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Performance appraisal is an important tool to:

• Evaluate the employees’ performance;
• Reward the employees accordingly (salary adjustment / bonus / promotion, etc.);
• Identify training and development needs of the employees;
• Identify the employees’ potential and develop them accordingly;
• Determine the Company’s manpower and/or ability;
• Strengthen Management-Employee relationship.

Therefore, it is important to have a proper performance appraisal policy, in order to establish a systematic and comprehensive evaluation system for all employees. The following points could be the guides in developing a performance appraisal policy / procedures:

• The period of the Performance Appraisal will be from <duration> (usually financial year of the Company) of each year.
• The Annual Performance Appraisal will be formally conducted in <month> each year.
• The Human Reseource Department will distribute the Performance Appraisal Report to respective Head of Departments.
• The immediate superior will have to conduct an Appraisal Interview to evaluate his/her subordinates.
• Before an interview is conducted, the immediate superior should:

• Give adequate notice to the subordinate prior to the interview and brief him/her on the purpose of the meeting.
• Refer to the main activities of the subordinate’s job and consider the performance of the subordinate on each task.

• Discuss and agree on the targets, priorities and action for the next coming period.
• Frankly discuss with the subordinate’s performance and give opportunity for him to comment and inform him on how he could improve.
• Take particular note of the subordinate’s work interest and career aspirations and consider the course of action to be taken by the subordinate in order to improve performance or develop potential.
• Discuss the subordinate’s strengths and weaknesses in a frank and honest manner.
• Refrain from discussing any recommendation for salary adjustment / increment or promotion as these are subject to further review by the Management.
• Record any factors that might have affected his results.
• Consider the target and priorities that will need to be set out in the next period.

In Malaysia, most companies will provide company cars / car allowance as part of the remuneration package for their senior managers, or as a tool to retain their key talent. Whether a company car or a car allowance is provided, it depends on the Company’s policy, budget, total number of eligible employees, etc.

As a guide to work out a Company Car / Car Allowance policy, the following terms shall be covered:

General

• This benefit is given subject to the job grades and the nature of job of the employees, with the approval of the <first level approval, could be Head, HR department) and <second level approval> (if any, to avoid dispute).
• This benefit is non-contractual and may be reviewed from time to time or withdrawn at the discretion of the Management.

Company Car

• Directors of Holding Companies shall be entitled to a company car, according to the following eligibility. <Spell out the categories of directors and their eligibility, usually by purchase value of cars>.
• The types of car shall be determined by the Management.
• All running expenses of the company car shall be borne by the Company, including insurance, road tax, petrol, maintenance, etc.
• The Management reserves the right to replace the company car every <number of> years or more, or at anytime the Management deems necessary.
• The purchase, maintenance and administration of the company cars shall be handled by <department>, (usually administration department of the Company).

Car Allowance

• Directors of Subsidiary Companies with grades <grade>, and eligible employees with job grades <grade> shall be entitled to the a car allowance according to their job grades. <Spell out the entitlement, e.g. RM4,000 per month for grade D1>.
• Notwithstanding the above term, the Management reserves the right to provide an employee with a company car, instead of car allowance, depending on their nature of work, or any other reasons. If an employee opts for company car instead of car allowance, it is subject to the Management’s approval.
• The car allowance shall cover car installments, annual insurance and road tax, maintenance expenses and other related expenses incurred from domestic business travel.
• For the employees who are eligible for car allowance, they shall replace their car at least every <number of> years from the date of car registration. Otherwise, the Management reserves the right to review the car allowance, to make sure the amount commensurate with the expenses of the particular vehicle used by the employees of the particular time.
• If an employee is promoted, his / her car allowance eligibility will not be automatically upgraded, unless separate notification is given.
• The employees should update the Company immediately on their vehicles’ information if there is any changes.