What is Benchmarking?

Answer:
Benchmarking is a business process in which

the business practices and operating procedures are compared to a national standard or national average.

Benchmarking is used by corporations to compare their level of productivity to that of a national standard or national average. Many different data are used for the comparison, with measurements being taken of employee work time, the amount of work being done, the amount of product sales, as well as various costs, with these measurements being compared against those of other corporations and against a standard set by each nation. These measurements and the comparison to the standards help corporations judge their performance with those of other corporations, and this data is used by the corporations to improve efficiency and productivity.

Benchmarking is also performed in the information technology field to measure a computer's performance and comparing it against other computers, with the benchmark results determining what programs the computer is capable of running. The software applications are "standards", or unchangeable measurements of the performance requirements of each application, with the benchmark results of the hardware determining if the hardware can support the software.

Another example of benchmarking is employee performance evaluations, where the company measures an individual employee's performance against those of his peers and against the requirements of the company. This type of benchmarking helps company managers see which employees are doing their job and which ones are not. This is the primary deciding factor in a person's chances of keeping his or her job.

The most well-known example of benchmarking is budgeting, where an individual's income is compared against their expenses and their income is compared to a national average. This data helps with salary negotiations, budget planning, and investments. This data determines how much work a person needs to do to be able to pay their bills each month. It also helps determine salary requirements, as individuals can negotiate a higher salary if the national average or the state average is higher than what a company is willing to pay.