Compensation management refers to managing and analyzing an organization’s pay and rewards. It includes all the monetary and non-monetary benefits that employees receive for their efforts.
It is ensured by the management that employees get fair wages, as it is essential for talent management. Effective compensation management is based on performance and job status, which improves employees’ engagement and motivates them to perform their best to receive rewards.
Professionals who receive rewards and benefits in addition to salary are more likely to be satisfied in the long term. The human resources department is responsible for managing compensation because they are the foundation of human capital management.
Benefits of Compensation Management
Following are some of the benefits of following a structured process of compensation management for an organization:
Compensation management can solve the entire calculation process, which creates consistency in fair pay. It simplifies the difficult task of compensation based on many factors, such as skills, duties, or market conditions.
Employees can track their performance and progress, which increases employee motivation. The self-service feature of the software provides information about skills required for promotions and rewards.
Employers can retain their best employees by analyzing historical performance in one place. The management software dashboard pinpoints top performers and provides a chance to reward them.
It reduces the use of spreadsheets as HR has to rely on multiple sheets for a single task. The software contains all the necessary data, helping to get accurate data for planning.
Compensation management tools help in analyzing the aspects required for compensation strategy planning. It compares the organization to external data, allowing it to pay its employees as per the market standard.
Here’s a list of some of the best compensation management software available in the market:
Leapsome is an intelligent people enablement software providing an all-in-one solution for growth-oriented organizations with performance management, employee management, and learning. The platform has tools for compensation management, OKRs & goals management, employee onboarding, etc.
It has a library of professionally designed templates to perform compensation reviews in a structured way.
It allows for writing more accurate performance reviews based on historical feedback.
It provides check-in meetings for managers and intelligent compensation recommendations.
The platform allows tracking the compensation review process and analyzing the results.
Other features Leapsome has are HRIS integrations, Slack and Microsoft Teams integration, multilingual Interface, SSO, and encryption features.
HiBob is an HR management software that helps HRs and managers increase employee performance and retention through various tools and features. The platform provides compensation management software to manage employees’ compensation plans and streamline processes.
It allows stakeholders from HR, finance, managers, and C-levels to be on the same page by accessing the updated real-time salary, tenure, and performance data.
It provides a platform for multiple currency management and pay periods.
It simplifies the compensation process and allocation of base pay, bonus, and equity plans for geographically distributed teams.
It provides a tool for quickly reviewing the salary of employees.
HiBob is the best alternative to traditional spreadsheets for keeping employee data stored in one place.
PeopleFluent is designed to provide specialized tools for compensation management. This tool fits into any complex compensation strategy to reduce managers’ workload and help them manage the organization’s goals, objectives, and employees’ performance.
The platform provides a one-stop solution for talent management within organizations.
Its visualization feature allows managers to view real-time data on the dashboard using graphs and charts and generate reports.
The communication tools available on PeopleFluent allow managers and employees to collaborate seamlessly on compensation decisions.
PeopleFluent provides a talent management feature by integrating tools like PeopleFluent Recruitment, PeopleFluent Learning, PeopleFluent Compensation, etc. with PeopleFluent Performance tool.
Paylocity is a web-based Human capital management solution for small and mid-sized businesses. It has various payroll, HR, administration, time & labor, and talent management tools. The platform allows self-service for employees. They can access their information like pay benefits or time-off details.
The platform simplifies compensation decisions for employers by ensuring budget alignment.
It automates manual tasks for HR and reduces compliance risk.
The talent management software automates the recruiting and onboarding experience and offers career development opportunities.
Other features of the software are reporting, analytics, and extracting data from over 100 standard reports.
Paylocity is available as a mobile application for all organizations across North America.
PayScale collects, analyzes, and validates business compensation data, helping them deliver their compensation budget. It is a proven cloud-based software that offers various tools for Insight Lab, Marketplace compensation survey management, and team collaboration.
The platform provides dynamic compensation data that helps businesses understand trending competitive salaries.
