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Definition
Performance benchmarking allows comparisons in performance between organisations, or separate units or local offices within a single organisation. Indicators typically cover productivity, resource use, costs, efficiency and quality. Examples include the number of staff, the cost of providing an output, the average time it takes to provide a service or produce a given work. If it is not possible to compare audit entities’ performance outright, the examples of good practices found may be used for illustrative purposes in the report, and may also be used to identify recommendations.
It can take two forms:
- standards benchmarking involves comparing actual results with a standard of performance that an effective organisation could be expected to achieve. (For example, payments should be executed within 14 days of receipt of invoice.)
- results benchmarking involves comparing the performance of a number of entities or parts providing similar services. (For example, comparing the average number of days that different subsidiaries take to make payments.)
Instructions
This page includes only instructions specific to performance benchmarking. When carrying out performance benchmarking the audit team should follow both the instructions on this page and the instructions applicable to benchmarking in general.
Reviewing existing performance measures
If the auditee has established its own [link title="performance%20measures" link="%2Faware%2FPA%2FPages%2FConcepts%2FInternal-control-performance.aspx%23Performance-measurement-system" /]
, the accuracy, relevance (appropriateness) and completeness of these measures can be validated. You should ensure that you have a thorough understanding of what is being compared, and with whom, in order to assess the validity of the comparison. Consider:
- For organisations’ programmes and projects being compared, if like is being compared to like.
- If the performance indicators used for comparison are relevant and appropriate for measuring actual performance.
- How the data was obtained and analysed, whether data is timely, reliable and relevant.
- Whether the benchmarking has taken account of factors that may compromise the comparison (for example, different policy framework, significant organisational differences, skills and qualifications etc.).
- If significant variations in the performance have been investigated and explained.
- If good practices and remedial action have been identified and taken to improve performance.
Identifying new performance measures
Performance indicators are unlikely to exist in many audits, and will have to be defined, designed and calculated by the auditors from information obtained during the course of the audit. The team should have a clear understanding of what a programme or entity does and the results it intends to accomplish (e.g. [link title="programme%20logic%20model" link="%2Faware%2FPA%2FPages%2FConcepts%2FIntervention-logic.aspx" /]
). When choosing the indicators for benchmarking, care must be taken to ensure that the they are [a-glossary term="RACER"]RACER.[/a-glossary]
Information for carrying out comparisons of entities within the EU can come from the following sources:
Equivalent comparator
Because of issues related to access of data, it may be easier to compare offices or units within one organisation (at the Commission), between the Institutions or between member states, than to compare with equivalent outside organisations.
Comparative information may also be available from external organisations such as the OECD, UN organisations, trade and professional bodies (for example, if comparing building costs), commercial operators (for example, real estate companies if comparing rents), benchmarking clubs and consultants.
Many audit organisations’ private consultancy businesses can provide industry-specific studies for key costs and performance measures in return for information about an entity’s own performance, or for a fee.
Deriving findings
Identifying significant differences in the performance of the organisations concerned allows us to question why such differences exist. The results may show areas where there is scope for doing things better, by improving efficiency or reducing costs.
A qualitative assessment of the reasons for differing performance levels (for example, staff calibre, experience, skills levels and training), is likely to be time-consuming and more prone to contradiction by the auditee.
In member states, performance may be affected by national particularities, and it may not always be possible to transpose best practices because of national structures, institutional environments, and socio-cultural preferences.
If the auditee does not measure its own performance, consider identifying opportunities for it to:
Resources
Example
The cost of translating one page was compared in three EU institutions ([link new-window title="SR%2009%2F2006" link="https%3A%2F%2Fwww.eca.europa.eu%2FLists%2FECADocuments%2FSR06_09%2FSR06_09_EN.PDF" icon="external-link" /]
on translation costs at the Commission, European Parliament and Council).
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