Benchmarking serves as a crucial tool for evaluating organizational performance, facilitating comparisons, and identifying areas for improvement. However, the process of aggregating performance data across different organizational units may introduce bias and distort the accuracy of benchmarking results. This paper explores the concept of assessing sub-unit efficiency to mitigate aggregation bias in benchmarking. By evaluating the performance of individual sub-units within organizations, potential disparities and inefficiencies can be identified, leading to more accurate benchmarking outcomes. The paper discusses methodologies for assessing sub-unit efficiency, including data envelopment analysis (DEA), stochastic frontier analysis (SFA), and hierarchical benchmarking approaches. Furthermore, it examines practical considerations and challenges associated with implementing sub-unit efficiency assessment in benchmarking processes. Insights from this paper contribute to enhancing the accuracy and reliability of benchmarking efforts, enabling organizations to make more informed decisions and drive performance improvement initiatives.

Benchmarking, Sub-unit efficiency, Aggregation bias

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