Association of Phoenix Employees - Assignment Example

ID No. Association of Phoenix Employees October 8, Albert C. Lancaster President Phoenix Textile Co. Phoenix, Arizona Dear Mr. President: We are pleased to submit to your office the final report and recommendations of the Human Resource Efficiency Group (HREG). The final report comprises the study made by HREG with the objective of enhancing the processing of the attendance records of employees, payroll processing and computation of overtime pay of employees. The study was commissioned by the members of the Association of Phoenix Employees of Phoenix Textile Co. (APEPTC) with the objective of improving the attendance and payroll system of the company. Our group is non-partisan and non-union and established with the aim of improving the welfare and condition of all employees in the company. The study was conducted by HREG from January to June 2011 with the permission of Phoenix Textile Co. (PTC) to enhance and improve the recording and tracking of attendance of employees, payment system and processing of salaries of employees. The study includes both software and system enhancement so that manpower time can be saved for the Human Resources, Accounting Department and the employees and workers that queue the Cashier/Disbursing Section (under the Accounting Department) to get their salaries. We are encouraging the management to act upon the recommendations submitted by HREG since implementation of the changes would bolster the morale and production of the employees and workers in the company. Modification in the system would save time both for the management and employees. Mr. President, on behalf of the APEPTC members, we are thanking you for allowing us to serve our fellow employees and workers. Sincerely, Edmund Ty President Association of Phoenix Employees of PTC cc: Liza Jones Violeta Ramos Head, Human Resources Department Head, Accounting Department Table of Contents Title Page . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Problems Identified . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Works Cited . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Executive Summary Phoenix Textile Co. (PTC) has a 500 strong-workforce who work on two shifts daily, seven days a week, and twelve months a year. Production demand fluctuates depending on the orders and season of the year. But production has never dropped to the point of making a number of employees go on forced vacation due to low demand. Thus, the company remains competitive in the local and global market. With the continuous work in PTC, attendance and absences recording and tracking pose a problem to the management. Paying the salaries of employees entail time for both the Disbursing Section and the employees. The long queue just to receive one’s salary produces annoyance since at times, the employees themselves become disorderly. This perennial problem will be addressed by the study and appropriate recommendations are provided. The recommendation also includes changes in the payout system so that processing of salaries and payout would be streamlined. Introduction Payment period is the time that employees and workers boost their morale. It is the time that they can enjoy the fruits of their labor. At present, the employees and workers receive their remuneration every 15th and 30th of the month. The twice a month payout enables the employees to properly budget their salaries unlike the end of the month payment since the latter would entice the workers to overspend if the salaries are received in whole at one time. However, the number of employees that queue the Cashier during the 15th and 30th of the month, viewed against the limited number of staff that disburses the salaries and limited space in the Cashier’s Office, result to disorder and irritation among the employees. With too many of them crowding the small space and all eager to be the first to get their pay envelope, disagreement and argument arise. In addition, this scenario exacts and waste time that should otherwise be used in production. There are also instances when the salaries of employees were delayed due to the inefficiency in the recording and tracking system of attendance and absences. Such delays were unexpected, and such inevitableness causes grudge and animosity in not a few employees and workers since they would not be able to pay their bills or buy necessities in life. Recognizing this necessity, Association of Phoenix Employees of Phoenix Textile Co. (APEPTC) offered its help to the management of Phoenix Textile Co. (PTC) to conduct a study to solve this problem. The APEPTC commissioned the Human Resource Efficiency Group (HREG) to conduct the study and make the necessary recommendations. The association shouldered the expenses for the study as a corporate social responsibility of the group, and without expecting favor or compensation from the management. The study was conducted from January to June 2011 by HREG with the aim of arriving at a recommendation to ease out the problems encountered by the management and employees in processing and receiving of salaries, respectively. Time is vital, and lost time means lesser productivity and profit. With the present system of the company, a substantial amount of time is lost due to unnecessary activities. Problems Identified The present system of recording the time in and time out of employees is the Bundy clock system. This system has been in use for several decades when the computer system was not yet developed. The Bundy clock is still in use by PTC. Though the Bundy clock may be practical since it is cheaper and can readily be used after purchase, it may only be practical to use in smaller companies but not in PTC. It is mentioned that in many companies at present, the Bundy clock may no longer meet their needs in terms of attendance tracking (What is a Time par. 2). There are only six personnel in the Disbursing Section of the company, with only four manning the payout counter and the other two performing clerical work inside the office. The management does not consider adding more personnel in the Disbursing Section. Due to the big number of employees, it takes more time for the Human Resources Department to compute the attendance and hours of work from the time card. And the Accounting Department also has to compute the amount to be paid based on the report of the Human Department. The systems of HR and