ANNUAL PERFORMANCE REVIEW POLICY

OBJECTIVE

The Objective of Performance Appraisal Review System in XXXXXXXXXX is to assess

objectively the performance and potential of the employee, to develop them and to
determine their career path.

BACKGROUND:

The strength of an organization is its people. If we recognize their talent, develop their
capabilities and utilize them appropriately, they will contribute to the long-term excellence
of the organization. Therefore it is imperative to assess objectively the performance, assess
their potential for growth.

To set a process wherein Employee’s immediate Superior / Head Of the Department will
review the performance of each staff on a quarterly basis using the Performance Review /
Appraisal form, and thus evaluate and improve the employees knowledge, skills and
attitude and to facilitate their overall individual development. The Performance Appraisal
Review System has the following features:

FEATURES:
 Focus on the development and utilization of an employee
 Transparency and openness in the system
 Emphasis on the potential assessment and career plan of an employee
 Identification of training and development needs
 Identification of strengths and improvement areas
 Review job expectations
 Check ongoing performance
 Recognize individuals
 Building the Organization & Business

PERIOD:

Quarterly Appraisal Review Period KRA to be fixed by HOD

1st Quarter October – December September
2nd Quarter January – March December
3rd Quarter April – June March
4th Quarter July – September June

SCHEDULE:

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1ST Quarter appraisal form will be dispatched to HOD during the 1st week of September to
fix the KRA for 1st Quarter [October – December]. Duly filled KRA will be reviewed by
HOD during October – December. Plan Vs Actual will be obtained after review and the
same should be submitted to HR Department on or before 7th January. Assessment [Rating]
will be done as per PMS standard.

2nd Quarter appraisal form will be dispatched to HOD during the 1st week of December to fix
the KRA for 2nd Quarter [January to March]. Duly filled KRA will be reviewed by HOD
during January to March. Plan Vs Actual will be obtained after review and the same should
be submitted to HR Department on or before 7th April. Assessment [Rating] will be done
as per PMS standard.

3rd Quarter appraisal form will be dispatched to HOD during the 1st week of March to fix the
KRA for 3rd Quarter [April - Jun]. Duly filled KRA will be reviewed by HOD during April to
June. Plan Vs Actual will be obtained after review and the same should be submitted to HR
Department on or before 7th July. Assessment [Rating] will be done as per PMS standard.

4th Quarter appraisal form will be dispatched to HOD during the 1st week of June to fix the
KRA for 4th Quarter [Jul to September]. Duly filled KRA will be reviewed by HOD during
January to March. Plan Vs Actual will be obtained after review and the same should be
submitted to HR Department on or before 7th October. Assessment [Rating] will be done as
per PMS standard.

ELIGIBILITY

The employee will be eligible for appraisal only after completion of three months of services
in the organization. However, for new joinees KRA will be fixed as soon as the date of
joining.

DEFINITIONS:

Appraiser: The person to whom the employee is reporting

Reviewer: The Departmental Head of the appraisee. In case more than one intermediate
level is involved, the department head will decide who will be the reviewer.

KRA:

On quarterly basis KRA to be fixed by the HOD on consultation with the individual
employee. KRA should be SMART analysis method [Specific, Measurable, Achievable,
Realistic and Time Bound]. Minimum 4 KRA & Maximum 6 KRA to be fixed per quarter.

1. KRA to be divided into 4 quarters on priorities basis.

2. Every quarter Head-HR has to do the appraisal to the individual along with concern HOD.
3. Appraisal report result to be submitted to MD by Head-HR along with action plan.

MD REVIEW

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Based upon the out come of the quarterly appraisal, meeting will be arranged with MD for
the review along with individual employees & HOD on weekly basis (minimum 25
Employees) as per schedule enclosed. MD will highlight the merits and demerits of the
individual employee during the meeting.

IMPROVEMENT PLAN

Based upon the MD’s review and actual ratings of the individual, the Low Performer will be
counseled for improvement and good performer will be considering for recognitions.

OPERATITVE PROCESS

 An appraisal is a meeting / discussion between employee and employees Superior /

Manager to discuss employees’ performance in order to plan together employee’s
future. It gives you a chance to think about how an employee has performed since the
last appraisal or since joining the organization and to agree future performance
objectives.

 Before the appraisal meeting, employee and his/her Superior / Manager should agree a
suitable time and date for appraisal.

 Listed in appraisal forms would be the qualities / skills that are important in an
employee’s job.

 Further to the rating the HR Department will receive the forms and prepare the final
data of rating status and track the same.

 The consolidated data is presented in the MIS format to the Top management for further
decision regarding conversion of performance points into salary increment, promotion
or any other such decisions.

Criteria for level of achievements relating to each KRA:

[a] Actual rating should be rated in 1-5 scale

5 means 100% achievement of KRA
1 means 0% achievement of KRA

S.No Ratings Grade

1 Below – 35 1 = Unsatisfactory
2 36 - 50 2 = Below Average
3 51 - 70 3 = Average
4 71 - 90 4 = Good
5 91 - 100 5 = Exceptional

[b] Overall Performance Scoring [1 + 11]

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 S.No Ratings Grade Increment % on gross *
1 Below - 1 = Unsatisfactory E 0%
2 1.1 - 2 = Below Average D 5%
3 2.1 - 3 = Average C 10%
4 3.1 - 4 = Good 20% Increment with Promotion
B
may be consider
5 4.1 - 5 = Exceptional 30% Increment with
A
Promotion to be given

* The above Increment % is proposed by HR only for policy purpose. The final % and
decision will be taken by management at the time of final review.

[c] Distribution on Ratings:-

HOD should follow the following rating pattern:-

S.No Grade Percentage of Rating Distribution

1 A 10% [Maximum] of total departmental strength
2 B 20% [Maximum] of total departmental strength
3 C 40% [Minimum] of total departmental strength
4 D & E 30% [Minimum] of total departmental strength

[D] Promotion Policy & Guidelines

1. Employee should perform well consistently and continuously for minimum 2 years
for Promotion.
2. Employee should have the requisite experience, qualification, potential and ability to
perform for higher level job. ‘Right Man for Right Job‛ – This is the Mantra for
promotions.
3. For ‚Special Promotions’ {Fast Tract] management will take 3% only from 10% [A
Grade] of the total departmental strength.
4. For ‚General Promotion‛ management will take 7% only from ‘A’ Grade [10%] and
‘B’ Grade [20%] of the total departmental strength.
5. Promotion is purely discretion of the management

By
K.KOTTAIRAJ
Executive – HR
ARL Chennai