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Rippling

Rippling gives businesses one place to run HR, IT, and Finance. It brings together all of the workforce systems that are normally scattered across a company, like payroll, expenses, benefits, and computers. So for the first time e...Read more about Rippling

4.9 (3050 reviews)

154 recommendations

isolved

isolved is the most-trusted HCM technology leader, providing the best combination of software and services to meet the needs of today’s People Heroes – HR, payroll, and benefits professionals. From talent acquisition to workforce ...Read more about isolved

3.9 (518 reviews)

154 recommendations

Paycom

Paycom offers user-friendly HR and employee-driven payroll technology to enhance the employee life cycle, in a single software. Paycom drives efficiencies, increases data integrity and gives employees power over their HR informat...Read more about Paycom

4.4 (898 reviews)

118 recommendations

Paycor

Paycor empowers leaders to build winning teams. Paycor’s human capital management (HCM) platform modernizes every aspect of people management, from recruiting, onboarding and payroll to career development and retention, but what r...Read more about Paycor

4.4 (2806 reviews)

60 recommendations

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Dayforce HCM

Dayforce makes work life better. Everything we do as a global leader in HCM technology is focused on improving work for thousands of customers and millions of employees around the world. Our single, global people platform for HR, ...Read more about Dayforce HCM

4.3 (963 reviews)

33 recommendations

Evolia

Evolia makes it easier to hire, schedule and track time worked by frontline in medium and large-sized businesses. Gone are the days of working in silos and having to play the telephone game finding last-minute replacements. With...Read more about Evolia

4.3 (49 reviews)

28 recommendations

Bob

Bob is a modern HR platform for modern HR challenges. Simplify complexity Bob lets you manage people globally and thrive through change. From culture and connections to performance and payroll, Bob is the HCM built for everyone i...Read more about Bob

4.6 (146 reviews)

20 recommendations

Performance Pro

Performance Pro by HR Performance Solutions is a cloud-based performance appraisal solution for HR professionals. Performance Pro is customizable and allows users to align the solution with company’s strategic goals. The system ca...Read more about Performance Pro

4.5 (187 reviews)

16 recommendations

Factorial

Factorial is a cloud-based human resources (HR) solution that caters to small businesses across various industry verticals. Key features include a time-off manager, an organisational chart generator, a document manager and more. ...Read more about Factorial

4.5 (255 reviews)

12 recommendations

PerformYard

PerformYard is your complete employee performance toolkit. Build your vision of performance management with an easy-to-use system your people will love. Get streamlined performance reviews, check-ins, goal management, continuous f...Read more about PerformYard

4.8 (122 reviews)

9 recommendations

Workzoom

Workzoom is the all-in-one HR, Workforce, Payroll, and Talent solution that consolidates and automates your people management. Bring your whole team together with a centralized hub for accessing personal information, company updat...Read more about Workzoom

4.6 (15 reviews)

7 recommendations

Deel

Deel is a cloud-based payroll and compliance software that simplifies international hiring for businesses of all sizes. With automated onboarding, payroll, and compliance, companies can hire anyone, anywhere in just a few minutes....Read more about Deel

4.8 (817 reviews)

5 recommendations

Compease

Compease is a complete cloud-based salary administration solution used by businesses of all sizes across industries such as retail and manufacturing. The solution allows HR teams to facilitate the analysis, design and execution of...Read more about Compease

4.9 (67 reviews)

3 recommendations

QGenda

QGenda is a leading provider of healthcare workforce management solutions, dedicated to optimizing the delivery of care. With their comprehensive software, healthcare organizations can activate, deploy, and manage their workforce ...Read more about QGenda

4.1 (50 reviews)

2 recommendations

Empuls

Xoxoday Empuls is a cloud-based collaboration solution designed to help organizations of all sizes manage processes related to workforce motivation, employee empowerment and engagement. Empuls facilitates collaboration amongst emp...Read more about Empuls

4.5 (71 reviews)

1 recommendations

HRsoft Compensation Management

With an industry-leading, purpose built platform for compensation lifecycle management, HRSoft brings the power and business impact of digital transformation to the least automated process in HR. HRSoft's Compensation Management...Read more about HRsoft Compensation Management

4.8 (51 reviews)

1 recommendations

Papaya Global

Papaya Global is a SaaS fintech company providing global payroll technology and the only one with an embedded payments platform designed for the workforce needs of global enterprises. Papaya's comprehensive technology, known as ...Read more about Papaya Global

4.4 (30 reviews)

1 recommendations

ADP Workforce Now

ADP Workforce Solution is suited for businesses with more than 50 employees looking to streamline HR processes. ADP Workforce Now includes capabilities such as payroll processing and tax filing, performance management, compensatio...Read more about ADP Workforce Now

Paychex Flex

Paychex Flex is a human capital management solution that's designed using web-based modular technology and a dedicated service center to help meet the HR needs of employers of any size and industry. With a single login, users can ...Read more about Paychex Flex

Workday HCM

Workday HCM assists global businesses of all sizes in a variety of industry verticals with workforce planning, analysis, and execution. Workday delivers user and administrative tools such as financial management, HR planning, tale...Read more about Workday HCM

Buyers Guide

Last Updated: March 16, 2023

Every company is different when it comes to compensation management. While budgets are usually based on company earnings, the ratio of employee salaries to overall revenue can vary significantly depending on the industry.

