Employee Evaluation Formulas & Curves
Employee Evaluation Formulas & Curves
(OP)
Greetings,
I've been trying to resolve an employee evaluation problem that I'm sure is common in any medium/large company.
At my company, employee evaluations are directly tied to raises. It starts once a year when, to leave out the complicated details, the accountant and the CEO decide on a lump sum of raises that can be distributed (i.e. 10K year.etc)
The supervisors then evaluate each of the employees that they supervise using a standard form, which results in a number score. This number score is then input into a formula which decides what percentage of the "lump sum" each employee will get.
The problem occurs when you have multiple supervisors conducting evaluations. Because supervisor "A" may be giving out a 4.5 average when supervisor "B" is giving out a 2.9 average. This problem is amplified by the fact that each score is going to have a direct effect on the amount of raise each employee will get.
Some companies go to a flat "across-the-board" type of raise but we don't want to go to such a system. We want to reward hard-work.
I assume this problem is fairly common. How do bigger companies solve this?
I have written a formula for "equalizing" or "curving" the scores. (See the attached file)
I wanted to see what other companies were doing & seek suggestions before I implement this.
Thanks,
VS
I've been trying to resolve an employee evaluation problem that I'm sure is common in any medium/large company.
At my company, employee evaluations are directly tied to raises. It starts once a year when, to leave out the complicated details, the accountant and the CEO decide on a lump sum of raises that can be distributed (i.e. 10K year.etc)
The supervisors then evaluate each of the employees that they supervise using a standard form, which results in a number score. This number score is then input into a formula which decides what percentage of the "lump sum" each employee will get.
The problem occurs when you have multiple supervisors conducting evaluations. Because supervisor "A" may be giving out a 4.5 average when supervisor "B" is giving out a 2.9 average. This problem is amplified by the fact that each score is going to have a direct effect on the amount of raise each employee will get.
Some companies go to a flat "across-the-board" type of raise but we don't want to go to such a system. We want to reward hard-work.
I assume this problem is fairly common. How do bigger companies solve this?
I have written a formula for "equalizing" or "curving" the scores. (See the attached file)
I wanted to see what other companies were doing & seek suggestions before I implement this.
Thanks,
VS





RE: Employee Evaluation Formulas & Curves
If you want to know why forced ranking is a shockingly bad idea as a permanent method then there are plenty of google hits. You might also like to read up on Tournament theory.
I personally can't complain about my pay rises relative to the rest of the organisation, but I also can't believe that such a stupid idea still has legs. We are supposed to work as teams. So why are individuals being encouraged to outperform their peers, and grab all the glory, rather than helping/educating the also-rans and young-uns? As an example, once upon a time, I prepared a graph in excel and sent it out as a png. A lowlife then hand transcribed the data off my graph onto an all but identical one, and issued it as his own work (yes MP, if you are reading this, I have kept that powerpoint). He won an award for that one.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Employee Evaluation Formulas & Curves
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Employee Evaluation Formulas & Curves
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Employee Evaluation Formulas & Curves
It then becomes a downwards spiral. Different levels of management focus on (and blame) different parts of the problem and put forward valid arguments as to why there is a problem. But if you do not retain the experienced staff with potential, the rot sets in. The companies need to look at who adds value to the company and provide incentives for them (remuneration, responsibility, training) and also focus on succession planning.
RE: Employee Evaluation Formulas & Curves
Dan - Owner
http://www.Hi-TecDesigns.com
RE: Employee Evaluation Formulas & Curves
It kind of goes back the Winston Chuchill saying: this is the worst system except for all the others that have been tried....
Any details on how your current employers conduct evaluations? And raises?
Thanks,
VS
RE: Employee Evaluation Formulas & Curves
Any plan that has an equal sign is trying to replace decisions with policies. I have found that these schemes tend to drive the stars out and encourage the slugs to never leave.
My first boss had it right. His policy was that he compensated his stars first, and spread the rest among the troops in an absolutely arbitrary manner. He was the one that said, "I plan to pay you so much that you don't think about your pay, because if you are thinking about your pay you are not thinking about the projects that make the company money." He never had a star quit him. He had more than a few slugs go looking for greener pastures. He passed away before the "personel department" became HR and took over the process. Everyone he had nurtured moved to greener pastures within a year of his passing.
If you take the decisions away from the supervisor and give it to an algorithm, the people who make you the most money will be the first ones you lose.
David Simpson, PE
MuleShoe Engineering
Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat
RE: Employee Evaluation Formulas & Curves
Numbers get run to see if the total falls within budget, and then the list get reviewed for anomallys - high salary '3' having larger bonus or increase than low salary '1'.
We repeatedly made the mistake of rounding the increase to get the numbers easier to read and would deal with fallout along the lines of "I got 3.32% inrease and so-and-so got 3.34%"
Then you get in to arguements over the increases between the different departments....
RE: Employee Evaluation Formulas & Curves
I was grossly underpaid for my nominal title a few years ago and so got to have some nice big pay raises, but now they're tapering off.
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?
RE: Employee Evaluation Formulas & Curves
The only times I tried a hard core ranking scheme to make a staffing decision, I scrapped it and trusted my gut anyway - once to hire an intern and once to help staff a department. Both times, it was the right thing to do.
zdas04 has the right idea.
RE: Employee Evaluation Formulas & Curves
This happens very often with any formal evaluation process, whether it is for people or design alternatives. Once you've got the stakeholders together, established the factors and responses, and the weightings, and then scored each proposal, the result is often odd. Then you have to reverse engineer the decision matrix and see what you missed out or did wrong. This can be useful. Or, as you did scrap it.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?
RE: Employee Evaluation Formulas & Curves
RE: Employee Evaluation Formulas & Curves