Benchmarking

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Quick Facts

14th November 2022

  • For information on remuneration and benefits benchmarking, please visit the Salary Benchmarking section of this service.

  • Benchmarking is a systematic approach to business improvement founded on the use of comparisons to a “benchmark” standard — essentially, comparing ourselves to, and learning from the experiences, actions and achievements of, others.

  • A benchmark is any form of standard that can be used for comparing policies, processes, activities, and achievements.

  • Benchmarking is a systematic approach to business improvement founded on the use of a “benchmark” standard. Background

  • Benchmarking is traditionally performed around quantifiable tasks. Benchmarking of Quantifiable Tasks

  • Benchmarking can also be used to analyse and improve a company’s strategies and methodologies. Other Applications of Benchmarking

  • Benchmarking can bring about a range of improvements. Advantages of Benchmarking

  • In recent years benchmarking has been seen as a key way of improving the performance and delivery of public sector services. Benchmarking in the UK Public Sector

  • The different types of benchmarking are strategic benchmarking, performance (competitive) benchmarking, process benchmarking, functional (generic) benchmarking, external and internal benchmarking. Different Types of Benchmarking

  • The choice of which type of benchmarking to use depends on a company’s circumstances and objectives. Choosing the Appropriate Method of Benchmarking

  • Successful benchmarking takes place in stages. Implementing Benchmarking

  • Benchmarking in a department can cover any aspect of that department. Example: Benchmarking in a Company HR Department

  • Benchmarking can be used in conjunction with other management tools. Integration of Benchmarking with Other Initiatives

  • There has been some questioning of the use of benchmarking especially where it has been used simply as a means of deflecting criticism of performance and delivery when more fundamental management actions may be required. Critique of Benchmarking

Summary

As defined by the Department for Business, Energy and Industrial Strategy (BEIS), benchmarking is “a systematic approach to business improvement where best practice is sought and implemented to improve a process beyond the benchmark performance”.

Benchmarking is more than just a method of comparing one process against another. It provides a framework for considering business processes in a more creative way, for building strategic partnerships and for learning from the parallels offered by similar business processes in different or competing workplaces.

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As defined by the Department for Business, Energy and Industrial Strategy (BEIS), benchmarking is “a systematic approach to business improvement where best practice is sought and implemented to improve a process beyond the benchmark performance”.

Benchmarking is more than just a method of comparing one process against another. It provides a framework for considering business processes in a more creative way, for building strategic partnerships and for learning from the parallels offered by similar business processes in different or competing workplaces.

While benchmarking can help organisations to sense check the efficiency and effectiveness of their ways of working, comparisons of benchmarking data should always take contextual issues into account including the organisation’s purpose, values, objectives and long-term business goals.

In today’s fast-changing and highly competitive business world, future-proofing how organisations operate is vital to sustain and grow economic success. This demands more than reflecting on historical data related to yesterday’s ways of working. It demands future gazing and gaining insights about tomorrow. Taking into account both past trends and future projections will help organisations to develop agility to respond to change and take advantage of emerging business opportunities.

This topic looks at the different types of benchmarking and their advantages, and contains an explanation of when to use each benchmarking approach. It also gives an example of benchmarking in an HR department.

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