Accounting Departments are not integrated by Information Technology. It has been observed by the HREG team that employees and workers do not line up in front of the counters when getting their salaries. It was also observed that many employees would pushed themselves into the crowd in front of the tellers to get ahead of others. This causes more annoyance to others that results to confrontation and quarrels. The company is operating on two shifts, from 8:00 am to 5:00 pm and 6:00 pm to 3:00 am. The employees in the second shift complained that the current disbursing of salaries only occurred from 8:00 am to 5:00 pm. Thus, they have to come early just to get their salaries. With the manual system of computing hours of work and overtime, it happens not only once that the payroll is finally completed a day or two after the 15th and 30th of the month. Thus, the employees’ home budgeting is affected. They would resort to loan or mortgage just to have cash for their needed expenditure. This causes additional burden to them in paying the interest of the loan or mortgage. The delay in disbursing of salaries takes one to two days. Although, this does not happen regularly, an employee expecting to receive his or her salary would be disappointed with the management with such delays. According to one employee, when a salary is delayed, the Disbursing Section would not provide information as to when it will be released. As reported by Ankomah (4), the delays in payment of salaries, especially for the newly hired, have resulted in strikes in the health care sector in Ghana. It will cause demoralization among the employees which might also result to a strike if it becomes a regular occurrence. Recommendation The management does not have to hire additional staff in the Disbursing Section. The crowding in this Section during payday can be lessened by dividing the workload and disbursing of salaries by department, shift schedules and work process of the staff. There are around 500 workers in the company who crowd the Disbursing Section every 15th and 30th of the month. To lessen this crowding, all the six personnel should be utilized during payday and should disburse the salaries to the employees. An additional two counters then must be added for the two staff to help in this task. With six of them working, there will be six queue lines for releasing the payslip. On the aspect of crowding and undisciplined crowding to get their salaries, a new policy must be implemented wherein the workers will be required to queue in a line so that they will not crowd in front of the tellers. Being served on a first come first serve basis will do away with the possibility of confrontation and quarrels among the employees. With the people lining up, others planning to get their salaries would easily see how long the lines are and can decide whether they would get their salaries that time or later on. Thus, time can be saved and used in production instead. The company is operating on two shifts within 24 hours. But disbursement of salaries only occur during the 8:00 am to 5:00 pm shift, requiring the second shift workers and employees to come early to the company to get their salaries. To eliminate this concern, three or four disbursing staff can render overtime during payday. There are lesser workers in the night shift than the day shift, so three or four staff would be able to release the salaries. Another remedy to the first and this concern is engaging the services of a banking institution. All employees will get their salaries from the bank any time at any day they want, even on Saturdays, Sundays or Holidays. This will also save time on the part of the Disbursing Section in counting cash and coins and inserting them into the pay envelopes of the 500 workers and employees. This system will also entail savings on the part of the company for not requiring three or four disbursing staff to render overtime during payday. Through an arrangement with a bank, all employees will be issued ATM cards so that they can withdraw their salaries during payday or any day thereafter at their convenience. The night shift workers do not need to come to the company earlier to get their salaries. The disbursing staff then will only have to release the payslips even before the payday. This will eliminate queuing at the Disbursing Section. The Cashier staff can go to the different departments and sections to distribute the payslips. For the second shift workers, only one or two staff can render overtime to distribute the payslips or they can be turned over to the supervisors of the different departments to do the distribution. In the latter system, the Disbursing Section staff do not have to render overtime. The ATM system of releasing salaries will only be applicable to workers who have been with the company for a long time. For the newly hired, while their ATMs are still being arranged with the bank, they have to get their salaries at the Disbursing Section through the first system being proposed. Moreover, the newly hired will be assigned only in the day shift. Another problem identified by the study group is the delay in the computation of hours of work and overtime of employees. In this delay, the workers and employees resort to loan or mortgage. In order to address this issue, the HR Department must establish new cut-off dates for the 15th and 30th paydays which will be on the 12th and 27th days of the month, respectively. Thus, for the 15th payday, the employee will receive payment for work rendered from the 28th day of the previous month to the 12th day of the current month. For the 30th payday, the employee will receive payment for work rendered from the 13th to the 27th of the current month. When the HR has released the payroll computation early, the Accounting Department having verified the data, and the Budget Department having allocated and/or deposited the money for the salaries in the bank, the Disbursing Section can even release the payslips on the 14th or the 29th day of the month. The company has been using the Bundy clock and time card system of monitoring attendance and work rendered of the employees. With 500 of them working, manual computation would take so much time of the Departments involved in monitoring and computing of salaries. The HR department has to input into the system all the time logs in the time card which may be subject to human error. Around $1,800 is wasted weekly