# Best Compensation Management Software 2026 | Capterra

> Find the top Compensation Management software of 2026 on Capterra. Based on millions of verified user reviews - compare and filter for whats important to you to find the best tools for your needs.

Source: https://www.capterra.com/compensation-management-software/s/web-based

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# Best Compensation Management Software

Last updated on March 31, 2026

How to find the right Compensation Management Software?

Learn more from our team about Compensation Management Software pricing features and benefits in our Compensation Management Buyers Guide

Verified Insights

Provider data verified by our Software Research team and reviews moderated by our Reviews Verification team.  
[Learn more](https://www.capterra.com/our-story/)

## What is compensation management software and how do I choose the right one?

Researched by: [Amita Jain](https://www.capterra.com/resources/author/ajain/)and reviewed by: [Caroline Rousseau](https://www.capterra.com/resources/author/caroline-rousseau/)

Updated on March 31, 2026

[Compensation management software](https://www.capterra.com/compensation-management-software/) helps organizations structure and manage employees’ pay, administer performance-based benefits, implement raises and promotions, and track compensation trends.

HR and payroll professionals use compensation management software to optimize the compensation structure for their growing workforce. Compensation management software can be purchased standalone or as part of a [larger talent management suite](https://www.capterra.com/talent-management-software/).

Most compensation management systems are priced monthly, scaling with the number of employees. Half of the compensation management software buyers Capterra advisors spoke to in the last year budgeted $5 to $10 per employee, per month.

Before purchasing a compensation management system, buyers should consult stakeholders to determine key questions to ask vendors, such as:

_Can the software handle salaried, wage-based, and project-based pay?_

_Does the system support pay for performance?_

_How is market-based compensation data sourced?_

_Can the system integrate with our_ [_payroll software_](https://www.capterra.com/payroll-software/)_?_

For more information consult our [Compensation Management Buyers Guide](#buyers-guide-content)

[4.8 (3625)](https://www.capterra.com/p/116050/Patriot-Payroll/reviews/)

Affordable payroll for American businesses and their accountants—fast, accurate, and backed by expert U.S.-based support. [Learn more about Patriot Payroll](https://www.capterra.com/p/116050/Patriot-Payroll/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

92% recommend this product

[4.6 (175)](https://www.capterra.com/p/156106/Hibob/reviews/)

[Capterra Shortlist](https://www.capterra.com/compensation-management-software/shortlist/)

HiBob empowers HR leaders to drive engagement and retention by closing pay gaps and creating clear paths for mobility and promotion. [Learn more about HiBob](https://www.capterra.com/p/156106/Hibob/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

80% recommend this product

[4.7 (30)](https://www.capterra.com/p/125707/Brightmine/#reviews)

Brightmine is HR software that simplifies compliance, optimizes talent strategies, and supports HR teams in making an impact. [Learn more about Brightmine](https://www.capterra.com/p/125707/Brightmine/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

Connect with a Capterra advisor for a free 15-minute consultation

Get a personalized software list aligned to your business needs with guidance from our expert advisors.

[4.9 (4263)](https://www.capterra.com/p/205015/Deel/reviews/)

[Capterra Shortlist](https://www.capterra.com/compensation-management-software/shortlist/)

Manage global compensation for distributed teams, with payroll sync to pay fairly and compliantly worldwide. All in Deel. [Learn more about Deel](https://www.capterra.com/p/205015/Deel/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

87% recommend this product

[4.7 (65)](https://www.capterra.com/p/222794/COMPview/reviews/)

[Capterra Shortlist](https://www.capterra.com/compensation-management-software/shortlist/)

HRSoft brings order to compensation chaos, with the only unified, purpose-built platform that digitally transforms the comp lifecycle. [Learn more about HRsoft Compensation Management](https://www.capterra.com/p/222794/COMPview/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[4.7 (25)](https://www.capterra.com/p/134291/CompAccelerator/reviews/)

Business rules based solution that assists managers in making allocation decisions for salary, bonus and long term incentives. [Learn more about CompAccelerator](https://www.capterra.com/p/134291/CompAccelerator/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[4.8 (115)](https://www.capterra.com/p/152579/Didacte/reviews/)

Manage pay bands, compensation reviews, and total rewards in one workflow that combines performance insights with industry-leading ben [Learn more about Workleap](https://www.capterra.com/p/152579/Didacte/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

