{"id":1880,"date":"2022-07-26T16:25:21","date_gmt":"2022-07-26T16:25:21","guid":{"rendered":"https:\/\/www.tivian.com\/us\/?p=1880"},"modified":"2023-03-17T13:35:46","modified_gmt":"2023-03-17T13:35:46","slug":"how-external-benchmarking-holds-back-employee-engagement","status":"publish","type":"post","link":"https:\/\/www.tivian.com\/us\/how-external-benchmarking-holds-back-employee-engagement\/","title":{"rendered":"How External Benchmarking Holds Back Employee Engagement"},"content":{"rendered":"<p><span style=\"font-weight: 400\">The old adage, \u2018you can only improve what you can measure\u2019 has led to undesirable side effects when it comes to employee engagement. One of the biggest problems is the continued use of external benchmarks. These shouldn\u2019t be confused with internal benchmarks, where you track progress against your own results \u2013 over time and against internal best practices.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Perceived as an effective guide for highlighting what companies are doing well, as well as where they can improve, external benchmarking does present real disadvantages, especially when it comes to accurately <\/span><a href=\"https:\/\/www.tivian.com\/us\/how-to-successfully-measure-employee-engagement\/\"><span style=\"font-weight: 400\">measuring employee engagement<\/span><\/a><span style=\"font-weight: 400\">. In this blog, we take a look at what external benchmarking entails before delving into the concerns that companies should consider.\u00a0<\/span><\/p>\n<h2>Why do companies use external benchmarking?<\/h2>\n<p><span style=\"font-weight: 400\">There are <\/span><b>five reasons companies use external benchmarks<\/b><span style=\"font-weight: 400\">, in a process that is normally managed by an external HR consultancy. The reasons are:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Management doesn\u2019t know what good or bad looks like<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">They are easy to understand and comprehend<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">They are supposed to provide direct comparators with your competition<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">They allow companies to align their efforts so they don\u2019t over-spend on follow-up actions<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">They enable companies to track and see what improvements they are making over time<\/span><\/li>\n<\/ol>\n<h3>What benefits does external benchmarking offer?<\/h3>\n<p><span style=\"font-weight: 400\">Let\u2019s delve into the benefits of external benchmarking, especially for consultancies:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Once external benchmarks have been adopted, a consultancy can lock clients in for years to come<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">This benchmarking greatly reduces the consultancy\u2019s work &#8211; but they only work if a constant set of questions is used<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Vendors can fine-tune their marketing materials and messaging about their best practice approach &#8211; this entails guarding their benchmarking data closely, which means it\u2019s rarely open to external scrutiny!<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">External benchmarking makes it easy to analyze survey results. Any variations to benchmarks will inevitably become focus areas for follow-up actions.<br \/>\n<\/span><\/p>\n<h2>How are external benchmarks created?<\/h2>\n<p><span style=\"font-weight: 400\">So, how are these benchmarks compiled in the first place? The three main approaches to external benchmarking are outlined below:<\/span><\/p>\n<h3>1. Multi-company comparison<\/h3>\n<p><span style=\"font-weight: 400\">Larger consultancies have a lot of data available from the work they do with other customers. From there, they take the key comparable questions from across all their client data, segment, and anonymize it. Et voila \u2013 you have your benchmarks.<\/span><\/p>\n<p><span style=\"font-weight: 400\">In reality, good-quality external benchmarks are a bit more complex as they need to be segmented by sector and region, and the data used should be as fresh as possible.<\/span><\/p>\n<h3>2. Representative sample surveys of competitors<\/h3>\n<p><span style=\"font-weight: 400\">A second approach to external benchmarking is to do a representative sample survey with a company\u2019s competitors, using the same questions as the client. This typically targets 1,000-2,500 respondents from competitors to create the benchmarks. Some vendors may argue that they have higher sample sizes, the largest benchmark database, or the freshest data. However, the principle behind the benchmarks remains the same.