It is the last week of March. Two salespeople walk into two separate appraisal meetings on the same afternoon. Both carried a ₹1 crore target. One walks out with an "Outstanding" rating and a handsome increment. The other walks out with "Needs Improvement" — and a quiet decision to update his CV that night.
On paper, the verdict is obvious. The first delivered ₹1.1 crore. The second delivered ₹85 lakh.
What the paper doesn't say is this: the first inherited a city territory with twelve years of loyal clients. The second was sent into a district where the company had never sold a single unit — and came back with 30 brand-new customers and a market that will pay the company for a decade.
So which of them performed better?
Most appraisal systems never ask. They were built to count the result, not to understand it.
The Ritual We Stopped Questioning
Every organisation knows the routine. The employee fills in a form. The manager gives a rating. HR processes the paperwork. Management approves the increment. The employee is informed.
It looks structured. It feels professional. And it quietly assumes something that is almost never true: that everyone began the year on the same starting line.
They didn't. One person got the strong market; another got the difficult one. One got a complete team; another spent six months covering a vacancy. One had a product customers already wanted; another had to create demand from zero.
And at the very end of the chain sits the question nobody puts on the form: who checks whether the appraisal itself was fair?
The Myth of the Level Playing Field
Let's return to sales — the department where the numbers look most objective, and where the unfairness is often most hidden. Three executives. Same designation. Same ₹1 crore target. Very different years.
Executive A — Mature Territory
₹1.10 crore · 110%Inherited strong, established customers. Most of the year was renewals and repeat orders.
Executive B — Crowded Territory
₹90 lakh · 90%Three aggressive competitors and limited demand. Every order was a fight on price and service.
Executive C — Brand-New Market
₹85 lakh · 85%Started with almost no customers. Built 30 new accounts and opened an entirely new market.
The Conventional Verdict
A > B > CA is exceptional, B is reasonable, C is poor. Clean, quick — and possibly completely wrong.
Illustrative example based on the scenario in the original CampusNewz story; figures are hypothetical.
Same numbers, read two ways
Bars scaled to 110% = full width. The labels inside each bar are what a conventional appraisal never records.
This is not an argument for excuses. Executive C still missed the target, and that shortfall matters. It is an argument for context. A difficult assignment handled well should never be scored the same way as an easy assignment handled well.
Five Chairs, Five Truths
An appraisal is not one person's opinion. It passes through five chairs — and each one sees a different part of the truth. A fair system has to hear all of them.
"You should hear my side."
The employee is the only person who lived the whole year from inside the work. They know the client who kept delaying a decision, the department that never sent the data on time, the target that quietly changed in October, the extra project that never appeared in any KPI.
But asking an employee to simply "rate yourself" invites inflation. The better question is structured: What did I achieve? What did I miss? Why? What am I good at? Where must I improve? What am I ready for next?
"I know my team."
And usually, they do. The HOD allocates the work, watches the deadlines and sees the output every day. Their judgement deserves real weight.
The danger is when one person becomes the only judge. Managers — often without realising it — reward the people who are visible, agreeable and good at "managing upward." The quiet problem-solver, or the one who disagrees professionally, slips down the list. Visibility gets mistaken for performance.
So the question to an HOD should never be only "How do you rate this person?" It must be: "What evidence supports your rating?"
"Is the process fair?"
Too often HR is reduced to forms, reminders and payroll files. In a modern system, HR is the guardian of the process — not the employee's lawyer against management, and not management's rubber stamp against employees.
HR's job is to ask the uncomfortable questions: Was the target reasonable? Was the employee told about problems during the year, or only now? Why does one manager rate everyone "Outstanding" while another rates no one above "Good"? Are people who accept the hardest assignments being quietly penalised for it?
"What value is this person creating?"
Leadership is right to demand accountability. Organisations don't survive because people are busy; they survive because people create results — revenue, customers, efficiency, better products, stronger teams.
But accountability does not mean reducing a human being to a single percentage. A CEO who sees only "110%" and "85%" is making a decision with half the file. And when leadership overrides everyone below it, someone has to be able to ask why.
"Can I trust these decisions?"
In many companies, especially family-run and founder-led ones, the chairman personally decides each increment. It feels decisive. In practice, it opens the door to inconsistency, access and influence — whoever reaches the chairman's cabin most often tends to do well.