caused by human error that occurs in the computation stage of the hours of work and overtime (Automated Time par. 2). The unaccounted worked hours of employees (due to human error) are estimated to be 4.3 hours a week per employee (par. 2). Thus, this would still be a cause for employees to complain of underpayment and dissatisfaction with the company procedure. HREG therefore recommends to the company to utilize the biometrics system which is interconnected with the HR Department, Accounting Department and the Budget Department. Only authorized personnel from the Accounting Department and Budget Department can access the database. HR is the only one authorized to release the official signed hard copy of the payroll to the Accounting Department. The latter can only identify the discrepancy and report the same to the HR for modification or clarification. The Budget Department only needs the total amount to be disbursed in order to plan the company budget. It does not need to access the details of employees’ names and time logs. The biometrics system uses the Information Technology that will interconnect the biometrics machine into the database server. The company has no IT Department at present, therefore, it is recommended to create it with two IT personnel. These personnel will be in-charge of monitoring the six biometrics machines, three to be installed near the entrance of the company and the other three at the exit area. Six of these machines should be installed so that long queues can be avoided and that the employees can log faster and save more time. The IT personnel must be knowledgeable about biometrics system and software program and can fix the machines in case of a breakdown. They can also create a backup of the attendance and time logs which must be secure from malware and virus attacks. Having an IT Department would lessen the occurrence of downtime in the processing of payrolls (Agarwal par. 4) and enhance security of the system from outside attacks and hackers (par. 5). A biometrics machine can also capture the time logs faster than the Bundy clock. At times, the time card would become folded and cannot be inserted into the clock. In the biometrics machine, only the thumb or index finger of the right hand will be scanned by the machine. An option of a thumb or index finger is provided since there are instances when a person’s thumbprint is scarred or unidentifiable but the index finger is not. The attendance data are stored in the database that can be accessed by the authorized personnel of HR. Different reports can be generated from the data which will be valuable in the planning of company program and activities. Even before the payday, a report can be generated on the employees who were absent during the week, how many employees got sick based on their sick leave applications also stored by the HR in the same database, the total hours of work and overtime pay that would be important in budgeting, etc. The employee may also request from the HR a hard copy of one’s attendance with all the time logs. The application of IT in the company will remove many of the problems encountered by the company. The biometrics machine with the software would cost $500 in 1998 but dropped to $100 in 2000, according to Lerner (20). Purchasing six biometrics machines would only cost below $600 at present, together with the software. The company has to budget an amount for the servers, interconnectivity and LAN cables, and other computer accessories. The biometrics system will facilitate logging in and out of company premises. Moreover, it will also make the premises secure since only those personnel who are in the database can log in and enter the premises. The security personnel will only allow an individual to enter who has successfully logged in into the system when a prompt has been signaled by the machine (e.g. a beep or any other sound). Conclusion Computerization and use of Information Technology can eliminate the problems and concerns involving the monitoring, computing and payout of the salaries of the employees of Phoenix Textile Co. Having an agreement with a bank would also facilitate disbursing of salaries. The Disbursing Section will be freed from counting cash and inserting it in the pay envelopes of the employees. Moreover, establishing an arrangement with a banking institution would greatly reduce the manpower time used in disbursing of salaries since the company can deposit an amount in bulk to the bank. The HR Department will be given the task of making this arrangement with the bank. The same department will allocate the specific amounts to be paid to the employees based on their hours of work and transfer the same data to the bank. This way, the salaries of employees for the particular pay period will be the only ones reflected in their payroll accounts with the bank. With a cut-off period to be implemented, the employees will also be able to receive their salaries on time or even earlier. With automated logging and computation, the possibility of error in computation can be eliminated due to human intervention which can happen in the HR Department (i.e. during the process of inputting data from the time card into the computer). Integration of the HR Department, Accounting Department and Budget Department into the computer system would facilitate transfer of data from one office to another. The manual system of attendance tracking is time consuming and highly inefficient with a huge amount of time being wasted (Automated Time par. 2). It was reported that a firm with around 100 personnel would waste approximately $327,000 annually just in processing the payrolls of employees (par. 2). This amount has to be multiplied five times in the case of PTC. This is a big amount compared to a few hundred dollars that will be expended in the establishment of the IT Department and the installation of the biometrics system and LAN connectivity. Works Cited Agarwal, Nitin. The Importance of IT Support in Your Business. 23 June 2011. 4 October 2011.. Ankomah, Martin. Rampart Strike Actions in the Public Health Sector: Curbing the Menace. n.d. 4 October 2011. . Automated Time and Attendance vs. Manual Time and Attendance. 16 September 2009. 3 October 2011. . Lerner, Eric J. Biometric Identification. American Institute of Physics. February 2000, pp. 20-23. 3 October 2011. . What is a Time and Attendance Tracking System. 2011. 3 October 2011. . Read More