It is typical for organizations to use benchmark data to compare their business results to those of their competitors. Using benchmark data to compare annual revenue, stock pricing, product launches, and retention rates can provide clear indicators of how an organization is performing. These business practices often lead to requests to compare individuals and cohorts against personality assessment benchmarks. It’s understandable. By nature, we want to know how we are doing compared to our peers and competitors, and benchmark data is leveraged in other parts of the business. However, benchmarks do not always provide comparative links to performance, leading to inaccurate evaluations. 

We champion using data-informed insights to develop high-performing leaders and teams. However, using benchmark data to compare leaders' personality assessment results warrants examination.

Eight Reasons to Reconsider Using Benchmarks

1. Overgeneralization: Benchmark data, representing averages across groups, can overlook individual and contextual differences within your organization, leading to an overly generalized interpretation that fails to capture the unique attributes and situational factors that influence your leaders’ effectiveness. Generalized data can't be leveraged to make talent management decisions without understanding the differences between how performance is evaluated and compared to your organization's performance expectations. 

2. Hindering Growth and Innovation: When leaders are measured against benchmarks, they risk overly focusing on differences between scores that may or may not be relevant to their ability to perform effectively. Suppose leaders focus on conforming to these benchmarks instead of developing strategic self-awareness regarding their capabilities and risks. In that case, they can hinder their growth, opportunities to innovate, and may suppress what has made them effective.

3. Outdated Relevance: Benchmark data often reflects past performance trends, highlighting where the dataset has been. This does not support organizations anticipating where they need to go or how to manage novel situations unique to their talent needs. Relying on this data can lead to strategies not attuned to evolving market conditions or organizational needs. 

4. Interpretation Bias: We often assume higher scores are better when interpreting personality data. However, this assumption can increase biases when contextual factors, performance indicators, and cultural influences are not considered. Additionally, not all dimensions will be relevant to performance outcomes, which often creates distractions or false beliefs about the meaning of the data.  

5. Misalignment with Culture: External benchmarks may not reflect your organization's cultural nuances or specific ways of working. When leaders are compared to a benchmark that doesn’t align with your organization's culture and expectations regarding how results are achieved, your leaders might be perceived as better or worse than they are when compared to the benchmark. 

6. Role-Specific Needs: Different roles require different personality traits and behaviors, which are not reflected in generic benchmarks. When these variations are not accounted for, this can lead to inappropriate development or selection initiatives that do not align with performance or effectiveness. 

7. Lack of Personalization: Leaders may prioritize meeting benchmark standards over pursuing tailored development goals that address their unique areas of opportunity, business objectives, and growth needs. When incorporated into development programs, this can limit their effectiveness because they are not designed to address the organization’s strengths, potential, and development needs. 

8. Practical Concerns: Using benchmark data for talent decisions can raise ethical questions. Individuals may be unjustly evaluated based on benchmarks that may not accurately reflect their contribution or potential, negatively impacting morale and engagement.

At INDx Talent Solutions, we leverage objective data and business context to accelerate talent and drive organizational success. Instead of relying on benchmarks, a more individualized and context-specific approach ensures that leadership assessments and development are aligned with your unique organizational needs and goals. Embracing a global normative sample can enhance your leadership evaluation process's fairness, accuracy, and effectiveness.

For more on our tailored, evidence-based solutions, contact us to learn more.