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Tim Richards

Clyde & Co

Associate

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Online payslips: A step too far?

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Online financial transactions are on the increase in all areas of the economy, yet electronically-delivered payslips still raise issues for employers and employees alike. Are they a natural evolution for organisations, or a technology too far, asks Tim Richards.

 
 
Presenting pay electronically can open up a wealth of possibilities for a company to demonstrate to their workforce how they are remunerated and valued. However, it should not be forgotten that pay is a highly emotive subject and making changes to employees’ experiences of reward should not be entered into lightly.
 
Online payslips are essentially a bolt-on to pre-existing HR or payroll technology. Presenting the kind of information generated by payroll in a way that will inform and appeal to employees is not too difficult. However, unless employees already have experience of using the internet or company intranet to access information, it is unlikely that they will go online purely to see that they have been paid.
 

Fit with the culture
 

Company culture and the market sector in which a company operates exert influence over whether online payslips are accepted. If an employee is used to working with a PC, or has online access elsewhere, they are unlikely to raise objections to using their time to view pay details.
 
There are, however, companies where computers have no role and employees are not comfortable using technology in this way. The personal and private nature of pay means employees could also be resistant to the idea of using a communal space to discover their financial details. Indeed, they may be resistant to using their home computer for this task and certainly the employer cannot presume acceptance by those who do have technology at home.
 

Man or machine?
 

Many companies feel there is something tangible and reassuring about having a piece of paper giving pay details. If a query does arise, the employee has something in their hand they can use to discuss with their line manager or the payroll department. True, this information can be held online as well, and there’s nothing to stop the employee from printing out the payslip if there is a problem. However, the amount of frustration that could be created by badly thought-out IT use could fuel an employee’s anxiety – imagine finding an error in your pay details and then having to find a printer to print off those details, possibly encountering more IT problems along the way. The employee will be considerably angrier at the end of such a process than they would be if they had the piece of paper in their hand in the first place.
 

Green pay

 
Much has been made of the ‘green’ benefits that online payslips bring such as eradicating paper, envelopes and stamps and saving money and resources. However the tendency for employees to print out the payslip themselves can compromise the environmental argument.
 
It may be that organisations are trying to find ways to save money and be more efficient, but online payslips alone do not offer a strong financial return on investment. Savings will be realised instead on postage, cost of printed statements and even manpower for distributing the information, but unless the organisation is large, the amount of money concerned is not substantial.
 

The other side of the coin

 
The online environment has the capacity to give more information than is possible any other way. Implemented correctly, online payslips can enhance the reward relationship between employees and their employer.
 
This is a chance to include details of other benefits given to the employee –bonuses and so on – making clear exactly what they get for what they do. Compare this to the paper payslip which contains basic information, wrapped up with pay and tax codes that the employee will have to look up before understanding why they’ve received the amount they have.
 
It should also be remembered that even when the online environment seems rife with electronic attacks of one kind or another, people still put their trust in websites when online banking. Online security is big business and there is no excuse for poorly defended websites or communications. For an individual who works on a computer, shops online and spends recreation time online, it seems only natural to also want to view pay details online.
 
The cost of implementing online payslips is not significant in the context of the wider HR / payroll technology application. Given this low cost, the way forward is for employers to introduce the feature alongside traditional payslips, allowing employees to opt into the feature. A company then can lessen the impact of change while also responding to the feedback from the users of the system.
 

Making the most of your payroll

 
The key to surviving economic difficulty is to get the best out of your people. If you lose good employees you also lose valuable organisational knowledge which is crucial to surviving the months ahead. By opening up a channel of communication around pay you can ensure your employees feel valued and appropriately rewarded and you can tailor pay information to meet their preferences.
 
Online payslips are not for everyone. Industry sector, company culture and even organisational size can make the technique inappropriate, however all companies should understand when it comes to paying talent, a number of options exist. Online payslips open up new possibilities and should not be cast out of hand on technology grounds or through the assumption that employees won’t accept them. The online financial environment can be tailored to meet the needs of an organisation, designed, implemented and continually updated to satisfy and engage the most inquisitive, challenging or sceptical employee. At the very least, delivering pay information in this way means an employer can be seen to be at the cutting edge of remuneration technology, and that’s a good message for any employee to hear.
 
 
Tim Richards is managing director of Bond UK
 

5 Responses

  1. OnLine Payslips
    Instead of uploading payslips to an Internet or Intranet site, the system we have developed at Newhaven sends a detailed, HTML-formatted, email payslip to each employee’s personal mailbox. This will usually be e.g. their BT, hotmail or gmail account, rather than their work mailbox. Employees don’t have to log in to pick their payslips up, nor do they risk losing access to them on leaving their employment. The appearance of the emailed payslip is a perfect copy of the paper document, making the switch from one to the other more acceptable.

    It makes so much sense to distribute payslips this way, saving time and money – notwithstanding the environmental issues. There may be staff members who insist on a paper version, so the software filters the flagged preference and produces the appropriate document for each employee. For us, email is definitely the future of the pay advice.

  2. Even less contact between the manager and the ‘managed’
    As the manager of a continuous process plant, a very long time ago, one of my routine jobs was to sign the time cards of each member of my, about 100 strong staff, each week. I thought it was a chore which could easily be deputed but quickly realised that each week I learnt something about my staff. I also picked up useful details on such things as, changes by mutual agreement to the shifts people worked, as well as absences, lateness, ‘doubling back’, and overtime. When I gave out the pay slips I noticed the various differentials, I also wondered about the productivity of each member and whether each was really paid according to his worth.
    It certainly forced me to keep in touch with what really happened on my plant.
    As managers we lose something when we are unaware of aspects which are of real concern to our people – and that is one of those most important aspects.
    Some managers are very aware of keeping in touch with their people at all levels; others only become aware when something goes wrong.
    There are, doubtless, efficiencies in computerising everything, but if it makes it easier for managers to be out of touch the cost of those efficirencies can become enormous. You all know a lot of managers: don’t tell me that they all remember what their people are paid or are aware of which ones are really worth their pay, and where the anomalies are.
    We should be very careful not to break yet another link between the manager and ‘the managed’

  3. … but customers want them
    When Ceridian recently surveyed its customers, an overwhelming majority voted green issues such as online payslips as of a high priority, and many have switched from paper to online.

  4. Online Pay Slips an Excellent Idea
    I’ve worked for Australian Government agencies and the Government of the United Arab Emirates that have self-help HRM systems. These systems include electronic access to pay slips. In the case of the latter, they email payslips to staff.

    I love the idea and understand how it cuts down costs of printing, paper and postage etc. However, I do understand that it could be difficult for staffs who do not have access to computer systems.

    I can access my pay slip online usually several days before payday. I convert it to Adobe PDF and file it electronically which means that I don’t use paper or printing supplies. If I need to check something, I can do so by accessing the electronic copies.

    The old system either involved mailing everyone’s pay slip to an office or giving it to you with a cheque. If you were away from the office for a while, you could miss out on getting your pay slip. That doesn’t happen with online access.

    In my humble opinion, the more HR stuff that can be handled electronically, the better. It’s 2009 after all.

    Robin

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Tim Richards

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