Benchmarking

Definition

Benchmarking is the process of identifying "best practice" in relation to both products (including) and the processes by which those products are created and delivered. The search for "best practice" can taker place both inside a particular industry, and also in other industries (for example - are there lessons to be learned from other industries?).

The objective of benchmarking is to understand and evaluate the current position of a business or organisation in relation to "best practice" and to identify areas and means of performance improvement.

The Benchmarking Process

Benchmarking involves looking outward (outside a particular business, organisation, industry, region or country) to examine how others achieve their performance levels and to understand the processes they use. In this way benchmarking helps explain the processes behind excellent performance. When the lessons learnt from a benchmarking exercise are applied appropriately, they facilitate improved performance in critical functions within an organisation or in key areas of the business environment.

Application of benchmarking involves four key steps:

(1) Understand in detail existing business processes

(2) Analyse the business processes of others

(3) Compare own business performance with that of others analysed

(4) Implement the steps necessary to close the performance gap

Benchmarking should not be considered a one-off exercise. To be effective, it must become an ongoing, integral part of an ongoing improvement process with the goal of keeping abreast of ever-improving best practice.

Types of Benchmarking

There are four types of benchmarking. They are not mutually exclusive and companies can choose any one or a combination to meet their objectives. It is recommended that strategic benchmarking is conducted first to create a context and rationale that will enhance all other benchmarking efforts.

Strategic Benchmarking

Concerned with comparing different companies' strategies and assessing the success of those strategies in the marketplace.

Analyses the strategies with particular reference to:

• strategic intent
• core competencies
• process capability
• product line
• strategic alliances
• technology portfolio

Should begin with the needs and expectations of the customer. This can be achieved through surveys to measure customer satisfaction and the gaps between a company's performance and its customers' standards.

Ensures a co-ordinated strategic direction regarding benchmarking and reduces the possibility that one improvement project will cancel out the effect of another. Benchmarking candidates are normally direct competition.

The main difficulty is persuading the benchmark partner to discuss their strategy. However, there is a great deal of information which can be obtained from customers, common suppliers and public domain information.

Functional Benchmarking

• Investigates the performance of core business functions.
• Does not need to focus on direct competition but, depending on the function to be benchmarked, the benchmark partner may need to be in a similarly characterised industry for useful comparisons to be made.

Best Practices Benchmarking

• Applies to business processes.
• It breaks the function down into discrete areas that are the targets for benchmarking and is therefore a more focused study than functional benchmarking.
• Some business processes are the same regardless of the type of industry.
• Attempts to benchmark not only work processes, but also the management practices behind them.

Product Benchmarking

• Commonly known as reverse engineering or competitive product analysis.
• Assesses competitor costs, product concepts, strengths and weaknesses of alternative designs and competitor design trade-offs, by obtaining, stripping down and analysing competitors' products.

The four different types of benchmarking are evolutionary beginning with product, through to functional, process and strategic. For the purposes of this document and the corresponding document 'Guide to Benchmarking' best practice benchmarking will be used due to its focus on processes. As benchmarking is becoming more widespread and companies are more proficient in its use, best practice benchmarking is becoming increasingly popular. This is also reinforced by the move away from functionality in organisations towards business processes. For further information on the other types of benchmarking, see the references to Watson, Camp and Miller.

Conclusion

Benchmarking must be a continuous process with the extent and scope of the project being dependent on the resources that the company has available.

The above key steps to benchmarking are detailed further along with a list of factors to be aware of in the companion document 'Guide to Benchmarking'.

Key steps to benchmarking

Based on our research and experience we would recommend the following stages in your Benchmarking projects:

1. Identify what to benchmark
2. Ensure management support and involve all stakeholders
3. Select the benchmarking team
4. Analysis of internal processes
5. Identify companies to benchmark
6. Decide on method(s) of data collection
7. Collect public domain information
8. Analyse collected information to establish what other information needs to be collected
9. Establish contacts with benchmark partners
10. Plan the actual visits
11. Conduct the benchmarking visits
12. Establish whether a performance gap exists
13. Predict future performance levels
14. Communicate benchmark findings
15. Establish targets and action plans
16. Gain support and ownership for the plans and goals
17. Implement the action plans, measure performance and communicate progress
18. Re-calibrate benchmarks
19. Adopt benchmarking on a company-wide scale

People CMM

Do you need to improve your management of people to get full advantage from your software development capability?

