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Benchmarking as a tool for determining pay

Over reliance can lead to a wrong estimation because of unreliable data.

While directors do not need to become statisticians or remuneration experts, a better understanding of the nature of the data that they are dealing with can help them make a better estimate of the total amount that they need to pay.

CURRENT approaches to remuneration management mainly rest on "benchmarking" as a technique. Benchmarking in this context means matching what is done in the organisation to the practices of the market. The key assumptions of a benchmarking approach to remuneration are that there is an efficient...

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