Performance Measurement - Part 4: Implementation of Benchmarking

Previously in Footnotes, we looked at the key performance measures and how to develop those measures. Then, we explained the process of reporting performance results. In this final issue, we will discuss the three forms of benchmarking in the public sector.

Benchmarking is a point of reference from which measurements may be made (i.e., a standard). It makes it possible to compare progress and results to data previously collected. Benchmarking is helpful in re-engineering work processes and operating systems, exposing employees to new ideas, and creating motivation for change. There are three types of benchmarking used in the public sector: Corporate-Style Benchmarking; Visioning Initiatives Benchmarking; and Comparison of Performance Statistics Benchmarking.

I. Corporate-Style Benchmarking: Seeking Best Practices

Corporate-style benchmarking focuses on a single key process and identifies "best in class" performers of that process. Steps to implement this type of benchmarking in the public sector are listed below:

1. Decide what to benchmark
2. Study the processes in your own organization
3. Identify benchmarking partners (i.e. those to which you compare your results)
4. Gather information
5. Analyze information
6. Implement for effect
7. Monitor results and take further action, as needed

II. Visioning Initiatives Benchmarking

Visioning initiatives emphasize a desired position (i.e. vision), for the community. Key elements of that vision are identified and benchmarks are used to measure the progress. This is the most widely publicized of public sector versions of benchmarking. Some celebrated examples of this type of benchmarking are Oregon Benchmarks, Minnesota Milestones and Florida Benchmarks.

III. Comparison of Performance Statistics Benchmarking

Comparison of performance statistics focuses on efficiency, effectiveness and service quality by comparing performance targets and results to other external organizations. This method allows for broad coverage and is useful in encouraging adaptation and innovation and establishing healthy competition. One common example of this type of benchmarking occurs when utilities compare their average monthly residential bill to those of other surrounding communities of similar size.

Benchmarking creates value by focusing on performance gaps, bringing ideas from other organizations to show opportunities, rallying the organization for continuous improvement, or justifying current practices if comparing favorably.

This completes our four-part series on Performance Measurement. To read previous articles in this series, please visit our website at www.umbaugh.com and click on the Newsletters link/Michigan and select from the following issues: March 14, 2007, April 11, 2007 and May 9, 2007.

For further information or assistance on how benchmarking and performance measurement can be helpful to your community or organization in this time of constrained budgets and heightened public awareness, please contact us at footnotes@umbaugh.com.