What Are The Benefits of Benchmarking Performance?
Performance is an ever-moving target. To evaluate your employee training based on their most recent performance (even the impression made over a period of multiple months), simply does not provide an accurate picture of their overall value. In order to avoid any unfair bias and to get a more accurate perspective of their performance, you must establish baselines, define best practices, and identify improvement opportunities throughout the year, in writing, to gain the most benefits possible from the process.
Here are just a few of those benefits, to help illustrate the value of benchmarking:
1. Gain an Independent Perspective of Performance
Depending on the reviewer, performance is a naturally subjective thing to evaluate. By laying down clear and quantifiable benchmarks against which future performance can be measured, you will be much better able to identify areas which need improvement. This holds true for one employee measuring their progress over time, and the performance of multiple employees against a baseline.
2. Identify Specific Areas of Opportunity
Benchmarking is a worthwhile exercise because it helps to clearly identify the areas where improvement can take place. If you don’t have periodic benchmarks by which to measure performance, it is difficult to see what can (or needs to) be improved in the long run.
3. Prioritize Improvement Opportunities
Similarly, benchmarking helps in prioritizing those improvement opportunities because it becomes clear what areas are most in need of attention over an extended period of time. Understand that benchmarking is about seeing the big picture, and providing reliable data to draw from in the future.
4. Validate Assumptions
Too often, managers and businesses at large make decisions about performance with little to no solid data to back up those assumptions. Performance is often tied directly to profit, with little insight into the effectiveness or strategy behind the performance decisions of an employee or team. Benchmarking provides the data that businesses need to support their decisions, which can be extremely valuable in the case of litigation or contention.
5. Set Expectations
Benchmarking, in part, is about communicating and documenting performance levels at any given time. Employees and managers should be able to look back at past performance benchmarks and actively track their performance improvement as outlined by an improvement plan, should they need to. That conversation between employee and manager created by the benchmark process enables the two parties to set clear expectations for the future.
6. Monitor Performance and Manage Change
Benchmarking, more than any other process, allows businesses to take an active role in the progress of their company as a whole. The effort to better communicate opportunities and expectations, across all levels, fosters support and often enthusiasm to do better than previous or external benchmarks. It empowers employees to grow within their role, and it provides companies with the data they need to manage change effectively.