Friday, April 13, 2012

Weighted criteria assessment in decision making

The Weighted Criteria Assessment is a method designed to support decision making where there are different alternatives. Fro example you want to change the job and you are in dilemma to change or not. This is based on your analysis and priority of the alternatives and different factors which are considered. As the title suggests, these criteria are 'weighted' based on their importance to the decision. The idea is to provide an objective assessment of a decision (which can be a job change or decision required to take a new house). Any number of attributes, factors or decisions can be compared.

There are essentially three steps to completing the Assessment Matrix:

1) Identify Criteria: A list of relevant criteria or dimensions needs to be created, it is often useful to group these criteria under general headings to faciliate communication and to also ensure that one heading with many criteria does not dominate the entire decision process (e.g. ten items under the heading “location” (in case of taking a new home) might dominate one item under the heading “distance” even both location and distance might have the same overall weighting for the decision).

2) Determine Weightings: Each criterion must be assigned a 'weighting'. In the matrix the weightings can be on a scale of 1 – 5. It is also possible to use a "Low, Medium, High" form of rating. You can either use an overall fixed weighting system (a total value for all critieria not to exceed 100 for example) or you can simply add as many critieria with their respective weightings as you wish. It is often valuable to enter a percentage at the grouping level to illustrate the importance of the grouping to the overall decision.

3) Ranking Decisions: With the criteria and their weightings determined, the next step is to put 'rankings' for how each decision variable fits the criteria. In this matrix, the rankings are on a scale of 1 - 5 although once again any scale could be used. After applying the rankings the matrix has to calculate a total weighted assessment and will 'recommend' one of the decisions automatically for you.

One of the benefits is you have a strong case on your decision and is based on the objective data.
It also helps in the decision making process and is an effective tool for communicating to other stakeholders the criteria and how they relate to the decision being made. This develops consensus on the criteria and weightings used and is a relatively quick way to get input from stakeholders.

Take an example of comparing two companies while changing the job.
While changing the job, you need to take the decision based on objective dimensions. Mostly the candidate sees the CTC and job profile, but if you only depend upon these two dimensions, you may end up in different area altogether. Hence other factors also need to be considered. In the example I have prepared some factors which should be taken care off. However you need to take a call for job change based on your priorities in your life. For example you may weight salary more against the company culture or vice versa.

As a final suggestion, it is often important to have a companion document that explains each criterion in enough detail that it is clear what the criteria represent.

Please download this file and follow the discussion on employee attrition on

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