Can you attract, train, deploy, and retain the people you need to develop software in today's competitive market?

With the help of the Capability Maturity Model Integrated (CMMI), many organizations have made improvements in their software and systems processes and practices. They have also discovered that their continued improvement requires significant changes in the way they manage people.

The People CMM is a maturity framework that describes the key elements of managing and developing the workforce of an organization. It describes an evolutionary improvement path from an ad hoc approach to managing the work-force, to a mature, disciplined development of the knowledge, skills, and motivation of the people that fuels enhanced business performance.

Although the formal period for submitting comments about the next version of the People CMM is over, the SEI People CMM Team appreciates change requests and insights shared by members of the community. We welcome your ideas about ways to update the model to reflect the best of current thinking and methods in workforce practice improvements.

The People CMM helps organizations to

• characterize the maturity of their human resource practices
• set priorities for improving the competence of its work-force
• integrate competence growth with process improvement
• establish a culture of workforce excellence

The People CMM publications and training will support incorporating people management capabilities into software improvement programs by communicating a model that complements the Capability Maturity Model Integrated (CMMI), and by making available an appraisal method that can be used alone or integrated with existing process appraisal methods.

The People CMM is designed to guide organizations in selecting activities for improving their workforce practices based on the current maturity of their workforce practices. By concentrating on a focused set of practices and working aggressively to install them, organizations can steadily improve their level of talent and make continuous and lasting gains in their performance. The People CMM guides an organization through a series of increasingly sophisticated practices and techniques for developing its overall work-force. These practices have been chosen from experience as those that have significant impact on individual, team, and organizational performance.

The People Capability Maturity Model (People CMM) adapts the maturity framework of the Capability Maturity Model for Software (CMM) [Paulk 95], to managing and developing an organization's work force. The motivation for the People CMM is to radically improve the ability of software organizations to attract, develop, motivate, organize, and retain the talent needed to continuously improve software development capability. The People CMM is designed to allow software organizations to integrate work-force improvement with software process improvement programs guided by the SW-CMM. The People CMM can also be used by any kind of organization as a guide for improving their people-related and work-force practices.

Based on the best current practices in the fields such as human resources and organizational development, the People CMM provides organizations with guidance on how to gain control of their processes for managing and developing their work force. The People CMM helps organizations to characterize the maturity of their work-force practices, guide a program of continuous work-force development, set priorities for immediate actions, integrate work-force development with process improvement, and establish a culture of software engineering excellence. It describes an evolutionary improvement path from ad hoc, inconsistently performed practices, to a mature, disciplined development of the knowledge, skills, and motivation of the work force, just as the CMM describes an evolutionary improvement path for the software processes within an organization.

The People CMM consists of five maturity levels that lay successive foundations for continuously improving talent, developing effective teams, and successfully managing the people assets of the organization. Each maturity level is a well-defined evolutionary plateau that institutionalizes a level of capability for developing the talent within the organization.

Except for Level 1, each maturity level is decomposed into several key process areas that indicate the areas an organization should focus on to improve its workforce capability. Each key process area is described in terms of the key practices that contribute to satisfying its goals. The key practices describe the infrastructure and activities that contribute most to the effective implementation and institutionalization of the key process area.

The five maturity levels of the People CMM are:

1) Initial.

