Sample Benchmarking Process Frequency

Sample_Documents

DISCLAIMER: This is a sample template provided for informational purposes only. It does not constitute legal, tax, or financial advice. Organizations should consult their own legal and tax advisors and tailor this document to reflect their specific business needs, geographies, and applicable laws.

Benchmarking Process & Frequency

Document Header

Field	Value
Document Type	Benchmarking Process & Frequency
Category	Base Compensation
Company	<Company Name>
Version	<Version Number>
Effective Date	<Effective Date: Date>
Last Reviewed	<Date>
Next Scheduled Review	<Date> (or at least annually)
Document Owner	<Owner Title: e.g., Director, Total Rewards>
Contributors	<Contributors: e.g., HRBP, Finance, Legal>
Approvers	<Approver Titles: e.g., CHRO, CFO>
Related Documents	Sample_Documents; Job Architecture; Salary Structures; Geographic Pay Strategy; Annual Compensation Planning; Variable Pay Plan

Purpose and Objectives

Define a consistent, repeatable, and auditable process for market benchmarking of base compensation at <Company Name>.
Establish the standard frequency for data refresh, market pricing, and range updates to ensure pay competitiveness and internal equity.
Specify roles, responsibilities, data sources, and governance to maintain compliance and data integrity.
Enable data-driven decisions on hiring, promotions, adjustments, and budgeting.
Support equitable compensation aligned to <Company Name>’s compensation philosophy, target market position, and pay-for-performance principles.

Scope and Applicability

In Scope
- Benchmarking base salary for employees and roles in <Country or Countries>.
- Regular employees (full-time and part-time) and temporary fixed-term employees where market data is available.
- Benchmarking of individual roles within the job architecture and external market pricing for new roles.
- Market pricing inputs to create or update salary ranges and midpoints.
Out of Scope
- Incentive compensation (short-term incentives, commission plans, sales incentives) covered in separate plan documents.
- Equity compensation benchmarking (e.g., RSUs, options) covered in equity guidelines.
- Executive compensation beyond the defined non-executive population unless otherwise stated.
- Non-cash benefits and allowances (e.g., car, mobile, per diem) except as referenced for total cash comparators.
Applicability
- This policy applies to HR, Talent Acquisition, Finance, and leaders involved in pay decisions at <Company Name>.
- The process governs all geographies in which <Company Name> operates, with local adaptations documented under International Considerations.

Guiding Principles

Market Relevance – Use current, high-quality, and role-relevant external market data.
Consistency – Apply standardized methodologies for job matching, level alignment, and data aging.
Fairness and Equity – Calibrate with internal equity and career frameworks to avoid unintended disparities.
Transparency – Document assumptions, sources, and decisions to enable reproducibility and auditability.
Compliance – Adhere to local pay transparency, pay equity, and data protection laws in each jurisdiction.
Pragmatism – Balance precision with practicality to support timely business decisions.

Benchmarking Data Strategy

Market Positioning and Philosophy

Target competitive positioning of <Company Name> is the <Percentile> percentile of the relevant labor market (e.g., 50th median for most roles; 65th–75th for critical/scarce roles).
Market definitions are role-specific and may combine industry, size, and geography criteria.
Salary structures will generally be anchored at the market median midpoint, with range widths of <Percentage> to <Percentage> depending on job family and level.

Data Sources and Selection

Primary Sources (examples; replace with <Vendor Name>)
- <Vendor Name 1> Global Remuneration Survey
- <Vendor Name 2> Technology Sector Pay Survey
- <Vendor Name 3> Radford/Aon, Mercer, WTW, or equivalent
Secondary Sources
- National statistics bureaus and professional association surveys
- Local salary surveys for niche roles or small markets
Selection Criteria
- Survey methodology transparency, sample size, aging policy, and data quality controls
- Robustness of job library and leveling framework compatibility
- Geographic and industry coverage aligned to <Company Name>’s footprint
- Legal use rights for compensation decisions and internal reporting

Peer Group and Market Definition

Primary peer group defined by <Company Name> includes companies of size <Revenue/Employee Count Range>, in industry <Industry>, operating in <Countries/Regions>.
For highly competitive or unique roles, a broader cross-industry market may be used where skill sets are transferable.
Where appropriate, a custom market composite will blend multiple surveys to match job family and level coverage.

Data Hygiene and Governance

Validate that all surveys are within <Months> months of publication; otherwise apply aging factors.
Exclude outliers beyond <Number> standard deviations or the top/bottom <Percentage> percentile tails, if allowed by survey license.
Retain survey participation documentation and access rights in a centralized repository.

