In 1988, the first winners of the Malcolm Baldrige National Quality Award were announced: Motorola, Globe Metallurgical Inc., and Westinghouse Electric’s Nuclear Fuel Division. In subsequent years, Xerox, Fedex, IBM, Cadillac, Milliken, Texas Instruments and The Ritz-Carlton all received the honor. They all had one thing in common that set them apart from their competitors: they all used the same measurement tool to dramatically improve customer service, quality, reliability, and accuracy of their business processes. Benchmarking became one of the world’s mostly widely talked about and used measurement and management tools. Companies in North America, Europe, Asia, Australia and New Zealand all wanted to understand and implement Benchmarking as a means to achieving competitive advantage.

In those early days of Benchmarking, there were very few companies and fewer individuals who had the expertise to effectively implement this new tool. All Baldrige winners have the responsibility to teach anyone who wants to learn how they achieved their results. Desire to learn was soon replaced by the need to learn. As more companies deployed benchmarking, their results led to breakthrough improvements. There were no benchmarking clearinghouses, no consortiums, no benchmarking exchanges, no websites to log onto. In order to understand the what, how, and why of these award winning and top performing companies, they had to talk to each other. They established dialogues that provided a meaningful exchange of information. This exchange of information let us to ask more and more questions about how and why companies did what they did to achieve their results. We were able to understand the practices and most importantly, the context the practices lived within. Companies around the world used Benchmarking to dramatically improve their business processes and achieve new levels of competitive advantage.

Benchmarking was more than a numbers game!

Benchmarking has become a misused and misunderstood measurement tool. Today, companies rely upon others to collect information from anyone interesting in submitting it. The data is scrubbed and filtered, massaged and manipulated, and mathematically calculated. The end result is a number that provides little insight, no context, and has little value. This number is then used by a company to make a decision that can have negative consequences on the bottom-line, on quality, customer service, or employee satisfaction. Take the example of the “benchmark” for number of employees served by 1 HR FTE: 1:85. This number was provided by a well known HR consulting firm and published in the August 2004 issue of a popular HR journal.

The unfortunate scenario that unfolds when a CEO sees this ratio will play out in far too many companies. The CEO first asks the head of HR, “What is our ratio?” If the ratio is lower, the directive is to cut staff. If the ratio is higher, the head of HR is questioned on their function’s effectiveness: “What do other organizations get from HR that we don’t?”

The questions that should be asked by the CEO are:

• What is the Value Discipline of these organizations and to what extent does HR align with it?
• What is the strategy of the business and how do these HR FTE’s contribute?
• What is the Effectiveness Rating of these HR FTE’s?
• Are the HR FTE’s seen as Business Partners or Administrators?
• What do these HR FTE’s spend there time doing?
• What is the ROI these organizations receive from HR?
• What is the financial performance of these companies?
• Does the performance of these HR organizations exceed your own?

Not one of these questions can be answered by the ratio 1:85. The only way to answer these questions is to enter into a dialogue with the companies that are performing at the level you want your HR organization to perform at. Once these questions are answered, it may prove that this ratio has no significance to your HR Strategy or service delivery.

Benchmarking is more than a numbers game!

Metrics and ratios do play a role in Benchmarking. Metrics are best used in the Benchmarking process as result measures. Metrics should be used to determine if the results achieved by another company are more successful or effective than your own results. If another company is achieving a result that exceeds your own, then the opportunity to understand the what, how, and why of their practice or process forms the basis of the Benchmarking study. The metric is not the driver of change. The practice or process that produces the desired level of performance is the driver of change. Comparing your metric to someone else’s metric is NOT benchmarking.

Benchmarking is:

“a continuous, systematic process for evaluating the products, services, and work processes of organizations that are recognized as representing best practices for the purpose of organizational improvement.”

The Benchmarking Book
By Michael Spendolini
1992 AMACOM

The proper deployment of the Benchmarking process can make significant and dramatic improvements in organizational performance. Emergency medical teams benchmark pit crews at the Indianapolis Speedway. To ensure that Benchmarking does produce the breakthrough results that top performing companies experience, we offer the following suggestions:

• Use your business strategy to determine the need for change, not a comparison of metrics.
  Do what’s right for your business, your customers, and your employees.
• Analyze, document and measure your process before you engage in dialogue with
  a potential partner. If you don’t know the results of your own practice or process, you
  can’t set goals for improvement, and you can’t determine who is performing at the level
  you need or want to.
• Choose your partners wisely. Don’t let someone else choose them for you. Staying within
  an industry or segment can limit your thinking and contribute to the “best of a bad lot” comparison.
• Be prepared to provide something your partner will value in exchange for their participation in your Benchmarking study. Treat them like valued customers, they may be.
• Adapt the “best practices” of other companies, don’t try to adopt them. Just because it
  works for them, doesn’t mean it will work for you. Most practices are not plug and play
• Following the teachings of Bobby Knight: “The willingness to win is not as important as
  the willingness to prepare to win.” Preparation improves learning.

