Forced Ranking (Forced Distribution)
Forced ranking method in performance appraisal
1. Definition of forced ranking (forced distribution)
Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution.
For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom.
The top-ranked employees are considered “high-potential” employees and are often targeted for a more rapid career and leadership development programs.
In contrast, those ranked at the bottom are denied bonuses and pay increases. They may be given a probationary period to improve their performance.
2. Application of Forced Ranking
GE, Ford Motor, Conoco, Sun Microsystems, Cisco Systems, EDS, Enron and a host of other U.S. corporations have adopted similar policies of this method
3. Advantages and disadvantages of forced Ranking
Advantages:
• They force reluctant managers to make difficult decisions and identify the most and least talented members of the work group.
• They create and sustain a high performance culture in which the workforce continuously improves.
Disadvantages
• They increase unhealthy cut-throat competitiveness;
• They discourage collaboration and teamwork;
• They harm morale;
• They are legally suspect giving rise to age discrimination cases.
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Job Evaluation by Ranking Method
Job evaluation by ranking method
1. Overview of ranking
The ranking method is simple to understand and practice and it is best suited for a small organization.
Jobs are compared to each other based on the overall worth of the job to the organization. The ‘worth’ of a job is usually based on judgements of skill, effort (physical and mental), responsibility (supervisory and fiscal), and working conditions.
2. Advantages of ranking
• Simple. “Alternation” method ranks “highest” then “lowest,” then next “highest,” then next “lowest”. “Paired comparisons” method picks highest out of each pair
• Fast
• Most commonly used
3. Disadvantages of ranking
• Comparisons can be problematic depending on number and complexity of jobs
• May appear arbitrary to employees
• Rank judgements are subjective.
• Can be legally challenged
• Unreliable
• Difficult to administer as the number of jobs increases
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Categories: Compensation and Benefits, Job Evaluation Tags: ranking method
Paired Comparison Analysis
1. Definition of paired comparison analysis
• Paired comparison analysis is a good way of weighing up the relative importance of options.
• A range of plausible options is listed. Each option is compared against each of the other options. The results are tallied and the option with the highest score is the preferred option.
2. Advantages and disadvantages of paired comparison analysis
• It is useful where priorities are not clear.
• It is particularly useful where you do not have objective data to base this on.
• It helps you to set priorities where there are conflicting demands on your resources.
• This makes it easy to choose the most important problem to solve, or select the solution that will give you the greatest advantage.
3. Steps to conduct paired comparison analysis
• List the options you will compare (elements as A, B, C, D, E for example).
• Create a table 6 rows and 7 column.
• Write down option to column and row; A to row second, cell first from left and A to row first, cell second from left; B to row third, cell first from left and B to row first, cell third from left etc; column seventh is total point.
• Identify importance from 0 (no difference) to 3 (major difference).
• Compare element “A” to B, C, D, E and place “point” at each cell.
• Finally, consolidate the results by adding up the total of all the values for each of the options. You may want to convert these values into a percentage of the total score.
4. Paired comparison in performance appraisal
• The term used to describe an appraisal method for ranking employees.
• We use the above model to appraise employee’ s performance.
Job Evaluation by Classification
Job evaluation by classification
1. Classification overview
According to this method, a predetermined number of job groups or job classes are established and jobs are assigned to these classifications.
This method places groups of jobs into job classes or job grades. Each level in the grade/category structure has a description and associated job titles. Each job is assigned to the grade/category providing the closest match to the job. Separate classes may include office, clerical, managerial, personnel, etc.
The classification of a position is decided by comparing the whole job with the appropriate job grading standard. To ensure equity in job grading and wage rates, a common set of job grading standards and instructions are used.
2. Advantages of classification
• Simple.
• The grade/category structure exists independent of the jobs. Therefore, new jobs can be classified more easily than the Ranking Method.
• Uses job families/groups instead of individual jobs
• May produce same results as Point Method, but is less costly
3. Disadvantages of classification
• Classification judgments are subjective.
• The standard used for comparison (the grade/category structure) may have built in biases that would affect certain groups of employees (females or minorities).
• Not useful when jobs are very different from each other
• May be confusing to employees about why jobs are included in a class
• Some jobs may appear to fit within more than one grade/category.
4. Process of classification
The following steps should be followed to introduce a job classification scheme.
• Select a representative sample of benchmark jobs covering all the occupations to be included in the scheme.
• Analyze the jobs and prepare job descriptions.
• Decide on the number of grades required.
• Define each grade in terms of discernible difference in skill and responsibility.The lowest grade may cover simple work done under close, supervision, and each succeeding grade will recognize a higher level of difficulty, complexity or the amount of discretion allowed to make independent decision.
• Slot each benchmark job into a grade with reference to job and grade description.
• Grade the other jobs with reference to the benchmarks jobs and grade descriptions.
Categories: Compensation and Benefits, Job Evaluation Tags: Classification, Evaluation
Job Evaluation by Factor Comparison
Job evaluation by factor comparison
1. Overview of factor comparison:
Under this method, instead of ranking complete jobs, each job is ranked according to a series of factors.
These factors include mental effort, physical effort, skill needed, supervisory responsibility, working conditions and other relevant factors (for instance, know-how, problem solving abilities, accountability, etc.).
Pay will be assigned in this method by comparing the weights of the factors required for each job, i.e., the present wages paid for key jobs may be divided among the factors weighed by importance (the most important factor, for instance, mental effort, receives the highest weight).
2. Advantages of factor comparison:
• Relatively easy to use once it’s set up.
• Customized to the organization.
• Results in ranking of jobs and a specific dollar value for each job, based on allocating part of the job’s total wage to each factor.
3. Disadvantages of factor comparison:
• Hard to set up.
• Not easily explained to employees.
• Using dollar values may bias evaluators by assigning more money to a factor than a job is worth.
• Every time wage rates change, the schedule becomes obsolete.
4. Process of factor comparison:
• Select key jobs (say 15 to 20), representing wage/salary levels across the organization. The selected jobs must represent as many departments as possible.
• Find the factors in terms of which the jobs are evaluated (such as skill, mental effort, responsibility, physical effort, working conditions, etc.).
• Rank the selected jobs under each factor (by each and every member of the job evaluation committee) independently.
• Assign money value to each factor and determine the wage rates for each key job.
• The wage rate for a job is apportioned along the identified factors.
• All other jobs are compared with the list of key jobs and wage rates are determined.
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