Data Aging and Market Movement

Apply a standardized annual market movement factor of <Percentage> for the current fiscal year unless superseded by more recent published data.
For month-specific adjustments, pro-rate the factor linearly: aged rate = survey rate x (1 + annual factor x months/12).
Example: If survey effective <Date> with median base of <Amount> and annual movement <Percentage>, the rate aged to <Date> equals <Amount> x (1 + <Percentage> x <Months>/12).

Weights and Composites

Blend multiple survey sources using weightings based on relevance and data quality.
Standard weighting unless otherwise justified: Primary survey <Percentage>, Secondary survey <Percentage>, Tertiary survey <Percentage>.
Document any deviations and rationale in the market pricing workbook.

Cuts and Filters

Use relevant cuts for industry, organization size, and geography where available.
Where insufficient data exists in a narrow cut, broaden to regional or national cuts while applying a geographic differential.

Currency and Purchasing Power

Convert survey data to local currency using <FX Source Name> monthly average for the month of aging.
Do not use cost-of-living indices to set pay; use labor cost differentials reflecting external market pay levels.
Apply geographic differentials maintained by Total Rewards to ensure internal consistency across locations.

Job Matching and Market Pricing Methodology

Job Architecture Alignment

Each job must be mapped to <Company Name>’s job architecture: job family, discipline, and level (<Level Framework: e.g., IC1–IC6, M1–M5>).
Job leveling relies on scope, complexity, impact, knowledge, and problem-solving criteria documented in the job framework.

Matching Hierarchy

Primary: Match to closest survey benchmark job using content and level alignment.
Secondary: Match to a role cluster if an exact match is unavailable; apply job-family median adjustments.
Tertiary: Use weighted proxy roles where jobs span multiple content areas; document assumptions and premiums or discounts.

Hybrid and Emerging Roles

For hybrid roles combining multiple functions, split match across survey roles with weightings reflecting time allocation (e.g., 60 percent function A, 40 percent function B).
For emerging roles lacking established benchmarks, triangulate using adjacent job families and internal relativities.

Skill, Certification, and Premiums

Apply skill premiums only when supported by market data or policy (e.g., cybersecurity certification premium of <Percentage> for roles requiring <Certification Name>).
Critical skill or scarcity premiums must be time-bound and require approval per Governance thresholds.

Geographic Differentials and Remote Work

Use a city or metro-area differential index relative to <Reference Market: e.g., <City, Country>>.
For remote roles, the market is the employee’s labor market unless explicitly designated as hub-based. Document any alternative market designation with justification.

Internal Equity Calibration

After market pricing, align proposed ranges and offers with internal equity:
- Compa-ratio distribution targets by level: <Percentage> to <Percentage>.
- Starting pay guideline: offers generally between 85 percent and 100 percent of midpoint depending on experience.
- Promotion guideline: <Percentage> to <Percentage> increase, subject to range minimum and market.

Benchmarking Frequency and Cadence

Standard Frequency

Annual comprehensive market refresh covering all benchmark jobs and salary structures.
Semiannual targeted refresh for critical roles, hot skills, or volatile markets as identified by HR analytics and Talent Acquisition.
Ad hoc benchmarking for new roles, acquisitions, or material role redesigns.

Triggers for Off-Cycle Review

External market movement exceeds <Percentage> since last refresh for a job family or location.
Hiring failures or offer declines due to pay competitiveness above <Percentage> of requisitions over <Number> months.
Regulatory changes that affect pay practices (e.g., pay transparency requirements).
Macro events causing rapid shifts in labor markets.

Service Levels and Timelines

Standard request turnaround for single-role market price: <Number> business days.
New role setup including job code, market pricing, and range proposal: <Number> business days.
Comprehensive annual cycle duration: <Number> weeks from survey release to final approval.

Sample Annual Calendar

Quarter/Month	Activity	Deliverables
Q1 (<Month–Month>)	Finalize compensation philosophy updates and survey participation commitments	Survey participation plan; budget for survey purchases
Q2 (<Month–Month>)	Submit survey data; validate job matches; confirm peer groups	Participation files; validation logs
Q3 (<Month–Month>)	Receive survey results; age data; composite market build; preliminary range refresh	Market pricing workbooks; draft salary structures
Q4 (<Month–Month>)	Governance review; finalize ranges; load to HRIS; manager enablement	Approved ranges; HRIS configuration; communication materials

Pay Structure Linkage and Range Management

Range Construction

Anchor midpoints to the market median (P50) for the target market unless strategic premiums apply.
Range widths by level (illustrative; replace with <Percentage>):
- Entry-level IC: <Percentage> width
- Mid-level IC: <Percentage> width
- Senior IC and Managers: <Percentage> width
- Directors and above: <Percentage> width
Midpoint progressions across grades: <Percentage> to <Percentage> to maintain internal relativity.

