White Paper: A guide to decisions in automating HR & Payroll functions

Published April 2012
By: George John V, Founder & Managing Director, Kallos Solutions Private Limited & www.KServeHRMS.com

Synopsis
HR automation can range from simple spreadsheet based solutions to complex enterprise wide solutions that automate every single process of the HR function. The automation can also extend to employees and even sourcing partners using self service portals. This paper looks at the various levels of sophistication that organizations have typically automated within this wide spectrum, and articulates the benefits that occur when the organizations take leaps through these various levels of sophistication. Organizations can leverage this paper to identify their current level of automation and determine if the benefits associated with a level of sophistication warrants the investment return for the chosen investment leap.

A guide to decisions in automating HR functions

1.0 Levels of sophistication
The need for the automation of HR and payroll usually increases when complexity and quantity of HR processes increase. The typical drivers for these are when
a) The number of employees go up
b) The geographical spread of employees across locations and countries go up
c) The number of statutory compliances related to employees go up
d) The cost per employee is higher based on industry or geography of operation
e) The availability of people with the right skills and profile to match the various positions is difficult to find.
As each of these factors drives up the complexity of HR processes within the organization, the need and the demand for Automation goes up. The result is a wide variety in the levels of sophistication as depicted in the diagram below.
As the diagram above indicates, the sophistication level depends on the level of automation and the coverage of the automation. Automation levels can start from simple spreadsheets and go on to highly integrated online applications that automate every process and activity.

In practice, however it is seen that organizations make the leaps in automation in steps. This is primarily because each leap requires careful planning for change management as well as investment in suitable IT systems that can be the foundation for the leap. The path to sophistication may be different for almost every organization, and this paper discusses some leaps that organizations most commonly take in their quest for better HR Automation solutions.
While there may be many routes, this paper depicts a specific 3 step route which in our experience has been the common route to complete automation

Leap 1: From spreadsheets to isolated applications
When volumes are low, spreadsheets are the most common form of managing. They are easy to edit, view and manipulate. However as the volume goes up the same flexibility proves to be its undoing. Errors creep in as multiple copies of the spreadsheet proliferate. Updates of existing and new employees are not made uniformly in each version, leading to different versions of the truth. The crunch time is usually at the end of every period when numerous updates and reports are required at the same time, and if updates are not done accurately, the results are wrong. The need for applications becomes critical, especially in areas where processing is required – typically payroll and leave management.
There are numerous areas where HR applications will do a better job than spreadsheets and these are in the areas of
 Employee Database
 Employee Life Cycle Tracking
 Leave, Time and Attendance
 Payroll & Benefits
 Performance Appraisals
 HR Administration and Reimbursements
 Recruitment
 Training
 Time Sheet and Resource Management
 Income Tax and Tax Planning
The choice of automation will depend on the priority for the business. Typically organizations in countries that have a high level of statutory complexity will automate payroll and benefits. Similarly organizations that employ highly skilled and expensive resources will give high importance to areas like Performance Appraisals and Resource Management, and organizations which have a high volume of new employees and separations would consider Recruitment important.
Choosing isolated applications are relatively easy since the functional breadth is small, and a quick evaluation of available products in the space will enable easy choices for implementation. Isolated applications can also be developed custom in case your processes are unique and products are not available for your flavor of business processes in the respective area.

Leap 2: From isolated applications to integrated applications in the core areas
Isolated applications as the name implies, lack integration. This means that while individual systems work well, a considerable amount of effort is needed to ensure data consistency between the systems. The core operational systems like leave, payroll, and employee database have a number of inter-relationships and require a high level of accuracy and timeliness.
In practice, reconciliation of the above is always done in a hurry, primarily because there is very little time between when the information comes in and the time when payroll and balances are processed. A lot of compromises occur, and these can be potentially dangerous for the organization. While it may be possible to have isolated applications for each of the core areas, a number of inefficiencies creep in if not integrated. The net result is that in every period a lot of time and effort is spent in reconciling the various systems before finalizing any useful output from the system.
Integration of these applications usually becomes a necessity typically when the number of employees crosses the hundred mark. While it is difficult to leap directly to completely automated applications for end to end HR functions, it is essential that at least the core operational applications are integrated. This is because the core applications of employee database, employee life cycle, leave management and payroll form the backbone of the HR function. The primary benefits of integrated will be in terms of saving the time of HR & Payroll Administration, and accuracy in internal and statutory reporting. Productivity levels will also be much higher. Once the operational accuracy, timeliness and productivity are obtained, the organization can scale out to far larger sizes, with far lower proportional increases in effort.

