Compensation software is a tool designed to help organizations manage employee pay and benefits efficiently. It allows HR departments to create, analyze, and adjust compensation plans based on various factors such as performance, market trends, and company budgets. This software often includes features for salary benchmarking, bonus calculations, and compliance with labor laws. By using compensation software, companies can ensure fair and competitive pay structures, which can improve employee satisfaction and retention. Additionally, it streamlines the compensation review process, making it easier for managers to make informed decisions about raises and promotions while maintaining transparency and equity within the workforce.