Range Refresh Rules

Update salary ranges when cumulative market movement since last refresh exceeds <Percentage> or at least annually.
Apply grade-by-grade movement based on job family composites, subject to guardrails to avoid compression.

Offer, Promotion, and Adjustment Guidance

Hiring offers should normally fall between minimum and midpoint; offers above midpoint require justification and approval per thresholds.
Promotions should place employees at or above new range minimum. Suggested increase guideline: <Percentage> to <Percentage> depending on movement between grades.
Off-cycle market adjustments considered when employee compa-ratio is below <Percentage> and performance is at or above <Rating>.

Roles and Responsibilities

Accountability Matrix

Total Rewards
- Owns survey selection, participation, and data governance.
- Conducts market pricing, constructs composites, and recommends salary ranges.
- Maintains geographic differentials, aging factors, and documentation.
- Partners with HRIS to implement approved structures.
HR Business Partners
- Validate job matches and internal equity considerations.
- Advise leaders on offers and adjustments based on approved market data.
- Escalate exceptions to Total Rewards and governance bodies.
Talent Acquisition
- Provide market feedback from candidates and offers.
- Use approved ranges and market data for offers; request pricing when gaps arise.
Finance
- Align budgeting assumptions with market movement factors and range updates.
- Review cost impacts and funding for adjustments.
People Leaders
- Make pay decisions within approved ranges and guidelines.
- Provide input on role content and skills needed for accurate matching.
Legal and Compliance
- Advise on regulatory requirements, pay transparency, and data privacy.
- Review communications and processes for compliance risk.
Executive Compensation or Compensation Committee (if applicable)
- Approve methodology, market position targets, and material policy changes.

Standard Process Steps

Total Rewards confirms survey sources, peer cuts, and participation plan; obtains approvals for spend of <Amount>.
HR and leaders validate job architecture mapping and target roles for benchmarking.
Surveys are purchased and/or participation files are submitted by <Date> per vendor instructions.
Upon receipt, Total Rewards reviews survey effective dates and applies aging factors to align with <Company Name>’s pricing month.
Job matching is performed using content and level alignment; secondary proxies are selected as needed and documented.
Composite markets are built with defined weights; outliers are removed; currency conversions and geographic differentials are applied.
Market medians and percentile data are summarized by job family, grade, and location; preliminary ranges are modeled.
HRBPs review internal equity and provide feedback; Talent Acquisition inputs hiring competitiveness insights.
Total Rewards finalizes recommendations for range updates, market premiums, and any adjustment programs; Finance models cost scenarios.
Governance body reviews and approves methodology and updated ranges; exceptions or premiums beyond thresholds are escalated.
HRIS implements approved structures; effective dates are configured; validation testing is completed.
Managers and HR are enabled with tools and communication materials; ongoing support is provided for offers and adjustments.
Documentation, workbooks, and approval records are archived in the central repository with version control.

Governance, Approvals, and Controls

Approval Thresholds

Range changes up to <Percentage> movement from prior midpoint: approval by Director, Total Rewards.
Range changes above <Percentage> or introduction of special market premiums: approval by CHRO.
Any policy methodology changes (e.g., shift in target percentile): approval by CHRO and CFO; inform Compensation Committee if applicable.
Offers above range maximum or hiring at premium markets contrary to policy: exception approval by CHRO.

Control Activities

Pre-implementation validation of HRIS range load against approved workbook.
Quarterly monitoring of offers versus approved ranges; report exceptions to governance body.
Annual audit of market pricing samples to verify adherence to methodology.

Legal and Compliance Considerations

Respect survey participation rules, minimum data contributors, and anti-trust safe harbor guidelines.
Comply with pay transparency reporting and posting requirements in <Jurisdictions>.
Follow equal pay and pay equity laws requiring the use of non-discriminatory factors in pay determinations.

International Considerations

Local Market Practices

Adapt to local norms where warranted (e.g., 13th-month salary, guaranteed allowances) when interpreting cash compensation medians.
Document country-specific policies for mandatory benefits that may affect total cash calibration.