Integrated applications are however complex to build and maintain and hence they are usually purchased from established vendors. The complexity arises from the fact that the number of processes being automated is very high. Statutory reporting needs to be complete and most importantly architecture of the application needs to be designed with flexibility so that changing organization structures, rules, and statutory laws and formats can be handled by the same application. The application should also be scalable as the organization grows larger over a period of time. Proven HR products like KServeHRMS™ specialize in all the above areas and hence it is better to leverage such products to handle this automation.
The decision also has to keep in mind that at some point the third leap will have to be made, and hence the choice of the product should be one that has the capability to execute the next leap also. If that is not made, it will lead to a reimplementation and re-purchase of another product to achieve that lead later on.

Leap 3: From integrated core areas to End to End automation/ Employee Self Service
Once the organization has automated its core HR transaction systems, the time is ripe to cover all areas of automation, and also expose this to employees for self service. It is not mandatory to automate all the applications before one goes for self service. It is vital, however, to ensure that the back office part of the application is functioning accurately before they are exposed to employees.
One could automate Payroll and make the pay slips available to employees, or automate leave alone and make it self-service ready. In all these cases it is essential to ensure that the back office component of the respective areas has been reconciled with accurate data and the transactions that update the system on a regular basis are accurate leading to useful services to employees live and online.
The investment decision to make the next leap is better done in one step, though this could also be phased out. The following are the reasons why the investment decision should be taken together
 End to end solutions are usually provided by external vendors and hence it is vital to know if the   vendor you choose can provide an end to end solution for your HR function rather than a part solution
 Part automation of a peripheral area like training will lead to duplication of effort later since integration with the same employee database or other information will have to take place
 The architecture of the whole solution should be determined from the deployment perspective, as well as from the technology perspective. Proliferation of solutions may lead to fatal flaws in the whole solution that may need to be reworked later.
 A large part of an Enterprise HR product involves use of common utilities like approval routing workflow, mail or SMS alerts, performance indicator tracking, role specific alerts, dashboards and portals. Localized applications in one area will lead to lack of integrity
 Newer environments for usage are coming up. Cloud (Private and Public), mobiles, tablets and other newer forms can provide tremendous benefits for HR managers and employees to improve their productivity. Applications from vendors that can effectively leverage these changes should be taken once for all HR functions rather than be taken numerous times separately.

Once the decision is taken, there has to be recognition that the implementation of the solution is a major one, which may be phased out and is to be executed in a professional manner. This means that internal and external positions of responsibility need created to implement the project over a period of time. Vendor selection, Change management, Extension development and IT infrastructure related decisions become vital for success.
Benefits of End to End Self Service Solutions
End to end solutions, especially ones with Self Service and live alerting via Email or SMS can provide major transformations in organizations. Approval routing workflows drive transactions through various stages of the workflow increasing the speed and reducing the effort in executing and completing processes. Leave requests, claims, infrastructure support, income tax workings and numerous other processes that are typically cumbersome to request, approve, process, monitor and account for are handled far more easily and automatically.
A typical HR interaction between an employee and the HR function (e.g. to determine leave balances) or to calculate tax deductions involve a lot of time if done manually. One could expect between two to four physical visits by the employee to complete the task, often taking weeks before the employee is satisfied. Compare that with a click of a button response. More important than the time saved is the satisfaction the employee gets through the process. He/ she now does not have to request, or sometimes plead, or even cajole to get responses now.
Typical benefits achieved from self service applications are
 Increase in productivity of HR and payroll executives.
 Time saved by employees while interacting with the HR and Payroll function
 Perform actions at the convenience of the requestor or approval, and is available 24 x 7
 Perform actions from remote offices, while traveling or even customer locations
 Employee satisfaction and motivation due to speed and accuracy of response
 Automatic processing of reports and statutory filings leading to accuracy and on time submissions
 The difference between successful implementation of a HR initiative is the ease at which it can be executed. The success HR policies like frequent performance appraisals to ensure that the organization stays performance driven and goal oriented depends a lot on the ease of adoption and execution, and self service makes the difference between success and failure
 Scale up size of organization, and HR services without equivalent additions in HR staff.
Each of the above points could be converted into tangible monetary returns for the organization which would normally justify the investment for the End to End applications.


For any additional information and advice on the above topic, one could visit www.KServeHRMS.com and make a query, which will be responded to as soon as possible.

