Productivity Benchmarking – A Powerful Tool for Management Teams

Department productivity benchmarking is one of the most powerful and versatile tools available to progressive hospital management teams. Here are just a few of its uses.

  • As a Cost Management Tool: Labor costs remain the largest single component of any hospital’s expense budget. Managing labor costs is important for both financial and moral stewardship reasons. Department productivity benchmarking is an important first step in identifying and resolving excessive labor costs.
  • As an Overall Performance Screening Tool: Staffing variances are a marker for potential performance issues that go far beyond excessive labor costs. Departments frequently “staff up” to overcome operating problems caused by everything from organizational cultural issues and resource inadequacies to work process factors. Departments that consume an abnormal amount of labor resources because of these factors are more often than not also struggling with quality, physician and patient satisfaction, employee relations and community image issues. Done correctly, department productivity benchmarking will help identify those departments in the most need of management action.
  • As a Management Data Set Validation Method: More than sixty percent of U.S. hospitals are managing with inadequate or inaccurate management information. A systematic review of data, performed during the course of the benchmarking process, will identify errors in the management data set leading to better decisions.
  • As a Change Management Resource: Is your team in the process of building a new organizational culture to meet today’s challenges? Productivity benchmarking serves as an essential component of any serious management initiative to transform the classic hospital culture. Hospitals that routinely and systematically benchmark department productivity are communicating powerful performance expectations with action as well as words.

Modern technology has placed annual department productivity benchmarking within the easy reach of every hospital management team. Major changes take place in the hospital almost every day. How current are your department productivity benchmarks?