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DISSERTATION PROJECT REPORT

PROJECT REPORT
ON
“BENCHMARKING OF HR PRACTICES"

Submitted for the partial fulfillment of the requirement


Of
MASTER OF BUSINESS ADMINISTRATION

PROJECT GUIDE SUBMITED BY


Prof. SHEETAL KHANKA DEVENDRA KUMAR

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ACKNOWLEDEGEMENT

This project has been made possible through the direct and indirect co-operation
of my academic mentor, Prof.Sheetal Khanka, for whom I wish to express my
appreciation and gratitude for giving me an opportunity to work on this project. I would
like to express my deep gratitude of indebt-ness to my mentor for providing valuable
guidance during the project and the completion of the project without which it would
have been difficult to achieve. I am also obliged to my mentor without whose guidance it
would have been difficult to complete project successfully.

My sincere thank to all faculty members of Institute of Technology and Science,


Ghaziabad for their co-operation.

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CONTENTS

1. DEFINITION 1-2

2. PURPOSE OF BENCHMARKING 3

3. NAVIGATING HR BENCHMARKING 4-6


- BENCHMARKING MODEL 4
-BENCHMARKING PROCESS 4
-STEPS OF A BENCHMARKING PROCESS 5-6

4. BENCHMARKING THE 5 HR FUNCTIONS 7

5. DIFFERENCE BETWEEN BENCHMARKING AND


BEST PRACTICES 8-9

6. FACTORS ENHANCING THE SUCCESS OF


BENCHMARKING PROCESS 10

7. BENCHMARKING BEST PRACTICES, RECRUITMENT


STRATEGIES AVAILABLE ONLINE NOW 11-12

8. BENEFITS OF BENCHMARKING HR PRACTICES 13

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9. RESEARCH METHODOLOGY 14-34
- DATA COLLECTION 15
- DATA ANALYSIS 16
- ARTICLES 17-27
- EXAMPLES OF TOP 10 BENCHMARKING FIRMS 28-30
- SUMMARY OF THE BENCHMARKING INTERVIEWS 31-34

10. FINDINGS 35

11. CONCLUSION 36

11. BIBLIOGRAPHY 37

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DEFINITION

What is Benchmarking?
"Benchmarking is a process for identifying and importing best practices to improve
performance." Benchmarking is not a simple comparative study, simply copying
practices from other organizations, or simply assessing performance.
The International Personnel Management Association and the National Association of
State Personnel Executives jointly developed the following definition for benchmarking:
A comparison of similar processes across public and private organizations to identify best
practices to improve organizational performance. The characteristics and attributes of
benchmarking include measuring performance, systematically identifying best practices,
learning from leading organizations, and adapting best practices as appropriate.

Benchmarking essentially involves learning, sharing information and adopting best


practices to bring about changes in performance. To simplify this, it can be stated as:

'Improving ourselves by learning from others'


In practice, benchmarking usually encompasses:
• regularly comparing aspects of performance (functions or processes) with best
practitioners;
• identifying gaps in performance;
• seeking fresh approaches to bring about improvements in performance;
• following through with implementing improvements; and
• following up by monitoring progress and reviewing the benefits.

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Alan Flower (1997) lists 5 main stages in effective benchmarking:

• Selecting aspects of performance that can be improved and defining them in a


way that enables relevant comparative data to be obtained - in effect, producing
performance indicators that will make sense to other organizations;
• Choosing relevant organizations from which to obtain raw or headline data;
• Studying the data to identify possible opportunities for improvement;
• Examining the procedures of the best-performing organizations to pick up ideas
that can be adopted or adapted to achieve performance improvements; and
• Implementing new processes.

Organizations usually benchmark performance indicators (e.g. profit margins, return


on investment (ROI), cycle times, percentage defects, sales per employee, cost per unit)
or business processes (e.g. how it develops a product or service, how it meets customer
orders or responds to enquiries, how it produces a product or service). For human
resources, three types of benchmarks are particularly appropriate (Matters, 1993).
• Broad measures of performance which take an organization-level view of HR
management, using broad productivity measures like sales per employee, profit
per employee, volume per employee, number of employees per HR specialists,
and other relevant "output-over-input" ratios;
• HR practices focusing on how effectively HR programs and practices are
implemented, and making comparisons with other organizations; and
• HR competencies tracking the knowledge, skills and abilities

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PURPOSE OF BENCHMARKING

• Have an experienced HR Consultant 24/7- just a phone call away.