2) Repeatable. The key process areas at Level 2 focus on instilling basic discipline into workforce activities. They are:

• Work Environment
• Communications
• Staffing
• Performance Management
• Training
• Compensation

3) Defined. The key process areas at Level 3 address issues surrounding the identification of the organization's primary competencies and aligning its people management activities with them. They are:

• Knowledge and Skills Analysis
• Workforce Planning
• Competency Development
• Career Development
• Competency-Based Practices
• Participatory Culture

4) Managed. The key process areas at Level 4 focus on quantitatively managing organizational growth in people management capabilities and in establishing competency-based teams. They are:

• Mentoring
• Team Building
• Team-Based Practices
• Organizational Competency Management
• Organizational
• Performance Alignment

5) Optimizing. The key process areas at Level 5 cover the issues that address continuous improvement of methods for developing competency, at both the organizational and the individual level. They are:

• Personal Competency Development
• Coaching
• Continuous Workforce Innovation

Total Quality Management

What is Total Quality Management?


TQM is a management philosophy, a paradigm, a continuous improvement approach to doing
business through a new management model. 
The TQM philosophy evolved from the continuous improvement philosophy with a focus on quality as the main dimension of business. Under TQM, emphasizing the quality of the product or service predominates. TQM expands beyond statistical process control to embrace a wider scope of management activities of how we manage people and organizations by focusing on the entire process, not just simple measurements.

TQM is a comprehensive management system which:


♦ Focuses on meeting owners’/customers’ needs by providing quality services at a cost that
provides value to the owners/customers
♦ Is driven by the quest for continuous improvement in all operations
♦ Recognizes that everyone in the organization has owners/customers who are either internal
or external
♦ Views an organization as an internal system with a common aim rather than as individual
departments acting to maximize their own performances
♦ Focuses on the way tasks are accomplished rather than simply what tasks are accomplished
♦ Emphasizes teamwork and a high level of participation by all employees


TQM beliefs: Presented here are universal total quality management beliefs.

♦ Owner/customer satisfaction is the measure of quality
♦ Everyone has owners/customers; everyone is an owner/customer
♦ Quality improvement must be continuous
♦ Analyzing the processes used to create products and services is key to quality improvement
♦ Measurement, a skilled use of analytical tools, and employee involvement are critical
sources of quality improvement ideas and innovations
♦ Sustained total quality management is not possible without active, visible, consistent, and
enabling leadership by managers at all levels
♦ If we do not continuously improve the quality of products and services that we provide our
owners/customers, someone else will


Deming’s Fourteen Points: 


Presented below are Deming’s fourteen points for total quality management.


⇒ Create constancy of purpose for improvement of product and service. (Plan to stay in business.)
⇒ Adopt the new philosophy. (Stop tolerating poor quality.)
⇒ Cease dependence on inspection to achieve quality. (Improve the process.)
⇒ End the practice of awarding business on the basis of price tag alone. (Seek longer-term supplier relationships; reduce the number of suppliers.)
⇒ Improve constantly and forever every process in the system of planning, production, and service.
⇒ Institute modern training (for everybody!).
⇒ Institute modern methods of supervision. (The responsibility of foremen must be changed from sheer numbers to QUALITY.)
⇒ Drive out fear. (Encourage employees to speak up.)
⇒ Break down barriers between departments.
⇒ Eliminate slogans, exhortations, and targets for the work force.
⇒ Eliminate work standards that prescribe numerical quotas.
⇒ Remove barriers to pride in workmanship. (Poor supervisors, poor materials, inadequate equipment, lack of training, etc.)
⇒ Institute a vigorous program of education and self-improvement for everyone.
⇒ Place everybody in the company to work to accomplish the transformation and create a structure in top management that will push every day on the above points.



Characteristics of Successful TQM Companies


The construction industry has arrived late to TQM, probably due to the tendency to easily brush aside anything in management that is new, or to dismiss TQM as a fad.

Continuous improvement is not a fad but a necessary part of management’s obligation to properly run its company. Gone are the boom days when quality did not matter due to the volume of work available and the ease of obtaining work. The attitude of construction managers and contractors was simply to add it to the bill, because the owner will pay for it. In other words, in those boom days Cost plus Profit equaled Price. Now, however, the new attitude is Price minus Cost equals Profit. Owners are now demanding higher quality work, and at a lower cost. In attempting to keep pace with the new attitude, a quality management system that helps
keep costs down is well worth implementing.

