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Performance Appraisal of Staff

Performance Appraisal  Policy of Staff 


Cost of non-conformance, as in case of product, is a very critical parameter.  Similarly for human beings cost of non-conformance is extremely high.  Annual Appraisal is one tool to define the performance level of each employee and it should be monitored regularly.  Eventually it is the sum total of employee's performance, which decides the performance of the organization.  

From organization's point of view, each employee has a cost and in return he/she is expected to contribute towards achieving departmental / organizational targets. Through annual appraisal, we set individual targets (tasks) and finally evaluate individual performance against these mutually agreed criteria. 

From employee point of view, it is important that clear targets/goals are decided so that he/she can make action plans, if needed demand resources.  Whereas money is considered to be the biggest motivator, but this alone cannot infuse enthusiasm in an employee to give his/her best. Clear target and regular feedback on performance can keep an employee charged. 

We have a structured system of doing performance appraisal. This is an annual exercise, but a half yearly appraisal is also done and marks against the MPCP, Behaviour, Commitment & Best are given. The ratings will be also done for half yearly appraisal.

In our appraisal system, the evaluation of an individual is divided into four parts i.e. MPCP, Behaviour, Commitment & Best rating.

For the appraisal, following break-up of marks shall be followed:




Commitment Rating







In order to award increments, Unit Rating will be done by Corp. office, using following criterion:

QPCDSM                                                           -       65 MARKS



NEW BUSINESS                                               -       05 MARKS


                                                              TOTAL        100 MARKS


During a particular year, in case a unit obtains less than 60% marks, 25% of increment amount of each staff will be retained & rest 75% of increment amount will be released w.e.f. April salary.

During next year Unit Rating, if unit is able to obtain 70% or above marks, then 25% increment amount, which was withheld in the previous year, would be released w.e.f. April of previous year as an arrear.

At the end of appraisal process, an employee gets the following rating based upon his  performance :


 * In case of Average rating of an employee, he will be communicated that he / she should improve his/ her performance within next six months. After six months, his/her performance appraisal should be done again. In case he/she does not improve, he / she should be separated from the organization.

After appraisal process increment will be awarded to each employee as per the rates / policy decided by management every year.

Increments for all the eligible employees shall be declared effective 01st April every year. Corporate HRM to define each year parameters and release the schedule for affecting the increments.

For all employees a performance appraisal form shall be completed by as per procedure & forwarded the same to the HRM through their Department Head. For all employees (except 2nd line), form shall be filled and for 2nd line employees form should be filled in. For Half yearly appraisal form to be filled and rating will also be given.

It is the responsibility of the concerned employee to fill the MPCP/ achievement sheet for the appraisal year as well as the MPCP which he is going to perform in the next appraisal year attached with the appraisal form. After filling the above, he should approach his superior for getting himself appraised.

Appraising authority after reviewing each employee working should call individually and details of his MPCP finalized for the next appraisal year as well as strength and weakness should be discussed which should be mutually be acceptable and specify the planned programme for his development as well as to overcome his area of improvement be mentioned. This should be signed by the concerned employee as well as by the appraiser. 

While discussing his area of improvements and strengths, the task undertaken and the performance achieved by him for the period of appraisal year should be kept in view (it is presumed that each staff must have been assigned specific task for the appraisal year). 

The Functional Head & Unit HRM Representative must also be present for appraising / sanctioning increments for the employees connected with their departments at the unit.  


Employee who have completed one year of service as on 31st March shall be given increment for the full year.

Employees who have not completed one year of service but have joined in the appraisal year shall be given increment proportionately e.g. if annual increment is sanctioned Rs. 600/- p.m. and he is having a service of only 8 months he will be given an increment of Rs 400/- p.m.

No increment shall be given to those employees who have joined from 01st January of an appraisal year their review for increments will be done only in April next year.

Management gives lot of importance to the attendance and punctuality. Following weightage to be given while recommending the increments /promotion.


If an employee’s attendance (including authorized leaves & holidays) is 260 & above days of working, the increments will be effective from 1st April.  The logic of arriving at 260 days is as follows:        

Total days in a year                                                    365         Days

                        Total weekly off                                     52         Days

                        Maximum Holidays                               10         Days

                        Casual Leave                                         7         Days

                        Sick Leave                                             7         Days

                        Earn leave                                             6         Days


                                                                                               102       Days


                                                                                 365 – 102 = 263 Days


If an employee has attended between 240-259 days, the increment will be effective from 01st July.

If an employee’s attendance is less than 240 days, no increment will be given.

Wherever 2nd Saturday is Off, 12 days be reduced for entitlement for increment of each employee.


Once the increment has been sanctioned, the Unit HRM Department shall send the photocopy of the increment sheet to Accounts Department for preparing the salary.

The increment letters will be issued to all staff.

Wherever, if the increment Nil, the concerned employees should be explained and again be guided to overcome his weakness as mentioned earlier. It should be said to him that he can definitely look forward to have better increment and promotion provided there is an improvement in his performance. This must be arranged in an informal and cordial atmosphere.

Retention of key people:

Key people means those who consistently get OS/VG ratings. These key employees should be recognized at various forums i.e. MMC meetings, annual days etc.  In case of consistent OS performance in continuous 2 years, a special reward should be given consisting of 5 days Company sponsored family tour anywhere in India as per the travelling norms applicable to his/ her level.   

Units to keep constant watch on these key employees for their marketability & up gradation of compensation such that it is always comparable in the market.  Unit HRM to prepare career growth plan for consistent OS employee. Minimum one key employee should be nominated for outbound training programme at national/international level.




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