• Establish solid HR Systems.
• Ensure compliance with Federal and State Employment laws.
• Get difficult, focused HR projects done accurately and quickly.
• Maintain HR Systems on an ongoing basis.
• Recommend systems and establish a timeline for project.
• Establish workers compensation reporting, drug testing procedures, and establish
working relationship with company doctor or clinic.
• Assist with staffing the company as needed.
• Provide assistance with interviewing, reference checking, and benefits sign-up
and initial orientation of new employees.
• Provide ongoing Human Resource support as needed and requested either on-site
or off-site.
• Train an on-site administrative person to handle day to day Human Resource tasks
such as monthly benefits administration, etc.
• Set up personnel files and recordkeeping systems such as Personnel Action
Request Forms, Performance Review systems, job descriptions, etc.

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NAVIGATING HR BENCHMARKING

Benchmarking Model

Benchmarking is the search for industry best practice which leads to superior
performance. The pioneer of competitive benchmarking was the American company,
Xerox Corporation. The company demonstrated the usefulness of observing and learning
from superior performers by benchmarking their competitor. Through the knowledge they
gained they managed to dramatically improve their productivity and significantly reduce
their cost of production.
Based upon the Xerox experience, Robert Camp has developed a model which can be
modified and adapted to suit any functional area, including HR management.

The Benchmarking Process

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Phase One: Planning
Camp has broken the process of benchmarking into 10 steps which progress through 4
phases:
Step 1: Identify what functions, products or outputs are essential practices and should be
benchmarked.
Step 2: Identify external organizations or functions within own organization with
superior work practices for comparison.

Phase Two: Analysis


Step 3: Determine what data sources are to be used. If an organization has up to date
personnel/payroll systems it should be able to measure a range of HR practices and
outputs relatively easily. Valuable information may also be available through personnel
records, surveys or even interviews.
Step 4: Determine the current level of performance. This will enable the gap in
performance to be identified. Camp emphasizes the importance of a "full understanding
of internal business processes before attempting comparison with external organizations."
Baseline measurement also provides an objective basis upon which to plan and act.

Phase Three: Integration


Step 5: Develop a vision for future operation based on the benchmarking findings. Focus
should be directed on the quality of best practice procedures/practices and how these can
be not just emulated, but improved upon by the organization.
Step 6: Report progress to all employees on an ongoing basis. Communication and
feedback are crucial components of benchmarking.

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Phase Four: Action
Step 7: Establish functional goals linked to the overall vision for the organization.
Step 8 & 9: Develop action plans and implement the best practice findings. This should
be the responsibility of the people who actually perform the work. Periodic measurement
and assessment of achievements should be put into place.
Step 10: Update knowledge on current work practices. This is, in essence, the crux of
continuous quality improvement.
The remainder of this paper will focus on how to begin step one, the planning
phase, of an HR benchmarking process, i.e. Identifying what to benchmark.
The discussion will primarily deal with the quantitative measurement of human resource
management. Although qualitative assessment can be a valuable and informative
benchmarking tool, the ease with which agencies can define, and in many cases obtain,
quantitative information makes it a practical starting point from which to develop a
benchmarking process.

Steps of a Benchmarking process:


The basic steps of a benchmarking effort are:

1. Decide what process to benchmark.


2. Study the process in your own organization.
3. Identify benchmarking partners.
4. Analyze the processes of benchmarking partners to identify differences that
account for superior performance.
5. Adapt and implement "best practices."
6. Monitor and revise.

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BENCHMARKING THE HUMAN RESOURCES FUNCTIONS

The Global best practices HR tool examines 44 performance measures in 5 key areas:

1. Cost and Staffing: Compare a series of cost measures, including the total cost of the
human resources department, in addition to a series of staffing measures, including the
number of HR staff to total employees.

2. Recruitment: Assess turnover rates. Determine the timeliness and efficiency of the
recruitment process.

3. Training and Recognition: Review types of training offered and use of incentive
plans.

4. Benefits: Understand methods used to communicate benefits information and the


extent to which contributions are made to retirement plans.

