As Layoffs Continue, Companies May Tweak Processes To Determine Appraisals

As companies continue to lay off their employees amid high market volatility, they may change the process to determine the quantum of the appraisals to be awarded in the upcoming year, experts told Business Standard. The salaries are less likely to increase based on seniority or tenure.

"This year could see a shift in the appraisal process, with companies looking to be more conscious of the costs associated with appraisals and better align them with their overall business objectives. Additionally, this year companies are less likely to increase employee salaries due to seniority or tenure in the organization," said Ruchi Ahluwalia, chief human resource officer (CHRO) at staffing firm Quess Corp.

"The approach for merit this year would be industry-competent and performance-based hiring which focuses on individual output and measurable outcomes," she added.

However, the experts were divided on the expected quantum of the salary hikes.

"Employers in India are gearing to offer a decent 10-12 per cent appraisal in 2023 and this might range up to 20 per cent for key talent in niche job roles for certain sectors," said Anjali Raghuvanshi, chief people officer at recruitment agency Randstad India.

On the other hand, Sumit Sabharwal, chief executive officer (CEO) of TeamLease HRtech, said, "Since most businesses are experiencing moderate growth, it would be difficult for them to give very high increments in salaries." He added that the companies are likely to provide non-monetary benefits instead.

Sabharwal added that companies increasingly use SaaS-based platforms to improve employee engagement and manage benefits.

"Better employee engagement helps retain employees by increasing the sense of belonging," he said.

Ahluwalia said that at Quess Corp, they have already started to focus on giving benefits for "emotional, physical and financial wellness".

Irrespective of the appraisals, however, employees will have to reskill and upskill themselves to meet the demands of the industry.

"It would also be important for employees across sectors to understand the changing demands of today's employment scenario and develop their professional expertise accordingly. With the ongoing digital transformation, employees must focus heavily on reskilling, upskilling and soft-skill development to keep up with the changing nature of work," Raghuvanshi said.

Notably, in her Budget 2023 speech, Finance Minister Nirmala Sitharaman announced that a Digital Ecosystem for Skilling and Livelihood (DESH) stack portal would be launched soon. It will aim to "empower citizens to skill, reskill or upskill through online training".

Experts further stated that the employees will now have to take an active role in their appraisal meetings and carefully underline the work done by them.