Organic matter in soil is plant and animal material that is either in the process of being broken down by tiny microbes or has already decomposed. Some of the waste given off by the microbes during the decomposition process is used as nutrition by plants. Adding organic matter helps the soil hold moisture by acting as a sponge within the soil, and organic matter helps keep clay soil aerated---and also prevents the erosion of sandy soils. Another benefit of organic matter in soil is that the healthy microbe population it attracts constantly searches for something to eat, consuming bad bacteria and the tiny eggs of pests like nematodes and grasshoppers.
Allow organic matter to decompose, or break down, to the point where it looks like damp soil and has no odor. The bacteria and microbes that break down organic material consume nitrogen in the process, so if the organic material that is added to the soil is not completely decomposed, the nitrogen level in the soil is depleted as the microbes break it down. This causes stunting of plants, and actually decreases the amount of microbial material in the soil.
Add organic matter to soil by spreading the composted material over the top layer of the soil with a shovel. If the organic matter is well-composted, you can add any amount you wish, but a two-inch layer of compost per year is appropriate. Keep in mind that it is better to add a steady supply of organic matter to feed the microbes than a lot at one time. Adding a lot at one time creates a lot of microbial activity at once, then a sharp drop-off of activity after the material is consumed. Also, adding a large amount of organic material to an area located on a slope may make the soil too loose, causing erosion problems.
Turn the organic matter into the top 6 inches of soil using a hoe, rake or shovel, or a tiller if preferred. Mix in the organic material as completely as possible. The top 6 inches of soil is where most of the microbial activity takes place. This is also the area where most of the roots of any plants will be located.
Rake the area smooth with a rake.