They engage in a kind of comparative close reading. They'll take the famous Chapter 42 of 'Portrait', where Isabel meditates through the night, and compare it to a similar moment of crisis in 'The Wings of the Dove' or 'The Golden Bowl'. Which passage is more psychologically penetrating, more beautifully written, more crucial to the character's arc?
They'll also look at the supporting casts. Are the villains like Gilbert Osmond or Charlotte Stant utterly convincing? Are the confidantes like Henrietta Stackpole or Mrs. Assingham brilliantly realized? A novel with only a great protagonist but weak secondary characters might not be the 'best overall'.
It's a cumulative assessment of all the novel's components: plot, character, style, theme, structure, and ending. Few novels score top marks in all, but the ones that come closest enter the final round.