TABLE OF CONTENTS Benchmark Definitions:
Noun
a: a point of reference from which measurements may be made; b: something that serves as a standard by which others may be measured or judged; c: a standardized problem or test that serves as a basis for evaluation or comparison.
Verb
a: to study (as a competitor's product or business practices) in order to improve the performance of one's own company.
Source: Merriam-Webster's 11th Collegiate Dictionary.
The benchmarking method is very much based on performance measurement. Independent performance measures are chosen before the study and the best way of achieving this performance is analyzed through investigating companies that are achieving high levels of performance in these areas. Best practice is then identified based on the performance differentials. Benchmarking is investigative as, in most cases, it has no hypothesis of which practices are "best." It analyses performance based on specified performance measures and investigates the reasons for performance differentials. These differentials typically result in the identification of best practices. This form of study is not "blind' to the effects of other practices, within the area under investigation, on performance. In this sense, the study is creating new knowledge of best practices.
The disadvantage of this type of study is that the results are very general. It is useful in terms of indicating which practices seem to work, but it does not indicate the sequence in which these practices should be implemented, the time scale for impact to occur,...
