Anyone who has spent any amount of time in the compensation function will know that "benchmarking" is an integral part of the job. 

     Actually there are two primary uses of the term in compensation ...

     First, benchmarking can refer to the sharing of "best practices" and other compensation data with other employers.  This is a long-standing practice.  One caution however is to make sure that when you talk to other employers, you don't discuss how you will use the data.  That could get you into anti-trust problems.  Just sharing the data and leaving strategies out of the discussion is your safest approach.

     Second, benchmarking can refer to the use of high-incumbent jobs with clear outside comparables to determine how your pay stacks up with the outside; and how to establish pay grades for new jobs internally based on the grades of the benchmarked jobs.  This approach is used when it is impractical to survey every single job in an organization.  Such an employer will identify "benchmark" jobs at most every level of the organization for which to survey and establish market comparability.

     Most federal agencies have not had to do compensation surveys since the Office of Personnel Management and the Bureau of Labor Statistics has done this in the past.  But with all the demonstration projects and broadbanding intitiatives in the federal government, agencies are finding themselves doing more and more market pricing.  Indeed, the WorldatWork total rewards professional association (formerly American Compensation Association) is working closely with various Department of Defense groups to train them in the professional approaches to developing compensation policies and practices.

     Anyone want to share their governmental experience with benchmarking compensation?