Payroll management is the process of compensating employees according to policy and procedures. It includes monitoring and evaluating employee compensation to ensure it is appropriate and competitive. Payroll is critical to an organization’s success, and employers must ensure employees are paid the right amount on time. Employers must also maintain a competitive edge in the marketplace to retain employees. Job classification is an important component of wage and salary management.
Payroll and payroll management is the process of compensating an organization’s employees according to accepted policy and procedures. An important component of a successful organization’s payroll and payroll policy is the monitoring and evaluation of all employee compensation to ensure that it is paid appropriately, both in comparison with others in the same organization and in the marketplace over time. as a whole. This process is often an integral function of the organization’s HR department, but in general, the larger the organization, the more likely it will be handled by a separate department.
The first element of payroll and payroll management, periodic payroll, is a critical component of how any organization works. If payroll is processed incompetently, the employer itself could conceivably collapse. Employees’ budgets and personal plans depend on them getting paid regularly and if compensation is late, short or missing even once, morale is severely affected, as is confidence in the stability of the employer. Whether an employer uses the services of a third-party payroll service or handles all payroll functions in-house, they will usually devote significant resources to ensuring that employees are paid the right amount on time.
The second element of payroll and payroll management – monitoring and evaluating employee compensation – is a permanent function. This includes assessing elements of each job in the organization and ranking them against a number of different criteria including the nature of the job itself, the amount of supervision needed, the physical strain normally associated with the job and the amount of training necessary to do the job competently. The underlying idea is to determine, as much as possible, the value of each job to the employer and compensate employees accordingly. From time to time, especially in the absence of collective bargaining, the results of this monitoring and evaluation process will lead to the adjustment of wages and salaries. In a collective bargaining environment, these assessments will be important in determining such adjustments, although other considerations may affect wage and salary adjustments.
In the United States, jobs are also assessed whether or not they are exempt from wage laws related to overtime pay. Most manufacturing and white collar jobs, for example, are considered non-exempt; that is, even though wages are handled on a weekly basis and called wages, from a legal point of view, the jobs are considered hourly. When a non-exempt worker works beyond the statutory requirements, usually 40 hours in a calendar week, a premium must be paid in addition to his or her regular hourly wage. Most executive and supervisory workers, and some higher-level employees, are considered exempt, meaning they are paid a flat rate each pay period, regardless of the actual number of hours worked. In general, exempt employees are paid more than non-exempt. The U.S. Department of Labor has specific tests that employers can apply to each job to determine if it is properly classified as exempt or non-exempt.
Job classification is only one element of the ongoing evaluation process which is an important component of wage and salary management. Employers need to maintain a competitive edge in the marketplace, and one way to do that is by hiring the best people. Savvy employers will seek to maintain a competitive edge on compensation because they understand that their employees are constantly on the lookout for better opportunities and that the total compensation package is one of the most important elements of an employee retention strategy. Employee retention, in turn, is an important responsibility of payroll and payroll managers.
Protect your devices with Threat Protection by NordVPN
