A critique of benchmarking and performance measurement

Abstract

This paper succinctly critiques the benchmarking literature and the performance measurement literature in regards to the novel concept of lead benchmarking as a possible means of achieving increased radical and innovative transformation in organizations. For the purposes of the paper, a working definition of lead benchmarking and performance measurement is: benchmarking and performance measurement, which focuses on analysing forward looking, predictive and future performance comparisons. This critique distinctly highlights that the currency of benchmarking and performance measurement needs a radical and indeed innovative transformation to adhere to the dynamics of the business environment. This critique raises various questions of interest. These issues will be investigated later through further research by conducting rich empirical research, whereby descriptions and explanations will be developed of the what, where, who, how and why of the benchmarking concept and the extent to which organizations carry out lead benchmarking

Benchmarking Initiatives in the Construction Industry: Lessons Learned and Improvement Opportunities

“…Conversely, benchmarking adds value to performance measurement because it allows companies to compare their data; it also allows for better decision making based on these comparisons ͑Beatham et al 2004͒. Authors concur to argue that most organizations involved in benchmarking initiatives tend to focus more on the comparison of performance metrics over time than on understanding and learning from other companies' good practices ͑Welch and Mann 2001; Hilton et al 2000;Anderson and McAdam 2004͒. According to Anderson and McAdam ͑2004͒, the use of benchmarking should be extended beyond the comparison of lagging performance measures. Although lagging indicators are important to assess the achievement of a company's strategic objectives, leading performance measures are also necessary because they are proactive and preventive in nature.…”

“…Previous studies indicate that the use of performance measures has had a significant effect on the development and effectiveness of benchmarking; when performance is tracked, outdated uncompetitive management practices are identified, and changes are investigated ͑Anderson and McAdam 2004;KPI 2000;CII 2000;Alarcón et al 2001͒. Therefore, companies must be flexible and able to adapt to unanticipated organizational changes; this in the long run will improve organizational competitiveness ͑Anderson and McAdam 2004͒.…”

Benchmarking Projects: How to Apply It on Non-Industrial Projects

“…It is essential to any organizational improvement process where current state of affairs is considered undesirable (due to ineffectiveness or inefficiency) until replaced by more desirable state of affairs based on evidence or an understanding that such states can be improved (Chen, 2005;Dawkins et al, 2007). It was applied in double loop organisational learning by (Argyris, 1977), in knowledge management initiatives by (McAdam & McCreedy, 1999), in total quality management by (Franceschini et al, 2006), supply chain management (Deming, 1982), Six Sigma (Xerox, 1979), performance measurement (Anderson & McAdam, 2004;Alstete, 2008) (as cited in Moriarity & Smallman, 2009) and used in construction by CII, oil and gas industry by COAA. Benchmarking can be extensively used in organisational and manufacturing processes.…”

“…For a given company, benchmarking provides sets of external comparisons to its peer group that can be used to establish improvement goals and objectively understand what "best in class" performance means (Mohammed, 1996). Typically, benchmarking looks at output (results) of a project resulting in lag benchmarks (Anderson & McAdam, 2004).…”

Benchmarking of industrial park infrastructures in Germany

“…Since the 1990s, there has been an increasing dissatisfaction with these traditional forms of performance measurement, e.g. due to limitations with regard to future performance developments or due to the heavy focus on financial factors, as evidenced by a number of literatures in the areas of management accounting, operations management as well as strategy (Fitzgerald et al, 1991;Brignall et al, 1992;Govindarajan and Gupta, 1985;Gregory, 1993;Kaplan and Norton, 1992;Anderson and McAdam, 2004;Neely et al, 1995;Moffett et al, 2008;Chia et al, 2009;Johnson and Kaplan, 1987;Bourne et al, 2000;Waal and Kourtit, 2013;Franco-Santos et al, 2012).…”