The HR Benchmarking Data Guide (& Why Beating The Benchmarks Isn't Enough)
By Megan Steckler - March 27, 2019
Interpreting survey scores without any context can be challenging. How do leaders know if their 70 percent score is really good or really bad? What does it mean? That’s why benchmarks are so important for understanding survey data; they are designed to provide context and meaning for interpreting your scores.
HR benchmarking data provides insight into what’s “normal” for each item or measure. Not all survey items are created equally; some topics tend to score higher than others. (Tweet this!) For example, benchmark research shows that items related to compensation tend to score low. A score of 70 percent on an item related to satisfaction with pay would be fantastic—but that same 70 percent on an item related to workplace safety would be a big red flag.
In addition, regardless of the topic, the wording used for survey items can impact how people respond. Asking whether or not an employee understands something may produce higher scores than if they are asked about the effectiveness of that same thing. Benchmarks help account for these nuances so leaders avoid overreacting or misinterpreting their own survey scores.
HR benchmarking metrics are important for identifying areas of strength and opportunity from the survey. This article will examine the different types of benchmarks, and considerations for using HR benchmarking data.
How does your company stack up against the competition? Perceptyx maintains a robust external benchmark database for interpreting and comparing your survey results to others’. Sign up for a demo today.
3 Types of HR Benchmarking Data
Benchmarks come in several forms, and each form provides unique value. Here are three types of benchmarks, and how and when to use them:
- Historical Data: Benchmark comparisons to data from previous surveys allow leaders to monitor progress and identify where they have made improvements or lost ground. The purpose of an employee survey is to drive improvement, so these comparisons provide context about progress the organization has made toward those goals. However, this data is not always available, as in cases where organizations are just starting a survey program, or when survey programs are evolving to incorporate new items and measures.
- Internal Data: Internal benchmarks can provide context for how each team or group compares to the overall company, department, most engaged teams, or highest performing locations. The overall company or department scores define what is average or normal for the organization or business unit.
For example, an internal performance benchmark based on teams scoring in the top 10 percent of the company on the Engagement Index could be established. This could provide context for what best-in-class looks like and what has actually been achieved within the organization. Defining these groups can also provide insight into what is driving those teams’ performance, and provide best practices and standards for improvements throughout the organization.
Internal comparisons can be easy for managers to understand, but have some limitations. The best-in-class scores used as a comparison might be below average relative to external benchmarks—or the lowest-scoring groups in the organization might be well above the external benchmark.
- External Data: Many leaders are looking for insight into how their scores compare to other organizations. These benchmark comparisons can provide context for interpreting and understanding what’s normal or average across survey items and measures. These are especially important where there is no historical data for comparison. These benchmarks can help uncover nuances that may exist between different countries, industries, length of employee tenure, and more.
The Perceptyx Benchmark Database
Perceptyx maintains a database of several hundred common survey items for external HR benchmarking. This data was gathered from Perceptyx clients over a rolling 3 year period and includes data from hundreds of organizations with millions of respondents. Domestic U.S. firms and many multinational organizations, varying in size from 50 to over 500,000 employees, are represented in the database. Benchmarks are available by industry, sector, sub-sector, job level, job function, age, gender, ethnicity, tenure, country, size of company, union status, Fortune 100/Fortune 500 status, and more.
In most cases, the overall benchmark provides the external comparison necessary to understand and interpret survey results. This is our most robust benchmark; it maximizes the number of items and measures for which a benchmark will be available. As that overall database is subdivided by company size, industry, function, or other attributes, coverage becomes more limited.
Overall, score differences among companies of different sizes and even industries are minimal. Among country benchmarks, there are greater differences, as local culture impacts the way people respond to survey items. When comparing scores from different countries within a global company, it may not be that employees in one country are actually less engaged than those in others; it may just be a reflection of cultural norms. Country benchmarks can provide valuable context to account for those nuances.
The context in which data is collected can also impact the way individuals respond to survey items. For this reason, Perceptyx offers specific benchmarks for onboarding and exit surveys. New hires tend to respond much more positively, and the onboarding benchmark can account for that context with items that are included in other types of surveys. Employees leaving the organization are also responding to questions in a unique context, which should be accounted for as well.
4 Considerations For Using Benchmarks
HR benchmarking data can be valuable—but only when used correctly. These four considerations should be taken into account when using benchmarks:
- Survey design: In order to establish benchmarks there must be consistency in survey questions. This means that many organizations will ask the same questions. Leveraging best practices for measuring specific topics is helpful, but no one survey or set of items fits every organization.
During survey design, consider benchmark coverage—but not at the expense of asking the right questions to get the insights needed. The available benchmarks should be balanced with the strategic priorities and insights needed by leaders within the organization. In addition, alternate item types such as multiple choice, ranking items or open-ended questions can add insight and value beyond the Likert (five-point “strongly agree” to “strongly disagree”) scale items required for benchmarking.
- Benchmark reporting: Benchmarks can be difficult for managers to understand and use appropriately without guidance. For this reason, many organizations report benchmarks in executive presentations and high-level leader reports, and choose to not give access to the external benchmark comparisons to all managers. Benchmarks can overwhelm managers and distract them from where they should really be focused—on the drivers of engagement.
- Interpretation: While benchmarks are helpful for identifying areas of strength and opportunity, they don’t provide insight into which items are most important for action planning. Many leaders are tempted to focus on the item scoring furthest below the benchmark, but that item may not be the one that matters most for improving engagement. Instead, focus on the drivers of engagement and address those key barriers to engaging your team to get the most impact from your efforts. Just because you are above the benchmark on a driver of engagement doesn’t mean you shouldn’t continue to work on it; leverage and build on that strength. By the same token, just because you scored far below the benchmark doesn’t mean you need to work on it. Surpassing the benchmark on an item that doesn’t matter to employees won’t have a big impact.
Similarly, considering items aligned to strategic priorities is important. Are your strategic priorities or cultural goals—for example, innovation or agility—a current strength, or do you have a lot of room to improve? How difficult will it be to improve those critical items?
- Setting goals: Benchmarks should be used with caution in the context of setting goals. The focus should be on continued improvement, rather than achieving a certain number. Some leaders are tempted to set specific benchmarks as a goal and hold managers accountable for achieving them, creating challenges for reinforcing the right behaviors from managers.
Beating a benchmark is not enough. The benchmark is just a number; the focus for the survey should not be on attaining a specific score, but on improving the behaviors that score represents. Focusing on beating a benchmark isn’t a healthy goal when it makes the score a priority over changing behaviors and driving real, sustainable improvement. The focus on score can cause leaders to lose out on candid and constructive feedback, if employees feel pressured to respond in a certain way to achieve a desired score. Use benchmarks to add context and understand your results, but keep your focus on driving action and behavior change.
Want to see how your survey results stack up against those of other companies?
Context provides clarity for interpreting employee survey results. Perceptyx maintains a robust external benchmark database to provide context for your survey results. Get in touch and let us show you how your company compares to others on the most important employee engagement metrics.