It’s appraisal season.

Performance reviews are underway, increment conversations are happening across teams, and employees are walking into discussions more prepared than ever—armed with market data, peer comparisons, and expectations.

For HR leaders, this changes the nature of the cycle.

Appraisals are no longer just about evaluating performance and allocating budgets. They’re about navigating expectations that are being shaped outside the organization.

Which means the question to ask this year is -

👉 How do we make appraisal decisions that hold up in the market?

Two questions from this week’s #general-qna-forum are worth paying attention to.

One member asked for reliable CTC benchmarking data they could use during performance reviews. Another wanted to understand what appraisal percentages look like across roles this year.

These aren’t just operational questions.

They reflect a shift in what HR is expected to do.

👉 It’s no longer enough to run a fair process.
👉 You need to run a process that is aligned with the market—and explainable.

That’s the bar in 2026.

Let’s start with the number most teams are referencing. According to EY, salary increases are projected at around 9.1%. If you’re planning budgets, this is useful context. But if you’re making appraisal decisions, it’s not enough because averages don’t tell you how to allocate.

What the data is really signaling is this:

So instead of using the average as a target, a more useful approach is to treat it as a range indicator, and then decide where you want to be above or below it—and why.

Now consider what employees are expecting.

Insights from Adecco show that 58% of professionals expect salary increases above 10%. This is where most appraisal strategies start to break.

Because expectations today are not shaped by internal communication. They’re shaped by:

So even a well-planned increment can feel misaligned if it doesn’t match the employee’s reference point.

For HR leaders, the takeaway is important:

👉 You’re not just managing compensation.
👉 You’re managing expectation alignment.

And that needs to be built into your approach—not handled reactively.

Across EY and Adecco data, one shift is consistent:
compensation is being intentionally allocated, not evenly distributed.

👉 As an HR leader, this means you need to decide where to invest more—and be explicit about it.

This is where appraisal season becomes a capability, not just a process.

👉 The shift to internalize:
Good appraisal cycles don’t just allocate budgets—they build trust.

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