Professional Documents
Culture Documents
PROJECT REPORT
ON
“BENCHMARKING OF HR PRACTICES"
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ACKNOWLEDEGEMENT
This project has been made possible through the direct and indirect co-operation
of my academic mentor, Prof.Sheetal Khanka, for whom I wish to express my
appreciation and gratitude for giving me an opportunity to work on this project. I would
like to express my deep gratitude of indebt-ness to my mentor for providing valuable
guidance during the project and the completion of the project without which it would
have been difficult to achieve. I am also obliged to my mentor without whose guidance it
would have been difficult to complete project successfully.
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CONTENTS
1. DEFINITION 1-2
2. PURPOSE OF BENCHMARKING 3
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9. RESEARCH METHODOLOGY 14-34
- DATA COLLECTION 15
- DATA ANALYSIS 16
- ARTICLES 17-27
- EXAMPLES OF TOP 10 BENCHMARKING FIRMS 28-30
- SUMMARY OF THE BENCHMARKING INTERVIEWS 31-34
10. FINDINGS 35
11. CONCLUSION 36
11. BIBLIOGRAPHY 37
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DEFINITION
What is Benchmarking?
"Benchmarking is a process for identifying and importing best practices to improve
performance." Benchmarking is not a simple comparative study, simply copying
practices from other organizations, or simply assessing performance.
The International Personnel Management Association and the National Association of
State Personnel Executives jointly developed the following definition for benchmarking:
A comparison of similar processes across public and private organizations to identify best
practices to improve organizational performance. The characteristics and attributes of
benchmarking include measuring performance, systematically identifying best practices,
learning from leading organizations, and adapting best practices as appropriate.
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Alan Flower (1997) lists 5 main stages in effective benchmarking:
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PURPOSE OF BENCHMARKING
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NAVIGATING HR BENCHMARKING
Benchmarking Model
Benchmarking is the search for industry best practice which leads to superior
performance. The pioneer of competitive benchmarking was the American company,
Xerox Corporation. The company demonstrated the usefulness of observing and learning
from superior performers by benchmarking their competitor. Through the knowledge they
gained they managed to dramatically improve their productivity and significantly reduce
their cost of production.
Based upon the Xerox experience, Robert Camp has developed a model which can be
modified and adapted to suit any functional area, including HR management.
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Phase One: Planning
Camp has broken the process of benchmarking into 10 steps which progress through 4
phases:
Step 1: Identify what functions, products or outputs are essential practices and should be
benchmarked.
Step 2: Identify external organizations or functions within own organization with
superior work practices for comparison.
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Phase Four: Action
Step 7: Establish functional goals linked to the overall vision for the organization.
Step 8 & 9: Develop action plans and implement the best practice findings. This should
be the responsibility of the people who actually perform the work. Periodic measurement
and assessment of achievements should be put into place.
Step 10: Update knowledge on current work practices. This is, in essence, the crux of
continuous quality improvement.
The remainder of this paper will focus on how to begin step one, the planning
phase, of an HR benchmarking process, i.e. Identifying what to benchmark.
The discussion will primarily deal with the quantitative measurement of human resource
management. Although qualitative assessment can be a valuable and informative
benchmarking tool, the ease with which agencies can define, and in many cases obtain,
quantitative information makes it a practical starting point from which to develop a
benchmarking process.
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BENCHMARKING THE HUMAN RESOURCES FUNCTIONS
The Global best practices HR tool examines 44 performance measures in 5 key areas:
1. Cost and Staffing: Compare a series of cost measures, including the total cost of the
human resources department, in addition to a series of staffing measures, including the
number of HR staff to total employees.
2. Recruitment: Assess turnover rates. Determine the timeliness and efficiency of the
recruitment process.
3. Training and Recognition: Review types of training offered and use of incentive
plans.
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DIFFERENCE BETWEEN BENCHMARKING AND
BEST PRACTICES
No, they are not the same. Benchmarking is the process that allows one to identify
potential best practices, i.e. by identifying the best performers; one knows where to look
for practices that might improve their own performance. However, there are different
types of benchmarking and some organizations engage in benchmarking in order to
identify performance targets for their own organizations rather than to look for practices
that make other organizations so successful.
A best practice is not simply a new idea, but rather a Best Practice is one that meets the
following seven criteria:
1. Successful over Time: A best practice must have a proven track record.
2. Quantifiable results: The success of a best practice must be quantifiable.
3. Innovative: A program or practice should be recognized by its peers as being creative
or innovative.
4. Recognized positive outcome: If quantifiable results are limited, a best practice may
be recognized through other positive indicators.
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5. Repeatable: A best practice should be replicable with modifications. it should
establish a clear road map, describing how the practice evolved and what benefits are
likely to accrue to others who adopt the practice.