Benchmarking is a measurement and management tool that has the potential to enable breakthrough thinking for an organization.

Einstein was right,

“the significant problems we face cannot be solved with the level
of thinking that was used to create them.”

As has been outlined here, Benchmarking is NOT simply the comparison of metrics across a group of companies. It requires thoughtful preparation, discipline, tenacity, and an open mind.

Benchmarking is more than a numbers game!

For more information on Benchmarking, contact Brian Lowenthal, Managing Partner, The Benchmark Partners, LLC, blowenthal@thebenchmarkpartners.com or 216.295.9589.

Brian Lowenthal
The Benchmark Partners, LLC
216-295-9589
blowenthal@thebenchmarkpartners.com

FOR IMMEDIATE RELEASE AND PUBLICATION

For information or questions, contact Brian D. Lowenthal
Managing Partner
The Benchmark Partners, LLC
216.295.9589
blowenthal@thebenchmarkpartners.com

CRAFTING AN HR SCORECARD THAT WORKS
The Ten Dimensions of an Effective Measurement System

Recent interviews with senior executives asked them to rate the issues most important to them. Among the most frequent responses was the need to measure the effectiveness and ROI of their HR organizations. HR has struggled with this issue for years. The advent of Balanced Scorecards provided a structure for establishing a company wide measurement system. Many organizations stopped here because they became frustrated with not having methodology to provide direction on the measures themselves. The successful companies turned to their finance organizations for help.

Finance functions have been affectionately known as “the number crunchers.” When in need of data, numbers, counts, metrics, we could always turn to Finance for the answers. As HR is being held accountable for measuring its contribution to organizational performance, we turn to our Finance partners for help.

The 10 Dimensions of Successful Measurement.

One final note: In the work we've done with companies on their measurement systems, we've encountered some confusion in the difference between an HR Scorecard and an HR Measurement System. An HR Scorecard should be considered an HR Measurement System, while an HR Measurement System should not be considered an HR Scorecard. The distinguishing characteristics are:

•  An HR Scorecard is aligned with the Strategic Plan of the Company.

•  An HR Scorecard provides focus, accountability and prioritization to all HR initiatives.

•  An HR Scorecard is used to determine the individual performance expectations of HR staff members and line management.

•  An HR Scorecard is used by the entire organization, not just HR.

•  An HR Scorecard identifies the role employees outside of HR play to impact results.

We invite you to assess your own measurement efforts. Click on the link below to answer 10 questions about your measurement system. You will receive a benchmark report that compares your measurement practices and provides insight into the success of your measurement process.

http://www.thebenchmarkpartners.com/surveynet/TakeSurvey.aspx?SurveyID=l2KL992

The Benchmark Partners, LLC , is dedicated to helping companies create a great workplace for all employees. Using a comprehensive set of measurement tools, we provide our clients with insights, analysis, and recommendations that ensure a meaningful return on their Human Capital investments. Our tools include organizational assessments based on the Performance Excellence Model; functional assessments that identify Human Resource Effectiveness; Leadership and Employee Assessments that enable productivity improvement; Benchmarking; Measurement and Scorecard Systems, and Technology Utilization and Deployment. Having worked with a diverse set of companies across all industries and size, The Benchmark Partners bring to each client engagement a unique set of solutions that are guaranteed to improve business results.

Brian D. Lowenthal is a co-founder and Managing Partner of The Benchmark Partners. In twenty-five years as a business professional, he has been a corporate executive, organizational consultant, and business owner. As a Vice President of Human Resources, he designed, developed, and implemented HR Strategic Plans aligned to the organization's business strategy. He has expertise in the deployment of HR technology, has implemented HR practices that have significantly increased the level of employee engagement, and built HR scorecards. As a consultant, he has worked with Fortune 100 companies, as well as start-up organizations. He was Regional Vice President for Development Dimensions International, and led the global HR Benchmarking practice for The Hackett Group, a division of Answerthink, Inc. An internationally recognized speaker on Benchmarking, HR Strategy, Measurement, and Organization and Leadership Development, Brian is an active member of SHRM and the HR Planning Society. He earned Bachelor of Science degrees in Business Education and Business Administration from Illinois State University and an MBA from Roosevelt University .