The characteristics that are common to companies that successfully implement TQM in their daily operations are listed here.


♦ Strive for owner/customer satisfaction and employee satisfaction
♦ Strive for accident-free jobsites
♦ Recognize that the owner/customer provides the revenue while the employees are
responsible for the profit
♦ Recognize the need for measurement and fact-based decision making
♦ Arrange for employees to become involved in helping the company improve
♦ Train extensively
♦ Work hard at improving communication inside and outside the company
♦ Use teams of employees to improve processes
♦ Place a strong emphasis on the right kind of leadership, and provide supervisors with a
significant amount of leadership training
♦ Involve subcontractors and suppliers, requiring them to adopt TQM
♦ Strive for continuous improvement



Quality principles that successful TQM companies recognize


The quality principles that successful TQM companies recognize and attempt to continually incorporate into their actions are the following:

♦ People will produce quality goods and services when the meaning of quality is expressed
daily in their relations with their work, colleagues, and organization.
♦ Inspection of the process is as important as inspection of the product. Quality improvement
can be achieved by the workers closest to the process.
♦ Each system with a certain degree of complexity has a probability of variation, which can
be understood by scientific methods.
♦ Workers work in the system to improve the system; managers work on the system to
improve the system.
♦ Total quality management is a strategic choice made by top management, and must be
consistently translated into guidelines provided to the whole organization.
♦ Envision what you desire to be as an organization, but start working from where you
actually are.
♦ Studies have indicated that people like working on a quality-managed jobsite especially due
to the cleaner site and safer place to work.
♦ Accept the responsibility for quality. Establish datums for measurement.
♦ Use the principle of get it right, the first time, every time.
♦ Understand that quality is a journey, not a destination. It consists of steps that form a
process that is continuous.


What are the Benefits of TQM?



For Management 
♦ Provides an invaluable problem-solving tool for managers and supervisors to use
♦ Dispels negative attitudes 
♦ Management becomes more aware of problems that affect the individual’s work environment
♦ Employees gain a sense of participation
♦ Increases efficiency and productivity
♦ Reduces turnover rate, tardiness, costs, errors, and scrap & rework
♦ Improves communications within and among all departments
♦ Develops management skills that were never taught, or are long forgotten due to lack of application
♦ Develops overall company awareness and company unity
♦ Rearranges priorities which once seemed locked in place
♦ Builds loyalty to the company
♦ Reveals training requirements in all departments
♦ Lessens the number of defects received from suppliers when they are encouraged to train in quality management.


For Employee
♦ Provides opportunity for personal growth and development (as a result of team training activities) and the opportunity to develop and present recommendations
♦ Increases innovation (through a greater variety of approaches and perspectives) for solving problems, removing fear of failure
♦ Employees use their knowledge and skills to generate data-driven recommendations that will lead to well-informed decision making
♦ Encourages decision-making at the most appropriate level
♦ Increases motivation and acceptance of new ideas
♦ Increases job satisfaction (as a result of the opportunity to participate in and have influence over work)
♦ Recognizes employees for their knowledge, skills, and contribution toward improvement
♦ Develops mutual respect among employees, management and customers
♦ Promotes teamwork

The Pitfalls Successful TQM Companies Must Avoid
The transformation to quality is not without its pitfalls. Many companies have started on the road to quality but failed to achieve success due to several factors:


♦ Lack of top management support.
♦ Lack of middle management support.
♦ Commitment in only one department.
♦ Short-term commitment - failure to stay on course.
♦ Haphazard approach - a little of this and that with no meaningful change in the system.
♦ Failure to acquire the services of a competent statistician or to provide statistical training for employees.
♦ Measure success and guide program on the basis of short-term profits.
♦ Failure to solicit worker input.
♦ Over dependence on computerized quality control.
♦ Funding failure - lack of funds to make meaningful changes in the system (i.e., new machinery, training, improved raw materials).
♦ No market research. Not knowing what the requirements are.
♦ no testing of incoming materials - garbage in - garbage out.
♦ Overselling hourly workers - expecting instant pudding.
♦ Adversarial management (management by fear).

