(Solution) CIPD 5HR03 appropriate ways in which benchmarking data can be gathered and measured to develop insight. (AC 2.2)


Benchmarking is a process of gathering data from different organisations and use it to make comparisons for better pay decisions (Murphy and Sandino, 2020). Benchmarking can provide Body Image with the data about training budgets, holiday entitlements, overtime payments, graduate starting salaries and wage rates. Difference ways this data can be gathered are:

Published data

Published data from government institutions, Acas and similar organisations can provide Body Image with benchmarking data to support its decisions (Cotton, 2022). The UK government publishes minimum wage rates and average employee salary on quarterly basis. This information can be valuable to Body Image and other organisations to design their minimum wage rate. The advantage of published data is that it is accurate and timely. For example, the expected minimum wage rate per hour is already in the government website. However, past published data may not be reliable for current and future decisions. This data is also for general country which is not comparable to similar organisations. Published data can be measured by checking whether the source is credible and can be relied upon.

Special surveys

Body Image may choose to conduct special surveys from different organisations within the industry to understand benefits offered to employees and other forms of rewards (Cotton, 2022). Survey data is effective because it is comparable. Body Image can compare survey data from similar organisations and be able to make informed decisions. Surveys are also source of primary data which is importance for analysis using statistical measures. However, surveys may garner dishonest answers from respondents which can lead to failed decisions. Also organisations might not be willing to provide data unless you share your organisation’s data. Survey data can also be measured by checking its accuracy including errors made my respondents.

Pay clubs

Pay clubs involves a group of employers who join together to share pay information (Cotton, 2022). Pay clubs are great way of finding pay data within a specific industry. This is due to their advantage of allowing members to compare data from organisations in the same sector. Reward pay clubs are mostly focused on narrow industries precisely to provide members with comparable pay information for reward benchmarking (Buckley, 2019). The problem with pay clubs is that they are limited only to members or participants. This data can be measured by checking if it is comparable and timely for effective decisions.

Pay clubs would be the most effective way Body Image can benchmark reward data because pay clubs provide data from similar organisations that is comparable.

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