What Is a Decision Matrix? (Plus How To Use One in 6 Steps)

Decisions are a regular part of people's everyday lives. One tool you can use, a decision matrix, can be a helpful tool when aiming to make effective decisions at work. This tool allows you to choose from a list of options, comparing them against one another through a decision matrix table.

In this article, we explain how decision matrices work and provide steps to enable you to take a logical, streamlined approach to decision-making.

What is a decision matrix?

A decision matrix is a decision-making table you can use to evaluate different options. This tool can simplify your process because you only need a list of options and the significant criteria to judge them. You then score each option, and the highest-scoring option typically represents the best decision because it most fulfills your criteria. Using a decision matrix enables you to compare and contrast your options in a simple-to-read format.

Some people also refer to a decision matrix in the following ways:

• Criteria rating form

• Decision grid

• Grid analysis

• Multi-attribute utility theory

• Opportunity analysis

• Problem matrix

• Problem selection matrix

• Pugh matrix

• Selection matrix

• Decision template

Related: 6 Tips for Making Effective Business Decisions

When to use a decision matrix

You can use a decision matrix in a variety of situations, from making decisions to solving problems. This tool works well if you have several options that you can compare easily using the same criteria. Because a decision matrix focuses on ranking and rating options, it's helpful for quantifiable business decisions that rely on logic rather than emotions or personal preference. You can use a decision matrix when:

• Choosing a new product or service to develop

• Selecting an office location

• Recruiting a vendor

• Deciding on a new operational procedure

• Purchasing software or tools

Something like a hiring decision may be too complex for a decision matrix because you also determine candidates' personalities and how well they fit into your work environment or team. You base your assessment of who they are on your perceptions rather than a logical determination.

Related: Decision-Making Skills: Definition and Examples

How to use a decision matrix

You can use the following steps to create and use a decision matrix:

1. List your options

When you make decisions, determine which options you want to evaluate and compare against one another. You create your decision matrix by listing those options as the rows of the table. For example, if you're choosing between several software options you want to purchase for your office, the left side of your matrix table may be like this:

2. Determine your criteria

Now, you determine the criteria to help you make your decision. While you can brainstorm a long list of criteria, you can reduce it to eight factors or less to ensure you target the best features. Consider the most important criteria for your decision. You then list those items as the columns of your matrix table. Using the example of software to purchase, you may create the following criteria columns:

3. Weigh your criteria

As you developed your list of criteria, you determined which factors mattered most. Now, you assign weights to them, ensuring that you don't treat the criteria equally when some have more importance than others. Depending on how many criteria you have, you may rank them from most important to least important. Using the software example, you can rank the four criteria on a scale from one to four. You determine that:

• Price has a weight of 4, which is the most important category

• Features have a weight of 3

• Integration has a weight of 2

• Customer service has a weight of 1, which is the least important category

Once you've determined your weights, create a row beneath the criteria. Place their corresponding number in those cells. You use these numbers later to help score the option and make your final decision:

4. Score your options

Create a rating scale to score how well each option meets the criteria. A common scale to use is from one to five, where one represents a poor rating while five represents an excellent rating. You can use as large or small as a scale as you would like—whether you rate items from one to three or one to 10. Then, define what each number on the scale represents. Once you've defined your scoring, move through the table and assign ratings to each option.

Using the example, a software option that scores five under the features criteria means it has all the features you want. Meanwhile, a software option that scores one means that it has only a few of the features you want. You rate each item from one to five as follows:

5. Calculate the weighted scores

You scored each option, and now you use the criteria weight to determine the weighted scores. To do this, move through the table and multiply each score by the criteria weight. This calculation determines the options' weighted scores and considers the varying levels of importance of the criteria. For example, software A scored three on price, and you determined price had a weight of four. Therefore, its weighted score for pricing is 12, highlighted by the following chart:

6. Make a decision

Once you calculate the weighted scores, you add them together. Place the sum of each option's totals in a “Score” column at the end of your table. Now that you have your totals, you can determine which option scored the highest across all criteria. That represents the best choice based on your wants or needs, thus enabling you to make your final decision.

In some situations, you may not solely rely on the decision matrix. For example, one option may have scored highest overall but may have scored lower in the criteria that mattered most to you. You can conduct further discussions or assessments to determine which option makes the most sense for you, but the matrix at least offers an effective starting point on which to base your decision.

Related: Optimizing Your Workplace Decision-Making Process in 7 Steps

Decision matrix example

Below is an example of using a decision matrix:

You're choosing a new office space for a company and have a list of four options. Next, you determine the criteria and rank their importance as follows:

• Price has a weight of 4, which is the most important category.

• Size has a weight of 3.

• Location has a weight of 2.

• Amenities have a weight of 1, which is the least important category.

Next, create a rating scale that determines how you evaluate each option against the criteria. You decide to rate them from one to five, with five representing an excellent rating and one representing a poor rating. Using all this information, you can create the following decision matrix:

Reviewing the totals, you can determine that Office C received the highest score and represents your best option.