A Field Experiment on the Effects of Benchmarking and Goal Setting on Company Sales Performance

Abstract

The effectiveness of internal benchmarking and goal-setting is examined in a field experiment carried out in an electrical products distribution company. The experiment involves a pre-post experimental design in which 138 branches of the company are assigned randomly to one of four conditions: (a) benchmarking; (b) “small-wins” goal-setting; (c) “big-bang” goal-setting; and (d) control group. The dependent variable is percentage increase in sales performance over a four month period. The findings point to the effectiveness of benchmarking for achieving improved performance and suggest that comparison against partners and knowledge about “best practice” contributes, together with goal-setting and goal-evaluation, to the efficacy of benchmarking.