Benchmarking for equality

Driven partly by government policy, the benchmarking of HR issues - including equality and diversity measures - is becoming more prominent.


Key points

  • The use of monitoring and benchmarking on equality indicators is increasingly widespread among employers, particularly in the public sector.

  • In terms of benchmarking for racial equality among local authorities, assessment of overall performance against the standard is a complex matter.

  • The Department of Trade and Industry and the Department for Work and Pensions are among organisations that have achieved the "platinum standard" in the Opportunity Now annual gender equality benchmarking exercise.

    In this article, we provide a brief guide to some of the benchmarking standards available in the area of equality and diversity. The article focuses on the use of standards among key employers within the public sector, which has traditionally been at the forefront of equality issues. We also explore some examples of actions being taken in the light of equality monitoring and benchmarking initiatives.

    In the public sector in particular, government policy is a major driver on how employers operate. The government's approach to HR issues is encapsulated by the launch in November 2000 of the public sector benchmarking service, with the key aim of promoting effective benchmarking and sharing good practice across the public sector.

    But the private sector is by no means immune from public policy developments - including the likelihood that these organisations will be forced to publish clear human capital measures in their annual reports (see below).

    Employers wishing to use benchmarking need to have systems in place to collect relevant data via monitoring - that is, the process of collecting, storing and analysing data about employees' personal characteristics, such as ethnicity, gender or disability. Monitoring enables employers to examine the make-up of their workforce and compare this with the data being used for benchmarking.

    Benchmarking has been defined as "the process of searching for, and achieving, excellent levels of performance" that is "achieved through a systematic comparison of performance and processes in different organisations, or between different parts of a single organisation, to learn how to do things better". This is the definition set out by the public accountancy body, the Chartered Institute of Public Finance and Accountancy (CIPFA). And CIPFA's characterisation of benchmarking has been lauded as a key definition of the concept in a report1 from the Improvement and Development Agency (IDeA) - the organisation that aims to support self-sustaining improvement from within local government.

    Council performance

    In local government, a wide range of corporate performance indicators have been in place for some time, including several concerning equality.

    As IDeA points out, performance indicators can provide essential data for benchmarking exercises in local government, since "as their title suggests, a performance indicator provides an organisation and external interested parties with a mark of how performance has been for a stated service within a defined time period".

    However, benchmarking "provokes a very mixed reaction in local authorities", according to IDeA. The evidence available "indicates that benchmarking for Best Value activities is pursued along a continuum ranging from committed enthusiasm to benign resignation to a task that has to be done".

    The Best Value programme requires local authorities "to seek to achieve continuous improvement by having regard to the efficiency, effectiveness and economy of their service delivery". Relevant performance indicators can be grouped into the following types:

  • a statutory Best Value performance indicator (BVPI) determined at national level, and other national indicators (for example as set in social services);

  • a local performance indicator (LPI); and

  • management information indicators.

    BVPIs, which have been set since the duty of Best Value on local authorities came into effect, are centrally set measures of performance. Prior to Best Value, similar measures were set by the Audit Commission. The indicators are set each year by the Office of the Deputy Prime Minister (ODPM) in conjunction with other government departments, and cover each financial year (1 April to 31 March). There are targets associated with many, although not all, BVPIs, while local targets can also be set.

    For the year from 1 April 2003, BVPIs - under the heading of "General corporate health" - include the following relating to equality and diversity (some of which are discussed in more detail below):

  • the level (if any) of the "equality standard" for local government to which the authority conforms;

  • the level to which the authority complies with the duty to promote race equality;

  • the percentage of authority buildings open to the public in which all areas are suitable for and accessible to disabled people;

  • the proportion of the top 5% of earners who are women or who come from black or minority ethnic groups;

  • the percentage of employees declaring that they meet the Disability Discrimination Act 1995 disability definition within the authority workforce, compared with the percentage of economically active disabled people in the authority's area; and

  • the percentage of employees from black or minority ethnic groups within the authority's workforce, compared with the percentage of the economically active minority ethnic community population in the authority's area.