Implementing TQM

1. • 1
     Assess the overall health of the company as it currently operates. If conditions such as lack of management skills and poor employee morale currently exist, you must address those problems first for a better chance of success in implementing Total Quality Management.
   • 2
     Study the history of the company in relation to change. If the company has a good track record of responding favorably to changes in the marketplace and making necessary modifications to business practices along the way, it is probably a good candidate to implement Total Quality Management.
   • 3
     Introduce the concept of Total Quality Management to senior level executives. Implementing Total Quality Management can't be delegated, it must be driven by senior management in order to succeed.
   • 4
     Enlist the services of Total Quality Management consultants. They can help you to audit the company in its current state, suggest areas of improvement and provide training to key employees who can then pass along that information to other employees.
   • 5
     Empower the employees to identify needed changes, with the knowledge that management values their ideas. Systems of reward for measurable improvements should be considered. Employees at all levels of the organization must feel that what they do contributes to the customer's satisfaction.
   • 6
     Realize that implementing Total Quality Management is a long process and doesn't happen overnight. But with management commitment, consistent training of employees and an eye on the ultimate goal of retaining satisfied customers, Total Quality Management can be achieved.

CAREER PLANNING PROCESS

It is obvious from the foregoing analysis that individuals differ a great deal in terms of their career orientation. The career orientation is influenced by the preference for a particular career anchor, the life-cycle stage one is in and individual differences in values, goals, priorities and aspirations. Organizations also differ in terms of the career paths and opportunities that they can provide given the reality of their internal and external environments. The career systems available in organizations also depend on their value system, growth potential, goals and priorities. The difference between what the employees look for in terms of their career progression and what career growth opportunities the organization is able to provide, gives rise to a situation of potential conflict between the individual aspiration and organizational opportunities. If the con­flict is allowed to persist, the employees will experience dissatisfaction and withdraw from being actively engaged in the productive pursuits. They might even choose the option of leaving the organization. In either case, the organization is not able to op­timally utilize the potential contributions of its employees towards the achievement of its goals.

The possibility of conflict between the individual and organization objectives calls for career planning efforts which can help identify areas of conflict and initiate such actions as necessary to resolve the conflict. Career planning, thus, involves matching of rewards and incentives offered by the career path and career structure with hopes and aspirations of different categories of employees regarding their own concept of progression. A general approach to career planning would involve the following steps:

(i) Analysis of the characteristics of the rewards and incentives offered by the prevail­ing career system needs to be done and made known to employees. Many individuals may not be aware of their own career progression paths as such information may be confined to only a select group of managers.

(ii) Analysis of the characteristics of the hopes and aspirations of different categories of employees including identification of their career anchors must be done through objective assessment. Most organizations assume the career aspirations of individual employees which need not be in tune with the reality. The individuals may not have a clear idea of their short and long-term career and life goals, and may not be aware of their aspirations and career anchors.

(iii) Mechanisms for identifying congruence between individual career aspirations and organisational career systems must be developed so as to enable the organization to discuss cases of mismatch or incongruence. On the basis of above analyses, it will be necessary to compare and identify specific areas of match and mismatch for dif­ferent category of employees.

(iv) Alternative strategies for dealing with mismatch will have to be formulated. Some of the strategies adopted by several organizations include the following:

(a) Changes in the career system by creating new career paths, new incentives, new rewards, by providing challenges through job redesign opportunities for lateral movement and the like.

(b) change in the employees' hopes and aspirations by creating new needs, new goals, new aspirations or by helping the employees to scale down goals and aspira­tions that are unrealistic or unattainable for one reason or the other.

(c) seek new basis of integration, compromise or other forms of mutual change on the part of both employees and organization through problem-solving, negotiations or other devices.

The Need for Career Planning

Organizations can hope to achieve high quality of work from their employees and foster positive attitudes and loyalty among workers through career planning. Career planning ensures that goals of individuals and organizations are in synergy and consequently tries to keep the motivation of managers high. This implies that once the individual becomes aware of his capabilities and opportunities within the organization, he chooses to develop himself in a direction that improves his chances of being able to handle new responsibilities.

