Explain the role of benchmarking in evaluating managers.

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Part 1

A.

Benchmarking or relative performance evaluation is the process of evaluating a manager's performance against the performance of other similar operations. The ideal benchmark is another operation that is affected by the same noncontrollable factors that affect the manager's performance. Benchmarking cancels the effects of the common noncontrollable factors and provides better information about the manager's performance.

B.

Benchmarking or relative performance evaluation is the process of evaluating a manager's performance against the expected performance otherwise known as the budget. The ideal benchmark is the budget that was approved at the beginning of the fiscal year. The difference between the actual and the budget is the variance by which the managers are evaluated.

C.

Benchmarking includes such measures, such as ROI, RI, EVA, customer satisfaction, and employee satisfaction. Benchmarking is used to monitor critical performance variables that help in evaluating managers. These measures help diagnose whether a manager is performing to expectations.

D.

Benchmarking describes standards of behavior and codes of conduct expected of all managers. Companies use benchmarking to emphasize ethical behavior by routinely evaluating managers against a business code of ethics.