Relative Assessment, also known as relative comparison, is a method used in organizations to evaluate the performance of employees.
Here’s how it works:

  1. Comparison Across Workgroups: Instead of evaluating an employee’s performance in isolation, this method compares the performance of one employee with others in the same functional or operational workgroup. This means that an employee’s performance is assessed relative to their peers.
  2. Balanced Distribution of Ratings: The goal is to achieve a balanced distribution of performance ratings across the organization. This helps to avoid situations where everyone gets a high rating, which can dilute the value of the ratings.
  3. Tied to Rewards: Often, these performance ratings are tied to rewards such as bonuses, promotions, or pay raises. The better an employee’s performance compared to their peers, the higher the reward they receive.
  4. Pros and Cons: Some people believe that relative assessment creates a more objective and level playing field, as it reduces bias and favoritism. However, others argue that it can create an unhealthy competitive environment and may not always reflect an individual’s true performance.

    Remember, the effectiveness of relative assessment can depend on how well the process is facilitated and whether the outcomes are accepted by all stakeholders. It’s not a one-size-fits-all solution and may work better in some organizations than others.

The following lists some of the pros and cons of a relative comparison process.

  • An effective method to assess and differentiate the talent pool (where to focus on and invest in development)
  • If well planned and facilitated, its an effective way to equitably deploy variable compensation
  • An effective mechanism for sharing talent insights across an organization
  • Good way to foster an objective platform to test performance and behavioral standards and beliefs in real-time situations
  • Creates a platform for gathering feedback and opinions that may not be regularly solicited from key stakeholders
  • Works to create and communicate career development strategies and programs along with practical paths and planning mechanisms that are connected to routine feedback and performance management programs
  • Gives people managers a chance to showcase their approach to setting expectations and evaluating results
  • Gives HR Business Partners a chance to coach and strengthen their role on the team
  • Tends to create unintended and unhealthy competition among team members
  • Often becomes a “veiled” forced ranking process
  • Criteria for making rating decisions is often viewed as unclear and subjective
  • Most assertive / “aggressive” team leaders often “win” the highest ratings for their people
  • Tends to be very rear-view mirror focused as opposed to future / developmental
  • Primarily focused on distribution of compensation not recognizing and motivating future performance
  • People don’t understand or trust the process
  • Managers and HR Business Partners frequently are not well-trained in facilitating good discussions and outcomes.

Gerald Gibson BA

Human Capital Advisor

Gerry has held senior level roles with board involvement and global accountability for leading, coaching and developing Talent, Change Management and Organizational Development Teams to assess, plan, design, develop and implement global Transformational Management Strategies. His focus has been geared to helping companies build organization capabilities, create change champions, cultivate the talent pipeline, and grow employee engagement and future Talent Management Leaders and SME’s.

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