93% recommend this product

[4.7 (21)](https://www.capterra.com/p/182887/SimplyMerit/reviews/)

Spreadsheet-free compensation planning for merit increases, bonuses, and equity grants. Multi-currency, GDPR-compliant, and payroll-agn [Learn more about SimplyMerit](https://www.capterra.com/p/182887/SimplyMerit/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[4.5 (187)](https://www.capterra.com/p/32288/QCommission/reviews/)

Powerful, flexible sales commission software. QCommission can stand alone or integrate with Salesforce, SugarCRM, & other systems. [Learn more about QCommission](https://www.capterra.com/p/32288/QCommission/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

86% recommend this product

[4.7 (9)](https://www.capterra.com/p/179918/J-P-Morgan-Workplace-Solutions/reviews/)

Workplace Solutions is a tech and service-based offering created to empower your team to navigate their workplace incentives. [Learn more about J.P. Morgan Workplace Solutions](https://www.capterra.com/p/179918/J-P-Morgan-Workplace-Solutions/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[4.7 (29)](https://www.capterra.com/p/106697/COMPOSE/reviews/)

Compensation planning, management, and analytics that operationalizes data. All managed via a secure, cloud-based centralized platform. [Learn more about Compose](https://www.capterra.com/p/106697/COMPOSE/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[4.0 (9)](https://www.capterra.com/p/186299/Zoho-Payroll/reviews/)

Zoho Payroll is a cloud-based payroll software compliant with India, UAE,Saudi Arabia and US tax laws with multi state support. [Learn more about Zoho Payroll](https://www.capterra.com/p/186299/Zoho-Payroll/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[4.6 (4190)](https://www.capterra.com/p/131882/Gusto/reviews/)

[Capterra Shortlist](https://www.capterra.com/compensation-management-software/shortlist/)

Gusto is the all-in-one HR platform for growing businesses—one place to hire, pay, insure, and manage your hardworking team. [Learn more about Gusto](https://www.capterra.com/p/131882/Gusto/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

81% recommend this product

[4.6 (1142)](https://www.capterra.com/p/153076/Homebase/reviews/)

All-in-one scheduling, time tracking, and payroll platform that helps small businesses save time, stay compliant, and manage teams. [Learn more about Homebase](https://www.capterra.com/p/153076/Homebase/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

83% recommend this product

[4.7 (176)](https://www.capterra.com/p/155747/PerformYard-Talent/reviews/)

Track employee performance data, goals, and feedback in one platform that integrates with your payroll provider to track compensation. [Learn more about PerformYard](https://www.capterra.com/p/155747/PerformYard-Talent/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

91% recommend this product

[4.9 (44)](https://www.capterra.com/p/178138/Commissionly/reviews/)

Highly customizable commission platform designed to replace your current excel solution and improve your compensation management. [Learn more about Commissionly](https://www.capterra.com/p/178138/Commissionly/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[5.0 (10)](https://www.capterra.com/p/265168/ZenCentiv/reviews/)

ZenCentiv is a no-code ICM platform with a flexible block system, automating sales compensation and offering real-time insights. [Learn more about ZenCentiv](https://www.capterra.com/p/265168/ZenCentiv/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[4.4 (44)](https://www.capterra.com/p/230651/Multiplier/reviews/)

Multiplier’s compensation management lets employees raise requests for their expenses and employers make payments in 120+ currencies.  [Learn more about Multiplier](https://www.capterra.com/p/230651/Multiplier/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

0.0 (0)

Market pricing automation at scale [Learn more about BetterComp](https://www.capterra.com/p/240112/BetterComp/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

0.0 (0)

Payfederate is an AI-powered compensation software for salary benchmarking, budgeting, offer management, and employee communication. [Learn more about Payfederate](https://www.capterra.com/p/10019828/Payfederate/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[4.4 (14)](https://www.capterra.com/p/196013/AttendLab/reviews/)

AttendLab is a free iOS and Android Mobile App, 100% cloud-based, AI-powred, facial recognition, real-time attendance tracking system. [Learn more about AttendLab](https://www.capterra.com/p/196013/AttendLab/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[4.0 (6)](https://www.capterra.com/p/70950/CommissionCalc/#reviews)

Flexible, easy to use, and cost effective. Handles splits, overrides, quotas, draws, bonuses, and just about anything else. Call today! [Learn more about CommissionCalc](https://www.capterra.com/p/70950/CommissionCalc/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[## ADP Workforce Now](https://www.capterra.com/p/155895/WorkforceNow/)

