Knowing whether your organisation or team is performing well when it comes to engaging its employees is the most basic function of Peakon. To give an accurate answer, it’s essential to have a measurement that’s anchored in some real world expectations, rather than an artificial scale.
To provide this, Peakon uses benchmarking as a tool to add context to your organisation’s engagement performance. For example, knowing that your employee population has an engagement score of 8.4 is of little use unless you know what’s to be expected of an organisation similar to your own.
When you know the average engagement score for your industry is 7.0 you can make a valid assessment that your organisation is doing well. In doing so, we do not rely on arbitrary categorisations of what is a “good” or “bad” score.
There are two basic forms of benchmark in Peakon:
Designed for HR leaders and business executives, this benchmark enables you to compare engagement performance against that of your industry. This metric is suited to those in an organisation who can often play the biggest part in shaping a company’s culture.
This will be the most frequently used benchmark throughout your organisation. All managers who have not explicitly been assigned to the industry benchmark will instead see the company benchmark. The company benchmark simply represents an average score across your organisation. This metric is the most practical choice for managers, as their own ability to engage employees comes within frame of the company’s broader culture.
These two forms of benchmark are then used as the baseline for calculating your True Benchmark when your organisation has this capability enabled.
Across the broad base of companies using the Peakon platform, we can see trends in how demographics and occupations affect engagement beyond the influence of individual managers or companies.
To counter these trends, a True Benchmark is generated by first looking at the composition of an employee population, and then looking at how this differs from the norm for your industry or company (depending on whether you see industry or company benchmark on your dashboard). In groups of employees that differ greatly from the norm, we take this into account when calculating a benchmark.
These trends are understood through the employee attributes used to segment your data in Peakon: tenure, age, gender, department, job level, and local office. For this last attribute, office locations are grouped into one of five global regions (Europe, North America, South America, Africa & Middle East, Asia Pacific) to correct for cultural differences between regions.
For example, a team with many new recruits will gain a higher benchmark with True Benchmark, as we know that new employees typically have a significantly higher level of engagement. Each correction like this is made visible to managers through their dashboard when they click on the True Benchmark icon.
When enabled, True Benchmark will provide a more accurate measure of the impact that your organisation’s leadership and culture has on the engagement of your employees. General trends that could mask issues or successes within your company will now be corrected for in your benchmark.
Setting up your Benchmark
As an administrator of your Peakon account you can activate True Benchmark by clicking on the "Administration" option in the left menu followed by "Data settings" and then selecting the "Benchmark" tab.
Select the attributes you would like to include in your True Benchmark calculation.
Select the industry benchmark:
- Automatic: this means that Peakon will automatically benchmark your organisation against the respective sector you have chosen in the account settings (Administration > Account)
- Peakon: this is the average of all organisations using Peakon. It's also possible to select the percentile in this option, eg. average, top 10%, top 5% etc.
- Industry: this option allows you to select a specific industry to be benchmarked against. It's also possible to select the percentile in this option. For example, top 10% of Technology for a “best-in-class” benchmark comparison.
Once you’ve toggled on the attributes and chosen your industry benchmark, you will notice that the benchmark displayed on your dashboard will now include the True Benchmark. In doing so, all dashboards throughout your organisation will also gain access to True Benchmark. When a manager clicks on the True Benchmark icon for the first time, they will receive a short intro tour that will explain the concept.
For larger organisations that operate in multiple industries, Peakon enables you to choose a different industry benchmark for certain segments of the business. For example, a financial services provider may wish for its fin-tech division to be benchmarked against technology businesses – given that it will need to operate more like a tech company than a bank to attract and retain talent.
A segment-specific benchmark can also be used for internal benchmarking (rather than external, against an industry). For example, a business with many manufacturing plants in different countries, may want to use the average of these as its internal global benchmark. When viewing a segment, such as the Ho Chi Minh plant in the example below, it would then be benchmarked against the average of all the manufacturing plants in the company.
When using hierarchical attributes, it is possible to automatically propagate the segment specific benchmark to child segments:
In relation to True Benchmark, should a segment-specific benchmark be applied, this will form the baseline benchmark that will then be corrected by True Benchmark – in the same process as a standard industry or company benchmark.
Updates to Peakon's industry and True Benchmark
Peakon performs updates to both the industry and True Benchmark adjustments on a periodic basis. More information can be found in our Updates to Peakon's Benchmarks article.
Article: Updates to Peakon's benchmarks