2 Learning Objectives Define and understand the basic functions of the HR management and payroll processes. Describe the relationship between the HR management and payroll processes and their environment. Comprehend the relationship between the HR management and payroll processes and management decision making. Depict the logical and physical elements of the HR management and payroll processes. Describe some of the technology used to implement the HR management and payroll processes. Prepare a control matrix for a typical payroll process, including explanation of how business process control plans can accomplish payroll operations and information control goals.
3 Process Definition and Functions The human resources management (HRM) process consists of people, equipment, activities, and controls that supports: –repetitive work routines of the HR department. –decision needs of those who manage the HR department. The HRM process –captures, records, and stores data concerning HR activities. –generates a variety of HR forms and documents. –prepares management and governmental reports. The payroll process consists of people, equipment, activities, and controls that – support the repetitive work routines of the payroll department. –maintain records containing data for payroll taxes and fringe benefits, attendance reporting, timekeeping, and paying employees.
Human Resources Options in Microsoft Dynamics GP 4
5 Organization Chart of the HR Function
6 Duties of HR Managers
7 Duties of HR Managers (cont’d.)
8 Integration of the HRM and Payroll Processes Payroll function often automated due to its repetitive, labor intensive nature. Current HR software can do much more than just payroll. Because the HR management and payroll processes share so much employee data, the functions must be integrated into an enterprise system. The HR module includes many options for managing employees, including –creating a single source for obtaining HR information. –providing for faster data access. –minimizing data redundancy. –ensuring data integrity and consistency. –facilitating data maintenance. –improving data accuracy.
9 Technology Trends and Developments HR self service systems –HR manuals –Helpful hints –Retirement information –Personal profile –Forms and changes –Important links Outsourcing of payroll and other HR functions Enterprise systems play a role in implementing required HR and payroll functionality.
Options for Maintaining Employee Master Data in Microsoft Dynamics GP 10
HRM Process - Systems Flowchart 11
12 Implementing the HRM Process Process Inputs: In general, the HR forms in the systems flowchart capture information about three HR-related events: (1) selecting employees (2) evaluating employees, and (3) terminating employees
13 Implementing the HRM Process Selecting employees may be initiated in one of two ways: 1.Departmental managers (outside the HR department) may initiate the process to satisfy their immediate hiring needs. 2.Selection process may be automatically started by the system. The candidate selected and hired can come from within or outside of the organization.
14 Implementing the HRM Process Evaluating employees involves many activities. –Departmental managers and supervisors (outside the HR function) usually initiate evaluations or other changes affecting employees. –The manager of personnel appraisal and development (in HR) typically approves the review and implements changes.
15 Implementing the HRM Process Terminating employees closes the employment process loop. –Periodically, departmental managers and supervisors (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.
16 Implementing the HRM Process Processing Logic and Process Outputs –HR requests initiated outside of the HR department are approved within that department and then routed to HR for approval. –Some data may be entered within HR. –The employee/payroll master data, skills inventory data, and labor-force planning data within the enterprise database are updated and various reports are made available. –Several outputs are produced including Internal communications Payroll reports Reports for governments (i.e. OSHA)
Organization Chart Illustrating the Payroll Function 17
18 Payroll Process Context Diagram
Payroll Process: Level 0 DFD 19
Payroll Process – Diagram 4 20
Payroll Accounting Entries 21
Accounting Entries (Cont’d.) 22
Payroll Process Flowchart 23
24 Payroll Fraud Types of payroll frauds: –Ghost employees (former or non-existent employees who are issued paychecks). –Falsified hours and salary (overstated hours worked or base salary amount). –Commission schemes (overstated sales or commission rates). –False worker’s comp claims (faking injury to receive compensation).
25 Payroll System Controls Segregation of duties between HR (employee record creation), payroll (prepares payroll) and AP/cashier (disburses cash). Direct deposit (eliminates opportunity for check fraud). Review of employee master data for duplicate names and/or social security numbers. Comparison of actual payroll to budget.
26 Reimbursement Fraud Reimbursement for employee business expenses often are done through the payroll system. Fraudulent activities include: –Claiming personal expenses as business –Altering receipts to increase expenses –Submitting false receipts –Submitting the same expense multiple times