For example, it would make sense for a landscaping company that depends on employee labor to allocate a higher percentage of their revenue to compensation compared to a manufacturing plant that handles the majority of its production through machines.

This is why some businesses struggle to calculate compensation plans that align with business goals and allow them to attract or retain top-notch employees. Luckily, there are a variety of software solutions that can help.

In this guide, we’ll break down everything you need to know about compensation management solutions. Here's what we'll cover:

What Is Compensation Management Software?

Benefits of Compensation Management Software

Common Functionality of Compensation Management Software

Additional Considerations

What Is Compensation Management Software?

Compensation management software allows HR managers to conduct salary planning, calculate bonus payouts by factoring in achievement and performance metrics for individuals or departments. The tool is available as a separate module that can be added to a vendor’s talent management suite, along with performance and learning management programs.

Common features of compensation management software include:

  • Compensation and salary planning

  • Budgeting and reporting

  • Compliance support

  • Automated incentive program administration

  • Self-service access for all employees

Whether your work for a large company or a small startup, it’s critical to invest in the right platform to balance the business’ compensation structure. Many affordable and efficient options are available to streamline the planning process and automate necessary tasks. This allows HR professionals to make more informed decisions and recommendations.

Benefits of Compensation Management Software

Effectively managing compensation means ensuring that employees are paid the right amount on time, every time. To do so, companies must keep current, accurate and accessible records, which is often a complex task. Some companies may use Excel spreadsheets or email to track compensation history, which can be inefficient as well as insecure. Compensation management software can eliminate recordkeeping problems, and comes with a range of other benefits, such as:

Increased accuracy and efficiency. Instead of spending time tracking and calculating employee compensation in multiple spreadsheets—which often leads to errors—business owners and managers can save time, and plan for pay increases and incentives, by tracking all employee data in one place.

Ready-made worksheets guide managers through the salary planning process, and allow them to enter discretionary rewards when an employee performs well. As a result, employers can reduce the risk of overpayment, manual errors and shadow accounting.

Improved security. By storing all compensation information in one online system, companies reduce the risk of misplacing employee compensation data. And since most systems are password-protected, there is also less of a risk that sensitive information will fall into unauthorized hands.

Increased insight into your budget. In addition to streamlining the initial compensation planning process, most solutions automatically monitor payouts and store the information in the system. This data can then be used by managers and business owners to produce built-in reports, ensuring the company stays within its budget and conforms to federal regulations.

Improved transparency and employee satisfaction. A lack of transparency about the compensation planning process can lead to misunderstandings between management and employees about their pay—which may, in turn, cause diminished employee satisfaction. This may be especially true for organizations with more than one reward type, such as stock rewards, pay-for-performance or commission-based pay.

Because employees and managers can view past payments with this software, there is greater transparency in the compensation process. This can help eliminate confusion about current and past compensation, and allows for clear and open communication about compensation practices.

Higher employee productivity. Studies have shown that employees highly value having their documented performance tied see their base pay, as well as increases or decreases in incentive-based. If your company is having difficulty tying performance goals to rewards, compensation management software can streamline the process and ensure employees are aware of the monetary benefits of a job well done—resulting in a culture of high performance.

Common Functionality of Compensation Management Software

Planning automation

Facilitates collaboration so that multiple business leaders can collaborate on compensation plans. For example, users can set compensation adjustment tasks and assign them to colleagues for approval.

Reporting and analytics

Generates data-based reports on a variety of values (e.g., cost of living adjustments, performance metrics and promotions) so managers can track and compare these values for the company at large or for individual employees.

Budget control

Sends alerts when compensation allocations exceed predetermined budgets.

Compensation assessment

Allows managers to view compa-ratios, goals, guidelines and other determining factors so they can best evaluate compensation allocations.

Compensation statements

Creates employee benefits statements that include all of a business’ perks and incentives. These may be customized depending on the platform.

Bonus calculations

Calculates bonus payouts by factoring in achievement and performance metrics for individuals, departments or the company at large.

Job market pricing

Provides roles-based market price data to determine how much employees should be paid as per the going market rate.

Additional Considerations

Some organizations claim a lack of integration with their talent management system prevents them from adopting a compensation management solution. While most compensation management programs are designed to integrate with your current human resources information system (HRIS) and payroll software systems, ask the vendor to ensure that their compensation management module is compatible with your current system.

Another thing your company may want to consider is deployment models. Traditionally, many organizations went with on-premise software, meaning the system is installed on location and maintained by the company. However, there has recently been a move toward hosting software “in the cloud” and paying for it using a subscription model (i.e., Software as a Service). This means the software is located on external servers, and updated automatically by the vendor. Each deployment model has its pros and cons. They also have different upfront and recurring costs, so your final selection should be based on your needs and budget.