Human Resources Benchmarking:
Should You Do It Or Not?
Human resources benchmarking refers to the process of conducting a search for and adoption of the best practices in Human Resource management.
For example, the best practices in recruitment, employee motivation and retention, and the most effective HR strategies in helping organizations to achieve positive financial outcomes on a continuous basis.
Your organization can use the information obtained through benchmarking to improve every important area in human resource management.
Benchmarking gives organization the opportunity to learn from the best and who had already reaped the fruits of implementing strategies in managing people and how these differ from its current HR practices.
Definition of "Best Practices"
In edmontons.com, it is stated that:
"Best practices are organizational structures, cultures and systems that set the benchmark standards of excellence for others in their industry to follow."
(Employers of Choice-Edmonton's website for Best Practices)
Study your organizational structure, culture, systems, and processes that may have the greatest impact on your business activities. Benchmark these for maximum impacts.
In human resources benchmarking, what organizations need to look for is the best performance level based on prevailing industry standards.
Your organization can benefit from benchmarking provided certain things are carried out.
- Selection of organizations that are very or fairly similar to your organization in terms of size, operational environment, and type of business activities. Some call this "apples to apples" comparison.
- Defining what "best practices" you are looking for based on your own criteria.
- Understanding and identifying what "HR Practices" currently in use and the standards.
- Studying the performance indices, and awards won by the selected organizations. Find out what they did to merit the awards.
- Determining the most appropriate time and time frame in the implementation of the "best practices" in your organization.
Writing about benchmarking in tourism businesses, Metin Kozak in "Destination Benchmarking: concepts, practices and operations", he states:
"Benchmarking is an established tool for quality improvement in certain industries (e.g. manufacturing and service)..."
This clearly indicates that benchmarking is important in human resource management.
Reasons for Human Resources Benchmarking
As a further clarification, benchmarking contributes toward improvement in HR performance.
- Through benchmarking, you can learn how other organizations had succeeded to excel in managing people.
- It will help you to identify and learn about ways to strategize management of people to meet organizational needs, For example, how good are your recruitment strategy in finding the right people for present and future needs.
- It helps to determine the level of effectiveness of your HR plan and what are necessary changes for improvement.
Choose not only the best but the most suitable when benchmarking human resources practices.
For example, it is said that some organizations benchmark the speed and accuracy of the services they provide on the standards of the grand prix service teams.
Another example is the excellent service provided by the Singapore Airlines. It is the recipient of the 2008 Awards for Best Airline of the Year, Best Business Class, and Best Airline: Asia. The Singapore Changi Airport is at No. 1 under the world's best airports for 2013 and 2014. Surely, it has done some very excellent things which other other airlines can benchmark.
Approach to Human Resources Benchmarking
Make your plan taking several important factors into consideration.
- Make a thorough study of your own HR practices.
- Identify which area or areas of HR you want to improve
- Identify the organizations you want to benchmark your HR
- Assign the right people to conduct the benchmarking. Ensure that these are the same people who are responsible for implementing the changes in HR management.
- Allow your people to exchange information with the benchmarked organizations but within the confine of the law.
- Respect the confidentiality of data provided by the benchmarked organizations.
So what do you with the information?
You conduct benchmarking with the purpose of improving your Human Resource management.
This inevitably requires implementing changes. This is not always easy. And things cannot change in a day.
By assigning the would-be owners of the new system to conduct the benchmarking, you are already preparing your forward-looking plan.
This is why selecting the right people to conduct the benchmarking is important.
Focus of Human Resources Benchmarking
Benchmarking must necessarily focus how the Human Resource "best practices" can positively contribute to the business outcome, effectiveness of HR strategies, and the linkage of the HR strategy to the overall strategic plan.
Learn from those that had succeeded in employing strategies in human resource management. There is all the likelihood of organizational success if you do this. Look for organizations that had received HR Best Practice Awards and study how they got the awards.
However, take note of what some experts have cautioned when conducting human resources benchmarking.
When organizations become too obsessed with the "best practices" in other organizations, there is the risk of becoming static, having fallen in love with these practices.
There is also danger in imitating other organizations' practices "lock, stock and barrel." No two organizations are the exactly the same. Context and background of organizations need some close study. Take the necessary step to avoid this pitfall.
Further, regular reviews are necessary in order to move in tandem with changes that are occurring within and outside the organization. Take what can help the organization and nothing more.
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