<\/span><\/p>\n<h3>3. External benchmarking against \u2018best in class\u2019<\/h3>\n<p><span style=\"font-weight: 400\">Many vendors tell you which companies are \u2018best in class\u2019 and explain that you should aspire to achieve similar results. Some will even give out prizes to those companies who have achieved or exceeded targets, or have improved their results most. However, it\u2019s a fact that 100% accurate benchmark data does not exist. Though vendors will argue that it doesn\u2019t need to be 100% accurate, because external benchmarks are meant to serve as a guide \u2013 highlighting where you are doing well or need to improve.<\/span><\/p>\n<h2>The disadvantages of external benchmarking<\/h2>\n<p><span style=\"font-weight: 400\">Let\u2019s look at the price you pay for this level of apparent comfort. Here are t<\/span><b>hree main issues with external benchmarking<\/b><span style=\"font-weight: 400\">:<\/span><\/p>\n<h3>1. General, not individual questions<\/h3>\n<p><span style=\"font-weight: 400\">WIth external benchmarking, you have to largely adopt a \u2018one-size-fits-all\u2019 approach, rather than tailoring and fine-tuning a questionnaire to your company\u2019s specific situation and need. For example, questions about whether your employees understand, and are aligned with, your strategic objectives can only be asked in general terms, rather than relating directly to your business. <\/span><\/p>\n<h3>2. Implied assumptions<\/h3>\n<p><span style=\"font-weight: 400\">External benchmarking makes a number of suppositions:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">It assumes comparability between jobs and companies. The external benchmarking process originally grew out of <\/span><a href=\"https:\/\/www.salary.com\/blog\/understanding-the-salary-benchmarking-process\/\"><span style=\"font-weight: 400\">salary comparisons<\/span><\/a><span style=\"font-weight: 400\"> of jobs that were essentially interchangeable between companies. Cultures were similar and benchmarks were divided by job type (such as manual or clerical). It assumes the ability to \u201cmatch\u201d companies with each other. However, once you take into account factors such as historical, recent or current events that impact an individual company and its market position and regional differences, accurate external benchmarking is pretty much impossible.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">It assumes the availability of robust and consistent data &#8211; which is a problem in many parts of the world.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">It\u2019s well known that a majority of organizations benchmark above the 50th percentile, which inevitably encourages a score spiral. After a couple of years of external benchmarking, companies tend to all gather around a specific percentile with no real pointers on how to move forward from it.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">External \u2018noise\u2019 factors such as global or regional events, legislation or crises influence the results considerably. Therefore, to be accurate, external benchmark data needs to be as fresh as the information it\u2019s being used with.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">It supposes that all organizations are pursuing the same strategy with similar resources.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Achieving results just below or above the benchmark tends to lead to a morphine effect. There is an initial feeling of warmth and comfort, which quickly turns into an oblivious lethargy, as there seems to be no need for further action or improvement.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">You can only operate and grow within your own internal boundaries \u2013 so focusing on what someone else is doing may not be right for you.<\/span><\/p>\n<h3>3. Gaming the system<\/h3>\n<p><span style=\"font-weight: 400\">The biggest problem with using external benchmarks is that they condense the results to a comparable\/benchmark-able score. If reaching or exceeding this score is also subject to monetary incentives, you have the perfect recipe for driving the wrong sort of behavior amongst managers! It\u2019s not hard to manipulate your team to give better scores. As managers know when the survey is coming, they learn very quickly which behaviors are needed over the short term to persuade staff to give better ratings.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Essentially you see <\/span><a href=\"https:\/\/www.oxfordreference.com\/view\/10.1093\/oi\/authority.20110803095859655\"><span style=\"font-weight: 400\">Goodhart\u2019s law<\/span><\/a><span style=\"font-weight: 400\"> in operation. Named after economist Charles Goodhart, this states: <\/span><b>\u201cWhen a measure becomes a target, it ceases to be a good measure.\u201d<\/b><\/p>\n<p><span style=\"font-weight: 400\">That\u2019s exactly what seems to be happening with external employee engagement benchmarking. The focus on targets means that many companies have lost sight of what employee engagement actually is and why it\u2019s important to them.