How To Establish KPI, KRA, PA Process And Performance Management System

Hello Everyone,

Can anyone share your organization's appraisal process? I want to understand the groundwork behind the appraisal process, i.e., how do we map the salary hikes of employees, and from where do we get the data to decide on the raised salary slabs of employees? I would be highly thankful to all if you could share the template or any raw data for the same. Awaiting your response.

Regards,
Swechchha

Dear Swechchha,

It appears that you do not have a proper policy on Performance Appraisal (PA) well in place. When employees join the company, during induction itself they should be told when their appraisal will take place. The salient features of the policy could be as below:

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

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

c) The percentage of salary hike should be linked to the score of PA.

The important point is PA concentrates only on individual performance. We need to go beyond and measure the business performance. For this, you need to have a well-designed policy on Performance Management System (PMS). There was a query in this forum on PMS. I have given a reply to this post. Click the following link to refer to the reply:

https://www.citehr.com/511936-pms-company.html

Though the heading of the post is about IT companies, the reply applies to all industries. In the above link, you will get further links. I request you to go through each link patiently, and possibly you may understand how the lack of proper work measurement impacts your organization. For further doubts, you may call me on my mobile number.

Thanks,

Dinesh Divekar

+91-9900155394

P.S.: - I provide consulting services to establish a comprehensive Performance Management System (PMS). While establishing the PMS, I develop KPIs to measure human resource utilization, machine utilization, etc. My activities surpass the usual measurements mentioned in the Balanced Score Card (BSc). If you wish to avail of my paid services, feel free to approach me. Thanks.

Dear All,

How to establish the PMS cycle in a startup organization?

Can someone please help with the basic steps included in setting up the PMS cycle for employees?

Hello Swechchha,

The appraisal process and the method of mapping salary hikes for employees can vary from organization to organization. However, here are some general steps that organizations typically follow in their appraisal process:

Goal Setting: At the beginning of each appraisal cycle, managers and employees set goals and objectives for the upcoming year. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART).

Performance Evaluation: At the end of the appraisal cycle, managers evaluate employees' performance based on the goals and objectives set earlier. They may use performance metrics, feedback from colleagues and customers, and other factors to assess employee performance.

Performance Review Meeting: Managers meet with employees to discuss their performance evaluation and provide feedback. This is an opportunity for employees to ask questions, receive feedback, and discuss any areas for improvement.

Salary Hike Decisions: Based on the performance evaluation, the organization decides on salary hikes for employees. The salary hike percentage may vary based on performance, role, and other factors.

Communication: Once the salary hike decisions are made, HR communicates the new salary slabs to the employees.

As for the data used to decide on salary hikes, organizations typically use a combination of factors such as market rates for similar roles, employee performance, and the organization's financial health. They may also conduct salary surveys and benchmarking studies to determine competitive pay rates for their industry.

Regarding sharing a template or raw data for the same, I'm afraid that I cannot provide you with a specific template or raw data as each organization has its own appraisal process and criteria. However, you can search online for sample appraisal forms and templates to get an idea of what the appraisal process looks like.

You can also read this article to find some relevant information: [Performance Appraisal Methods](https://www.pockethrms.com/blog/360-degree-performance-appraisal/)

I hope this information helps you in understanding the groundwork behind the appraisal process.

Thanks!