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Experts say that internal benchmarking can help companies derive an edge in the external market. Have you established standards against which employee performance can be measured and enhanced?

Internal benchmarking enables the organisation to understand how maximum productivity can be achieved and what changes need to be made in order to reach the level of highest efficiency. The procedure is not only applicable for physical goods, but is also a great indicator of the performances of employees in a certain company. It can successfully bring forward the intricacies of different departments and prove highly beneficial in helping them to work in harmony and synchronisation.

Internal benchmarking has a very wide scope in improving the product quality and performance levels in any company. It provides an unconventional method of analysis of any facet in the functioning of an organisation. Sunil Goel, director, GlobalHunt, elaborates on the concept, "Internal benchmarking can be defined as the best practices that are established as standards within the organisation against which the performance of a department or an individual is measured. This process is vital for creating an edge in the external market. Internal benchmarking could be used for different functions, departments, groups and can also be utilised in different regions of an organisation."

There are numerous benefits offered by this process. Goel lists the advantages, "Internal benchmarking can be created within the organisation without giving third-party access to the trade and business secrets and it also does not involve consulting or advisory costs. It motivates the internal resource by setting up a level in the same organisation and everyone tries to achieve that. This, in turn, improves the focus, dedication and performance of the organisation. It gives an edge to the company in terms of external competition.

Internal benchmarking, like any other appraisal process, needs to be carried out with care. If not conducted in a vigilant manner, it can fail to achieve its objective and can give false conclusions and estimations. Harinder Singh, HR and strategic head, Vigneshwara Developers, tells us about the limitations of internal benchmarking and how these loopholes can be overcome, "Internal benchmarking is supposed to help a company in identifying, understanding and adopting outstanding practices from within the organisation to improve its performance. However, the practice has certain problems associated with it that must be taken care of. It lacks external focus and may foster complacency as the organisations tend to bask in the thought of having outdone their expectations, thereby limiting scope for further improvement. Also, internal weaknesses of the organisation associated with organisational culture and leadership may also pose as issues in producing a satisfactory result. These limitations can be overcome through good leadership, wherein the process receives due support and interest from senior management and sound understanding of the internal dynamics of the organisation and knowledge of all operations and requirements of improvements."

Thus, internal benchmarking can go a long way in aiding organisations better their output levels and motivating the staff to perform with a greater focus.

— Palak Bhatia