5. Technology and Organization: Examine the types of human resource information


systems used, as well as methods of effective communication and employee feedback.

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DIFFERENCE BETWEEN BENCHMARKING AND
BEST PRACTICES

Are benchmarking and best practices the same?

No, they are not the same. Benchmarking is the process that allows one to identify
potential best practices, i.e. by identifying the best performers; one knows where to look
for practices that might improve their own performance. However, there are different
types of benchmarking and some organizations engage in benchmarking in order to
identify performance targets for their own organizations rather than to look for practices
that make other organizations so successful.

What distinguishes a best practice from a better practice or a good idea?

A best practice is not simply a new idea, but rather a Best Practice is one that meets the
following seven criteria:

1. Successful over Time: A best practice must have a proven track record.
2. Quantifiable results: The success of a best practice must be quantifiable.
3. Innovative: A program or practice should be recognized by its peers as being creative
or innovative.
4. Recognized positive outcome: If quantifiable results are limited, a best practice may
be recognized through other positive indicators.

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5. Repeatable: A best practice should be replicable with modifications. it should
establish a clear road map, describing how the practice evolved and what benefits are
likely to accrue to others who adopt the practice.
6. Has local importance: Best practices are salient to the organization searching for
improvement. The topic, program, process, or issue does not need to be identical to the
importing organization, however.
7. Not linked to unique demographics: A best practice may have evolved as a result of
unique demographics, but it should be transferable, with modifications, to organizations
where those demographics do not necessarily exist.

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FACTORS ENHANCING THE CHANCES OF SUCCESS FOR
A BENCHMARKING EFFORT

A well-designed benchmarking process is essential. However, there are some other


critical success factors, including:

• Senior Management Support;


• Benchmarking training for the project team;
• Useful information technology systems;
• Cultural practices that encourage learning; and
• Resources, especially in the form of time, funding, and useful equipment.

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BENCHMARKING BEST PRACTICES, RECRUITMENT
STRATEGIES AVAILABLE ONLINE NOW

One of the most important services an association can provide its members is the
information necessary to improve its performance. One way to do that is by conducting
benchmarking surveys and then taking a closer look at best practices—summaries of
what individual agencies are doing in areas like workforce planning and healthcare cost
management.
The IPMA-HR benchmarking committee recently completed work on the Healthcare
Benefits Cost Management Survey, and the results are available for free to all IPMA-HR
members. How to handle the growing cost of providing health benefits has posed a
significant problem for public sector employers who don’t have the option of passing
along the costs to customers.
In addition, five best practices summaries in the area of workforce planning are now also
posted to the IPMA-HR Web site at http://www.ipma-hr.org/. IPMA-HR learned from the
original study that many organizations have not begun to tackle the looming Baby
Boomer retirement crisis. For agencies that anticipate a workforce shortage in the next
five to 10 years, workforce planning is the place to start. Take a few minutes to learn
what other agencies are doing by visiting the IPMA-HR Web site.

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The benchmarking committee is also looking forward to sharing information on
recruitment and selection strategies. This is a topic that garners great interest, with
hundreds of members accessing IPMA-HR research products online each month. In late
February, the benchmarking committee launched a survey in partnership with NEOGOV
on this important topic. Results should be available in late spring.
The benchmarking Web site (http://www.ipma-hr.org/index.cfm?navid=128) and best
practices Web site (http://www.ipma-hr.org/index.cfm?navid=127) are easily accessible.
Do not forget to login to access the members-only material.

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BENEFITS OF BENCHMARKING HR PRACTICES

• Affirmative Action Plans.


• HR Policy and Procedures Manuals.
• Employee Handbooks.
• Interviewing Guides and Training.
• Human Resource Department Audits.
• General on-site and off-site Human Resource Support.
• Organizational development.
• Teambuilding.
• Performance Review Systems.
• Attitude Surveys.
• Wage & Salary Surveys.
• Supervisory Training.

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RESEARCH METHODOLOGY

STUDY
This research project is a descriptive type of study on the topic-
“BENCHMARKING OF HR PRACTICES”.