    CRE standard for local authorities

    The establishment of the new "equality standard" for local government is currently under way - with the aim of helping authorities measure the effectiveness of their equality strategies using a single new standard covering race, gender and disability. A pioneering standard in the field of benchmarking specifically in the field of racial equality was first published in 1995: the Commission for Racial Equality's (CRE's) standard for local government is known as "racial equality means quality". The standard is based on the assumption that quality management can be used "to ensure that racial equality penetrates all aspects of employment practice and service delivery". Also "by establishing a set of performance measurements, by which a local authority can evaluate its progress against a common standard, a framework is established through which racial discrimination becomes an issue for all local authorities".

    The standard is organised around five areas of assessment of racial equality policy, practice and achievement, which are:

    1 - policy and planning;

    2 - service delivery and customer care;

    3 - community development;

    4 - (a) employment recruitment and selection, (b) employment development and retention; and

    5 - marketing and corporate image.

    For each of these areas, there is a five-level attainment structure against which councils can measure and develop their performance; it ranges from "level 1", which is a basic starting point, to the highest ("level 5"). Within each level of each area, there are between two and six action targets.

    "Assessment of the overall performance of an authority against the standard is a complex matter and far from being an exact science," according to the authors of the CRE study Measuring up, which is downloadable at www.cre.gov.uk .

    Whether or not this observation will also apply to the new single "equality standard" for local government, as it becomes more established, remains to be seen.

    Senior echelons of government

    At the heart of the public sector, central government departments - including the senior civil service (SCS) - are also subject to monitoring and benchmarking on equality indicators. The monitoring data at this level relating to October 2002 includes the following findings:

  • 2.8% of staff at senior civil service level are from ethnic minority backgrounds;

  • 1.7% of staff at that level are disabled; and

  • 25.8% of the SCS are women - and a similar percentage (23.1%) of those in the "very top" management posts are women, including four women at permanent secretary level.

    Over the long term, it seems that progress has been made on increasing the representation of women, and on tackling underrepresentation of women in the top management posts. And - again over a long-term period - progress has been made on tackling underrepresentation of ethnic minority staff at SCS level "in terms of both proportions and numbers of known ethnicity". However, it is acknowledged that "data on staff with disabilities at SCS level indicates that considerable challenges remain".

    Measures being taken to ensure the sharing of good practice to enhance progress on performance in respect of diversity in the organisation include:

  • running a service-wide focus group, which was set up in partnership with Opportunity Now (see below) to look at gender issues, including the development and progression of women;

  • developing "elevator partnerships" - which is a mentoring scheme for women across the service; and

  • implementing an action plan for staff with disabilities, including producing guidelines on the recruitment of disabled people, developing guidance for managers on mental health issues and reviewing approaches to providing reasonable adjustments.

    Individual approaches

    In addition to centralised initiatives, individual departments are also taking steps in the form of action plans to meet their own targets for women, ethnic minority staff and disabled staff - resulting in a number of national awards.

    For example, the Department of Trade and Industry and Department for Work and Pensions have both achieved the "platinum standard" in the Opportunity Now annual gender equality benchmarking exercise (see below).

    Benchmarking standards may also be expected to be developed to encompass a widening range of personal characteristics as new statutory provisions come into effect, particularly on sexual orientation, religion and age. For example, the Cabinet Office has run a workshop with trade unions on sexual orientation, together with staff from gay, lesbian and bisexual networks and outside experts to determine priority issues. Following this, work is under way with these groups on various issues including supporting the use of data from staff surveys to track and address concerns. The aim is to adopt a similar approach to tackling religious issues.

    Improving working lives in the NHS

    Elsewhere in the public sector, the NHS - the UK's largest employer - is covered by standards set as part of the Department of Health's Improving Working Lives (IWL) programme.

    IWL is a national standard that sets a model of good HR practice, against which NHS employers and their staff can measure their organisation's HR management. The standard has eight key themes - one of which is equality and diversity.

    A summary of the background to the IWL programme is set out in the document extract, and further details can also be found at www.doh.gov.uk/iwl/ .