[4.4 (7165)](https://www.capterra.com/p/155895/WorkforceNow/reviews/)

[Capterra Shortlist](https://www.capterra.com/compensation-management-software/shortlist/)

Cloud-based and AI-enabled human capital management solution that offers payroll, HR, and workforce management features for businesses. [Learn more about ADP Workforce Now](https://www.capterra.com/p/155895/WorkforceNow/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

[## Rippling](https://www.capterra.com/p/172127/Rippling/)

[4.9 (4600)](https://www.capterra.com/p/172127/Rippling/reviews/)

Rippling simplifies headcount and compensation planning by centralizing data, automating workflows, and ensuring adherence to budgets.  [Learn more about Rippling](https://www.capterra.com/p/172127/Rippling/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

95% recommend this product

[## Paycor](https://www.capterra.com/p/133745/Paycor-Perform/)

[4.3 (3033)](https://www.capterra.com/p/133745/Paycor-Perform/reviews/)

[Capterra Shortlist](https://www.capterra.com/compensation-management-software/shortlist/)

Streamline compensation processes, reduce manual work, and enhance transparency with Paycor Compensation Management.  [Learn more about Paycor](https://www.capterra.com/p/133745/Paycor-Perform/)

Compensation Management features reviewers most value

Activity Dashboard

Benefits Management

Bonus Management

Compensation Statements

Employee Database

Payroll Management

Performance Management

Reporting/Analytics

Salary Planning

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We have selected the most important and critical features as defined by Capterra user reviews

[Activity Dashboard](https://www.capterra.com/compensation-management-software/features/2178-activity-dashboard/)

[AI Copilot](https://www.capterra.com/compensation-management-software/features/721-virtual-assistant/)

[Benefits Management](https://www.capterra.com/compensation-management-software/features/566-benefits-management/)

[Bonus Management](https://www.capterra.com/compensation-management-software/features/2641-bonus-management/)

[Budget Management](https://www.capterra.com/compensation-management-software/features/3501-budget-management/)

[Compensation Statements](https://www.capterra.com/compensation-management-software/features/2345-compensation-statements/)

[Customizable Templates](https://www.capterra.com/compensation-management-software/features/196-customizable-templates/)

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[Generative AI](https://www.capterra.com/compensation-management-software/features/2098-ai-content-creation/)

[Market Data Analysis](https://www.capterra.com/compensation-management-software/features/3137-market-data-analysis/)

[Organizational Charting](https://www.capterra.com/compensation-management-software/features/2363-organizational-charting/)

[Payroll Management](https://www.capterra.com/compensation-management-software/features/1440-payroll-management/)

[Performance Management](https://www.capterra.com/compensation-management-software/features/3893-performance-management/)

[Reporting/Analytics](https://www.capterra.com/compensation-management-software/features/2900-reporting-analytics/)

[Salary Planning](https://www.capterra.com/compensation-management-software/features/3200-salary-planning/)

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[Free](https://www.capterra.com/compensation-management-software/s/free/)

Table of Contents

-   [Essential compensation management software buying information](#essential-compensation-management-software-buying-information)
-   [What are the most reviewed compensation management systems?](#what-are-the-most-reviewed-compensation-management-systems)
-   [What is compensation management software?](#what-is-compensation-management-software)
-   [Compensation management software pricing](#compensation-management-software-pricing)
-   [Compensation management software features](#compensation-management-software-features)
-   [Top compensation management software benefits identified by users](#top-compensation-management-software-benefits-identified-by-users)
-   [Common challenges of compensation management software identified by users](#common-challenges-of-compensation-management-software-identified-by-users)
-   [What is compensation management software used for?](#what-is-compensation-management-software-used-for)
-   [Who uses compensation management software?](#who-uses-compensation-management-software)
-   [What to know about compensation management software integration](#what-to-know-about-compensation-management-software-integration)
-   [Recent trends in compensation management software](#recent-trends-in-compensation-management-software)
-   [Learn more about how compensation management software can help your business](#learn-more-about-how-compensation-management-software-can-help-your-business)

## Essential compensation management software buying information

[Compensation management software](https://www.capterra.com/compensation-management-software/) helps organizations structure and manage employees’ pay effectively. It streamlines the process of setting salaries, administering bonuses, implementing raises and promotions, and tracking compensation trends.