6. Has local importance: Best practices are salient to the organization searching for
improvement. The topic, program, process, or issue does not need to be identical to the
importing organization, however.
7. Not linked to unique demographics: A best practice may have evolved as a result of
unique demographics, but it should be transferable, with modifications, to organizations
where those demographics do not necessarily exist.
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FACTORS ENHANCING THE CHANCES OF SUCCESS FOR
A BENCHMARKING EFFORT
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BENCHMARKING BEST PRACTICES, RECRUITMENT
STRATEGIES AVAILABLE ONLINE NOW
One of the most important services an association can provide its members is the
information necessary to improve its performance. One way to do that is by conducting
benchmarking surveys and then taking a closer look at best practices—summaries of
what individual agencies are doing in areas like workforce planning and healthcare cost
management.
The IPMA-HR benchmarking committee recently completed work on the Healthcare
Benefits Cost Management Survey, and the results are available for free to all IPMA-HR
members. How to handle the growing cost of providing health benefits has posed a
significant problem for public sector employers who don’t have the option of passing
along the costs to customers.
In addition, five best practices summaries in the area of workforce planning are now also
posted to the IPMA-HR Web site at http://www.ipma-hr.org/. IPMA-HR learned from the
original study that many organizations have not begun to tackle the looming Baby
Boomer retirement crisis. For agencies that anticipate a workforce shortage in the next
five to 10 years, workforce planning is the place to start. Take a few minutes to learn
what other agencies are doing by visiting the IPMA-HR Web site.
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The benchmarking committee is also looking forward to sharing information on
recruitment and selection strategies. This is a topic that garners great interest, with
hundreds of members accessing IPMA-HR research products online each month. In late
February, the benchmarking committee launched a survey in partnership with NEOGOV
on this important topic. Results should be available in late spring.
The benchmarking Web site (http://www.ipma-hr.org/index.cfm?navid=128) and best
practices Web site (http://www.ipma-hr.org/index.cfm?navid=127) are easily accessible.
Do not forget to login to access the members-only material.
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BENEFITS OF BENCHMARKING HR PRACTICES
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RESEARCH METHODOLOGY
STUDY
This research project is a descriptive type of study on the topic-
“BENCHMARKING OF HR PRACTICES”.
Research Design:
Research Design is simply the framework or plan for a study, which is used as a guide in
collecting and analyzing the data. It is the blueprint that is followed in completing a
study. As the objective of the research is descriptive in form, the research design must be
made accordingly:
• Formulating objective of the study.
• Designing the method of data collection.
• Selecting the sample size.
• Collection of data.
• Analysis.
• Conclusion.
Descriptive research includes websites, books, magazines, observations and fact-finding
enquiry of different kind.
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DATA COLLECTION
PRIMARY DATA: Primary data helps in validation of the knowledge gathered from
secondary data. Primary Data are those, which are collected afresh and for the first time.
The methods adopted for it are as under:
• Observation Method
• Questionnaire
SECONDARY DATA: Secondary data provides the knowledge about the topic of the
research and the company in terms of facts and figures. Secondary data are those, which
are collected through someone else, and users can obtain from websites, books,
magazines, and articles in newspapers.
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DATA ANALYSIS
METHOD OF DATA COLLECTION: The study is based on the secondary data. The
research tools are the magazines, journals and websites.
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ARTICLES
Dr Keith Good all, Senior Associate at the Judge Business School, Cambridge University
Programme description:
This three-day programme focuses on the relationship between Human Resource
Management and the leadership and management of successful businesses. The
development of the Human Resource function from its early role in ‘Personnel
Management’ to the current emphasis on Human Resource as a ‘strategic partner’ will be
examined.
The course is organised around case studies which detail Human Resource practices in a
variety of industries. The teaching methodology includes short lectures, practical
readings, group discussions and DVD presentations.
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Key focus areas
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Who should attend?
The course is suitable for practicing HR managers interested in benchmarking their
current practices against international trends. It is also suitable for senior managers who
want to use their HR function as a source of competitive advantage.
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2. HR PRACTICES FOR HIGH PERFORMANCE ORGANIZATIONS
ABSTRACT:
If Australian organizations are to be competitive, more productive and economically
sustainable, they will require highly skilled knowledgeable, innovative workers and a
relatively stable workforce. An increasing number of companies in the United States and
Europe are implementing management systems and HR practices with greater employee
involvement to increase productivity and quality, and to gain the competitive advantage
of a workforce strategically aligned with the organization’s goals and objectives.
