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Human Resources Benchmarking: The Pros and Cons

For example, you can learn about the best practices in recruitment, employee motivation and retention, and the most effective HR strategies in helping organizations to achieve positive financial outcomes.

Your organization can use the information obtained through benchmarking to improve every important aspect of human resource management.

Benchmarking gives your organization the opportunity to learn from the best and who had already reaped the fruits of strategic human resources management.

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."

Study your organizational structure, culture, systems, and processes that may have the greatest impact on your business activities. Benchmark these for maximum impacts.

External Benchmark
When we talk about human resources benchmarking, we are looking for the best performance level based on prevailing industry standards.

Your organization can benefit from benchmarking provided certain things are done.

• Select 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.
  
• Define what "best practices" you are looking for based on your own criteria.
  
• Understand and identify what "HR Practices" that you currently have or are practising and the current standards.
  
• Study the performance indices, and awards won by the selected organizations. Find out what they did to merit the awards.
  
• Determine 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
To explain further, 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 your human resource management to meet organizational needs, For example, how good are your recruitment strategy in finding the right people.
  
• It will help you to determine the level of effectiveness of your HR plan and what changes are necessary to make the necessary improvement.
  

Only choose the best of the best in benchmarking your 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 the excellent service provided by the Singapore Airlines. is It is the recipient of the 2008 Awards for Best Airline of the Year, Best Business Class, and Best Airline: Asia. (Note: The 2010 awards will occur soon in Hamburg)

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" are contributing to the business outcome, effectiveness of the HR strategies adopted, 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.

However, we need to take note of what some experts have cautioned when we conduct 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. Take the necessary step to avoid this pitfall.

Regular reviews are necessary in order to move in tandem with changes that are occurring within and outside the organization.

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