Benchmarking is commonly used to measure an organization’s human resource performance. Therefore, many organizations from various industries employ the use of benchmarking to measure and improve their performance while noting their downfalls (Condrey, 2005). However, benchmarking is the main component of constant improvement programs. Benchmarking is both applicable to private and public companies. Due to the competitive nature of businesses among companies, companies are forced to undertake benchmarking so as to compare itself with other performing companies that are their competitors (Condrey, 2005). Benchmarking can either be internal or external benchmarking This paper reports on the advantages and disadvantages of external benchmarking human resource management, ways of selecting comparison organizations, how benchmarking can utilize for personal job searching and how benchmarking can create objectives and performance measurements.
Benchmarking is very important in measuring the company’s performance through the identification of issues of a concern, section of top performing competitors excelling where the company underperform and call for necessary significant changes (Kaše & Zupan, 2005). Among its advantages, benchmarking helps in lowering an organization’s labor costs. For instance, a small and growing organization can study how a well-performing competitor utilizes robots in carrying out various activities in the organization (Kaše & Zupan, 2005). Use of robot definitely might be contributing to the competitor’s success by saving on the labor costs. Benchmarking opens up the organization to identify various ways and strategic measures to take in order to save on labor cost.
Benchmarking helps an organization to identify areas of weakness in their product’s quality thus helps in improving on the product quality (Kaše & Zupan, 2005). The benchmarking organization is capable of surveying and studying the processes of production of their competitor including the quality of their products. This enables them to compare their production processes as well as the quality of their products thus being able to determine the difference between the products while noting their areas of weaknesses that require improvement in order to gain a competitive advantage.
Benchmarking facilitates the improvement of the organization’s operating functions, services and products and eventually increasing its sales. Improved customer service and productivity attract customers hence increasing the organization’s profits (Condrey, 2005). The organization undertaking the benchmarking can also improve on its sales representatives, advertisements which will help to increase sales. Essentially, organizations that operating efficiently because of benchmarking may significantly lower its operating costs. Moreover, benchmarking enables an organization to determine its own vital activities in improving the organization’s profit.
Contrary, benchmarking can have some disadvantages. Benchmarking can result in the organization’s stabilized standards (Kaše & Zupan, 2005). Majority of the organizations compare their work environment together with another well-performing organization in the same organization. After figuring out the cause of the improved success, the organization may include those concepts belonging to that organization to promote their productivity. And ultimately, they make their standards stable to that one trait regardless of the course of action.
Another disadvantage is that insufficient information may be acquired. A time when comparing the traits of different organizations, the benchmarking company may obtain insufficient information due to their information collection strategies (Kaše & Zupan, 2005). As a result, it can lead to the benchmarking organization business loss due to the insufficient information regarding the organization. Furthermore, benchmarking can decrease the organization’s performance results. When organizations establish and set its standards and objectives and then later attempts to improve those standards due to the implementation of new creative strategies, at that point the organization has to imitate the organizations that are performing well in the same industry (Kaše & Zupan, 2005). This is probably to create confusion and disrupt the benchmarking organization from performing well. Additionally, benchmarking can lead to customer dissatisfaction. Mostly in the course of the benchmarking process, the organization identifies outputs that need improvement and development in order to ensure the organization’s growth. Changing of means of production and quality of products to imitate those of the competitor organization can lead to customer dissatisfaction since the customers were used to the organization’s products and services.
To select a comparison organization, the benchmarking organization should find an organization that is a top competitor in the same industry (SHRM, 2016). The organization operation processes and its competitive advantages need to be taken into consideration. To ensure effective benchmarking, organizations with similar operations, size, contexts, and cultures need to be selected (SHRM, 2016). Literally, organizations that have the potential of greatly impacting the organization’s performance needs to be selected.
It is essential that our company to acquires services from other consultants or benchmarking organizations. This is because it enables our company to acquire more information that is useful in fostering organizational development that will contribute to the performance improvement (SHRM, 2016). However, that information obtained from benchmarking fails to provide the cause of action. Nonetheless, benchmarking can be employed in the personal job search. An individual searching for a job opportunity can utilize benchmarking to determine the wages that he or she can acquire, the job description and obligation and as well get to determine the competencies that are required out of it (SHRM, 2016). Benchmarking is an important information gathering strategy thus it is important that the information acquired is used to create and set the organization’s goal. The human resource management can utilize benchmarking to set the organizational goals to improve company performance.
To sum up, benchmarking is an important tool in human resource management in an organization. Benchmarking plays a significant role in spearheading an organization’s performance. It acts as an eye opener for the underperforming organizations and as well helps them borrow ideas that will improve their performance. Therefore, benchmarking should be encouraged and frequently employed so as to ensure an organization’s effectiveness.