Employee benchmarking: Improving organisational performance for success

How prepared are our local organisations for the changes necessary to operate and survive in a globalised or even regionalised market? How well do they attract and retain the talent they need for the future?  Are they optimising their human capital for business success?  Are their management practices producing the desired results? Business research, experience and common sense all invariably point to a direct relationship between management practices and business success.  A strong business case can be made that the way an organisation manages its people — its human capital — is a real and enduring source of competitive advantage. Accor-ding to Dr Jac Fitz-enz, world-renowned “father of human capital benchmarking” who conducted a workshop here earlier this year, “the selection, development and retention of human capital is the foundation on which innovation, product quality and customer service are built.”

Since 2000, over 20 local and regional organisations and more than 6,000 employees have participated in a survey called the Employee Benchmark Survey(tm) or EBS.  The EBS measures, assesses and benchmarks management and organisational practices from the perspective of the employee. The survey is designed to help organisations improve the way they lead and manage their people and their organisations for better business performance through benchmarking management best practices. There is a growing body of evidence that suggests that an organisation’s management practices, like its leadership style, internal communication, human resource practices, etc; impact employee outcomes, such as employee retention, productivity and performance; which, in turn affect customer outcomes, like customer loyalty and retention; which result in increased profitability, shareholder value and competitiveness. Employee benchmarking is an example of how local and regional organisations are using research data to inform their business decisions. Participating companies have used the EBS to get feedback on matters affecting employee performance and productivity; to assess their managerial and organisational strengths and weaknesses; to compare themselves with other companies; to help shape their business and human resource management strategies; and to learn and apply best practices in their organisations.

Over the years, the survey has identified local benchmark companies, such as Guardian Life of the Caribbean, Phoenix Park Gas Processors Ltd (PPGPL), TRACMAC and National Flour Mills.  Many of the benchmark companies have gone on to receive both local and international awards for outstanding performance in various areas of activity.  For example, earlier this year, PPGPL received the Prime Minister’s Award for Innovation, and more recently, Guardian Holdings Ltd, the parent company of Guardian Life, was voted the Most Admired Company in Trinidad and Tobago. At the recent launch of this year’s Employee Benchmark Survey, the president and ceo of Phoenix Park Gas Processors Ltd, Eugene Tiah, said: “PPGPL has derived a lot of value from participating in the survey.  It has helped us to define the vital few actions that we need to focus on, given the competition for our limited time and resources and it has provided a bridge to learn from others that were the benchmark companies in each of the surveyed categories through the “Best Practice Forums.” He goes on to say: “...with the use of this tool we’ve been able to minimise turnover, sustain high levels of productivity, adequately identify and address employee issues and effect corrective actions in the incipient stages before any undesired consequences occurred.” However, the survey has also revealed that there is a high degree of mistrust between management and employees in many of our local organisations, and that, on the average, less than half our employees are satisfied with their organisations’ management practices. 

According to Dr Fitz-enz, “the 21st Century belongs to those who learn how to leverage human capital.”  Employee benchmarking is helping local and regional organisations “leverage human capital” for competitive advantage by identifying how benchmark and best practice companies like Phoenix Park are doing it.  These companies are characterised by high management/employee trust and mutual respect, open communication and information sharing throughout the organisation, visionary leadership, management/ emplo-yee partnership in the business, value-driven management and, in general, enabling rather than disabling management styles. And this is not the whole story.  Benchmark companies also tend to perform better in the marketplace than their competitors, confirming the link between management practices and the bottom line. Employee benchmarking is one way in which local and regional organisations can improve their performance for business success.

Dr Charles is a director of Quality Consultants Ltd.

The views expressed in this column are not necessarily those of Guardian Life. You are invited to send your comments to guardianlife@ghl.co.tt