HR and payroll professionals rely on compensation management software to optimize the compensation structure for their growing workforce. Compensation management software can be purchased standalone or as an application within a [larger talent management suite](https://www.capterra.com/talent-management-software/).

Most compensation management systems on the market are priced on a “per month” basis that scales based on the number of employees in your organization. Half of the compensation management software buyers Capterra advisors spoke to in the last year are budgeting $5 to $10 per employee, per month.\[[1](#sources)\]

Before purchasing a compensation management system, first-time buyers should meet with relevant stakeholders to figure out important questions to bring to vendors, such as:

-   Can the software handle salaried, wage-based, and project-based pay?
    
-   Does the system support pay for performance?
    
-   Where is the market-based compensation data sourced from?
    
-   Can the system integrate with our [payroll software](https://www.capterra.com/payroll-software/)?
    

## What are the most reviewed compensation management systems?

[Capterra Shortlist](https://www.capterra.com/compensation-management-software/shortlist/) identifies the top compensation management systems based on a proprietary blend of user ratings and popularity, helping small businesses efficiently find the most effective compensation management solution for their needs.\[[2](#sources)\] Here are the five most-reviewed products in our Capterra Shortlist for this category:

**Product**

**Overall score**

**Popularity score**

**Ratings score**

[ADP Workforce Now](https://www.capterra.com/p/155895/WorkforceNow/)

94/100

47/50

47/50

[Paycor](https://www.capterra.com/p/133745/Paycor-Perform/)

94/100

48/50

46/50

[Deel](https://www.capterra.com/p/205015/Deel/)

94/100

44/50

50/50

[Workday HCM](https://www.capterra.com/p/66908/Workday-HCM/)

84/100

37/50

47/50

[Dayforce HCM](https://www.capterra.com/p/205376/Dayforce-HCM/)

84/100

38/50

46/50

These rankings are determined by combining verified user ratings and publicly available web search popularity data: 

-   **Ratings score:** Relative score of the software based on ratings given by users on Capterra, normalized for number and recency of reviews.
    
-   **Popularity score**: Relative popularity of software based on web search trends and products’ web presence.
    

## What is compensation management software?

[Compensation management software](https://www.capterra.com/compensation-management-software/) helps organizations manage different aspects of an employee’s compensation cycle, such as salary planning and processing, tax deduction, and bonus payouts based on performance metrics. The software gives HR departments a centralized repository of employee compensation details—including base, bonus, commission rates, and incentives—to analyze and optimize.

Compensation management software is available as a stand-alone module or as an integrated application within an [HR or talent management suite](https://www.capterra.com/talent-management-software/).

Capterra covers 252 compensation management products, and we published 7,521 reviews from compensation management software users in the past year.\[[3](#sources)\]

## Compensation management software pricing

Most compensation management systems on the market are priced on a “per month” basis that scales based on the number of employees in your organization. The typical entry-level compensation management system costs $35 per month, while premium systems with advanced features can go up to $250 per month\[[4](#sources)\].

-   Entry level systems include core functionality such as compensation budget management, compensation plan modeling, and market data analysis.
    
-   More advanced systems add on features like bonus management, performance management, and an employee portal where workers can track their own information.
    

Half of the compensation management software buyers Capterra advisors spoke to in the last year are budgeting $5 to $10 per employee, per month.\[[1](#sources)\]

First-time buyers should be aware that: 

-   Implementation, integration, and customization are common upfront costs 
-   Maintenance and support are common recurring costs
    

Before committing to a software, try out product demos and free trials. This lets you see how the software works in a real-world setting. On Capterra, you’ll find free trial options in the compensation management software category, and systems that even offer [free versions](https://www.capterra.com/compensation-management-software/s/free/). 

Free versions can be great if you’re just starting out. They let you use basic features for as long as you want without paying. But they often have limits, like how many employees you can manage or what features you can use.

## Compensation management software features

All compensation management software systems include budget management, plan modeling, and market data analysis features, and most share a variety of common features such as activity dashboards, compensation statements, and salary planning.

### Core compensation management software features

-   **Budget management**: Forecast, allocate funds, and organize financial resources toward employee compensation.
    
-   **Compensation plan modeling**: Automate calculations and analysis of how salary and equity should be awarded to employees based on a variety of factors (performance, location, etc.).
    
