Question

What is benchmarking (with regard to compensation)?

Option 1: A method used to set a fixed pay rate for all employees in an organization.
Option 2: Comparing an organization's compensation practices to those of similar organizations in the same industry.
Option 3: A technique for determining employee bonuses based on individual performance.
Option 4: The process of establishing minimum wage standards in a specific region.

Answer 1

Benchmarking, with regard to compensation, is the process of comparing an organization's compensation practices to those of similar organizations in the same industry. It helps companies understand how their compensation packages stack up against their competitors and ensure that they are offering competitive wages and benefits to attract and retain talented employees.

Step-by-step explanation:

Benchmarking, with regard to compensation, is the process of comparing an organization's compensation practices to those of similar organizations in the same industry. It helps companies understand how their compensation packages stack up against their competitors and ensure that they are offering competitive wages and benefits to attract and retain talented employees. By benchmarking, organizations can identify any gaps or discrepancies in their compensation practices and make informed decisions on how to adjust their compensation strategies.