Currency, Inflation, and Indexation

In high-inflation markets, consider quarterly aging or indexed mid-year adjustments where market movement exceeds <Percentage> within 6 months.
Use consistent FX conversion sources; evaluate hedging impact on expatriate or commuter arrangements separately.

Data Privacy and Cross-Border Transfers

Store survey data and employee compensation data according to <Data Residency Requirements>.
Use pseudonymized data in market pricing analyses where required by local regulations.

Documentation and Recordkeeping

Repository and Retention

Store all survey licenses, participation confirmations, workbooks, and approvals in <Repository: e.g., SharePoint/Confluence>.
Retain records for a minimum of <Years> years or longer where required by law.

Version Control

Each annual cycle receives a unique version identifier; updates are logged with change descriptions and approver names.

Audit Trail

Maintain traceability from final ranges back to source survey records, aging factors, composite weights, and differential tables.

Implementation Guidelines

HRIS Configuration

Load new structures with effective date <Date>; preserve historical ranges for prior periods.
Validate job-to-grade mappings and range assignments; run exception reports for employees outside range.

Manager Enablement and Tools

Provide market pricing summaries by job family, location, and grade.
Offer calculators for compa-ratio, range penetration, and proposed adjustment costing.

Budgeting Integration

Collaborate with Finance to translate market movement and range changes into annual merit and adjustment budget guidelines.
Establish default planning assumptions (e.g., merit budget <Percentage>, structure movement <Percentage>, adjustment pool <Percentage> for compression).

Exception Management

Types of Exceptions

Offers above midpoint for critical skills
Hiring above range maximum due to proven scarcity
Market premiums for specific locations or teams
Deviations from standard weights or sources

Request and Approval Workflow

Requestor submits exception form with business rationale, candidate profile, and supporting market data.
HRBP reviews for internal equity and completeness.
Total Rewards validates alignment with methodology and proposes alternatives if applicable.
Approver reviews based on thresholds; decision recorded with effective date and duration if time-bound.
Exception is tracked and revalidated at next refresh cycle.

Audit and Continuous Improvement

Audit Program

Annual independent review of a sample of <Number> jobs per region to ensure matching quality, correct aging, and application of differentials.
Verification that offers and salaries remain within approved ranges or have documented exceptions.

Continuous Improvement Actions

Use hiring outcome metrics and time-to-fill data to refine peer groups and weights.
Conduct post-cycle retrospectives with HR and TA to identify process improvements.
Update tools and templates based on feedback and changes in data availability.

Metrics and Reporting

Core Effectiveness Metrics

External competitiveness index: percentage of roles priced at target percentile ± <Percentage>.
Offer acceptance rate attributable to compensation.
Range utilization: distribution of compa-ratios by grade and demographic lens where legally permitted.
Employee population outside range minimum/maximum.
Time-to-complete market price requests.

Equity and Compliance Indicators

Pay gap analyses by protected categories where legally permissible and with Legal oversight.
Exception frequency and average magnitude by reason code.
Transparency compliance metrics (e.g., job posting range accuracy).

Effective Dates and Transition Rules

General Rules

New salary structures are effective on <Date> and apply to offers extended on or after that date.
Employees below new range minimum will be adjusted to minimum on the effective date or as part of the annual cycle, subject to local law.

In-Flight Offers and Promotions

Offers extended prior to the effective date follow the previous ranges unless the business opts to reprice using new ranges with appropriate approvals.
Promotions effective after the new ranges load will reference the new range.

Mid-Year Changes

If a mid-year market refresh occurs for a critical family, only impacted grades and locations are updated; communicate targeted changes to affected leaders.

Review and Approval Process

Review Cycle

This document will be reviewed at least annually by Total Rewards, with input from HRBPs, Finance, and Legal.
Interim updates may be made in response to material regulatory or market changes.

Approval Workflow

Total Rewards drafts updates and captures a redline summary.
Legal reviews for regulatory compliance and disclosure risks.
Finance reviews for budget and financial impact.
CHRO approves final policy; CFO co-approves if financial thresholds are impacted.
Document is published in <Repository> with version update and communication of changes.

Risk Management and Legal Disclaimers

Risk Considerations

Overreliance on single-source data may bias outcomes; mitigate via composite weighting.
Rapid market spikes can create compression; mitigate with targeted adjustment pools.
Data privacy breaches can expose sensitive information; enforce access controls.

