ABSTRACT: Benchmarking is a technique for assessing a firm’s performance against the performance of other firms. It is used to find the best practice and to take necessary actions to improve the firm’s own performance so that it meets or exceeds that of its competitors. It is usually a process of reengineering or quality improvement initiative, and focuses on the ongoing quality management efforts of strategic business units. This has resulted in the establishment of a conceptual framework for evaluating users’ needs identified in market opportunity analysis, a new service concept, the user’s ombudsman, relationship marketing, and a citizen charter. The article highlights the significance of using benchmarking as performance indicators, process reengineering and quality improvement in organizations. In this article the researcher highlights the importance of benchmarking in HRM practice, to define the key performance indicator in HR areas, classifying various types of benchmarking, advantages of benchmarking, and identifying the key drivers in making success of benchmarking.