    Opportunity Now leads the way

    The private sector is also influenced by public policy - especially in light of the likelihood of new rules on personnel information that companies must publish (see below). Many employers are anxious to benchmark on equality - as much as on other issues - to ensure equality of opportunity and reap such potential benefits as enhanced employee motivation and retention.

    For several years, Opportunity Now (formerly Opportunity 2000) - which is part of the organisation Business in the Community - has run a "unique" benchmarking exercise for its members to measure progress in achieving gender equality. This exercise encompasses both private and public sector employers.

    Opportunity Now is a business-led campaign that works with employers "to realise the economic potential and business benefits that women at all levels contribute to the workforce". Since its launch in 1991, the number of participating employers has risen from 61 to 350.

    The Opportunity Now benchmarking exercise is a survey-based tool that enables employers to:

  • assess progress towards gender equality/diversity, year on year;

  • compare progress with that of other organisations from year to year;

  • share good practice with, and learn from, other organisations; and

  • establish gender equality/diversity goals and an agenda for the coming year.

    Opportunity Now stresses that its benchmarking survey is nota league table. The exercise has been designed to help organisations at all stages of working towards gender equality/diversity, whether they are just beginning or have been active for some time.

    The latest annual benchmarking report - published in May 2003 and covering 226 organisations - identified a number of improvements in the position of women and action taken over the past year to enhance gender equality. For example, the number of companies that include gender equality as part of managers' performance targets has increased from 13% last year to 23% this time round.

    There is also a "diversity change model", which was developed for Opportunity Now by Shapiro Consulting. There are three key elements to this model: motivate the organisation and its people to undertake diversity action; take action to develop and value diversity; and assess the impact of diversity action and learn from this assessment to remotivate the organisation and establish future goals. Underpinning each of the elements is the change process that provides essential guidance on how to motivate organisations, take action and assess the impact of diversity in the workplace.

    Each organisation completing Opportunity Now's benchmarking survey receives confidential feedback on its progress and performance against the diversity change model and other benchmarking employers. Feedback aims to help identify where the most progress has been made and where future efforts should be focused. Information is provided relating to each organisation's performance benchmarked against the following: the whole benchmarking group; the organisation's individual sector group; and organisations at a similar stage of developing their gender equality.

    In addition, reports, summaries and information sheets are provided. These give an overview of the results of the benchmarking exercise and details of good practice and ideas for progressing gender equality further.

    New rules in the pipeline

    It seems increasingly likely that private companies will be forced to publish clear human capital measures in their annual reports, in light of the publication of a consultation document2 by the government-appointed Accounting for People taskforce. As reported in HR - your number is up , the taskforce - chaired by former Competition Commission deputy chair Denise Kingsmill - has responsibility for examining the performance measures currently in use, considering best practice, and championing the business case for human capital reporting.

    While the report itself is due out later this autumn, the consultation document suggests that human capital management measures might be reported as part of the new operating and financial reviews being introduced for large companies as a result of the government's overhaul of company law.

    The measures to be reported under the Kingsmill proposals could include details of workforce composition - including gender, ethnicity and age - which would be likely to stimulate further interest among employers on the issues surrounding monitoring and benchmarking on equality and diversity.

    1.Join the club? Benchmarking for Best Value, IDeA, downloadable free at www.idea.gov.uk .

    2.Available at www.accountingforpeople.gov.uk.

    This article was written by Janet Egan, researcher/writer, IRS Employment Review, janet.egan@irseclipse.co.uk.


    Document extract: Improving Working Lives in the NHS

    The Improving Working Lives standard summarises the commitment that ministers expect from NHS employers to create well-managed, flexible working environments that support staff, promote their welfare and development and respect their need to manage a healthy and productive balance between their work and their life outside work. It sets a model of good HR practice against which NHS employers and their staff can measure the organisation's HR management and against which NHS employers will be kitemarked. NHS organisations will be required to achieve accreditation against the standard by April 2003, demonstrating they are improving the working lives of staff.

    Source: Department of Health.