Annual appraisal and increments – maximising value

Discussion to finalise annual increments

Manager : While I am in agreement with the overall guidelines of the company of an increment of 8% for the top 20% of my team, I would like to use managerial discretion, also permitted by the company, in a couple of cases.

Senior Manager : Which ones ?

Manager : The first is Peter. Though he has made it to the top 20% bracket, he has not performed well. In fact, on a couple of occasions his actions have cost the company financially. I would like to bring him down to 6%, in line with the next 40% of the team. At the same time, Paul has shown himself to be an outstanding performer right through. He is of immense value to the company. Though no individual is indispensable, his value is immense. I would like to up his increment to 10%.

Senior Manager : I agree with your decision to reduce Peter’s rating. It will also save the company money. I am, however, not in agreement with your proposal to increase Paul’s increment. I don’t think he has done anything special. Any employee in his position would have done what he has done. He should be grateful to the company for having been given this responsibility. Besides, giving additional increment costs the company money. In these times, a penny saved is a penny earned.

Manager : May be additional increment costs money. I daresay it will become a lot more expensive for the company if he decides to leave. And I think he is considering options.

Senior Manager : That’s an illogical argument. Employees cannot start holding the company to ransom by threatening to leave.

Manager : I fully agree sir. However, this is not a case of an employee holding the company to ransom. It is a question of fair reward for work done keeping in mind the marketplace realities.

Senior Manager : He will not go anywhere. Take my word for it.

Next week

Manager : Sir, Paul has given in his resignation today.

Senior Manager : What ? How did you not see this coming ? You are expected to know about the people working for you. If we had known in advance we could have done something, like an additional increment.

Manager : I did tell you when we were finalising the increments. I did recommend an additional increment for him of 10% which you shot down.

Senior Manager : Don’t make excuses. What will happen to the Project he was doing ?

Manager : It will continue. But we will need to rework the timelines. And hire someone in his place.

Senior Manager : Let us try to keep him back. How much increase is he getting in his new job ?

Manager : Not sure, but I believe about 12%. Senior Manager : He is important to the company. Offer him a 15% increase and retain him.

Manager : As you say sir. I hope you will fund the extra 5% cost that we are having to pay Paul, from your Budget !

6 thoughts on “Annual appraisal and increments – maximising value

    • Thank you. No idea about marital status. The Fictitious Company, his employer, collects personal information only for corporate abuse. The names are chosen because the Manager is trying to “rob Peter to pay Paul”.

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