Technology and the Internet have made many business functions easier and faster and have expanded the scope of many processes. e-Compensation is one of those processes that has benefited from technology; it made it easier to access similar salaries and compensation and allowed management to determine what it would take to retain vital talent within an organization. This paper will discuss the advantages and disadvantages of web-based compensation tools, how they support the job evaluation process, the advantages and disadvantages of the centralized approach to merit pay programs, discuss the integrated analytical capabilities needed for Compensation planning and decision support in electronic compensation. systems, evaluate the barriers that prevent organizations from realizing the potential of web-based internal equity tools and propose approaches to overcome those barriers, recommend strategies that HR leaders can use to evaluate the quality of the market data they receive from external sources. Advantages and Disadvantages of a Web-Based Compensation ToolWeb-based compensation tools provide an organization with the best choice of information to compensate its employees. There are many reasons why e-Compensation is better than a stand-alone client-server or PC-based system, including the accessibility of the web-based system which can occur anywhere there is Internet connectivity, it is available 24 hours a day 24 hours a day, it simplifies processes and provides access to sophisticated databases and decision support tools (Gueutal & Stone, 2005). The federal government uses web-based services to support their benefits packages, which allow the employee to make insurance decisions every open season without having to go through HR departure... middle of the paper... time don't give them information that allow them to game the system to receive more compensation than they deserve. The desire of the tool is to fairly compensate the employee for achieving the organization's goals and leading the company to success. Works Cited Gueutal H., & Stone, D., (2005). The Brave New World of eHR: Human Resource Management in the Digital Age, San Francisco: Jossey-BassJohnson, J., (2011). Evaluating Salary Survey Methodologies, retrieved December 14, 2013 from the Internet http://www.erieri.com/PDF/Evaluating-Survey-Methodologies.pdfKavanagh, M.J., Thite, M., Johnson, D.J., (2012). Human Resources Information Systems, Thousand Oaks, CA; SAGE Publications, Inc.Shimko, D., (2013). Choosing a Compensation Structure That Works for Your Practice, Retrieved December 14, 2013, from the Internet http://www.aafp.org/fpm/2000/0200/p30.html