A comparative study of benchmarking in New Zealand public sector organisations

Abstract

This is a comparative study of benchmarking in five New Zealand public sector organisations. The broad objective of this study was to gain an understanding of benchmarking implementation in New Zealand public sector (NZPS) organisations. This study also looked at the drivers and inhibitors of benchmarking. In addition, it captured the perceived effectiveness of benchmarking. The participants of the research were five NZ government organisations. There were two local government organisations, which were Wellington City Council and Hutt City Council, and three central government organisations, which are Department of Corrections, Ministry of Health and Accident Compensation Corporation. In total 17 interviews were conducted using a semi-structured interview schedule. The transcripts were then analysed by identifying themes from the interviews and arranging the information under those themes. This led to the development of a narrative for each organisation. The five organisations were compared on these themes, involving their understanding of benchmarking, ways in which benchmarking has been implemented, drivers and issues regarding benchmarking implementation and perceptions of benchmarking. The findings from the research indicated that organisations had different understanding of benchmarking. The term benchmarking represented studies that were conducted simply to identify best practice, compare performance and, sometimes to implement the identified best practices. NZPS organisations used a mixed approach to implement benchmarking. Depending on the nature and context of the study, the benchmarking exercise would be ongoing or ad hoc. Clearly, local government organisations were more inclined to contract out benchmarking than central government organisations. This is because of the difference in structure between the two government sectors. NZPS organisations had also used business excellence framework and benchmarking clubs to help them implement benchmarking. The main factors influencing the implementation of benchmarking externally was the new public management philosophy followed by the NZ public sector, and internally was the organisation culture. The issues that hindered organisations from taking up benchmarking were issues relating to data, management, resources and ownership. NZPS organisations perceived benchmarking as a valuable tool for learning, improvement and initiating change. Previous experience of benchmarking had an influence on the benefits derived from benchmarking. As organisations matured, they became proficient in performing the different steps in benchmarking. They were proficient in identifying areas that needed benchmarking, identifying best practice and adopting those practices in their processes.