The ranking method in HRM, also known as stack ranking, is a comparative method for performance evaluations where employees within a specific group, typically a department, are ranked based on their perceived value to the manager or supervisor.
Understanding the Ranking Method
This performance appraisal technique involves a manager directly comparing employees against each other rather than evaluating them against predetermined standards or objectives. The core idea is to create a relative order of performance from best to worst within a defined group.
As stated in the provided reference: "In a ranking method system (also called stack ranking), employees in a particular department are ranked based on their value to the manager or supervisor. This system is a comparative method for performance evaluations."
How Ranking Works
Implementing the ranking method typically involves a few simple steps:
- Identify the Group: Determine the specific team or department to be ranked.
- Assess Value/Performance: The manager evaluates each employee's contribution, performance, and overall value relative to others in the group. This assessment is often subjective.
- Create the List: Employees are listed in order from the highest-ranked (most valued/highest performing) to the lowest-ranked.
Types of Ranking
While the basic concept is simple ranking, variations exist:
- Simple Ranking: Employees are listed from 1st to last.
- Alternation Ranking: The manager selects the best employee and the worst employee, then the second best and second worst, and so on, until all employees are ranked.
- Paired Comparison: Each employee is compared head-to-head with every other employee in the group. The employee who wins the majority of comparisons receives the highest rank.
Advantages and Disadvantages
Like any performance appraisal method, the ranking system has potential pros and cons:
| Advantages | Disadvantages |
|---|---|
| Relatively quick and easy | Can be highly subjective |
| Forces managers to differentiate | May create a competitive, cut-throat environment |
| Useful for identifying top performers | Difficult to justify specific ranks objectively |
| Simple concept to understand | Can damage team cohesion |
Practical Considerations
Organizations using or considering the ranking method should be aware of its implications:
- It can highlight performance differences but offers little insight into why performance is high or low.
- Providing specific feedback based only on a rank can be challenging.
- It may be perceived as unfair, especially if the ranking criteria are unclear or inconsistent.
In summary, the ranking method in HRM is a straightforward comparative approach where employees are ordered based on a manager's assessment of their relative value or performance within a group.
