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Is performance appraisal and salary increment the same?
From India, Hyderabad
Dinesh Divekar

Dear member,

"Performance Appraisal" and "Salary Increment" are absolutely two different terms. These can be related but are not dependent on each other.

Unfortunately, in India, the usage of correct terms or terminology is not given importance. The words or phrases or terms are used loosely. The loose usage creates distortion but not many care for it.

Yes, I have seen people saying "I got an appraisal of 8%". However, little do they understand that what they got was a salary increment. The salary increment may take place without appraisal also.

In organised companies, the measures of performance are communicated at the beginning of the performance cycle. The performance slabs are also designed and also communicated. For example, a company may say if the target achieved is > 85%, > 75% and >65% then the performance level is A, B and C respectively. For every slab, the company decides a certain percentage of salary increase. While the performance slabs are fixed, the percentage of the salary increase will vary depending on the financial performance of the company.

I hope I have brought out the difference between the two.


Dinesh Divekar

From India, Bangalore

Performance appraisal is a managerial tool to evaluate the performance employees. The basic objective of performance appraisal is to know whether the employee concerned is fit for the job, what measures are required to improve his performance so that he can meet the goals set for him. Under a salary scale which is not based on time scales, the performance appraisal will, naturally, form a base for deciding how much increase the employee can get in his salary. As Dinesh Divekar has rightly said, salary increment can be given without a performance appraisal. Yes, in a time scale where a guaranteed increment rate is given, the employee will get the increment unless he is debarred to get it.
From India, Kannur
Shailesh Parikh_HR Pro

Dear friend,

"Performance Appraisal" as the term suggests it is appraisal of ones performance against pre determined Goals or Targets.

"Increment' is a raise in salary

Now, organizations have different policies/norms to review and revise salary/release increment.

- Salary raise or increment can be linked to ones performance as derived from process of Performance Appraisal. e.g. consistent rating of above "X" rating will get Y% of Basic salary etc.

Hope this helps

Shailesh Parikh
99 98 97 10 65

From India, Mumbai

Appraisal & salary increment are two different things. So, after the appraisal process the individual comes to know about his strengths and weaknesses. Where as increment in salary is a part of compensation planning process & inputs from appraisal are required while deciding the increment in salary.
From Zimbabwe, Harare

Performance appraisal and salary increment are related but distinct concepts within the context of employee compensation and performance management:

Performance Appraisal:

Performance appraisal is the process of evaluating an employee's performance and contributions within a specific period, typically annually or semi-annually.
During a performance appraisal, an employee's performance is assessed based on predefined criteria, such as job responsibilities, goals, competencies, and behaviors.
The purpose of performance appraisal is to provide feedback to employees, identify areas for improvement, recognize achievements, and make decisions related to career development, promotions, and rewards.
Salary Increment:

Salary increment refers to an increase in an employee's base salary or compensation package, typically as a result of performance, tenure, market conditions, or other factors.
A salary increment may be awarded to employees based on their performance appraisal results, where high performers are often rewarded with higher salary increases.
Salary increments may also be given periodically, such as annually or biannually, as part of the organization's compensation strategy to align employee pay with market rates and retain top talent.
While performance appraisal and salary increment are closely linked, they are not synonymous:

Performance appraisal focuses on evaluating employee performance and providing feedback, while salary increment is a form of reward or recognition that may be based on performance appraisal results among other factors.
Salary increment is just one potential outcome of a performance appraisal process, along with other forms of recognition such as bonuses, promotions, or additional responsibilities.
In summary, performance appraisal and salary increment are complementary processes within the broader framework of performance management and compensation, with performance appraisal informing decisions related to salary increments and other rewards.

From India, Mumbai
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