Posts tagged ‘hr best practice’

March 23, 2014

Payrollers! Are You Prepared for the New Australian Privacy Principles in force on March 12, 2014?


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The new Australian Privacy Principles came into effect on March 12, 2014 and replace the National Privacy Principles and apply to all organisations (with some exceptions), as well as Australian government agencies.

The objective of the Principles is to ensure that organisations manage personal information in “an open and transparent way” and some of the key areas that relate to payroll functions include:

  • All organisations must take reasonable steps to implement practices, procedures and systems to ensure the organisation complies with the Australian Privacy Principles and to provide a system of dealing with enquiries and/or complaints
  • All organisations must have a clearly expressed and up to date policy about the management of personal information, including:
  1. The kinds of information the organisation collects and holds
  2. How the organisation collects and holds the personal information
  3. The purpose of the collection, holding, use and disclosure of the information
  4. How an individual may access personal information and correct any information
  5. How an individual may complain about a breach of the Principles
  6. Whether the organisation is likely to disclose the personal information to an overseas entity
  7. If the organisation is likely to disclose personal information to an overseas entity, the countries in which that may occur
  8. Organisations must not collect personal information unless the information is reasonably necessary for one or more of the organisation’s functions or activities
  • Organisations must not collect “sensitive” information about an individual unless an individual consents to the collection and the information is reasonably necessary for one or more of the organisations functions or activities
  • If “sensitive” personal information is collected as a requirement by law or a “permitted general situation exists in relation to the collection of the information”
  • Where an organisation holds personal information that was collected for a particular purpose (the primary purpose), the organisation must not use or disclose the information for another purpose (a secondary purpose) unless the individual has consented, or the individual would reasonably expect the organisation to use or disclose the personal information for the secondary purpose, or if the use or disclosure of the personal information is required  or authorised under an Australian law
  • Before an organisation discloses personal information about an individual to an overseas recipient, the organisation must take all reasonable steps to ensure that the overseas recipient does not breach the Australian Privacy Principles
  • An organisation must take reasonable steps to ensure the integrity of all personal information to ensure the information is accurate, up to date and complete
  • An organisation must take reasonable steps to ensure the personal information is protected from misuse, interference and loss and from unauthorized access, modification or disclosure

If an organisation refuses to correct the personal information as requested by the individual, the entity must give the individual a written notice that sets out the reasons for the refusal, the mechanisms available to the individual to complain about the refusal and any other matter prescribed by the regulations

All organisations must take reasonable steps to implement practices, procedures and systems to ensure the organisation complies with the Australian Privacy Principles and to provide a system of dealing with enquiries and/or complaints

All organisations must have a clearly expressed and up to date policy about the management of personal information, including:

If you are a Payroll Manager or hold a position of responsibility for the management, security, disclosure and use of personal information you can be fined under the Act for non-compliance, apparently up to $340,000.  I’ve not studied the Act yet to understand whether this is per offence, which could be a devastating blow for an individual who is responsible for the disclosure of a substantial numbers of employee’s information, where there is a security breach or a non-compliant business practice.

If your organisation hasn’t made a big deal out of the new Australian Privacy Principles as far as payroll is concerned, especially if you outsource any part of your payroll function, you have a couple of days to establish how your payroll function will ensure compliance.

According to this Smart Company article on 5th March 2014 “The laws will apply to businesses that turn over more than $3 million a year and collect personal data.

However, there are some small businesses which turn over less than $3 million that will still need to abide by the new legislation. For example, the laws apply if the business is a health services provider, related to a larger business, trades in personal information, or is a contractor which provides services under a Commonwealth contract.”

For more information on the changes to the Privacy Act, visit the Office of the Australian Information Commissioner (OAIC) website.

If you are unsure whether the Privacy Act applies to your business, check out the Privacy Checklist for Small Business from the OAIC.

More articles on the Australian Privacy Principles from Australian Law Firms:

Australia: Are you compliant with new privacy laws coming into effect 12 March 2014? By Dan Brush of CBP Lawyers on mondaq.com

Australia: Major changes to Australia’s Privacy Act: Why they matter for foreign IT suppliers doing business in Australia by David Smith of Corrs Chambers Wesgarth on mondaq.com

Australia: Timely Guidance from the Privacy Commissioner – APP Guildelines Released by Sophie Bradshaw of Corrs Chambers Westgarth on mondaq.com

If you have any questions you would like to raise personally, please email Louise Vidler at The Professional Payroll Manager.

