Tag: performance

Benchmarking

What is Benchmarking ?

Benchmarking is a process of measuring the performance of a company’s products, services, or processes against those of another business considered to be the best in the industry, aka “best in class.” The point of benchmarking is to identify internal opportunities for improvement. By studying companies with superior performance, breaking down what makes such superior performance possible, and then comparing those processes to how your business operates, you can implement changes that will yield significant improvements.

That might mean tweaking a product’s features to more closely match a competitor’s offering, or changing the scope of services you offer, or installing a new customer relationship management (CRM) system to enable more personalized communications with customers.

There are two basic kinds of improvement opportunities: continuous and dramatic. Continuous improvement is incremental, involving only small adjustments to reap sizeable advances. Dramatic improvement can only come about through re engineering the whole internal work process.

Liberalization and globalization have made the global market very competitive. Every Company of this global market needs to maintain its competitive advantage for long term survival. The cut-throat external competition makes it absolutely necessary for the companies to benchmark with similar organizations or organizations of different industry. 

Benchmarking is the measurement against defined standards, i.e., benchmark. It is essentially the setting up of principals of the best practices in relation to both products and the processes by which these products are created and delivered. It is applied by the senior management of a company, keeping in view :  

• The detailed existing business processes •Business processes of similar or different organizations.

• The analysis of comparison of the business performance with that of own past records and other organizations

• And finally, taking the necessary action to fill the performance gap, if any

Benchmarking should be an on-going process in any industry or organization. There are many types of benchmarking process that senior management applies in various departments depending upon the various scenarios. They could be Strategic Benchmarking which is used as a tool by the senior management to re-align those business strategies which have become inapt or obsolete. Or it could be the Performance or Competitive Benchmarking, Process Benchmarking, Functional Benchmarking, Internal Benchmarking, External Benchmarking, International Benchmarking etc.   

Almost every activity can be benchmarked. For example a banking company can benchmark on loan processing time from the competitor’s practices. A call center can benchmark on the reduction of number of dropped calls from one of its competitor. Or an auto ancillary industry can benchmark on reducing the number of defects from the quality practices adopted from the competitor. Be it any industry or any organization, benchmark is not only possible but also ‘need of the hour’.   

It is also important as it helps the senior management to chart the organizations performance. If you want to determine the effectiveness of your company, you will have to put together the in-house metrics that show the organization’s capabilities and improvements. If you want to prove your organization’s worth to the overall industry, you will have to use benchmarking to show how you are measuring up your efforts and effectiveness vis-à-vis similar efforts at other companies.  

The Indian organizations are becoming world class, both in terms of size and performance. Therefore, there is a greater need to become superior in performance consistently. Quality is becoming the hallmark for both products and services. Indian and multinational organizations are increasingly becoming quality conscious and try to deliver high quality products and services to customers.  

Quality delivery which was considered as the property of foreign companies like General Electric, Ford, General Motors, Xerox and AT & T had become the buzzword in many corporate circles in India as well. From Software major Infosys to Automobile giant Mahindra, from educational institutes like IIM’s and IIT’s to Steel manufacturing giants like TATA, everyone is adopting best in class technology, borrows and adopt best ideas, incubate and implement them as part of their corporate strategy.  

Even Indian Government considers Benchmarking as an important mechanism for introducing accountability in service delivery. Recognizing its importance, the Ministry of Urban Development, Government of India constituted a Core Group on Benchmarking under the chairmanship of Joint Secretary. This group has finalized a Handbook of Service Level Benchmarks, which provides –

(i) a common minimum framework for monitoring and reporting on service level indicators, and

(ii) guidelines on how to operationalize this framework in a phased manner.

Government of India has extended implementation support for the SLB framework in about 26 pilot cities so that they can serve as role models for other cities across the country. The Ministry of Urban Development, Government of India has formulated benchmarks for key performance indicators for water supply, waste water/sanitation, solid waste management and drainage to enable cities to measure and improve their own performance vis-à-vis the benchmarks. It is now well recognized that a sustained process of benchmarking comprising –

(i) developing comprehensive and dis aggregated baseline data on service levels

(ii) information system improvement to enhance quality of planning and

(iii) performance improvement plans to attain new standards , is critical  to ensure optimal use of investment and to sustain outcomes in service delivery.

Benchmarking enables urban local bodies to identify strengths and weaknesses in their own practices and to reach out and learn from the practices of others to achieve excellence in service delivery. It also increases accountability and transparency to citizens. Thus, the process of benchmarking, although very important, is very complex as well. It does require a great degree of systematic process review and constant control apart from flexible planning, detailed analysis, qualitative implementation, constant review and progressive change management.

Performance Management lessons from LAGAAN

Released in the year of 2001, this sports-based iconic movie was based on a small number of people in a village in the Victorian India where they challenged the British for a game of cricket so as to avoid paying of taxes. The movie is an iconic one because it depicts how the protagonist, Amir Khan as Bhuvan took the responsibility to rescue his fellow villagers and how he taught them to play cricket. And the best part of the movie is that, how in spite of all the major and minor obstacles, Amir Khan won the game against the British and managed to secure an opportunity to not pay taxes for the coming three years.

