Benchmarking

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Submitted by to the category Business and Industry on 12/29/2012 08:27 AM

Think of a topic in your job/organization that you would like to benchmark. Do a little research and determine how your topic compares with that of other companies. Why is it important to benchmark? For example, my organization’s short-term disability policy provides employees with six months of full pay; what do other companies in my industry or location provide?

Benchmarking is the search for and implementation of the best practices (Camp, 1995, p. 15). It is a process of learning from the best of the best and emulating those best practices. As such, it is best suited to analyzing work process aimed at defined organization goals. The five phases of benchmarking process includes planning, analysis, integration, action, and maturity.

My organization recently had to review the current health care plan that will expire in January 2009. Benchmarking had to be completed to secure the best possible plan for the employees at the best possible rate. We had to be mindful that the new rates would not severely impact the recent 3% pay increase. Blue Cross Blue Shield (IBX) quoted a rate that would increase employee contributions by 68%. The current insurance Aetna quotes a 24% increase. Both quotes would impact the employees pay increase. Unfortunately health insurance rates are not regulated and can increase at any time to any amount.

After serious negotiation we were able to get Aetna to decrease their quote to 19%. We decided to continue our business with Aetna. One reason was if we switched to IBX for 2009, rates for the following year could increase up to 50% and at that point, Aetna would not be willing to re-quote. The outcome was a 19% increase in the employee contribution for the Mid and high end plans and a 100% company contribution for the low end plan. The employees would pay only $10 more than what they are paying now.

By comparing rates with other companies and negotiating we were able to save the employees a substantial amount of money. We were...

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