Payscale has versatile compensation technology that stratifies planning for the future. It automates surveys and participation.
It provides tools to structure employees’ salary creation.
It allows seamless integration with Payscale’s team product to help managers make pay decisions easily and streamline the increase cycle.
The Payscale is suitable for planning the future by analyzing market trends.
Salary.com is a modern compensation software that examines salary rates, pay gaps, pay equity, and job descriptions. It integrates internal data with data from external markets and helps in making intelligent decisions for the right salary.
It provides third-party survey data on salaries that help compare compensation programs to competitors.
The Flexible modeling tool maintains the salary structure of all departments or divisions.
Salary.com helps to easily price jobs based on skills and efforts and compare them with competitors to provide the best salary.
This software is an all-in-one platform for all the necessary data for salary payment analysis.
Zenefits is a one-stop solution for all HR tools where employees can self-manage their plans. It automates low-priority tasks of the business. The software aligns compensation management with business goals, improving decision-making efficiency and accuracy.
Zenefits’ tools create relevant data for salary benchmarking, helping managers understand the best pay for their employees.
The software compares salaries to other companies for similar roles. It sets an idea of what to pay new employees.
It evaluates the organization’s compensation, evaluating an employee’s salary to see who is receiving more for their efforts.
Zenefits compares individual efforts to their pay. It also reflects the position of competitors.
Paycom automates the highly complex payroll process, ensuring paid contributions as an employee. Compensation management software allows employees to be rewarded within budget. Paycom offers user-friendly solutions to users to manage employee life cycles in one platform.
The platform ensures that employees will receive equal pay for equal responsibilities.
PayCom reports employee compensation history, indicating whether they are above or below minimum wage by grade.
It has a single database that provides excellent speed and accuracy.
Paycom covers all payroll processes of the organization. It reduces the burden of searching spreadsheets of the HR department.
Empxtrack is a cloud-based HR software that covers the employee lifecycle. The platform’s compensation management software has fair and transparent aspects of employee compensation. It simplifies planning to develop fairness in pay, bonuses, and rewards.
The software provides merit-based salary suggestions for employees, motivating them to work better.
It aligns employees with organizational goals and makes it easier for managers to reward employees for their performance.
Empxtrack provides valuable data for compensation budgeting, reducing time-consuming efforts.
The platform automates the whole HR management process and helps managers manage and track compensation, deductions, salary increases, and administrative work.
Keka is a cloud-based HR solution that streamlines business processes and allows them to focus on their core goals. It plans and manages complex compensation programs based on insightful analysis.
It allows managers to seamlessly track employees’ performance, attendance, overtime, etc.
Keka’s payroll software gives visibility of pending salaries and avoids delays in salary revision.
It has a compensation analysis feature that provides valuable insight into salary distribution based on gender and age.
The software plans budgets for each department individually and also forecasts salary costs.
It provides third-party integration with ZestMoney, Plum, Upside LMS, Stashfin, and QuickBooks.
Keka will help in focusing on salary revisions and hikes from time to time. The platform ensures that employees are receiving continuous benefits.
Compensation management vs. salary benchmarking
Salary benchmarking is the process of analyzing an organization’s internal salaries with their external values. This process involves competition with competitors for the same job role, as it is essential to re-engage employees. An appropriate salary is based on the job description, company size, and location. Compensation management is the process of paying required salaries to employees based on their efforts. It includes all those aspects in monetary and non-monetary terms that an employee receives. Employee compensation includes profit sharing, bonuses, overtime pay, rewards, recognition, sales commission, etc.
As the company grows, managing employees, payroll, or other compensation becomes difficult. Compensation management software is the solution for you to manage compensation in a better and more effective way. The article has some of the best compensation management software along with their features.
You can review each of them and determine which suits your organization’s needs best. If you are still confused about whether or not your organization needs compensation management software, I think you should get one and enjoy its excellent benefits.
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