-   **Market data analysis**: Collect and analyze compensation data in various locations to determine if you’re offering competitive compensation.
    

### Common compensation management software features

-   **Payroll management:** Manage employee salary processes, data, taxes, and records for administration.
    
-   **Bonus management:** Manage merit increases and develop bonus structures for employees.
    
-   **Compensation statements**: Create and deliver total compensation statements to employees.
    
-   **Employee database:** A central repository of important employee information.
    
-   **Employee reward program:** Build a system of recognition and rewards to encourage employee performance and link outcomes to business goals.
    
-   **Performance management**: Create goals and track employee performance against them.
    
-   **Reporting/analytics**: View and track important compensation metrics.
    
-   **Salary planning**: Budget, benchmark, and track salary processes and associated costs.
    
-   **Customizable templates:** Pre-designed layouts that can be customized to match preference and requirements.
    

## Top compensation management software benefits identified by users

**Improved performance and efficiency**: Automated compensation processes and analysis found in compensation management software allow users to complete compensation tasks faster and with higher accuracy.

_“Through the use of \[our product’s\] powerful suite of features, we have been able to achieve greater efficiency, productivity, and accuracy across our operations.”_

–Devendra Kumar S., manager, information technology and services

**Accelerated growth with trackable goals**: Users say it was easy to set, track, and achieve goals. The system provides transparency in goal-setting and tracking, helping employees understand how their efforts contribute to the bigger picture.

_“\[Our product\] puts real-time pay stats right at my team's fingertips. This lets me actively track sales goals and stay on top of performance. Having the numbers visible 24/7 keeps me way more motivated too.”_

–Udit P., director of sales, information technology and services

**Error-free and faster incentive calculation**: With customizable incentive structures, you can tailor employee rewards to drive results that matter most to your business. Users say they were able to accurately calculate commissions and bonuses, with more confidence in their data quality. 

_“With \[our product\] we have reduced our bonus calculation time by 80% and manual processes by 90%.”_

–Giulio P., financial partner and analyst, retail

## Common challenges of compensation management software identified by users

When it comes to compensation management software, it's important to address security concerns due to the sensitive nature of the data involved. These concerns stem from risks such as unauthorized access, data breaches, and the potential for cyber attacks.

The second most cited challenge is issue resolution. Many users express frustration with unresolved problems, poor communication from account managers, and difficulties getting in touch with support teams.

A third challenge is reporting and analytics. Users mention that in-system analytics are not robust enough for executive summaries, and there are issues with report customization and alignment.

To mitigate these risks, take multiple product demos to check the system’s speed and reliability, and ask vendors how responsive their customer support team is. To zero in on the most compatible software options for demo, you can reach out to our advisors who will help you navigate these challenges.

## What is compensation management software used for?

Analysis of our extensive compensation management software reviews highlight the most common use cases:

-   **Implementing pay for performance**: Businesses use software to set employee performance goals and tie monetary values to reaching them.
    
-   **Tracking commission pay and calculating incentives**: Compensation management software helps companies set commission rates and track commission payouts.
    
-   **Doing long-term compensation planning**: Market analysis gives HR departments the data they need to adjust compensation rates to be competitive in the local job market.
    

If you don’t need a full-fledged compensation management platform, there are other types of software dedicated to meet your objectives:

-   [Payroll software:](https://www.capterra.com/payroll-software/) Automates the management of employees' salaries, wages, bonuses, and deductions. Payroll software can be standalone but often integrates with an organization's accounting software.
    
-   [Performance management system software:](https://www.capterra.com/performance-appraisal-software/) Automates the process of reviewing employee performance, setting new objectives, and managing individual development plans.
    
-   [Human resources software:](https://www.capterra.com/human-resource-software/) Enables an organization to manage employee records and information. Many human resource management systems and resource management software also interface with applicant tracking and payroll software.
    
-   [Commission software:](https://www.capterra.com/commission-software/) Improves sales productivity by centralizing and automating an organization's commission-based incentive plans. Commission tracking software can also help manage regulatory reporting requirements related to compensation or bonuses.
    
-   [Talent management software:](https://www.capterra.com/talent-management-software/) Streamlines processes such as recruitment, onboarding, learning and development, succession planning, and employee engagement. While integrating with compensation management tools, talent management software holistically nurtures a high-performing and motivated workforce.
    

