Appraisals Due: Average salary hike of 12% likely; top talent to get 25%

New Delhi: It is appraisal time again and employees can look forward to an average hike of 10-12%, while top performers can eye as much as 25%, but this once-a-year evaluation norm may change as firms are shifting to a more regular feedback culture, say experts.

Most companies have a bell-curve system of management in place, which compares employees’ performance relative to others and puts them in different rankings—top, average and bottom performers—with the vast majority being treated as average performers. Human resource (HR) experts believe, however, that times are changing and more and more companies are planning a revamp of their appraisal systems, opting for more regular feedback-based review systems.

“Eliminating bell curve/forced distribution or going ‘rating less’ is undoubtedly catching a lot of attention with many organizations willing to test it as a pilot if not fully implement it,” Willis Towers Watson India director, rewards, talent and communication, Shatrunjay Krishna said. Recently, companies like Accenture, Infosys, HCL, Axis Bank and KPMG announced plans to shift from the bell-curve appraisal system and more companies are expected to follow suit.

“Almost every major company wants to revamp their current approach. They want to make it intuitive, focused on feedback, and more developmental,” Nishith Upadhyaya, head-advisory and knowledge for SHRM India said adding that “the trick to get it right is to improve upon the curve that uniquely reflects the real driver of people performance in your organization”.

Regarding appraisals Kunal Sen, senior vice-president, TeamLease Services said average salary hike will be about 11% across sectors with information technology (IT) leading the way at about 13.5%, while, top talent should be getting 20-25% hikes, he added. “The average hike in 2016 will be 10-12% where in top performers will end up getting 15-20% specially in the industries like e-commerce, startup’s wherein the increase is also the part of the retention policy since this particular sector has lot of poaching and business models are evolving,” said Sunil Goel, managing director GlobalHunt, an executive search firm.

According to Joseph Devasia, managing director Antal International India “most Indian companies have now started terminating this style of appraisal system or tweaking it to be more flexible, rewarding and feedback-based”. Meanwhile, V. Suresh chief sales officer Naukri.com believes “the intent of any performance appraisal system is to identify and differentiate top performers and to nurture people to move to the next level. Bell curve is a tool used to achieve this intent and the tools may evolve basis the market dynamics but the intent will still be the same”.