How does benchmarking benefit an organization?

Benchmarking benefits an organization by providing a systematic process for comparing its performance metrics to the best practices within the industry. This comparison enables an organization to identify areas where it may lag behind competitors or industry leaders, motivating improvements and innovations. By focusing on the best practices, benchmarking allows organizations to not only enhance efficiency and effectiveness but also to set realistic and measurable goals. This proactive approach can lead to operational improvements, increased competitiveness, and ultimately, better alignment with industry standards, which supports a culture of continuous improvement.

Other options suggest actions that could detract from an organization's performance or growth, such as increasing operational costs or implementing outdated practices, which do not contribute positively to the organization's strategic objectives. Reducing employee performance reviews would potentially hinder feedback and development, which are essential for maintaining high standards in an organization. Thus, the value of benchmarking lies in its ability to drive performance improvements through informed comparisons.