Compensation analysis is an essential tool that businesses use to ensure that they are offering competitive pay to their employees. It involves the examination of the different types of compensation, the factors that affect compensation decisions, and the steps involved in conducting a compensation analysis. This article will provide a comprehensive overview of compensation analysis, including its types, factors that affect it, how it’s conducted, common tools used, and the challenges businesses face. Compensation analysis is critical for businesses to attract and retain top talent. It helps organizations stay competitive and ensure that their pay decisions align with industry standards.