Research Design:
Research Design is simply the framework or plan for a study, which is used as a guide in
collecting and analyzing the data. It is the blueprint that is followed in completing a
study. As the objective of the research is descriptive in form, the research design must be
made accordingly:
• Formulating objective of the study.
• Designing the method of data collection.
• Selecting the sample size.
• Collection of data.
• Analysis.
• Conclusion.
Descriptive research includes websites, books, magazines, observations and fact-finding
enquiry of different kind.

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DATA COLLECTION

PRIMARY DATA: Primary data helps in validation of the knowledge gathered from
secondary data. Primary Data are those, which are collected afresh and for the first time.
The methods adopted for it are as under:
• Observation Method
• Questionnaire

SECONDARY DATA: Secondary data provides the knowledge about the topic of the
research and the company in terms of facts and figures. Secondary data are those, which
are collected through someone else, and users can obtain from websites, books,
magazines, and articles in newspapers.

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DATA ANALYSIS

OBJECTIVE OF THE STUDY:


The objectives of the study are as under:
• To study the purpose of benchmarking the HR practices.
• To study the process and steps of benchmarking.
• Defining the factors enhancing the success of benchmarking efforts.
• To know the benefits of benchmarking.
• To analyze the trends and best practices for using HR for competitive advantage.

METHOD OF DATA COLLECTION: The study is based on the secondary data. The
research tools are the magazines, journals and websites.

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ARTICLES

1. USING HR FOR COMPETITIVE ADVANTAGE- TRENDS AND


BEST PRACTICES

Dr Keith Good all, Senior Associate at the Judge Business School, Cambridge University

Programme description:
This three-day programme focuses on the relationship between Human Resource
Management and the leadership and management of successful businesses. The
development of the Human Resource function from its early role in ‘Personnel
Management’ to the current emphasis on Human Resource as a ‘strategic partner’ will be
examined.
The course is organised around case studies which detail Human Resource practices in a
variety of industries. The teaching methodology includes short lectures, practical
readings, group discussions and DVD presentations.

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Key focus areas

• Analyzing the roles of HR Frameworks developed by Harvard and Michigan to


think systematically about how HR connects with business needs, with strategy,
and with the environment will be deployed.
• Aligning HR with Strategy what is it exactly that makes HR ‘strategic’? An
understanding of strategy will be clarified and then the programme examines how
HR can be aligned with strategic objectives. Each of the case studies used will
give practical examples of the different ways in which HR can support the senior
management team and the line.
• Winning the ‘war for talent’ and retaining key staff. Starting with the McKinsey
guidelines for winning the war to attract and retain key talent, the programmed
then looks at a detailed case from the pharmaceutical industry. The assumption is
that poor HR practices will always retain staff, but the ones that stay will be the
ones you don’t want.
• Building commitment. A framework for understanding commitment in a high-
performance organization, as opposed to having simple compliance, will be
developed. The cases will also illustrate the different ways modern organizations
build commitment in the workforce.
• Systems thinking. It is important for HR and senior managers to take an overview
of the interactions between ‘people’ and the ‘hard’ aspects of the business in a
dynamic business environment. The McKinsey/Harvard 7-S model will be used
as an example of how systems thinking can be applied to the analysis of
organizational effectiveness.
• Change management and HR. One of the constant themes of modern management
is the need for change. The case of a French cement company in China will be
used to examine the relationship between HR and change management.

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Who should attend?
The course is suitable for practicing HR managers interested in benchmarking their
current practices against international trends. It is also suitable for senior managers who
want to use their HR function as a source of competitive advantage.

By the end of the course participants will:


• have practical frameworks for analyzing the roles of the HR function
• understand the relationship between HR and strategy in a high performance
organization
• have analyzed the use of HR in different types of businesses (high-tech; service;
manufacturing …)
• understand HR as part of a ‘systems’ view of business effectiveness
• be aware of trends and best practice in obtaining, retaining, motivating and
developing staff
• Understand the relationship between HR and change management.