## Who uses compensation management software?

HR and payroll professionals typically rely on compensation management software to optimize the compensation structure, administrative processes, and payment frequency. The main business functions that find these systems useful include:

1.  **Human resources and payroll** for overall compensation strategy and salary administration.
    
2.  **Sales** to manage commission structures, incentive plans, and performance-based bonuses.
    
3.  **Finance** to integrate compensation data with overall financial planning.**Learning and development** to align skill acquisition with career progression and pay rise.
    

Notes from our advisor calls reveal that 42% of compensation management software buyers come from midsize companies with between 101 to 500 employees. The most common role that contacts us about compensation management software are HR managers or HR directors.\[[1](#sources)\]

## What to know about compensation management software integration

According to our conversations with HR software buyers in the past year who require compensation management, we can observe two tendencies: 51% seek a standalone system, while 46% prefer an integrated suite for their compensation management needs.

The value of an integrated suite is that you don’t have to deal with integrating disparate systems together. However, these suites cost more than a standalone compensation management system and you should make sure that there isn’t a lot of functional overlap with the software you already have.

An analysis of our extensive user review database reveals that compensation management systems are most frequently integrated with three key categories: [accounting](https://www.capterra.com/accounting-software/), [payroll](https://www.capterra.com/payroll-software/), and [human resources](https://www.capterra.com/human-resource-software/). [CRM](https://www.capterra.com/customer-relationship-management-software/) integration is also common if you need to compute and manage sales bonuses.

Choosing between a standalone system or a package deal depends on your current pay system, how much you want to spend, and what software you’re already using.

## Recent trends in compensation management software

**Chatbots go mainstream**: According to [Capterra’s 2023 HR Chatbot Survey](https://www.capterra.com/human-resource-software/hr-chatbot-research/), almost half (52%) of HR departments are already using HR chatbots integrated with internal systems, and 41% are considering implementation. This trend complements the adoption of compensation software, as integrating chatbots can streamline inquiries related to compensation, and enhance efficiency and employee experience. 

**Pay transparency becomes a top priority**: In 2024, 40% of recruiting leaders anticipate that their organization will share salary details in job postings across all of their locations—up from 15% in 2022.\[[5](#sources)\] As pay transparency laws become more prevalent, many compensation systems are being updated to help companies stay compliant. They can help you set clear pay structures based on experience and performance, automatically optimize pay ranges on job openings, let staff see where they stand in the salary ranges for different roles, and even flag any pay gaps or inconsistencies.

## Learn more about how compensation management software can help your business

-   [Types of Compensation: A Complete Guide for HR Professionals](https://www.capterra.com/human-resource-software/types-of-compensation/)
    
-   [HR Compensation and Benefits: How To Create a Competitive Package](https://www.capterra.com/resources/employee-benefits-package/)
    
-   [HR Expert Explains How Pay Transparency Can Benefit Your SMB](https://www.capterra.com/resources/pay-transparency-for-small-businesses/)
    
-   [Exploring HR Responsibilities: Key Areas of Focus for Effective Human Resource Management](https://www.capterra.com/resources/hr-responsibilities-and-duties/)
    

Sources

1.  **Capterra advisor call notes:** Findings are based on data from telephonic conversations that Capterra’s advisor team had with small-to-midsize businesses seeking compensation management tools. For this report, we analyzed phone interactions from the past one year as of the production date. [Read the complete methodology](https://www.capterra.com/resources/proprietary-data-research/#software-buyers-guides-methodology).
    
2.  **Capterra Shortlist:** Capterra Shortlist identifies the top products in our software categories based on a proprietary blend of user ratings and popularity. We featured the products with the most reviews at the time of Capterra Shortlist publication. [Read the complete methodology](https://www.capterra.com/resources/proprietary-data-research/#capterra-shortlist-methodology).
    
3.  **Capterra reviews data:** Capterra reviews are collected from verified users for individual software products. For this report, we analyzed reviews from the past one year as of the production date. [Read the complete methodology](https://www.capterra.com/resources/proprietary-data-research/#software-buyers-guides-methodology).
    
4.  **Capterra software pricing data:** Only products with publicly available pricing information and qualified software products within the category, as of May 14, 2024, are included in the pricing analysis. [Read the complete methodology](https://www.capterra.com/resources/proprietary-data-research/#software-buyers-guides-methodology).
    
5.  [8 Trends That Will Shape Talent Acquisition Strategy for 2024](https://www.gartner.com/doc/5017131), Gartner