Productivity Benchmarks And the Process of Benchmarking
Companies in different industries may have different productivity benchmarks. The productivity
benchmark of companies belonging to the same industry may even have subtle differences in their
productivity benchmarks.
In its basic economic definition, productivity is the ratio of output to input. In most cases, it entails to
production and processes. Mostly, the output refers to the product or service in production while the
inputs are the resources used for conversion process.
Benchmark, on the other hand, is the standard by which all items are compared and measured. The
benchmark of one industry can be different from that of another industry, which can be attributed mostly
to the differences in products or services.
Productivity benchmark may then refer to the standard in comparing the productivity of an enterprise to
its performance. It may also refer to the standard used as a measure of productivity.
For coming up with a productivity benchmark, it is important for companies to make internal evaluation
and assessment of its past and current performances. Each department can have its own productivity
benchmark. But in order to have a standard in basing its productivity, it is only good for companies to
make thorough scanning and evaluation of performances from the past, as well as to have realistic
forecast.
Companies may also have to consider the asset size and number of employees in devising productivity
benchmarks. They may also have to see different areas, such as marketing, finance, and production
facilities for coming up with written benchmarks.
The process of devising a productivity benchmark involves different areas and factors. There is also an
involvement of planning and monitoring of results.
It is important to collect and collate information from different means and areas of interests, such as
surveys, industry information, interviews, publications, and other sources of information for analysis and
evaluation. In this manner, there is a possibility for an entity to have a clear productivity benchmark as
basis for its performance, or the performance of its organization and production process. In order to
develop productivity benchmarks, an entity may have to employ the benchmarking process.
There are various forms of benchmarking that entities can apply. Internal benchmarking makes a
comparison on the processes and practices of different departments within the organization. Competitive
benchmarking involves contrasting the processes of companies with their direct competitors.
Functional benchmarking compares the practices and processes of other industries, while generic
benchmarking entails investigation of activities occurred in most businesses.
Benchmarking normally involves the comparison of practices and processes. It can be seen as a strategy
of entities to know the moves and practices of their competitors and of other industries to be aware of the
things that should be done, as well as to have the reason for emulation when the practices and
processes of other competitors and in other industries seem suitable.
Benchmarking can be useful for an entity to develop its productivity benchmark. Productivity benchmark
may be seen as a target, in its most basic sense. Mostly, this is set by companies pioneering in a certain
industry. It would be on the discretion of other companies to emulate or to make their own benchmarks for
productivity.
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