TOPIC 6: HUMAN RESOURCE MANAGEMENT AND PAYROLL PROCESS

Personnel management started by handling payroll and personnel administration, but evolved by adding functions to handle recruiting, employee relations, and so on. HRM still viewed personnel as something that could be controlled. HCM philosophy is based on three major principles. An individual’s value to an organization is derived from his/her job-related knowledge, skills, attitude, and motivations. Human assets include full-time permanent employees, plus part-time employees, temporary employees, and independent contractors. With supply chain management, an organization’s human assets could include employees of suppliers, sales channel partners, and customers. A person’s relationship with an organization, from hiring through termination, must be nurtured and managed to obtain maximum lifetime value

TECHNOLOGY TRENDS AND DEVELOPMENTS

Technology trends and developments are included HR self service systems. Organizations might outsource other functions to support HR management processes such as web-based collaboration and payroll. Enterprise systems play a major role in implementing required HR and payroll functionality. Implementing the HRM process with an enterprise system can help recognize the benefits of integration of the HR management process with other enterprise systems modules such as financial accounting, logistics, sales and distribution.

IMPLEMENTING THE HRM PROCESS

Process inputs are in general, the HR forms in the figure capture information about three HR-related events are selecting employees, evaluating employees, and terminating employees.

Selecting employees may be initiated in one of two ways which are departmental managers that outside the HR department may initiate the process to satisfy their immediate hiring needs. Selection process may be started by the system automatically.

Evaluating employees comprises a multitude of activities. Departmental managers and supervisors are outside the HR function usually initiate evaluations or other changes affecting employees. The manager of personnel appraisal and development typically approves the review and implements such changes.

Terminating employees closes the employment process loop. Periodically, departmental managers and supervisors which in concert with HR managers must make difficult decisions about the retention of employees. If a termination is necessary, the employee change screen is used to initiate the process of changing an employee’s status from current employee to terminated employee.

PAYROLL

            Payroll is the transactional process through which compensation is transferred to employees and federal, state and local income and payroll taxes are withheld from employees’ checks. It is also though payroll that any benefits costs borne by employees are withheld. Although some employees receive actual checks for net pay, it is more common, especially among large organizations, for direct deposits to be made to employees’ bank accounts.

Resource: Charles H. Fay and Renato E. Nardoni. Performance Management, Compensation, Benefits, Payroll, and the Human Resource Information System