Organizational Career Planning

Following activities should be included:

I. Human Resource Forecasting and Planning

This helps in identifying the number of people to be hired. Second. the organizations will be able to coordinate their selection procedure with the overall strategic goals.

2. Career information

This should he shared with employees and includes promotional policy and career paths. Role directions and critical attributes could he made available to employees for identifying possible career paths and competency requirements.

3. Career Counselling

Senior executives should have periodic discussions with their subordinates and offer career counselling to them.

4. Career Pathing

Organizations nowadays plan job sequences for their employees by which transfers and promotions are done more systematically.

5. Skill Assessment Training

Three types of analyses should be performed—organizational analysis, job analysis and job manpower requirement analysis. Organizational analysis and job analysis are the first steps in the training process.

6. Succession Planning

Here organizations assure that competent candidates are available in succession for critical positions. HR subsystems like promotions, terminations, transfers, retirements, etc. also make succession planning necessary.

Limitations of Career Planning

Though career planning helps an organization in numerous ways, it has a few limitations that undermine the importance and relevance of career planning. These arc:

Time Factor

Career planning is usually a long-term and time-consuming process. It is based on the logic of suffering short-term pain to get long-term gains. However, organizations may not be ready to spend a lot of time and resources on a process that would prove beneficial only in the long term.

Unsuitable for Large Workforce,

It may not be possible for organizations with a large workforce to develop individual career plans breach and every employee of the organizat ion. This is because the career plan process requires an in-depth analysis of each employee's strengths and weaknesses on a sustained basis.

Lack of Objectivity

Only those organizations which believe in strict observance of objectivity in promotion and transfers can succeed in career planning. In contrast, favouritism and nepotism in promotions often make career planning an unsuccessful exercise.

External Interventions

Government rules and regulations can also affect the Greer planning options of an organization. For example, the government may make it mandatory for the organization to adopt reserva­tions in promotions, especially iUl is a government organization or a public sector enterprise.

Lack of Knowledge and Awareness

Career planning by an employee is essentially a self-management process. It requires the employees to be aware of the basics of career planning and management activities. However, the employees at the lower levels of the organizational hierarchy may not be familiar with the career planning process.

Lack of Flexibility

Many organizations treat career planning as a ritualistic, rigid exercise. They often fail to consider the uncertainties caused to the career planning activities by the changes in the situa­tion. In fact, the absence of dynamic career planning programmes may limit the applicability of the career plans in uncertain and changing situations.

Difficulty in Measuring Career Success

Since career success is an abstract concept, it is interpreted differently by different persons. Some may consider a good performance in the job as career success. Others may consider the quality of life as an indicator of career success. Still others may consider the vertical mobil­ity in the organizational structure as career success. This divergence of opinions may cause confusion and vagueness in interpreting career success.

Merits of Career Planning

The merits of career planning are quite a few. Some of these have been listed as follows:

· Career planning helps employees in developing career goals and also in accomplishing those goals in a time-bound manner.

· It facilitates employees in identifying the career opportunities available within the organization.

· Ti helps the employees determine their training and development requirements based on self-assessment.

· It helps the organization in finding a fit between the job requirements and the employ­ees knowledge, skill and abilities to choose the right persons for the jobs.

· It provides an occasion for the organization to identify the strengths and weaknesses of its workforce.

· It assists the organization in HR policy formulation. For instance, it facilitates the HR manager in deciding between internal and external sources of recruitment.

· It helps the organization in achieving enhanced job satisfaction, efficiency and commitment for its employees.

· It aids the organization in controlling employee attrition and related hiring costs.

· It assists the organization in developing succession plans for the critical positions in the organization. Thus, it enables the organization to make long-term investments on their employees through succession plans.

· It provides an opportunity to the organization to express its interest in the well-being and future of its employees.

It enables the organization to achieve cordial industrial relations and thus ensure better cooperation from trade unions.

It helps the organization in building goodwill in the labour market and thereby attract the best talents with ease.