Why your annual appraisal will not lead to a salary hike

HR experts question relevance of annual appraisals in today’s work environment

Once a year appraisals could be an outdated way to assess the performance of employees and reward them accordingly, say HR experts.
Annual appraisals only highlight the recent achievements and it may be unhealthy to pit employees against each other.

“It’s followed everywhere but seems outdated to me. It’s like a school exercise – much like final exams,” said the HR manager of a multi-national bank in Dubai on the condition of anonymity.

Big names like Adobe may be doing away with annual appraisal system as was reported in the media.

[Random wage cuts in UAE...click here to read more]

Google, another forward looking company, stresses on a 360-degree appraisal where employees are assessed by peers, bosses and subordinates.

Microsoft also values employee behaviour rather than targets.  HR managers believe regular feedback is the way to go forward and hinging on annual reviews may not do justice to the employee being evaluated.

According to Toby Simpson, Managing Director, The Gulf Recruitment Group, “An employer should not see appraisals as simply a vehicle to analyse compensation levels, this should be a byproduct rather than the main focus. 

“A regular feedback should always be in place during the working week and is easy to achieve, but this tends to be on a specific task or operational process level. 

[To know more about the best GCC pay hikes this year click here] 

“Annual or quarterly appraisals are a chance to take a step back and look at the bigger picture; to really think about the goals of both management, the business and the employee and how best to combine them to ensure shared purpose within the firm.”

Experts also believe that striking the right balance is the key to having a healthy system in place and a more reliable way to reward employees.
“Annual appraisal is the standard best practice and all companies should be doing this.

“However, regular feedback is even more important, especially in order to engage your workforce and iron out any issues before they become problems. 

“Even the best of us need a pep talk from time to time, to get re-focused and to revise and amend our goals and objectives- therefore regular feedback is vital in this regard,” Hasnain Qazi, Middle East Business Manager at Huxley Associates told Emirates 24|7.

Agrees Suhail Masri, VP Sales at Bayt.com. “There are many motivation stimuli a company could offer to its top performers such as awards to employees; recognition or appreciation; employee of the month or year, or year-long peer-to-peer recognition.  “When it comes to rewards and engagement, point of views differ between employer and employees,” he said.

Konstantina Sakellariou, Partner, Marketing & Operations Director at Stanton Chase believes both – annual appraisals and regular feedback – are a reliable way to reward employees. 

“Both are needed. Annual appraisals assist the employees to have an overall feedback over a longer period of time, but regular (formal or informal) appraisals are also needed, to keep a person motivated, and also highlight what works best, so that the employee may focus on improving and enriching the successful practices,” she told this website.

“Our reward programmes and employee engagement in the Middle East (November 2011) poll revealed that companies that are attempting to boost engagement levels are doing so by showing more recognition (25.3 per cent), giving more rewards (22.5 per cent), encouraging open communication (24.5 per cent), increasing transparency (13.3 per cent), and empowering staff (14.5 per cent).

“However, 44.7 per cent of employees claim that first and foremost, more opportunities to learn and grow within the company are needed to make them feel more engaged. 

“A better salary and benefits package comes in as a distant second with 17.1 per cent placing it as a priority; trailing behind is a clear career path (13.7 per cent); a good relationship with colleagues (9.1 per cent); and a good relationship with their manager or supervisor (8.6 per cent).
“Only 6.8 per cent believe that more recognition or appreciation will increase their level of engagement at work,” added the Bayt.com expert.

UAE is the GCC's most promising country for salary hikes in 2012

The UAE stands at the 19th position in terms of the best salary increment expected in 2012, according to a new study by recruitment platform MyHiringClub.com and NriJobPortal.com.

The UAE is seen leading the GCC in terms of expected salary hikes this year, followed by Saudi Arab, Kuwait, Qatar and Bahrain. The country improved its position by two slots this year.

Globally, salary increment in 2012 of employees is expected to be highest in Denmark (15.49 per cent), followed by Ireland (15.31 per cent). The UK ranks 3rd with an average 15.09 per cent hike followed by Switzerland with a 14.89 per cent salary increment. The other countries high on the list include Belgium (14.76 per cent), Germany (14.57 per cent), US (14.33 per cent) Australia (14.21 per cent), Hong Kong (14.19 per cent) and India (14.03 per cent), the survey said.

Despite a subdued economy in the United States, the study has put the country on the 7th slot with an expected 14.21 per cent increment. However, the country has come down to this position from the 2nd slot last year. The study highlights that India remains one of the most favourite outsourcing destinations due to this cost factor and as of now is ranked 9th in the top ten best salary increment outlook globally.

Countries like Bulgaria, Vietnam and the Philippines have received the lowest ranking with 4.03 per cent, 4.13 per cent, and 4.21 per cent salary increment in 2012. Worldwide average 2012 salary increment outlook is 10.19 per cent.

“The US Job market had initialised their recruitment processes after the crisis and it is expected to pick up momentum in the next 2 to 3 months. The country has declined by five positions in 2012 salary increment outlook list, but companies in the US plan to give some healthy increments and incentives to their employees. Countries like Switzerland, Ireland, Australia, Hong Kong are increasing their salary packages to attract and retain talented employees for minimising their higher attrition rate,” said Rajesh Kumar, CEO, MyHiringClub.com

The study compared the total annual cash compensation and total remuneration information of 5,326 companies in 31 different countries between 15th December, 2011 to 31st December 2011.

GCC countries ranking

UAE - 8.02%

Saudi Arabia - 7.43%

Kuwait - 7.30%

Qatar - 7.12%

Bahrain - 6.86%

2012 salary increment outlook in top ten countries worldwide

Denmark - 16.49%

Ireland - 16.27%

UK - 16.02%

Switzerland - 15.76%

Belgium - 15.57%

Germany - 15.45%

Australia - 14.79%

US - 14.21%

Hong Kong - 14.19%

India - 14.03%

2012 salary increment outlook in ten lowest countries

Bulgaria - 4.03%

Vietnam - 4.13%

Philippines - 4.21%

Thailand - 5.16%

Malaysia - 5.67%

Indonesia - 5.91%

Portugal - 6.19%

Austria - 6.21%

Norway - 6.37%

Bahrain - 6.86%


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