Legal Notes

Participation in surveys must comply with anti-trust safe harbors (e.g., minimum participants, data age, third-party aggregation).
Pay transparency and equal pay laws vary by jurisdiction; consult Legal to tailor posting ranges and disclosures.
Nothing in this policy creates contractual obligations or guarantees of pay increases.

Tools and Templates

Standard Artifacts Maintained by Total Rewards

Market Pricing Workbook template (with placeholders for <Vendor Name>, cuts, weights, and aging factors)
Geographic Differential Table
Exception Request Form
Survey Participation Calendar
Offer Range Calculator

Glossary of Terms and Definitions

Terms

Aging Factor – The percentage used to adjust survey data from its effective date to the pricing date.
Compa-Ratio – Employee base pay divided by the midpoint of the salary range.
Composite Market – A blended market result derived from multiple survey sources with specified weights.
Geographic Differential – An index used to adjust pay between locations to reflect labor market differences.
Job Architecture – The framework of job families, disciplines, and levels used by <Company Name>.
Market Median (P50) – The 50th percentile of market pay for a given role, level, and location.
Market Premium – A targeted increase above standard market positioning for scarce or critical skills.
Midpoint – The central reference point of a salary range, typically aligned with market median.
Pay Range – Minimum, midpoint, and maximum defining the target pay distribution for a grade.
Peer Group – The set of comparator organizations chosen for benchmarking.
Range Penetration – Employee pay position within a range measured from minimum to maximum.
Salary Structure – The collection of salary ranges aligned to grades or bands.
Target Percentile – The market percentile aligned with compensation philosophy (e.g., P50).
Total Cash Compensation – Base salary plus target short-term incentives and allowances, where applicable.

Communication to Employees and People Managers

How <Company Name> Keeps Pay Competitive: What You Need to Know

At <Company Name>, we want our pay to be both competitive in the market and fair across our teams. To do that, we use external market data from independent compensation surveys to understand typical pay levels for roles similar to yours in the locations where we hire. We compare this data with our internal job framework to set and refresh salary ranges each year.

Our goal is to position base pay around the <Percentile> percentile of the market for most roles, with higher positioning for certain critical or hard-to-hire skills. This does not mean every employee will be paid exactly at that percentile. Instead, we use salary ranges that recognize different levels of experience, performance, and responsibilities. Within a range, employees may be paid below, at, or above the midpoint depending on their role fit and contributions.

What does this mean for you? Each role is assigned to a salary range that has a minimum, midpoint, and maximum. When you join or move into a new role, your pay is generally set between the minimum and the midpoint, taking into account your skills and experience. As you grow in the role and take on more responsibility, your pay can progress through the range. Promotions move you to a new range aligned with the next level of scope and impact.

We update ranges regularly. We complete a comprehensive review of market data every year and refresh ranges as needed. In fast-changing markets or for certain roles, we may conduct additional mid-year checks. If market changes push our ranges up, we make sure employees are not paid below the new minimum. Other adjustments are made thoughtfully, considering performance, internal equity, and budgets.

Your manager and HR partner have tools that help them make consistent decisions, and our Total Rewards team maintains the process and data behind the scenes. If you are applying for an internal role or receiving an offer, your recruiter or HR partner can discuss the range for that position and where your offer fits. In locations with pay transparency requirements, we disclose posting ranges that reflect our current structure for that job and location.

We also take fairness seriously. We review pay outcomes against our internal equity principles and comply with all applicable laws. Decisions are based on job-related factors such as role requirements, experience, skills, and performance. If you have questions about how your pay is determined or how you can progress in your range, please talk with your manager or HR partner. They can help you understand where you are today and what skills and experiences will help you grow.

Finally, remember that base pay is one part of your overall rewards. Your total rewards may also include bonus opportunities, equity, benefits, and well-being programs. We designed our approach so that our compensation remains competitive, equitable, and aligned with <Company Name>’s mission, values, and culture.

If you have questions about this process or would like to learn more about the salary range for your current or prospective role, contact <HR Contact or Alias>.

Document Information:

Document Type: Benchmarking Process & Frequency
Category: Base Compensation
Generated: August 22, 2025
Status: Sample Template
Next Review: <Insert Review Date>

Usage Instructions:

Replace all text in angle brackets < > with your company-specific information
Review all sections for applicability to your organization
Customize content to reflect your company's policies and local regulations
Have legal and HR leadership review before implementation
Update document header with your company's version control information
At bottom of the document you find a short example on how the content could be communicated to end-users, for instance employees.

This sample document is provided for reference only and should be customized to meet your organization's specific needs and local legal requirements.