Benchmarking

Meaning & Definition

Benchmarking refers to the comparison of organizational HR metrics, policies or processes against best-in-class organizations and industry average or standards. The benchmarking process within HR normally involves comparisons of various organizational elements such as Salaries, Benefits, Hiring Practices, Performance Metrics, and HR Processes, which allows the company to find the errors within its HR processes and ultimately improve its competitiveness within the marketplace.

Importance of Benchmarking 

• Aligns compensation and benefits with the marketplace.
• Allows for the development of more effective HR Policies and Processes by providing organizations with improved Operational Efficiency.
• Provides an organization with a Data-Driven Approach to making Strategic HR decisions.
• Identifies the best Practices associated with attracting and retaining talent.
• Provides Continuous Improvement in the ‘People’ and ‘Process’ areas of the organization.

Compliance & Policy Considerations

There are no Statutory Requirements for this terminology.

Benchmarking activities must be aligned with:

• Compensation, Benefits and Performance Policies
• Ethical Sources of Data and Maintaining Confidentiality Standards
• The Internal Approval and Governance Frameworks

Organizations should only utilise credible surveys for Benchmarking data sources, meeting all State Law Compliance.