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Anonymous
Dear Seniors and CiteHR Members,

Happy New Year !

I need your suggestions. So far,we were having Employee appraisals a year from their date of joining . Now, we are planning to get all the appraisals to one particular month of the year(Jan). I have already started the process of reviews 8 months back.

Two things that I am a bit stuck in are:

1. Calculating the increment percentage for Employees whose appraisals were already done.,(although ,we planned to get the cycle to jan, we had done the increment for employees upto the month of Aug; sept onwards it is pending).

for ex: employees whose increment were done in the month of Aug 2014 will get an increment again in Jan 2015 (7mnths ahead if the original cycle of appraisals were followed)- [ there is a score and an increment slab with it]

ex: Again employees whose increment fall in September but were pushed to Jan. What will be their increment percentage?

2.Will there be any Tax implications, now that investments by employees have already been done and with this increment in Jan,will it affect their Tax?

Seniors, Please help me out.

Thanks & Regards

From India, Mumbai
Dinesh Divekar
7879

Dear friend,

For the proper Performance Appraisal (PA), you need to have proper Policy on Performance Appraisal. When employees join the company, during induction itself they should be told that when their appraisal will take place. The salient features of policy could be as below:

a) Appraisal may be done quarterly or half-yearly. Appraisal cycle of one year is too long. Nevertheless, salary hike may be done as on 1st April or 1st Oct.

b) Employees who join in between, when their first PA will take that can be decided in the policy.

c) % of salary hike should be linked to the score of PA. The slabs could be as below:

91% and above

81% to 90.9%

71% to 80.9%

61% to 70.9%

What would be the hike in % cannot be decided as of now. It depends on several factors like market conditions, business done by the company, industry trend etc.

By the way, do you have comprehensive policy on Performance Management System (PMS)? In today's age, you cannot stop at just Performance Appraisal (PA). It is old hat of the days of personnel management. For additional information, you may click the following link. It is past reply to similar query:

https://www.citehr.com/513953-reg-pe...-industry.html

Thanks,

Dinesh Divekar


From India, Bangalore
Anonymous
Dear Dinesh,

Appreciate your prompt reply.My answers to your points:

a) Appraisal may be done quarterly or half-yearly. Appraisal cycle of one year is too long. Nevertheless, salary hike may be done as on 1st April or 1st Oct.

We have qtrly appraisals. Its the increment I am worried about.

b) Employees who join in between, when their first PA will take that can be decided in the policy.

Can you give me an example please .

c) %of salary hike should be linked to the score of PA. The slabs could be as below:

91% and above

81% to 90.9%

71% to 80.9%

61% to 70.9%

The slabs are exactly the same as mentioned by you.

What would be the hike in % cannot be decided as of now. It depends on several factors like market conditions, business done by the company, industry trend etc.

But ofcourse the hike will be based on certain factors.

Let me reframe my query:

Mr. X is an Employee with a Salary of say 38000/- pm ,whose last increment was in the month of August 2014. Based on the existing Increment cycle ,His next increment is due on Aug 2015....But ,now the Management has taken a call to have the increment cycle in Jan.So,in this case of Mr.X, say based on his ratings,he gets a hike of 7.5K pm,but since his increment cycle has been preponed by 7 months, there is an overlap. and here lies the challenge.

Thanks & Regards

From India, Mumbai
radhika.prem
Hello,
I have faced a similar situation. The solution arrived was as follows:
Here in this case for Mr. X, you can give the hike wef jan 2015. As his hike is preponed for 7 months, he get an additional amount of Rs. 52500/- when his hike is 7.5k . So you deduct this additional Rs. 52500/- in 12 equal installments starting from Jan 2015. ie Rs. 4375/- per month and he would get a salary of Rs.41125/- from january till december instead of 38000/-. (ie the amount which would have been received by Mr. X till August if there was no salary hike is Rs.266000(38000*7) and from august to december with hike is Rs. 227500/-(45500*5). that is he would have received a total of Rs.4,93,500 for the period Jan to December 2015 if hike was in August 2015. So when his salary is Rs. 41125/- from January to December 2015, he receives the same amount of Rs. 4,93,500/- for the year.
Hope this is clear. If am wrong, please correct me.
Regards
Radhika

From India, Kochi
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