REVEALING WORKPLACE REALITIES
Using Exit Interviews to Improve Performance

Senior executives in organizations of all sizes, and across all industries, continue to raise concerns about their ability to retain and attract top talent. Turning to their HR leaders, senior executives expect the implementation and execution of policies, practices, and procedures that will address this issue. Most HR leaders continue to use measurement methods that do not accurately reflect the effectiveness or efficiency of HR initiatives, nor do they get at the root cause of employee turnover.

One of the most effective tools that should be used to measure an organization's ability to retain and attract the top talent it needs to achieve competitive advantage is the Exit Interview Process. Exit interviews with employees who have decided to voluntarily leave an organization provide valuable insights into the effectiveness of HR policy, practice, and procedure. The Exit Interview Process reveals workplace realities that cannot be understood through any other method.

Exiting employees are much more likely to tell the truth about what's really going on in the organization. Without the fear of retribution, exiting employees are more willing to speak about unethical co-worker behavior, workplace abuses, or failure of corporate initiatives. Exiting employees are also more willing to discuss practices that work and why.

To enable exiting employees to feel comfortable revealing workplace realities, it is best to use an objective third party. Outsourcing the Exit Interview Process is the most effective way to insure employee anonymity and openness. By using a combination of on-line survey and “live” interview, the organization is able to gain both a quantitative and qualitative understanding of HR effectiveness.

One of the unique ways we have been able to produce results for our clients, is to use a double rating on the on-line survey. By asking what is important to the employee and how the organization is performing, we have been able to provide a unique insight into employee motivation and performance. This approach provides insight, direction, and a focus on critical issues that other methods can't.

A common concern voiced by HR regarding the use of surveys has been that surveys raise the expectation that the organization will have to act on employee feedback! Exiting employees do not have this as an expectation. When the purpose and importance of the exit interview is properly communicated to the exiting employees, they have been very willing to provide actionable information. In one instance, an exiting employee made it very clear to us that she only had 10 minutes to spare for the “live” interview. After 45 minutes of questions and honest answers, we asked if she needed to go. She said yes, but there were a few more things we should know. We were able to assure this exiting employee that she could trust us with her concerns and issues. She revealed to us an abusive manager who needed counseling. Had this information not been provided, this manager may have been the cause of greater problems for the company. (Harassment lawsuits can cost an organization 10 times more than the cost of an outsourced Exit Management Process).

Another valuable use of exit interview data is as a lead indicator in the HR measurement system. The reasons employees decide to voluntarily leave an organization can be seen as early indicators of a disengaged workforce. Disengaged employees are very costly to organizations. They are less productive, produce more errors, have higher health care costs and higher absence rates. Understanding what has led to “disengagement” is an important first step in retaining top talent.

HR leaders should not forget that employees are ambassadors of their companies, recruiting and referring other employees to the workplace. Ex-employees who have had a positive employment experience can also help to recruit and refer employees to the company. In much the way that dissatisfied customers tell their story to anyone they can, so do disengaged employees. Unfortunately, ex-employees whose employment experiences have not been so positive are more likely to reveal your workplace realities to the very people you hope to attract. The exit interview is an excellent tool to enable you to not only understand what your ex-employee will be saying about your company, but more importantly to enable the employee to leave with positive feelings and kind words.

HR leaders and senior executives must understand that it costs more to recruit top talent than it takes to retain top talent! One of the most effective measurement tools that an organization can use to retain and attract the top talent they need to improve corporate performance is the Exit Interview Process.

We invite you to assess your own Exit Management efforts. Click on the link below to answer questions about your exit management process. You will receive a benchmark report that compares your exit management practices and provides insight into the success of your process.

http://www.thebenchmarkpartners.com/surveynet/TakeSurvey.aspx?SurveyID=l2KM792

The Benchmark Partners, LLC , is dedicated to helping companies create a great workplace for all employees. Using a comprehensive set of measurement tools, we provide our clients with insights, analysis, and recommendations that ensure a meaningful return on their Human Capital investments. Our tools include organizational assessments based on the Performance Excellence Model; functional assessments that identify Human Resource Effectiveness; Leadership and Employee Assessments that enable productivity improvement; Benchmarking; Measurement and Scorecard Systems, and Technology Utilization and Deployment. Having worked with a diverse set of companies across all industries and size, The Benchmark Partners bring to each client engagement a unique set of solutions that are guaranteed to improve business results.

