Employee Ranking System is a measurement mechanism that helps arrange employees by groups to evaluate them relative to each other by using some criteria to determine which employees show higher/lower performance versus their colleagues. Such a system is used by most employers to list their workers in some sort of ranked order.
The core idea behind using employee rankings is that employees are compared to each other to supposedly determine whether they are better, the same, or less effective than their co-workers and colleagues. A ranking system lets give an estimation of an employee’s skills, knowledge and experience to rank this employee against other workers within the same working environment and determine what pay raises the employee is supposed to receive and what authority the employee gains within the working environment.
Although employee ranking systems seem to be good and essential tools in managing employees, such systems are not effective in identifying truly valuable employees from less valuable ones. The core disadvantage is that any ranking system does not allow using methods for measuring and improving individual performance because the system focuses on employee groups and fails in determining how an employee differs from the rest employees.