Benchmarking

Benchmarking is the process of evaluating business performance and processes by comparing them to industry best practices and top-performing companies.

What is benchmarking with an example?

Benchmarking is the process of comparing your business performance, processes, or metrics to industry best practices or top-performing companies.

Example:

A customer support team benchmarks its average response time against a leading company known for excellent service. If the industry leader responds in 1 hour and your team takes 4, you now have a target to improve toward.

In short, benchmarking helps identify gaps, set goals, and drive continuous improvement by learning from the best.

‍

Why use a benchmark in performance evaluation?

Benchmarks in performance evaluation help organizations:

• Set clear standards to measure employee or team performance
• Compare results objectively against industry or internal best practices
• Identify strengths and weaknesses for targeted development
• Encourage continuous improvement by aiming for proven high standards
• Make fair decisions on promotions, rewards, or training needs

Using benchmarks ensures evaluations are consistent, fair, and aligned with business goals.