Most companies and their functional areas tend to passionately pursue best-in-class performance, but do executives send a different signal to their employee benefits teams?

In James Harrington’s 1996 standard-setting book, High Performance Benchmarking, he opens with the assertion, “No matter how good your organization is, or how well regarded your products and/or services are, you cannot stop improving. You cannot stand still. When you do, you really are not standing still ― you are slipping backward.”

He goes on to say that one of the best ways to keep improving an organization is through benchmarking ― the process of learning from the best-of-the-best and making the changes necessary to perform at a “world class” level, if not becoming the new best-of-the-best. Those who do this are the “winners.”

Harrington considers those who perform above average, but think they’re average or better, and those who perform below average, but think they are average or better, as mere “survivors.” His philosophy has motivated leading companies to continuously compare and improve their performance levels ― not just to keep up with the pack but become world class performers.

Yet, in the employee benefits world, we typically see benchmarking applied in a very different way. Most companies only seek to provide comparable or slightly better benefits than their peers. Only in a highly competitive labor market are some willing to provide much better benefits in the name of employee attraction and retention.

And what “better benefits” even means is up for debate. All too often, it simply consists of adding programs that only benefit a limited number of employees, while taking steps to maintain reasonable payroll contribution levels, deductibles, and copays/coinsurance. And sometimes it also means offering a range of voluntary insurance products sold by their broker.

On the cost side, most benefit programs are “benchmarked” to be close to (above or below) average. Almost no companies seek to be best-in-class, and rarely do any seek to be world class. Most appear complacent simply performing at the survivor level.

Only once in my career have I heard an employer ask a TPA who their best performing company in a specific area was and what they were doing to achieve those results. When hearing that they were, in fact, that organization, the client expressed disappointment and a strong desire to do better.

The far more common question I hear from companies is “Who else is doing [insert name of trendy program]?” More than becoming world class performers, the prevailing interest seems to be in following the herd. Yet, as Harrington pointed out, that is not the purpose of benchmarking.

I believe many more employers can sponsor high-performing benefit programs ― programs with excellent and affordable coverage, exceptional service, and at a low cost. The process begins with good data but shouldn’t end with the status quo. It’s supposed to end with being best-in-class!

“If you simply adopt another organization’s approach or adapt it to your item, you will not obtain the desired results. The ‘copycat’ approach to improvement will keep your organization always in a catch-up mode.” — James Harrington