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2. HR PRACTICES FOR HIGH PERFORMANCE ORGANIZATIONS

ABSTRACT:
If Australian organizations are to be competitive, more productive and economically
sustainable, they will require highly skilled knowledgeable, innovative workers and a
relatively stable workforce. An increasing number of companies in the United States and
Europe are implementing management systems and HR practices with greater employee
involvement to increase productivity and quality, and to gain the competitive advantage
of a workforce strategically aligned with the organization’s goals and objectives.
Critical organizational processes such as information sharing, training, decision-making
and rewards are now being moved down to the lowest levels in the organization. This
approach to HR puts knowledge, power, rewards, and a communication network in place
at every level in an organization. If organizations are to be sustainable in the medium to
long-term, employees must be motivated to care about the work they do, to acquire
knowledge-related skills, and to perform.
Greater employee involvement can only be achieved through a carefully managed
process that strives for participation by integrating the individual with the organization to
achieve high productivity and competitive advantage. This process involves restructuring
the work so that it is challenging, interesting, and motivating as possible. Employees at
all levels are given power to influence decision-making.
However, high quality employees do not assure an organization of having a sustainable
competitive advantage or even a short-term advantage. If employees are poorly motivated
or if the correct organizational systems are not in place, the employees’ talent may be
wasted or lost to competitors.

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THE FORCES OF CHANGE:

The organizational events of the last ten years – out-sourcing, downsizing, re-
engineering, reduced organizational levels, acquisitions and joint ventures, high
management turnover, broadened spans of managerial control, rapid technological change
and globalization – are challenging traditional HR and executive development practices
established since the mid-1970s.

The impact can be seen in many ways:


• There are fewer levels and broadened spans of organizational control which
means that organizations are finding it harder to retain talented people;
• Radically changing organizational structures have effectively abolished career
paths and middle management in both the private and public sectors;
• External recruitment of talent has risen dramatically as many HR departments and
their organizations have opted for this soft option rather than developing talent
from within;
• Reduced budgets and more demanding shareholders and other investors have
forced companies to focus developmental resources for optimum return in the
short-term and invest less.

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WHY HR IS NOW BECOMING INCREASINGLY IMPORTANT

• Organizations in Australia have changed significant aspects of their employment


policies during the 1990s.
• The role of trade unions has declined, bargaining about employment conditions
and wages has shifted to the enterprise level and increasing numbers of
organizations are introducing techniques to communicate directly with their
employees.
• There has been a growth in pay for performance schemes, flexible employment
practices, training, performance appraisals and broader job structures.
• The bureaucratic and hierarchical organizational structures have given way to
broader and flatter structures where self-managed work teams have become more
prevalent and workers.

MAJOR CHALLENGES FACING AUSTRALIAN ORGANIZATIONS.


Although there has been a marked decline in the Australian dollar, the ability of
Australian organizations to compete with goods and services from overseas competitors
may have been impaired due to the poor economic health of many Asia-Pacific
economies. Consequently, overseas competitors are able to provide products and services
at a lower price to the detriment of the local industry Australian organizations now need
to concentrate more on highly value-added products and services produced by a skilled
and motivated workforce. This requires that Australian organizations need to take a more
"strategic" approach to HR that will enable them to cope with the challenges resulting
from rapid changes in technology and globalization.

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HR PRACTICES WHICH ARE CRITICAL TO ECONOMIC SUSTAINABILITY

• Employment security
• Selective hiring of new personnel
• Self-managed teams and decentralization of decision-making
• High compensation contingent on organizational performance
• Extensive training and development
• Continuous improvement HR programs
• Reduced status distinctions and barriers
• Trust between management and employees at all organizational levels
• Efficient and effective use of new information technologies

WHAT IS "BEST PRACTICE" IN HR?


There is no single best practice to which all organizations should aspire. Rather, the
literature shows that each firm has a distinctive HR system that represents a core
competencies required for the survival and sustainability for that particular organization.
“Best practices" in HR are subjective and transitory. What is best for one company may
not be best for another. What was best last month may not be best for today. The concept
of "best" is highly subjective and non-specific.

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FACTORS WHICH CONSTITUTE BEST PRACTICES IN HR ARE
• Communications
• Continuous Improvement
• Culture Consciousness
• Customer Focus & Partnering
• Interdependence.
• Risk Taking
• Strategy and commitment.
.