You can also call or Mail to manish.kumar@kallossystems.com/+91 9379994111 for any advice for the best HR Practice in your company.

To meet our Representative at your city feel free to contact us.

Kallos Solution Enables Smooth Deployment Of Enterpirse Apps

George John Vettah, Managing Director, Kallos Solutions talks in detail about deploying applications in enterprise in time and cost effective ways.

Kallos Solutions has delivered enterprise software solutions that have transformed business processes for hundreds of customers since its inception in 2003.

Kallos Solutions is organized into two divisions - solutions division and our online products division

The solution division focuses on Cloud/ Web based IT transformation solutions to organizations that want to leverage Cloud innovatively

The online products division  has a range of Cloud ready products in the areas of  HR & Payroll, Employee Portal based HRMS, Core Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM).

Developing HRM strategy

 

Faced with rapid change organizations need to develop a more focused and coherent approach to managing people. In just the same way a business requires a marketing or information technology strategy it also requires a human resource or people strategy.
In developing such a strategy two critical questions must be addressed.
What kinds of people do you need to manage and run your business to meet your strategic business objectives?
What people programs and initiatives must be designed and implemented to attract, develop and retain staff to compete effectively?
In order to answer these questions key dimensions of an organization must be addressed. These are:
Culture : The beliefs, values, norms and management style of the organization
Organization: The structure, job roles and reporting lines of the organization
People : The skill levels, staff potential and management capability
Human resources systems: the people focused mechanisms which deliver the strategy - Employee selection, communications, training, rewards, career development, etc.
Frequently in managing the people element of their business senior managers will only focus on one or two dimensions and neglect to deal with the others. Typically, companies reorganize their structures to free managers from bureaucracy and drive for more entrepreneurial flair but then fail to adjust their training or reward systems.
When the desired entrepreneurial behavior does not emerge managers frequently look confused at the apparent failure of the changes to deliver results. The fact is that seldom can you focus on only one area. What is required is a strategic perspective aimed at identifying the relationship between all four dimensions.
If you require an organization which really values quality and service you not only have to retrain staff, you must also review the organization, reward, and appraisal and communications systems.
The pay and reward system is a classic problem in this area. Frequently organizations have payment systems which are designed around the volume of output produced. If you then seek to develop a company which emphasizes the product's quality you must change the pay systems. Otherwise you have a contradiction between what the chief executive is saying about quality and what your payment system is encouraging staff to do.
There are seven steps to developing a human resource strategy and the active involvement of senior line managers should be sought throughout the approach.
Steps in developing HRM strategy

 
Step 1: Get the 'big picture'
Understand your business strategy.
Highlight the key driving forces of your business. What are they? e.g. technology, distribution, competition, the markets.
What are the implications of the driving forces for the people side of your business?
What is the fundamental people contribution to bottom line business performance?

Step 2: Develop a Mission Statement or Statement of Intent
That relates to the people side of the business.
Do not be put off by negative reactions to the words or references to idealistic statements - it is the actual process of thinking through the issues in a formal and explicit manner that is important.
What do your people contribute?

Step 3: Conduct a SWOT analysis of the organization
Focus on the internal strengths and weaknesses of the people side of the business.
Consider the current skill and capability issues.
Vigorously research the external business and market environment. High light the opportunities and threats relating to the people side of the business.
What impact will/ might they have on business performance?
Consider skill shortages?
The impact of new technology on staffing levels?
From this analysis you then need to review the capability of your personnel department. Complete a SWOT analysis of the department - consider in detail the department's current areas of operation, the service levels and competences of your personnel staff.

Step 4: Conduct a detailed human resources analysis
Concentrate on the organization's COPS (culture, organization, people, HR systems)
Consider: Where you are now? Where do you want to be?
What gaps exists between the reality of where you are now and where you want to be?
Exhaust your analysis of the four dimensions.

Step 5: Determine critical people issues
Go back to the business strategy and examine it against your SWOT and COPS Analysis
Identify the critical people issues namely those people issues that you must address. Those which have a key impact on the delivery of your business strategy.
Prioritize the critical people issues.
What will happen if you fail to address them?
Remember you are trying to identify where you should be focusing your efforts and resources.