Critical organizational processes such as information sharing, training, decision-making
and rewards are now being moved down to the lowest levels in the organization. This
approach to HR puts knowledge, power, rewards, and a communication network in place
at every level in an organization. If organizations are to be sustainable in the medium to
long-term, employees must be motivated to care about the work they do, to acquire
knowledge-related skills, and to perform.
Greater employee involvement can only be achieved through a carefully managed
process that strives for participation by integrating the individual with the organization to
achieve high productivity and competitive advantage. This process involves restructuring
the work so that it is challenging, interesting, and motivating as possible. Employees at
all levels are given power to influence decision-making.
However, high quality employees do not assure an organization of having a sustainable
competitive advantage or even a short-term advantage. If employees are poorly motivated
or if the correct organizational systems are not in place, the employees’ talent may be
wasted or lost to competitors.
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THE FORCES OF CHANGE:
The organizational events of the last ten years – out-sourcing, downsizing, re-
engineering, reduced organizational levels, acquisitions and joint ventures, high
management turnover, broadened spans of managerial control, rapid technological change
and globalization – are challenging traditional HR and executive development practices
established since the mid-1970s.
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WHY HR IS NOW BECOMING INCREASINGLY IMPORTANT
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HR PRACTICES WHICH ARE CRITICAL TO ECONOMIC SUSTAINABILITY
• Employment security
• Selective hiring of new personnel
• Self-managed teams and decentralization of decision-making
• High compensation contingent on organizational performance
• Extensive training and development
• Continuous improvement HR programs
• Reduced status distinctions and barriers
• Trust between management and employees at all organizational levels
• Efficient and effective use of new information technologies
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FACTORS WHICH CONSTITUTE BEST PRACTICES IN HR ARE
• Communications
• Continuous Improvement
• Culture Consciousness
• Customer Focus & Partnering
• Interdependence.
• Risk Taking
• Strategy and commitment.
.
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KEY FINDINGS AND LESSONS LEARNED
The literature refers to some key findings from research and lessons learned. These
include:
• The most striking increases in high-involvement work practices are in the use of
on-line work teams and off-line problem-solving groups.
• Higher levels of managerial tenure had a positive and statistically significant
association with greater increases in the use of high-involvement work practices.
• In newly industrialized countries, investments such as increased training,
performance-based pay, the elimination of status barriers, and more selective
recruitment and hiring practices were assessed by the corporate parent.
• High-involvement work practices may represent "competence-destroying"
change, which is difficult to implement, and may lead to worsened performance in
the short-term.
• Plants that undergo a major disruption in their operations – creating opportunity
for various organizational changes - were more likely to adopt high-involvement
work practices.
Manufacturing technology is necessary but insufficient, without work force commitment
to performance. Any competitive advantage will not be sustained without a skilled,
motivated, and committed management team and work force. Organizations must
enhance work force ability to improve productivity. Technology without a talented work
force is an opportunity that has not been utilized enough.
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NEW ROLE FOR HR PROFESSIONALS
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CONCLUSION
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EXAMPLES OF TOP 10 BENCHMARKING FIRMS
The very best companies in recruiting are constantly striving to improve everything they
do through continuous learning. One of the best learning tools at their disposal is
benchmarking, which often provides learning that can be applied immediately.
Unfortunately, unlike many other professions, there is no standard measure as to what
makes a recruiting function world class, which might provide a list of which firms are
benchmark worthy (for benchmarking to be truly beneficial, all parties involved must be
able to learn from each other).
The Top Ten
1. First Merit Bank. Some may find it hard to believe that the most strategic and
innovative approach to recruiting isn't found inside one of America's most recognized
companies, but rather from this bank headquartered in Ohio. In addition to a great referral
program, they are the best in understanding how recruiting can adopt successful
approaches such as data mining, customer relationship management, competitive
intelligence, and assessment metrics from other business functions.
2. General Electric. Long recognized as "the" benchmark firm when it comes to building
a performance culture, GE wins hands down as having the best overall talent
management strategy. They prioritize jobs and focus on "game changers." Their
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employer-of-choice brand is second to none and they are among the leaders (along with
Home Depot) in recruiting from the military.
3. Microsoft. Giving GE a run for their money as best in talent management is Microsoft.
They excel at workforce planning, redeployment, utilizing analytics, and leveraging the
internet. They are also truly world class when it comes to the effective use of contingent
workers. Microsoft was also ranked #57 on Fortune Magazine's 2005 100 Best
Companies to Work for in America.
5. Starbucks. Given the "less than glamorous" nature of the retail industry, the approach
taken by this coffee giant to employment branding and becoming an employer of choice
is phenomenal. They also excel at high-volume hiring. Starbucks was ranked #11 on
Fortune Magazine's 2005 100 Best Companies to Work for in America.