IMPLEMENTING HR PRACTICES AND POLICIES


When implementing HR practices and policies, managers should note that HR practices:
• Cannot be "copied" from one organization to another.
• Must be implemented with regard to the organizational context of a particular
firm.
• Are more effective, and can produce a synergistic effect, if they are
complementary to each other.
• Require significant planning, resources and effort.
• Necessitate that people who are expected to assist with the implementation of the
new HR practices must be consulted and be a part of the planning, development
and implementation processes right from the start.
There must be an effective management system to support long-term productivity
improvements. Policies and training have to be aligned with HR practices.
Must be broadly complementary to HR policies linked to "high-involvement work
practices" and are thus relevant to explaining the variation in the diffusion of such
practices.

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KEY FINDINGS AND LESSONS LEARNED
The literature refers to some key findings from research and lessons learned. These
include:
• The most striking increases in high-involvement work practices are in the use of
on-line work teams and off-line problem-solving groups.
• Higher levels of managerial tenure had a positive and statistically significant
association with greater increases in the use of high-involvement work practices.
• In newly industrialized countries, investments such as increased training,
performance-based pay, the elimination of status barriers, and more selective
recruitment and hiring practices were assessed by the corporate parent.
• High-involvement work practices may represent "competence-destroying"
change, which is difficult to implement, and may lead to worsened performance in
the short-term.
• Plants that undergo a major disruption in their operations – creating opportunity
for various organizational changes - were more likely to adopt high-involvement
work practices.
Manufacturing technology is necessary but insufficient, without work force commitment
to performance. Any competitive advantage will not be sustained without a skilled,
motivated, and committed management team and work force. Organizations must
enhance work force ability to improve productivity. Technology without a talented work
force is an opportunity that has not been utilized enough.

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NEW ROLE FOR HR PROFESSIONALS

The role of HR departments is being transformed as line managers assume greater


responsibility for a number of people management activities and as HR specialists focus
more closely on integrating HR and corporate strategy. It will become increasingly
important for HR specialists to demonstrate that they can contribute to organizational
efficiency and effectiveness in both the short and long term.

HR professionals can now play a more proactive role by:


• Demonstrating that they understand these employment changes has an impact on
employees and that employee’s experience organizational change in different
ways.
• Realigning the expectations of managers and other employees within their
organizations. HR practitioners are responsible for communicating the need to
understand the changing nature of work and the impact of such changes on the
organization.
• Monitoring how well employees are coping with employment changes where
many employees do not feel that they are effectively making the transitions when
organizational changes and flexible work practices are introduced.
• Providing advice to executive management to adopt a long-term strategic
approach to HRM that is more conducive to the development of employment
relationships based on mutuality of organizational and individual goals and
expectations.

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CONCLUSION

There is significant evidence in the literature to indicate that a strategic approach to HR


policies and practices in Australia has been largely pre-occupied with strategy in its
narrowest form. An explanation of this may be that strategic HR practices have been used
opportunistically rather than strategically, and the approach by HR specialists and their
CEOs has been overridden by the need to survive and grow in an increasingly complex
and volatile economic environment. Unlike their financial counterparts, HR specialists
are often ignored when strategic business decisions are made. This supports the belief
that the material considerations for long-run strategic decisions placing HR as the critical
function in corporate strategy do not exist.
Organizations that continue to seek solutions to their competitive challenges by
downsizing, outsourcing and weakening their organizational culture are now "on
borrowed time" and will not be sustainable. Organizations need to match HR policies and
practices with long-term business strategies required to compete in the global market
place, and generate employee commitment and retention over the long-term. HR
practices are required that are incremental and collaborative and provide the opportunity
to employees to make decisions affecting their work and to share in the rewards of their
creative efforts.

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EXAMPLES OF TOP 10 BENCHMARKING FIRMS

THE TOP 10 BENCHMARK FIRMS IN RECRUITING AND TALENT


MANAGEMENT

The very best companies in recruiting are constantly striving to improve everything they
do through continuous learning. One of the best learning tools at their disposal is
benchmarking, which often provides learning that can be applied immediately.
Unfortunately, unlike many other professions, there is no standard measure as to what
makes a recruiting function world class, which might provide a list of which firms are
benchmark worthy (for benchmarking to be truly beneficial, all parties involved must be
able to learn from each other).
The Top Ten
1. First Merit Bank. Some may find it hard to believe that the most strategic and
innovative approach to recruiting isn't found inside one of America's most recognized
companies, but rather from this bank headquartered in Ohio. In addition to a great referral
program, they are the best in understanding how recruiting can adopt successful
approaches such as data mining, customer relationship management, competitive
intelligence, and assessment metrics from other business functions.

