Appraisal 2008
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It’s not a typo; here is what I’m writing this entry about –Appraisals. In every industry, annual / bi-annual appraisals are a very important event in the HR calendar. The employees eagerly await fruits of their labor to see how the companies value their efforts, in terms of salary increments and promotions. This year is no different! Many companies have just completed the appraisals and others are aiming at June for their yearly or bi-annual appraisals respectively. I would like to start a discussion about this very important aspect, which leads to attrition rates / recruitment drives and let everyone share their opinions. The aim is to identify best practices, which have been tested in our industry and have lead to keep a healthy balance.
In my humble opinion the appraisals do play a vital role in shaping the IT industry. End result of appraisals can be one of the following:
- Employees think the company has not done justice with them on not giving them a respectable raise, therefore they should move
- Employees are satisfied with the appraisals and feel motivated to work & stay
- Either satisfied or not, employees use the upcoming appraisal range to jump for a sizeable raise with next prospect employer
I’ve come across some interesting individual comments in my recent interviews with candidates:
- “The appraisal should justify the rate of inflation which we are effected with in our daily lives, experts rate it around 20%â€
- “Appraisal is our right, what companies should also start doing is giving bonuses based on revenue from projects which we have successfully completedâ€
- “I really worked hard to maintain clients and made sure that I give my total dedicated output on the project; and at the end I get just 10% raise – its not fair!â€
- “ABC company (top 5 player) is giving X% increments this year to SSE with Y years of experience, my company is only giving 50% of it. That’s why I feel I should move.â€
Now from the other side of the fence – the Employer!
- “What should be a decent rate of appraisal, for 25-person team operation – 10%, 15%, —?â€â€œShould we have increment slabs, like for 50K plus 10% etc?
- “Should promotion with its respective package be enough or do we need to give some bonus?â€
- “The candidate qualifies promotion but we already have resources on the same level. I think we will let him have the same title but make the salary in range with the others.â€
- “Is Bi-annual increment system more applicable for the industry keeping in view the attrition rates?â€
I hope this would lead to a healthy discussion. The above comments I have shared are from my own personal experience with both clients and candidates during my recruitment practice at Radical Hire
12:33 pm
Most managers take appraisals easily; something boring that has to be done every year (or twice a year, even more boring). What these managers don’t realize is that this attitude of theirs (and not the money) is costing them their best employees.
Appriasals do a simple thing: they tell the employees how they are doing in their current postions. These appraisals, however, are of no value if the appriasees don’t agree with the appriasals. The only way to ensure agreement is to have a well defined performance culture in the organization.
Jack Welch argues in “Straight from the Gut” that GE’s implementation of Vitality Curve produced great results only because they spent years implementing the performance culture.
1:47 pm
I have always had difficulty dealing with yearly appraisals. I would rather have a continuous process where weekly feedback is part of the appraisal system. Productivity should not be the only measure, rather other metrics should be defined which measure the value one employee adds to the culture.
6:47 pm
I’m also expecting a good response on this post. I guess 25K over-shadowed this one. Lesson learnt! One post a day
I’m expecting “Employers” again to give us some of theirs thoughts into this topic. Osama, would you start with this one too ?
9:37 pm
hmm – I think there are three different open-ended topics in this one post.
1- Performance monitoring
2- Performance criteria
3- Appraisal Design
Appraisal Design is a pretty open ended discussion because it depends almost entirely on the employer imho – Maybe an HR expert here can add the science behind it. For our company, we just look at expected $ benefit to the company (in revenue earned or cost saved) from that person that is expected over the next 6-12 months and try to give out a fair compensation based on that (keeping within cashflows).
Performance metrics is again often a matter of choice – people use heavy analytical tools, tools such as disc profiles and 360-degree analyses etc, while others like subjective views.
We do subjective evaluations from everyone around a person, particularly the supervisors… to minimize unobjectivity we have a mechanism of capturing this feedback in real-time throughout the year, and looking at it as a whole.
To do this, we use CDF Snip – through that all the management that is able to observe a certain person can add constant, real-time silent feedback which is archived and searchable by date when — down the road – we are going to do appraisals.
9:41 pm
But I would really strongly suggest to the employee force to make such evaluations (as listed in the post) keeping in mind the context of the company.
Also, monetary appraisal shouldnt be the only measurement on that side – you might be put on a fast-track to management, might be given some key accounts, might get the chance to become the apprentice of some of the key people in the firm…. all of these are indicators of your worth to a company. Monetary appraisals can often be affected by cashflows, strategic investments, credit line crunches and other things the company might be facing.
11:43 am
Usually 5-30% percentage is selected and handed to employee.
Then Mr. Inflation chews on most of it.
Then Govt. chews on some of it via tax increase.
Person is worse off compared to a year ago. That is why people look for greener pastures.