Appraisals and Wages Increases - Same Time?

mwild31 · September 2003

We've been knocking this idea around for a couple of years and I think we are about to finally make a decision. We want to seperate the Wage Increase from the Appraisal/Review process and move to a model where Wage Increases are discussed and determined in January and Reviews are given in October or November. Here's some of the motivation:

1. Employee's hear, "blah, blah, blah and your increase is a $1.00 more per hour", or, "blah, blah, blah and there's no increase available." A lot of what employee's need to know for future wage increases or areas of performance is located in the appraisal (they've heard it through out the year, it's just consolidated) and they miss most of it once wage increase is discussed.

2. If an employee is unhappy with the wage decision or appraisal and decides to leave, we are stuck and held hostage a bit (usually occurs during our busiest seasons).

3. Budgetary reasons. Financially, it makes sense for our company to consolidate to one month - rather than throughout the year.

4. During our busiest months, it's hard to get all of the reviews done on time because production takes precedence - so they take a back seat.

My question to all of you is: Do you seperate Appraisals from Wage Increases?

Thanks in advance for your insights!

gillian2 · September 2003

No, they were always at the same time to my recollection. I don't think that separating them does much - employees will always join the two.

Leslie · September 2003

I agree with Gillian2. They are so intrinsically tied that the separation won't do much good. I'd move raises and reviews to the month(s) that are less busy for you and keep them together.

mwild31 · September 2003

What's interesting to me is that basically, the model I've described is something that other businesses, namely Microsoft, does follow. I would be interested to know the "why's" behind why it shouldn't be followed either through first hand experience or from observations. Thanks!

HR in CA · September 2003

In former jobs I have done it both ways. Frankly I like keeping the two separate. Many managers would give someone a performance review based on the amount of the increase available. To me it was a cop out for the managers, if you have issues bring them up, don't use the performance review time as the time to hammer the employee on issues that they are just hearing about for the first time in the review.

mstechphr · September 2003

We tie our wage increases to appraisals and spread them out during the year. We used to do them on one date but moved to the month of the anniversary of the ee's hire date. Our managers like this better because they are not faced with doing many appraisals all at once, the employees get more individualized attention from their mgr., and there is more consistency dollar wise. Do you have a performance rate increase schedule (i.e. a certain percentage) that you use for rate increases that is tied to the employee's overall performance evaluation?

Margaret Morford · September 2003

I really recommend against tying a certain percent increase to a certain review score. You will get less candid performance appraisals from the managers because they will be tempted to "halo" the review to give their person more money. The amount of an increase is not simply a function of performance, but is also affected by company performance, what the market place is paying for that particular job (Remember the programmers before Y2K?), where that individual is when compared to the other people who hold the same job and where that person is within the job band for his/her particularly job. I always explain to people that performance is a large part of what determine what they receive, but other factors come into play as well.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

Cristina · September 2003

Starting in 2004 we will switch from ee hire date to January apprasial/raises. We have 24 ee; Jan is our slow month (construction). We found that the Mgrs. put off apprasials when we were busy; then we had to retro the raises. We hope that doing it all at once will help them focus; it will also be easier to compare performance within job types.

I will be the one who will be swamped because I schedule and process them all and I conduct my interview after the Mgr. I review their uniforms and ask them how they are doing etc. not reference the functional parts but more the interpersonal/communication issues. I review their insurance/benefits to asks for suggestions/complaints.

Balloonman · September 2003

Currently we do increases and performance reviews at the same time. We do reviews now based on fiscal quarter. This is much easier then trying to track 50+ reviews throughout the year. I have given thought to, and read some books about seperating the two, and it does make sense. May go that route in the future.
One book that many of you might find intersting reading is "Catalytic Coaching" by Gary Markle. Talks about try to improve performance and give a solid reasoning behing seperating the two.
My $0.02 worth.
DJ The Balloonman

rad · September 2003

Ours are separate...we have year end appraisals and everyone gets their increase in the spring. There is a correlation between the two but increases are never discussed at appraisal reviews, they are treated as two distinct events.

Don D · September 2003

We should also remember the fact that at certain times of the year, the mere mention of monetary increases sends the CEO and board into anxiety attacks. For that reason alone, I always hate to see the suffering that occurs in the group of employees who have anniversary dates/reviews/increases considered anywhere during the last two or three months of a fiscal year. Is there ever a good time to push this element to? No matter what we say about the value and triggers of performance increases, they are ALWAYS impacted by the company's perception of the budget at any given time of the year. Unless we're talking public employment and non-profits. Maybe all considerations of increases should take place during the first two weeks of a new budget period.

scottorr · September 2003

We seperate out our reviews from the raises. We give all of our raises on September 30. We do performance reviews twice a year. Once in January and once in July. We do not base our raises on performance, they are based on market rates. Our bonuses are tied to performance. We have zero complaints from employees.

blw · September 2003

Ours are separate. We do performance eval's on the employees anniversary date. All increases are effective January 1st. As a non-profit, it helps us budget better.

ray a · September 2003

We separate the two.

Performance reviews are done every 12 months based on hire date - so they occur all year long. The only variation on the 12 month performance review cycle is if the ee is promoted then they receive 30/60/90 day reviews in their new classification and go back to annual reviews following the 90 day review.

Salary Reviews are done at the end of each calendar year so finance has information for the following year for budgetary purposes. I give each "manager" a large spreadsheet with each of his/her ee's listed showing information such as, hire date, current salary, last increase date and amount, last evaluation rating, last ranking, etc. From that information, they have to fill in the blanks - amount of increase and when effective. It is a merit based system, so the effective date could be anywhere from 6 months to 18 months depending on various factors.

It is rare the two coincide, but usually the ee's will try to link them. They often ask about their raise when they receive their performance review, even though it has been explained many times that they are two different animals.

Whatever · September 2003

All our increases and bonuses are at the beginning of a New Year. Reviews are done at that time. Also, we do smaller reviews more frequently for those employees whose reviews indicate a problem. This is basically done to keep the managers on top of the situation, create the paper record etc. in case the employee does not improve.

mwild31 · September 2003

Wow! Thank you to all who contributed to this thread - by this information alone, I've just justified why the forum is an important tool to our company and the HR department. Again, many grateful thanks x:-)

Appraisals and Wages Increases - Same Time?

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