The owner's real role is not to allocate money person by person. It is to make sure the system that allocates it is honest.
Six Questions Every Appraisal Must Answer
These are the questions employees ask in corridors and canteens but rarely find on any appraisal form.
I hit my target. My team didn't. Should I lose my incentive?
Picture a salesperson who delivers 110% of her personal target while her division closes at 85%. Under a blanket "division failed, so no incentive" rule, she walks away with nothing. The lesson she learns: individual effort is pointless.
A better structure separates three layers — individual, team and company — so each is rewarded on its own merit. The exact split depends on the role; a sales role may weight the individual share heavily, a support role may lean more on the team.
reward
An Illustrative Incentive Split
How do we weigh a difficult market against an easy one?
Give every major assignment a Difficulty & Opportunity Profile at the start of the year — not at the end, when it can look like an excuse. It records market maturity, existing customer base, competition, resources, team strength, workload and starting position.
At appraisal time, results are read against that profile. The easy territory is expected to over-deliver. The hard territory earns credit for what it built, not only for what it billed.
Should HODs be evaluated by other HODs — and by their own teams?
Yes. No department works alone. Sales depends on Finance; Finance depends on timely information; HR supports everyone; Administration keeps the lights on. A leader who hits their own numbers while making life impossible for every other department is not a strong leader.
But this must not become a popularity contest. The Head of Finance should not judge HR's technical expertise — she should rate HR on responsiveness, coordination and cooperation. Team members should rate their HOD on observable behaviour: Does she communicate clearly? Give credit? Develop people? Handle disagreement professionally? Decide on evidence?
How does HR stop favouritism and "buttering the boss"?
No system can remove human bias entirely. But a good system makes bias harder to hide. Three tools do most of the work: every rating must be backed by evidence; more than one perspective must be heard; and HR must have the authority to send an appraisal back when the evidence doesn't support the score.
HR should also watch the patterns — managers whose ratings are consistently inflated or deflated, departments that are far out of line with the rest, "stars" whose files are full of adjectives and empty of facts.
Who checks the CEO's final decision?
The CEO and owner have every right to make the final business call. But authority should not make evidence irrelevant.
If the HOD recommends a strong rating, HR confirms the process was consistent, the documented achievements support it — and the final rating is still cut sharply — the override must come with a written reason. The record should show the original recommendation, the final decision, the reason for change, the evidence or policy basis, and who approved it.
For serious disputes, an Appraisal Review Committee should hear the case — and the person whose decision is being challenged should not be the one chairing it. That is what checks and balances look like inside a company.
Should the Chairman see percentages and evidence — not just decide an amount?
Absolutely. Instead of a list of names and a blank column for increments, the chairman should receive a performance dashboard: individual achievement, assignment difficulty, quality, additional contribution, team contribution, 360° feedback, HOD and HR assessments, last year's performance, the recommended pay range — and any disagreement flagged clearly.
That changes the chairman's question from "How much should I give this person?" to "Why is this person rated 91%?" The first is a favour. The second is governance.
Four Desks, Four Hidden Stories
Unfair appraisal is not only a sales problem. Every department has work that the form never sees.
The market-builder who "failed"
Executive C's ₹85 lakh came with 30 new customers, two distributor tie-ups and the company's first footprint in a new district. Next year, whoever takes over that territory will look like a star — on the foundation she laid.
Forty hires are not always forty hires
One HR executive closed 60 positions — mostly bulk entry-level roles with a ready candidate pool. Another closed 38, but 12 of them were niche technical roles that took months to fill. She also ran a sensitive workplace inquiry that appears in no KPI and that no one will ever talk about publicly.
Late books — or late invoices?
An accounts manager closes the monthly books four days late, three months in a row. On the scorecard, it's a red mark. Look closer and the delay starts upstream: sales invoices arrive late every month. Meanwhile, the same manager caught a duplicate vendor payment worth ₹18 lakh before it left the bank.
When success means nobody noticed
The admin head's best year is the one in which nothing went wrong: the office moved floors over a single weekend with zero downtime, facility contracts were renegotiated for real savings, and the generator kicked in during every power cut. Because nothing broke, nobody remembers any of it at appraisal time.
Department examples are illustrative composites created for this editorial, not accounts of specific individuals.
