Employees expect to be paid accurately and on time. The employer is responsible for ensuring this happens. Often, he employs a payroll staff to perform these duties. Everyone makes mistakes, and the payroll staff is no exception. However, a poorly run payroll department can be a tremendous inconvenience to employees who depend on their paychecks to support their livelihood. It is critical that the employer and the payroll staff find ways to enhance the quality of service they provide.
Improving the Quality of Payroll Service
Employ a competent payroll staff. If the payroll staff has no (or limited) knowledge of wage and deduction computations, and payroll taxes, they will make costly mistakes. Payroll taxes must be reported and paid to the government in a timely manner; if not, the employer is subject to fines. Therefore, if you are hiring a new payroll professional, check his or her references carefully and ensure that he or she has performed the tasks you require. If not, and you are willing to train someone, ensure that he or she has good mathematical, problem solving and organizational skills and receives training from a knowledgeable individual.
Ensure the payroll staff knows how to communicate effectively with employees. When payroll errors occur and employees become upset, the payroll staff must handle them diplomatically. Hanging up the phone or screaming at an understandably angry employee is unacceptable. The payroll person must be empathetic and levelheaded--and should be qualified enough to respond accurately to employees’ general payroll inquiries.
Provide payroll training to the payroll staff. This can include seminars on the software being used to process payroll or on any new payroll procedures being implemented. Devise a training system that provides written documentation so the payroll staff can refer to it as needed. Be open to providing repeat training if one session is not sufficient.
Streamline the payroll department (even if it's comprised of only one person) so it is separate from other departments within the company. For example, your payroll person should not be sitting in the cubicle next to an administrative assistant. Payroll requires confidentiality, which can be easily compromised if others are within earshot.
Ensure that when certain payroll errors occur, you have a system that can provide immediate solutions. For example, if an employee is short a substantial amount of hours on his or her paycheck; have a manual check system so a check can be issued to her immediately if the employee can't wait until the next pay date.
Consider offering direct deposit. Many employees would rather not have to go to the bank to cash their checks. Direct deposit also reduces the time and money spent to sign and print checks. Simply let your bank know that you would like to offer your employees this option.
Use a payroll service. If you do not have an in-house payroll staff or are unsatisfied with their quality of service, hire a payroll service provider such as Paychex. These companies have payroll professionals who are trained to provide comprehensive payroll services to small and large businesses.