<\/span><\/p>\n<p><a href=\"https:\/\/www.tivian.com\/us\/understanding-the-employee-experience-across-the-employee-lifecycle\/\"><span style=\"font-weight: 400\">Employee engagement isn\u2019t just a numbers game<\/span><\/a><span style=\"font-weight: 400\">. You need to ask yourself the question, <\/span><b>\u201chow many business improvements have we achieved as a result of decisions that were driven by our external benchmarking?\u201d<\/b><span style=\"font-weight: 400\"> There may have been lots in the first couple of years when you identified some black spots and fixed them, but after three years of benchmark focus \u2013 what value are you really getting?<\/span><\/p>\n<h2>Summary: The way forward for benchmarking<\/h2>\n<p><span style=\"font-weight: 400\">You don\u2019t need to throw the baby out with the bath water and abandon all external comparators. There is nothing wrong with tracking key driver questions, such as Employer NPS, Intention to Stay or similar. The key is to ensure that you get real insight from your data and <\/span><a href=\"https:\/\/www.tivian.com\/uk\/employee-wellbeing-survey-questions\/\"><span style=\"font-weight: 400\">ask questions<\/span><\/a><span style=\"font-weight: 400\"> which are both relevant to your employees and to your business\u2019 current situation, strategy and objectives. Ultimately, it\u2019s behavior which makes the difference and not scores on a page.<\/span><\/p>\n<p><span style=\"font-weight: 400\">External benchmarking has nothing to do with creating real engagement or sustainable improvements or changing organizational culture for the better. You cannot get the insights you need to carry out meaningful actions that will improve the workplace, increase productivity, or entice your workforce to go the extra mile. Essentially, it\u2019s deliberately dumbed-down to ensure compatibility and largely follows a one-size-fits-all approach. What incentives are there for managers who achieve their score targets to do anything different, embrace innovation, or make changes to meet the generational demands of their workforce?<\/span><\/p>\n<p><span style=\"font-weight: 400\">This approach breeds mediocrity. If you\u2019re happy to train your managers to adopt short-term measures and avoid challenging management tasks, rather than giving your employees a real voice in driving your business forward, external benchmarking is your option. But if you want to increase engagement and make feedback central to business change at all levels,<\/span><b> look beyond external benchmarking to internal metrics that focus on your company and its specific challenges, objectives and needs<\/b><span style=\"font-weight: 400\">.<\/span><\/p>\n<p><a href=\"https:\/\/www.tivian.com\/us\/why-tivian\/\"><span style=\"font-weight: 400\">Tivian<\/span><\/a><span style=\"font-weight: 400\"> has a suite of software solutions for HR teams to help employers to gain meaningful data from their people. Explore our <\/span><a href=\"https:\/\/www.tivian.com\/us\/our-products\/employee-experience\/\"><span style=\"font-weight: 400\">employee experience tools<\/span><\/a><span style=\"font-weight: 400\"> to see how our technology can support your efforts to measure and improve your employee experience initiatives.\u00a0<\/span><\/p>\n<p><!--HubSpot Call-to-Action Code --><span id=\"hs-cta-wrapper-8dbc76e8-87e4-4e96-b7c9-7b7b2d300efd\" class=\"hs-cta-wrapper\"><span id=\"hs-cta-8dbc76e8-87e4-4e96-b7c9-7b7b2d300efd\" class=\"hs-cta-node hs-cta-8dbc76e8-87e4-4e96-b7c9-7b7b2d300efd\"><!-- [if lte IE 8]&gt;--><\/span><\/span><\/p>\n<div id=\"hs-cta-ie-element\"><\/div>\n<p><a href=\"https:\/\/cta-redirect.hubspot.com\/cta\/redirect\/8948602\/8dbc76e8-87e4-4e96-b7c9-7b7b2d300efd\"><img decoding=\"async\" id=\"hs-cta-img-8dbc76e8-87e4-4e96-b7c9-7b7b2d300efd\" class=\"hs-cta-img aligncenter\" style=\"border-width: 0px\" src=\"https:\/\/no-cache.hubspot.com\/cta\/default\/8948602\/8dbc76e8-87e4-4e96-b7c9-7b7b2d300efd.png\" alt=\"See what Tivian\u2019s Employee Engagement tools can do\" width=\"615\" height=\"48\" \/><\/a><!-- end HubSpot Call-to-Action Code --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The old adage, \u2018you can only improve what you can measure\u2019 has led to undesirable side effects when it comes to employee engagement. One of the biggest problems is the continued use of external benchmarks. These shouldn\u2019t be confused with internal benchmarks, where you track progress against your own results \u2013 over time and against [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":1881,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15,14],"tags":[],"class_list":["post-1880","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-employee-engagement"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How External Benchmarking Holds Back Employee Engagement | Tivian US<\/title>\n<meta name=\"description\" content=\"External benchmarking is a popular approach to measuring employee engagement, but not the most efficient. 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