Benchmarking national labour market performance: A radar chart approach

The radar chart approach is one of a number of special analytical tools that have been developed in connection with benchmarking in the private and public sectors. Although well established as a management tool, the radar chart approach has to our knowledge never been applied to benchmarking labour market performance. This paper assesses the usefulness of the radar chart approach in this policy area. The radar chart approach makes two important contributions: First, it provides a simplified presentation of multiple performance indicators, which is highly intuitive even to non-experts. Second, the surface area, formed by the four (or more) axes, can also be used as a composite performance indicator. Among EU Member States, the best overall performers on the employment and unemployment indicators examined were Denmark, Sweden, the United Kingdom, and Austria in that order. Japan and the USA attained the highest overall performance scores. By contrast three countries (Spain, Italy and Greece) were clearly worst performers. This benchmarking exercise demonstrates the utility of the radar chart approach in assessing comparative labour market performance. It has, however, also identified a number of theoretical and practical problems that should be taken into consideration in future work: 1) The sensitivity of national benchmarking rankings to the choice of performance dimensions and the definition of indicators; 2) The desirability of including additional dimensions of the European employment strategy such as "adaptability" and of giving greater consideration to qualitative dimensions of labour market performance; 3) The methodological problems of the construction of a quantitative indicator of over-all labour market performance based on radar charts, including standardization, weighting, and correlation among indicators; 4) The need to distinguish the impact of short-term (e.g. cyclical) and structural components of labour market performance in benchmarking.