Brian D. Lowenthal is a co-founder and Managing Partner of The Benchmark Partners. In twenty-five years as a business professional, he has been a corporate executive, organizational consultant, and business owner. As a Vice President of Human Resources, he designed, developed, and implemented HR Strategic Plans aligned to the organization's business strategy. He has expertise in the deployment of HR technology, has implemented HR practices that have significantly increased the level of employee engagement, and built HR scorecards. As a consultant, he has worked with Fortune 100 companies, as well as start-up organizations. He was Regional Vice President for Development Dimensions International, and led the global HR Benchmarking practice for The Hackett Group, a division of Answerthink, Inc. An internationally recognized speaker on Benchmarking, HR Strategy, Measurement, and Organization and Leadership Development, Brian is an active member of SHRM and the HR Planning Society. He earned Bachelor of Science degrees in Business Education and Business Administration from Illinois State University and an MBA from Roosevelt University.

For additional information
Contact Brian Lowenthal
Managing Partner
216.295.9589
blowenthal@thebenchmarkpartners.com

The research Robert Levering of the Great Place to Work Institute began in 1980 on the practices that lead to a great workplace, has been the inspiration for numerous International, National, State, City, and Industry recognition programs. The most familiar is Fortune Magazines’ annual list of 100 Best Companies to Work For. Each of these recognition programs has the same intent: to benchmark companies who have deployed workplace practices that lead to higher levels of employee engagement, customer satisfaction, and profits.

HR professionals have always known what practices lead to these organizational results. In a great workplace, how people are treated adds significantly to the competitive advantages available to the organization. Research covering the nation's best employers for Fortune magazine's "100 Best Companies to Work for in America"  confirm that these great workplaces benefit from the following:

• Receive more qualified job applications for open positions.
• Experience a lower level of turnover.
• Experience reductions in health care costs.
• Enjoy higher levels of customer satisfaction and customer loyalty.
• Foster greater innovation, creativity and risk taking.
• Benefit from higher productivity and profitability.

The Benchmark Partners’ breakthrough research, gathered from companies who have been recognized as a Great Place to Work, has finally answered the question:

What is the optimum investment of Time, Money, and People
required to create a great workplace?

The study also provided  insight into the following issues:

Highlights of the benchmark study indicate:

      Numerous independent studies have shown that companies from the "100 Best" list deliver higher returns than their peers. A study conducted by the Russell Investment Group demonstrated that the public companies that were recognized by Fortune Magazine from 1998-2004 had a 15.61% return vs. the S&P 500 return of 4.79% during the same period.

When you invest in your people, you invest in your organization's success. 

A comprehensive review by the Department of Labor of more than 100 studies that examined the link between progressive people practices and improved bottom line results concluded that:

Positive people practices don't cost more money, they redirect resources to focus on what counts the most: motivating every employee, to do as much as possible to attract and keep customers.

If you want to benchmark your HR investments against those of Great Place to Work Companies, please visit our website: http://www.thebenchmarkpartners.com/ to find out how you can participate.

The Benchmark Partners, LLC, is dedicated to helping companies create a great workplace for all employees. Using a comprehensive set of measurement tools, we provide our clients with insights, analysis, and recommendations that ensure a meaningful return on their Human Capital investments. Our tools include organizational assessments based on the Performance Excellence Model; functional assessments that identify Human Resource Effectiveness; Leadership and Employee Assessments that enable productivity improvement; Benchmarking; Measurement and Scorecard Systems, and Technology Utilization and Deployment. Having worked with a diverse set of companies across all industries and size, The Benchmark Partners bring to each client engagement a unique set of solutions that are guaranteed to improve business results.

Brian D. Lowenthal is a co-founder and Managing Partner of The Benchmark Partners.  In twenty-five years as a business professional, he has been a corporate executive, organizational consultant, and business owner. As a Vice President of Human Resources, he designed, developed, and implemented HR Strategic Plans aligned to the organization’s business strategy. He has expertise in the deployment of HR technology, has implemented HR practices that have significantly increased the level of employee engagement, and built HR scorecards. As a consultant, he has worked with Fortune 100 companies, as well as start-up organizations. He was Regional Vice President for Development Dimensions International, and led the global HR Benchmarking practice for The Hackett Group, a division of Answerthink, Inc. An internationally recognized speaker on Benchmarking, HR Strategy, Measurement, and Organization and Leadership Development, Brian is an active member of SHRM and the HR Planning Society. He earned Bachelor of Science degrees in Business Education and Business Administration from Illinois State University and an MBA from Roosevelt University.

For more information on Benchmarking, contact Brian Lowenthal, Managing Partner, The Benchmark Partners, LLC, blowenthal@thebenchmarkpartners.com or 216.295.9589.