Yet, given the nature of a payroll, not implementing best payroll practices can lead to mayhem, because there is a lot of paperwork involved in it. Although primarily a function of the finance department, HR has a role to play in implementing best payroll practices.
A few best payroll practices
Ensuring transparency: a proper payroll policy should be spelt out by the organization. An exercise to be jointly carried out by management, HR and Finance, it should state and publish the payroll policy. The document should spell out all the details for the benefit of all employees coming under the payroll, such as how employees are classified, who all are exempt from the policy, on what basis and in what method the wages are classified and so on. These should be updated whenever there is a change in pay or any other element such as leave policy, for any of the employees.
Set up correct check-in and checkout times: many employees are careless with their punch-in. A proper system will ensure that HR will get a complete record of the time spent on nonproductive work, or if they take longer than stipulated breaks, and so on.
Setting a time frame for audits: another of the best payroll practices is that audits should be done at fixed and regular intervals. This is a great way to ensure that mistakes are corrected immediately and before they snowball into anything major.
Complete automation: there should be complete computerization of the payroll processes. Computerization has evolved to correct the fallacies of a manual system, and an organization’s willingness to automate is a one of the best payroll practices it can implement.
Make sure the forms are issued and received on time: another of the best payroll practices is to issue relevant and necessary forms to be filled up the employees, well in time. This gives the employees sufficient time to fill in the details and prevents overwork for HR and Finance.
Another among the best payroll practices is to maintain confidentiality of the records. This is a no-brainer, but many in HR tend to overlook factors such as this.
References:
http://www.hrmtoday.com/featured-stories/5-best-practices-for-a-successful-payroll-system/
http://hotelexecutive.com/business_review/2400/ten-best-practices-to-prevent-payroll-headaches
