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Hello Tutor,
In Kaplan book, one of the disadvantages of Internal Benchmarking is, ” It often involves non-financial data which can be less robust”.
I don’t get this part, please can you explain that to me?
Thank you.
I think they mean non-numeric benchmarking. For example, non-financial could include % rejects or days employees’ absence. These are perfectly robust (reliable) to measure.
However, once you stray into measures like employee attitude or customer relations there is more subjectivity.
I don’t think it’s a disadvantage of internal benchmarking just a warning to be careful when interpreting the results. It is obviously important to be able to compare different branches’ relationships with customers and there is no way round subjectivity even if you could have external information about competitors’ relationship with customers.
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