HRMS Salary Management: The Fundamentals of Compensation

It’s easy to talk about using HRMS software for compensation management and get so caught up in bonuses, performance-related pay, healthcare, paid time off, equity options and all the rest of it that we forget about the original, fundamental compensation: salary. Well practiced HRMS salary management can provide the perfect compensation foundation on which to build trust with your workforce.

Of course, using software to manage salaries (or payroll) is one of the oldest business uses of IT systems. Starting off as little more than standalone glorified spreadsheets, these packages have evolved dramatically over recent years to become fully-integrated components of the HRMS suite, linking to onboarding, performance management, talent management, you name it.

One of the established features of the modern compensation management system that employees have come to expect as standard is self-service. In other words, they want access to their own data within the system (and according to CedarCrestone’s annual HR Systems Surveys, these functions have long seen majority adoption by employers of any size).

Earned, Not Bought

Employee self-service access to HRMS salary data is about more than simply viewing an online payslip when they want and from where they want. A key element of employee motivation and engagement is feeling fairly compensated for their effort and results, and that includes comparison to the wider marketplace. Your people can, of course access this sort of data through external websites and resources (, anyone?) but a good compensation management system will bring this sort of comparison into the workplace demonstrating, apart from anything else, that you as an employer have nothing to hide. This sort of transparency leads to trust and confidence, essential workplace features that can only be earned, not bought.

For you the employer, your HRMS salary functionality should provide you with a variety of flexible reporting capabilities – comparing salaries (and other compensation elements) according to department/team, role, grade, or job category (such as executives, sales, field services, contact center and so on). By cross-referencing with other HRMS data you can identify salary trends, impact on turnover, and talent and skills retention.

The Beauty of Automation

Compliance with various salary-related legislation is the other big advantage of HRMS salary management software. It may be the UK’s ‘real time information’ PAYE submissions, or the complex array of federal, state and local data capture and reporting requirements in the U.S., stemming from legislation such as FICA, FUTA and even the Consumer Credit Reporting Act (with implications for garnishment or wages).

The beauty of automation is that the system then deals with salary issues such as social security contributions, correct classification of employees, and even monthly attachments of earnings. And so long as the setup is accurate, the question of human error is removed. Non-compliance costs businesses millions each year in penalties and fines; in that sense alone, your HRMS salary capabilities can pay for themselves.

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Dave Foxall

About the author…

Dave has worked as HR Manager for the Ministry of Justice for a number of years, he now writes on a broad range of topics including jazz music, and, of course, the HRMS software market.

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Dave Foxall