6. Marriott International. This hotel giant was one of the earliest adopters of
employment branding, and one of the few companies to maintain a dedicated focus on the
art. While they still excel in employment branding, their diversity recruiting and work
with the disadvantaged are world class by any standard. Marriott was ranked #63 on
Fortune Magazine's 2005 100 Best Companies to Work for in America.
7. Southwest Airlines. The clear winner for innovation in recruiting, this company not
only excels in selection but also scores huge in branding with the launch of its own TV
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show (Airline). Every employee periodically receives productivity and financial reports
so they can act more like owners.
8. Booz Allen Hamilton. The things that set this professional services firm apart from the
competition comprise a laundry list of "must have" programs for professional-level talent.
In addition to these programs, they also excel at employment branding. BAH was ranked
#75 on Fortune Magazine's 2005 100 Best Companies to Work for in America.
10. T-Mobile. Excellent work in nearly every aspect of recruiting, T-Mobile is a stand out
in both the usage of metrics and online candidate assessment. In 2004, T-Mobile set out
to demonstrate the business impact of recruiting and succeeded beyond expectations.
With a largely tech-savvy target audience, they also excel at innovation in Internet
recruiting.
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A SUMMARY OF THE BENCHMARKING INTERVIEWS
The overall trend in the delivery of modern human resource practices is to refocus the
traditional orientation of the Personnel Office from conducting transactions alone to
combining service delivery and strategic planning. For example, at Genzyme, Human
Resources (HR) is 70% a business partner and 30% a service provider. Johnson&
Johnson has organized HR into three segments: Thinkco, Touchco and Serveco. Thinkco
is a strategic unit providing direction to individual areas; Touchco exists within the
business unit to deliver specific human resource practices; Serveco handles human
resource transactions across the organization.
In the aggregate, three key factors are necessary for high level human resource practices:
strong leadership, clear organizational values, and ongoing measurement. Success
requires faith in administrative processes, use of technology, and high-level involvement
of HR in the overall strategic planning for the organization. Every organization the team
interviewed cited the critical importance of high-level leadership to advocate for change
and to clarify the focus of future human resource practices.
To better define and clarify the values of the institution or corporation, several
organizations have specified human resource principles that provide a basis for the
development and implementation of new practices. For example, one multi-national
organization developed a process to review practices world-wide, after which it issued a
statement defining seven principles of leadership and appointed people to guide the
subsequent implementation of new human resource practices.
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These organizations used employee surveys, exit interviews and cross-functional
meetings initiated by HR to measure the success of changes in human resource practices.
Common Themes
Certain approaches to human resource practices were fairly common across many of the
organizations interviewed.
3. Career Planning
Consistently, career planning is described as being the responsibility of individual
employees. Several organizations said, "the job belongs to the company; the career path
belongs to the individual."
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4. Hiring
Technology is widely used by central HR for recruiting, hiring, retaining and assessing
performance and competencies. Nevertheless, screening, interviewing and final decisions
remain the responsibility of the business units. The documentation supporting these
transactions is processed and stored electronically. The organizations believe this
technologically enhanced hiring process is valuable to both the internal and external
candidates.
5. Succession Planning
Succession planning is of growing importance to organizations as they come to realize
that professionals who have achieved a high level of success within a particular discipline
have not necessarily developed all the competencies for leadership. Several organizations
have taken specific steps to develop new leadership. For example, Johns Hopkins has
established a Leadership Institute that may contribute to succession planning.
6. Job Design
Successful job designs offer flexibility; are guided by what needs to be done; and meet
the demands of the marketplace.
7. Classification
Job classification remains the responsibility of central HR. Problems occur when
standards for classification are not applied.
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8. Compensation/Recognition/Other Rewards
Total compensation and rewards are being desegregated into base salary, discretionary
bonuses, and non-financial recognition. For example, AT&T provides cash awards for
ideas which lead to cost saving. At Lucent Technologies, bonuses are based on a
combination of individual merit, the performance of the business unit, and the
performance of the corporation.
Together, the experiences of these organizations offer guidance to MIT as it works to
expand its human resource practices, to deliver base line services more efficiently and to
develop the workforce to meet the strategic needs of the Institute.
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FINDINGS
There were many findings which were made from the study which are as follows:
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CONCLUSION
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BIBLIOGRAPHY
www.benchmarkoutsourcing.com
www.gibs.co.za.com
www.globalbestpractices.com
www.osp.state.nc.us
www.dpc.wa.gov.au
www.qut.edu.au
Article Reviews:
www.ere.net
The Top 25 Benchmarking firms in Recruiting and Talent Management.
www.fsed.org
HR Practices for High Performance Organizations.
Flower, Alan. 1997. How to: Benchmarking? Personnel Management. 12 June.
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