2. General Electric. Long recognized as "the" benchmark firm when it comes to building
a performance culture, GE wins hands down as having the best overall talent
management strategy. They prioritize jobs and focus on "game changers." Their

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employer-of-choice brand is second to none and they are among the leaders (along with
Home Depot) in recruiting from the military.

3. Microsoft. Giving GE a run for their money as best in talent management is Microsoft.
They excel at workforce planning, redeployment, utilizing analytics, and leveraging the
internet. They are also truly world class when it comes to the effective use of contingent
workers. Microsoft was also ranked #57 on Fortune Magazine's 2005 100 Best
Companies to Work for in America.

4. Wachovia Corporation. This hands-down leader in diversity recruiting is also well


versed in utilizing metrics and running a fee-for-service recruiting model capable of
actually generating revenue by selling excess recruiting capacity to other organizations.
Their recruiting strategy is world-class in a relatively conservative industry.

5. Starbucks. Given the "less than glamorous" nature of the retail industry, the approach
taken by this coffee giant to employment branding and becoming an employer of choice
is phenomenal. They also excel at high-volume hiring. Starbucks was ranked #11 on
Fortune Magazine's 2005 100 Best Companies to Work for in America.

6. Marriott International. This hotel giant was one of the earliest adopters of
employment branding, and one of the few companies to maintain a dedicated focus on the
art. While they still excel in employment branding, their diversity recruiting and work
with the disadvantaged are world class by any standard. Marriott was ranked #63 on
Fortune Magazine's 2005 100 Best Companies to Work for in America.

7. Southwest Airlines. The clear winner for innovation in recruiting, this company not
only excels in selection but also scores huge in branding with the launch of its own TV

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show (Airline). Every employee periodically receives productivity and financial reports
so they can act more like owners.

8. Booz Allen Hamilton. The things that set this professional services firm apart from the
competition comprise a laundry list of "must have" programs for professional-level talent.
In addition to these programs, they also excel at employment branding. BAH was ranked
#75 on Fortune Magazine's 2005 100 Best Companies to Work for in America.

9. Valero Energy. Managing in a place "run by CPAs" requires extraordinary metrics,


and Valero comes through with the best metrics in recruiting, bar none. Their use of
regression analysis for workforce forecasting is truly best in class. In addition, they have
development metrics that demonstrate the relationship between recruiting effectiveness
and stock price per share, and they have created a sourcing channel report that
demonstrates the ROI in the effectiveness of their best sourcing channels. Valero was
ranked #23 on Fortune Magazine's 2005 100 Best Companies to Work for in America.

10. T-Mobile. Excellent work in nearly every aspect of recruiting, T-Mobile is a stand out
in both the usage of metrics and online candidate assessment. In 2004, T-Mobile set out
to demonstrate the business impact of recruiting and succeeded beyond expectations.
With a largely tech-savvy target audience, they also excel at innovation in Internet
recruiting.

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A SUMMARY OF THE BENCHMARKING INTERVIEWS

The overall trend in the delivery of modern human resource practices is to refocus the
traditional orientation of the Personnel Office from conducting transactions alone to
combining service delivery and strategic planning. For example, at Genzyme, Human
Resources (HR) is 70% a business partner and 30% a service provider. Johnson&
Johnson has organized HR into three segments: Thinkco, Touchco and Serveco. Thinkco
is a strategic unit providing direction to individual areas; Touchco exists within the
business unit to deliver specific human resource practices; Serveco handles human
resource transactions across the organization.
In the aggregate, three key factors are necessary for high level human resource practices:
strong leadership, clear organizational values, and ongoing measurement. Success
requires faith in administrative processes, use of technology, and high-level involvement
of HR in the overall strategic planning for the organization. Every organization the team
interviewed cited the critical importance of high-level leadership to advocate for change
and to clarify the focus of future human resource practices.
To better define and clarify the values of the institution or corporation, several
organizations have specified human resource principles that provide a basis for the
development and implementation of new practices. For example, one multi-national
organization developed a process to review practices world-wide, after which it issued a
statement defining seven principles of leadership and appointed people to guide the
subsequent implementation of new human resource practices.

