find, we may have to pay them higher - irrespective of their actual performance. Equity and fairness are valid, but it is quite difficult to maintain equity for all. Additional factors like age and experience can also affect the salary increase decisions. Some decisions are also about "correcting" some previous "wrong" decisions taken. Discrimination based on these factors is natural and should be accepted. Such discrimination, if based on proper rationale, is explained to employees, and they will also accept it. Remember - such discrimination will be necessary to retain talent.

I hope this is useful.

Regards,
Nishikant

Hello,

I am attaching the file once again; it can be seen at the bottom of the message in a table-like format. I hope you have Adobe Reader 7 for reading this file on the computer. In case you are still unable to receive it, please inform me of another email ID, and I will send it to that ID as well.

Regards,
Nishikant

Hi,

Let's look at the PA tools. Type-wise, you can have two kinds of tools: 1. Stand Alone (or independent tools), 2. System dependent. In the case of system-dependent tools, the tool is prescribed within the system, e.g., MBO, kaizen, etc. There are independent tools like ROPAS, etc. However, before administering any tool, one needs to customize the same according to the needs of the organization.

I am enclosing herewith a copy of ROPAS, customized for our organization; you may try it.

Regards, Manas Das Head - HRD Merino Industries Ltd.

Hi Vikram,

I am attaching here a standard appraisal form. I hope this is helpful in establishing the process at your company.

Regards,
Aditi

Hi,

Actually, I'm working in a bank. I have recently joined, and my company has given me an appraiser form to fill out. But seriously, I don't know what to write. Can anyone help me?

Regards,
Ischa

Keep posting,

It is really a nice format, but do we have an appraisal format for the finance sector? If anybody has it, please post it on the site so that we can benefit from it.