Step 6: Develop consequences and solutions
For each critical issue highlight the options for managerial action generate, elaborate and create - don't go for the obvious. This is an important step as frequently people jump for the known rather than challenge existing assumptions about the way things have been done in the past. Think about the consequences of taking various courses of action.
Consider the mix of HR systems needed to address the issues. Do you need to improve communications, training or pay?
What are the implications for the business and the personnel function?
Once you have worked through the process it should then be possible to translate the action plan into broad objectives. These will need to be broken down into the specialist HR Systems areas of:
Employee training and development
Management development
Organization development
Performance Appraisal
Employee reward
Employee Selection & Recruitment
Manpower Planning
Communication
Develop your action plan around the critical issues. Set targets and dates for the accomplishment of the key objectives.

Step 7: Implementation and evaluation of the action plans
The ultimate purpose of developing a human resource strategy is to ensure that the objectives set are mutually supportive so that the reward and payment systems are integrated with employee training and career development plans.
There is very little value or benefit in training people only to then frustrate them through a failure to provide ample career and development opportunities.
(Collected Articles from Internet)

Managers can reduce employees intention to quit

Intention to quit is largely influenced by job dissatisfaction, lack of commitment to the organization and feelings of stress, 


However, for managers who are concerned about the impact intention to quit and possible turnover, these are the  factors over which they may have some control.


 In particular, job stressors (e.g. work overload, job ambiguity), which are the factors that trigger the chain of psychological states that lead to intention to quit, can be adjusted.


Supervisor support is a similarly influential mediator which can reduce the  impact of stressors on psychological states and intentions to quit. Monitoring workloads and supervisor-subordinate relationships by management may not only reduce stress, but increase job satisfaction and commitment to the
organization. 


Further, given their importance in quitting intentions, managers need to monitor both the extrinsic and intrinsic sources of job satisfaction available to employees. This in turn may reduce intention to quit, and
subsequent turnover, thereby saving organizations the considerable financial cost and effort involved in the recruitment, induction and training of replacement staff.

Dog and the Donkey: Management Lesson

There was once a washer man who had a donkey and a dog. One night when the whole world was sleeping, a thief broke into the house, the washer man was fast asleep too but the donkey and the dog were awake. The dog decided not to bark since the master did not take good care of him and wanted to teach him a lesson.

The donkey got worried and said to the dog that if he doesn't bark, the donkey will have to do something himself. The dog did not change his mind and the donkey started braying loudly.

Hearing the donkey bray, the thief ran away, the master woke up and started beating the donkey for braying in the middle of the night for no reason.

Moral of the story “One must not engage in duties other than his own"


Now take a new look at the same story...

The washer man was a well educated man from a premier management institute. He had the fundas of looking at the bigger picture and thinking out of the box. He was convinced that there must be some reason for the donkey to bray in the night.. He walked outside a little and did some fact finding, applied a bottom up approach, figured out from the ground realities that there was a thief who broke in and the donkey only wanted to alert him about it. Looking at the donkey's extra initiative and going beyond the call of the duty, he rewarded him with lot of hay and other perks and became his favourite pet.

The dog's life didn't change much, except that now the donkey was more motivated in doing the dog's duties as well. In the annual appraisal the dog managed "ME" (Met Expectations) .

Soon the dog realized that the donkey is taking care of his duties and he can enjoy his life sleeping and lazing around.

The donkey was rated as “star performer". The donkey had to live up to his already high performance standards.

Soon he was over burdened with work and always under pressure and now is looking for a NEW JOB...

Kallos Solutions releases the next version of its Cloud ready,KServe™Employee Self Service HRMS4.1 | PRLog

Kallos Solutions releases the next version of its Cloud ready,KServe™Employee Self Service HRMS4.1 | PRLog

Self Appraisal

A little boy went into a store, reached for a soda carton and pulled it over to the telephone. He climbed onto the carton so that he could reach the buttons on the phone and proceeded to punch in seven digits. The store owner observed and listened to the conversation.

The boy asked, "Maam, Can you give me the job of cutting your lawn?" The woman replied, "I already have someone to cut my lawn."

"I will cut your lawn for half the price of the person who cuts your lawn now." replied the boy. The woman responded that she was very satisfied with the person who was presently cutting her lawn.

The little boy was even more perseverant and said, "I'll even sweep your curb and your sidewalk, so on Sunday you will have the prettiest lawn in all of Palm beach , Florida ." Again the woman answered in the negative.

With a smile on his face, the little boy replaced the receiver. The store owner, who was listening to this conversation, walked over to the boy and said, "Son... I like your attitude; I like that positive spirit and would like to offer you a job."

The little boy replied, "No thanks, I was just checking my performance on the job I already have. I am the one who is working for the lady I was talking to!"