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These organizations used employee surveys, exit interviews and cross-functional
meetings initiated by HR to measure the success of changes in human resource practices.

Common Themes
Certain approaches to human resource practices were fairly common across many of the
organizations interviewed.

1. Planning and Appraisal


In general, planning and appraisal processes focus on developing the individual; letter
grades are not used. Several organizations use a "360" evaluation tool in which
subordinates, colleagues, and supervisors contribute to an individual's evaluation. An
important outcome of this process is a training plan that links both the needs of the
individual and the goals of the organization. Positive, honest feedback is critical.

2. Individual and Team Development


The key to individual and team development is training. Characteristics of successful
organizations include: budgeting training expenses and releasing individuals to attend
training sessions; providing centralized core training appropriate for the job; training
managers, coaches, and supervisors in work and family issues; and providing training
specifically tailored to the needs of teams.

3. Career Planning
Consistently, career planning is described as being the responsibility of individual
employees. Several organizations said, "the job belongs to the company; the career path
belongs to the individual."

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4. Hiring
Technology is widely used by central HR for recruiting, hiring, retaining and assessing
performance and competencies. Nevertheless, screening, interviewing and final decisions
remain the responsibility of the business units. The documentation supporting these
transactions is processed and stored electronically. The organizations believe this
technologically enhanced hiring process is valuable to both the internal and external
candidates.

5. Succession Planning
Succession planning is of growing importance to organizations as they come to realize
that professionals who have achieved a high level of success within a particular discipline
have not necessarily developed all the competencies for leadership. Several organizations
have taken specific steps to develop new leadership. For example, Johns Hopkins has
established a Leadership Institute that may contribute to succession planning.

6. Job Design
Successful job designs offer flexibility; are guided by what needs to be done; and meet
the demands of the marketplace.

7. Classification
Job classification remains the responsibility of central HR. Problems occur when
standards for classification are not applied.

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8. Compensation/Recognition/Other Rewards
Total compensation and rewards are being desegregated into base salary, discretionary
bonuses, and non-financial recognition. For example, AT&T provides cash awards for
ideas which lead to cost saving. At Lucent Technologies, bonuses are based on a
combination of individual merit, the performance of the business unit, and the
performance of the corporation.
Together, the experiences of these organizations offer guidance to MIT as it works to
expand its human resource practices, to deliver base line services more efficiently and to
develop the workforce to meet the strategic needs of the Institute.

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FINDINGS

There were many findings which were made from the study which are as follows:

• Benchmarking establishes HR systems.

• It ensures compliance with Federal and State Employment Laws.

• It maintains HR systems on an ongoing basis.

• Steps of benchmarking process are very effective.

• Areas which are benefited by the benchmarking practices.

• The Top 10 benchmarking and their strategies for success.

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CONCLUSION

"Benchmarking is a process for identifying and importing best practices to improve


performance." Benchmarking is not a simple comparative study, simply copying
practices from other organizations, or simply assessing performance. Benchmarking helps
in establishing solid HR systems and maintaining HR Systems on an ongoing basis. It
also helps in recommending systems and establishing a timeline for project. It also helps
in assisting with staffing the company as needed. There are various benefits of
benchmarking. It helps in making affirmative action plans and thereby makes HR policies
and procedures manuals. It helps in enhancing Teambuilding. The Performance Review
Systems are made effective by practicing benchmarking. Wage & Salary Surveys are
done to make the existing policies more effective.

Hence, Organizations usually benchmark performance indicators (e.g. profit margins,


return on investment (ROI), cycle times, percentage defects, sales per employee, cost per
unit) or business processes (e.g. how it develops a product or service, how it meets
customer orders or responds to enquiries, how it produces a product or service).

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BIBLIOGRAPHY

www.benchmarkoutsourcing.com
www.gibs.co.za.com
www.globalbestpractices.com
www.osp.state.nc.us
www.dpc.wa.gov.au
www.qut.edu.au

Article Reviews:
www.ere.net
The Top 25 Benchmarking firms in Recruiting and Talent Management.

www.fsed.org
HR Practices for High Performance Organizations.
Flower, Alan. 1997. How to: Benchmarking? Personnel Management. 12 June.

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