HR Processes and Functions
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Chapter12.pptxCHAPTER 12
Performance Management, Compensation, Benefits, Payroll, and HRIS
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INTRODUCTION
Performance, rewards, and payroll systems are the basic exchange between employees and employers.
Employees provide performance, and in exchange, employers provide rewards, which are distributed via payroll systems.
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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PERFORMANCE MANAGEMENT
Process – within the framework of talent management
Performance planning
Observing performance and providing positive and corrective feedback
Developing periodic performance summaries
Supported by periodic performance evaluations/ appraisals/summaries
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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MODEL OF CONTEMPORARY TALENT MANAGEMENT
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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PERFORMANCE PLANNING
Define what performance means – what the employee is to accomplish and be expected to do, deliver, or contribute
For each performance dimension
Develop specific outcomes and behaviors to measure performance
Set appropriate standards for each measure
Performance dimensions, measures, and standards are unique to each position
Develop common standards for employees with identical job titles
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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PERFORMANCE PLANNING
Communicate performance dimensions, measures, and standards to the direct report
Direct report sets performance goals for the coming year
Becomes the performance “contract” for the period
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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PERFORMANCE PLANNING AND RATING MODULE SCREEN
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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Typical Performance Management DATA INPUTS
Inputs for PM systems include the following:
Organizational level – tied to business strategies
Job level – key tasks and responsibilities
Individual level – performance appraisal
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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TYPICAL PM REPORTS
Performance contract for each employee
Annual summary appraisal for each employee
Reports include aggregate performance data by unit
Reports comparing aggregated unit performance with unit output
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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PM DATA OUTFLOW
Performance data is used in many HRM decisions and will flow automatically into some processes or be available for others as needed.
The performance measure used is the summary performance level for each employee.
Performance data used for the following:
Promotions
Layoffs
Assignment to training programs
Developmental assignments
Training and development
Staffing
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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PM DECISION SUPPORT
The basic decision support system in the area of performance management is the entire system
Managers can track the following:
Direct reports
Group performance
Administrative aspects of PM
Direct reports can track their own performance
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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EXAMPLE OF RELATING PERFORMANCE TO COMPENSATION
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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COMPENSATION
One of the most complex topics in HRM
Turning to technology for help
All compensation programs should be integrated
Consistent message about
What adds value in the organization
Type of behavior and culture that is desired
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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COMPENSATION
Components of compensation:
Base pay
Merit pay
Short-term incentives
Long-term incentives
Perquisites
Recognition awards
Attraction/retention awards
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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COMPENSATION – under regulation
Fair Labor Standards Act (FLSA)
Exempt vs. nonexempt workers
Nonexempt workers:
Must be paid at least the minimum wage
Must pay time worked in excess of 40 hours a week overtime at a rate of 1.5 times the normal pay
Must provide records to the federal government on hours worked and regular and overtime pay for all nonexempt workers
Office of Federal Contract Compliance Programs (OFCCP)
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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TYPICAL COMPENSATION DATA INPUTS
Internal
Job/people/organizational
External
Market survey, reward practices
Generated
Job evaluation, salary structure, merit metrics, reward guidelines
Employee group specific data
Executive compensation, sales compensation, gain-sharing programs
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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TYPICAL COMPENSATION REPORTS
Budget reports
Employee compensation report
Salary survey
EEO reports
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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COMPENSATION DATA OUTFLOWS
Primary data outflow is to payroll
Audiences
Compensation analysts
Managers
Benefits analysts
Data sent to federal, state, and local agencies
Rewards survey firms
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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COMPENSATION DECISION SUPPORT
The major rewards decision that has to be made about every employee is how much should he or she should be paid
DSS deal with
The use of market data — Sales compensation
Building a salary structure — Market pricing
Running incentive programs — Job evaluation
Developing a merit matrix — Executive pay
Sarbanes-Oxley Act (SOX) of 2005
Troubled Asset Relief Program (TARP) of 2009
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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SCREEN OF SALARY REVIEW MODULE FOR DEPARTMENT MANAGER
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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BENEFITS
Retirement
Pension plans, defined contribution plans, etc.
Income protection
Workers’ compensation, life insurance, etc.
Medical and other health benefits
Health, dental, major medical, etc.
Paid time off
Vacation, holidays, etc.
Miscellaneous benefits
Dependent care, tuition reimbursement, etc.
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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BENEFITS (CONT.)
Differ from compensation
Employee pays all or part of the cost of most benefits
Most organizations have some flexibility in the benefits program
Growing trend to outsource benefits programs and administration
HRIS requirements to support benefits can be complex
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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TYPICAL BENEFITS DATA INPUTS
Data supporting relationship with current and prospective vendors
Data supporting internal management of benefits programs
Data supporting employee data input and management
Data supporting federal, state, and local laws and regulations governing benefit practice
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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TYPICAL BENEFITS REPORTS
Required federal and state government reports
ex. annual benefits report to employees
Employee “rewards scorecard”
Web-based access
View reports anytime/anyplace
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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COMPENSATION AND BENEFITS PLANNING SCREEN
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BENEFITS DATA OUTFLOWS
Internal data flows
Payroll and accounting
External data flows
Benefits providers, outsourced benefits administrators
Federal, state, and local government agencies
Large cost savings with electronic transfer
AT&T – $15 million
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BENEFITS DECISION SUPPORT
Some overlap with reports
Can generate reports that help benefits managers manage the complexity of benefits administration
Help employees determine what level of coverage to sign up for
By transferring responsibility to employees
Reduced costs
Reduced administration burden
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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PAYROLL
Compensation is transferred to employees
Federal, state, and local income and payroll taxes are withheld
Benefits costs borne by employees are withheld
Direct deposit
Flawless execution of payroll is crucial
Frequently outsourced HRM function
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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TYPICAL PAYROLL INPUTS
Internal
Compensation data
Benefits data
Other payroll additions
Payroll deductions data
Time and attendance data
External
Federal, state, and local income and payroll tax rules
Payments made to inactive employees
Payments from ex-employees for continuation of benefit
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DATA ENTRY SCREEN FOR A PAYCHECK
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PAYROLL TYPICAL REPORTS
Organization focused
Current pay for all employees (or for a subunit)
Types of deductions and total deductions for the pay period (or cumulatively)
Employee focused
Paycheck or direct deposit notification
Pay details
External reports
Federal, state, and local agencies
Benefits providers
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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PAYROLL DATA OUTFLOWS
Payroll data go to the following:
Accounting
Federal
State and local agencies
Benefits outsourcing firms
Individual benefit program providers
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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PAYROLL DECISION SUPPORT
Payroll data are not usually used by HR or line managers for decision-making purposes.
They are used extensively for audit purposes.
Kavanagh, Human Resource Information Systems 4e. SAGE Publications, 2018.
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