A Better Model: The Seven-Part Performance Picture
The fix is not a longer form. It is a fuller picture. Instead of one rating chosen from "Outstanding / Very Good / Good / Average / Poor", every appraisal should be built from seven parts:
🏆 Achievements
Targets met, projects delivered, problems solved — with measurable evidence.
📌 Shortfalls & Reasons
What was missed, and honestly why — own performance, resources, market, another department, or factors outside anyone's control.
💪 Strengths
What this person does unusually well, and where the organisation should use it more.
🛠️ Areas for Improvement
Specific skills or behaviours to build — framed as a development plan, not a punishment.
⚖️ Difficulty / Opportunity
How hard was the assignment? Market, customer base, competition, resources, workload, starting point.
➕ Additional Contribution
Mentoring, cross-team help, crisis handling, ideas adopted — value created beyond the formal KPIs.
🎯 Future Goals
What the employee is ready for next — "I'm ready for more responsibility," or "I need training before the next step." This is what turns appraisal into growth.
The employee fills in all seven. The HOD independently assesses the same seven. The gaps between the two views are not a problem to be hidden — they are the most valuable part of the conversation.
From Verdict to Process: Seven Steps to a Fair Decision
A fair appraisal is not a moment. It is a sequence, in which each step checks the one before it.
- Employee Self-ReviewThe employee completes the seven-part Performance & Development Statement, with evidence.
- HOD AssessmentThe department head independently reviews the same seven parts — and must back every rating with facts and examples.
- Employee / HOD DiscussionA real conversation, not a verdict. Differences are discussed, clarified and documented.
- 360° FeedbackFor managers and HODs: input from peers, team members and internal stakeholders on observable behaviour.
- HR Fairness CheckHR tests the evidence, compares rating patterns across managers, flags outliers and can return an appraisal that isn't supported.
- Management ReviewLeadership calibrates across departments using the performance dashboard. Any override is recorded with a reason.
- Final DecisionRating, incentive, increment and development plan are confirmed — with an Appraisal Review Committee available for serious disputes.
One more rule holds the whole thing together: the annual appraisal should never be the first conversation about performance. Quarterly check-ins — what's working, what isn't, has the market changed, is the target still realistic, what support is needed — mean that March brings a summary, not a surprise.
Five Questions That Should Never Be Merged
Much of the frustration around appraisals comes from blending different questions into one number. They are related, but they are not the same.
| Decision | The Question It Answers |
|---|---|
| Appraisal | How well did this person perform, given their assignment? |
| Incentive | What did they earn from measurable individual results? |
| Team bonus | What did their team or vertical achieve together? |
| Company bonus | What did the organisation achieve this year? |
| Promotion | Is this person ready for greater responsibility? |
A high performer can deserve recognition in a difficult financial year. And nobody should receive a high rating simply because the company had a good one.
Fairness Cuts Both Ways
The employer's mirror
If someone misses a target repeatedly, management must also ask: Was the target realistic? Was the person trained? Were the resources there? Did other departments deliver what they owed? Was the employee given the authority to match the responsibility?
An organisation cannot demand accountability while refusing to examine whether it created the conditions for success.
The employee's mirror
Fairness is not a free pass. A tough market, a difficult client or thin resources are not automatic excuses. The employee still has to show what happened, what they did about it, what they could control, what they couldn't, what they learned and what they will do differently.
That is the balance a modern system has to strike: responsibility without unfairness.
Back to That March Afternoon
Imagine the second salesperson's meeting run differently. His HOD opens not with a rating but with his Difficulty & Opportunity Profile. They talk about the 30 new customers and the ₹15 lakh gap — what caused it, what he could have done better, what support he needs next year. HR has already checked that his manager's ratings are in line with everyone else's. The chairman, reviewing the dashboard, sees "85% achievement, highest difficulty in the team, new market created" — and asks the right question.
He may still not get the biggest increment. But he walks out knowing his work was understood. And he doesn't update his CV that night.
That is the real test of any appraisal system. Not whether it produces a ranking — any spreadsheet can do that — but whether the people who do the hardest, least visible work believe it sees them.
Measure the achievement. Understand the journey. Hear the employee. Examine the evidence. Consider the context. Recognise the contribution. Develop the person.