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how to calculate how much of a multiplier i should give

dan holliday

dan holliday

New Member
I'd to get other people's opinions on what they believe is the best way to create multipliers for situations like mine.

Scenario- scoring a group of people that are assigned work in different states. Some states have more potential for profit than others because the volume is much higher. I do not want to punish the people that work in lower volume areas. So i'd like to create multipliers/factors to level the playing field for everyone as far as profit dollars go.

it seems like i would take the average profit per transaction and then rank them to see whos #1 and then divide everyone elses avg profit per transaction by the #1's avg.

Any thoughts of methods you can recommend?
 
Welcome to the forum, Dan!

Remember in high-school physics class when the teacher curved everyone's grade based on the achievement of the highest student? I didn't ever like that very much...(this always gets complaints from the median students)

If you know each person's average profit per transaction, I would suggest that you use the median profit per transaction as your starting point -- and curve everyone else's on a scale of -1 to +1. This way, the extreme highs and lows receive the MOST curve, and the middle scores receive the LEAST curve...(and this will ensure that your complaints all come from the highest achievers, which is a problem of its own...)
 
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Hi Vletm, I haven't tried or even heard of Trimmean-function. so i'll take a gander at that.

Eibi,
i'm leaning towards using the average profit per transaction for a particular state rather than the individual.

For example if georgia was the highest profit per transaction at 10.00 per
I would give Georgia a multiple of 1( basically their profits wont get a bump.

but a employee in California where the profit per transaction in that state is 6.00 would get a multiple of 1.66 bumping up their profit dollars to be equal to that of a person working Georgia.
 
I plugged in your formula (as far as I understand it) and mine, and I found that the resulting ranks were the same both ways. But I'm not happy with either, because neither takes into account the distribution of whole set....that is to say, the rank of the whole set is skewed by a few outlying values.

I'm not a statistician, but I took a shot at normalizing the data using the standard deviation, and found an outcome that is much more satisfying to me...

See attached Scenario 3...Food for thought...

I sure have enjoyed thinking on this problem.

All best!
 

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Hi Eibi, this does indeed level the playing field but some of the multipliers bring the actual profit dollars down. if profit dollars are scored according on a 1- 5 scale. It appears i have two choices, use another method than we've discussed or change my 1-5 metrics to account for this
 
When you create a propose a multiplier (as you suggested in your first post) -- you aren't dealing with real money any more -- you are purposely inflating and deflating local currency values to normalize your comparisons...

It's almost like your states are using different currencies -- one region has a strong currency (which translates to a low absolute profit margin), while another region has a weaker currency (which translates to a higher absolute profit margin).

The only person whose rank/score should tie exactly to their absolute sales is a perfectly average person with perfectly average sales in a region with a perfectly average profit potential...And nobody is perfect :)

If you have to apply a 1-5 scale to these performance measures, take a look at where each person's adjusted sales (Scenario 3, column R) fall in the Bins in $R$33:$S$38. Everybody in S34 might get a 1, everybody in S35 might get a 2, etc...
 
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