That being said, this movie is quite extensively used by the B-Schools to teach about the various performance management lessons that can be derived from this movie. So after watching this movie again and following an extensive analysis, I have noticed certain instances which can provide exemplary examples of performance management. Below depicted are some of the instances:

World Water Day: From Lagaan to Well Done Abba, films that ...
  1. At the time when the villagers were unable to pay back the taxes, Bhuvan took the responsibility of all the villagers and acted as a leader to carve out a way of glory for them.
  2. After challenging the British over a game of cricket, Bhuvan took it upon himself to learn the game and then to teach all the fellow members.
  3. During the selection of the cricket team members, Bhuvan believed in instilling diversity and inclusion policy. Kachra was selected in the team because of a deformity in his hand which made him a good bowler, in spite of all the caste based differences. Bhura was selected because he was an expert in running to catch his hens which was identified as a major parameter to catch the ball. Even the drummer who could not speak, was selected because he spent most of his lifetime playing the drums and hence had a good upper body strength. So from these instance, Bhuvan was recognized to identify the differences in the team which can be a source of competitive advantage.
  4. At the onset of the game, Bhuvan and his team did not have the necessary resources. But he was more concerned about the performance of his team than about the scarcity of resources. He gave directions to build the necessity from the scratch and that too by the local folks. Being a leader, Bhuvan turned out to be innovative.
  5. Bhuvan did not just made the team, but he did a good job in allocating roles and responsibilities to each of the team members based on their strengths.
  6. One of the note-worthy point is that Bhuvan set some measurable goals and he supervised and improved the performance of his team members. His mantra was pure hard work but with empathy and compassion, which shows a good sign of performance management.
  7. At the end of the movie, even when Kachra facing the last ball, Bhuvan did not give up. He ran for that single run but then it was turned out to be ‘no-ball’. So as a leader of a team, Bhuvan showed immense amount of trust in his team members and a ‘never give up’ attitude.

Lagaan is definitely a movie to watch if one is trying to understand what it is that a leader truly believes in and does. So next time when you watch this movie, you can watch out for these instances of performance management.

Source: Movie ‘LAGAAN’

Institutionalization of 360-Degree Feedback

One of the most dreaded times of a financial year in an organization is the Performance Appraisal time. Traditional way of conducting performance appraisal is to hold it once, usually at the end of financial year with feedback coming in from the higher levels of management that is the team lead and the reporting manager. This method works well if one is at the lower levels of the hierarchy. But this traditional method of performance appraisal is now replaced by a more flexible method by integrating feedback throughout the year or in frequent intervals, without reserving it for the special occasion.

As an associate goes up the levels of hierarchy, his or her pay component also changes. That is, the base or the fixed component decreases and the variable pay which is linked to the performance of his or her team increases. And that is where the concept of 360-Degree Feedback kicks in. 360-Degree Feedback is the process by which surveys are used to gather and analyse feedback about the performance of a particular employee (usually at a higher-grade) from about 10 or 20 people which includes colleagues, managers, vendor, customers, suppliers, supervisor, peers and other stakeholders, who have an experience working with that employee either directly or indirectly. So to sum up, a higher grade associate is usually rated on the performance as depicted by the people he or she is interacting with.

10 Benefits Of 360 Degree Feedback - Edge Training Systems
360-Degree Feedback

The mail goal of 360-Degree Feedback is to convert the intangible qualities into the strengths and deficits, which can be used as a report, thus carving out a path with highlighted points which require definite action for improvement. 360-Degree Feedback has a lot of other advantages too, some of which are:

  1. Provides deeper insight into the mode of doing a particular job, in terms of collaboration, communication and promotion of innovation.
  2. Provides an interesting contrast in how the participants view themselves and how the others see them.
  3. Gives rich data for statistical analysis and provide ratings, based on actual data, thus eliminating subjectivity.

360-Degree feedback is highly valuable and is receiving a lot of positive responses due to its objective nature, is very much candid owing to the fact that the feedback from the peers will be anonymous and is highly compelling in nature. If one analyses the very purpose of such a feedback, benefits can be reaped from the administrative perspective as well as from the personal perspective too. From the administrative perspective, the results of the feedback is used for performance appraisal and thus for performance rating which ultimately affects the compensation. For executives at higher grade, a small increase in compensation without much analysis usually has a tumultuous effect on the bottom line of the company. And from the personal perspective, the feedback, which was provided anonymously can provide the strengths and the pain points, which can be used as reference by the associate for improvement.

360-Degree Feedback works very well for the executives at higher grades because in that way, their performance is very much linked to the performance of his or her peers and direct interacts. So in one way, it can be a great tool to improve or to remove someone if that associate is unable to perform the expected. But it has to be used with great care. Not only there is a distrust regarding the results of the 360-Degree Feedback, but also sometimes the outcomes generates more questions than answers. So this mode of feedback should be handled with utmost care and with proper control.

But in one way, 360-Degree Feedback means – “Once I knew the problem, I could fix it and I had a game plan.”

Source: https://qulture.rocks/en/blog/360-degree-feedback-what-is-it-and-how-does-it-work/