© 2014 Louise Vidler T/As The Professional Payroll Manager.  All rights reserved.

All materials contained on this web site not otherwise subject to copyright of other parties are subject to the ownership rights of Louise Vidler T/As The Professional Payroll Manager. Louise Vidler T/As The Professional Payroll Manager authorises you to make a single copy of the content herein for your own personal, non-commercial, use while visiting the site. You agree that any copy made must include the Louise Vidler T/As The Professional Payroll Manager copyright notice in full. No other permission is granted to you to print, copy, reproduce, distribute, transmit, upload, download, store, display in public, alter, or modify the content contained on this web site.

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February 2, 2014

Reading Contextually Between the Payroll KPI’s


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The Minimum Essentials Payroll KPI’s outlined the KPI’s all payroll services should have implemented and touched on benchmarking.  Benchmarking can be dangerous territory for the unitiated, because it is so subjective.

Simply comparing your end result numbers against another organisation, industry or a global best practice and deciding that your payroll service must work to achieve best practice may result in degradation of your service levels and compliance.  You must apply “context” to the benchmarking data, in order to truly achieve any level of benchmark against others.

To apply the “context”, it is essential to understand that behind every number is a complex array of factors including:

Scope of the Study

First and foremost, the scope of the benchmark study and the compilation methods of the data used to calculate the metrics, especially how the cost of payroll production has been calculated.  The cost of payroll production is a base line measurement for a major part of the benchmarking process, so it is important to ensure that everyone is compiling their costs using comparable methods and with the same definition of end to end payroll.  Company “A” may interpret end to end payroll as the process from receipt of timesheets into the payroll service to the deposit of funds into employee bank accounts, whereas Company “B” will rightly incorporate the compilation of employee timesheets and production of post payroll reporting, and include the cost of all employees involved in the process.

Automation & Integration of Systems

Automations and integrations achieved by the HRIS and related systems significantly reduce the cost of payroll production as automation plays an integral role in the efficiency of the payroll service.  If your payroll is fully integrated with time and attendance and employee self-service and the general ledger, you are half way there.  Every process that is performed manually, multiplied by the number of times the process is performed, adds up to a significant potential cost saving over the course of a year.

Volume of Management & Statutory Reporting

Management reporting and the volume of it, varies from business to business and if you have the luxury of HRIS and related integrated systems that automatically produce the reports and email them to the recipient list you are miles ahead of the payroll service that is manually compiling data for management reporting

Statutory reporting is often an onerous task and the more data you can pull down from your systems, either as data into excel spreadsheets or as completed reports from your systems to automate the reporting processes will result not only in efficiency, but should also result in greater compliance by virtue of the reduced manual intervention.  The ultimate HRIS system for me would include one with the capability of calculating the payroll tax, fringe benefits tax and other required reports with all the bells and whistles that submit the electronic returns.

Method of Pay Slip Distribution

The automation of pay slip distribution can be a giant cost and efficiency gain to organisations that is under rated and under utilised by so many organisations.  If your organisation is taking the time to print, separate, seal, collate and physically send pay slips across the organisation, it’s time to start asking your employees if they’d like to receive their pay slips via email and/or investigating the return on investment of employee self-service.

When benchmarking your payroll service against another, factor in the varying methods of pay slip distribution, especially where there are sizeable organisations with a national presence.

Business Process Automation

Automations achieved by business processes need to be taken into account when analysing one organisation’s KPI’s against others:

  • If your payroll service operates with highly manual processes and a considerable quantity of hard copy forms, you will never achieve best practice in efficiency and as a result of that, cost.  Best practice efficiency results from the automation of processes such as employee self-service to enter leave applications, supply of information to reduce employee queries and upload of information by HR/P&C or employees to minimise transactional processing by the payroll service.
  • Physical data entry of timesheets by the payroll service is another detriment to the achievement of efficiencies in comparison to payroll services that utilise excel uploads, time and attendance system integrations and other automated processes.
  • Physical data verification of timesheets and employee information is time consuming and should be minimised as much as possible.  This is said, on the absolute proviso that comprehensive audit and validation checkpoints and reports are produced and verified to ensure that all potential errors will be identified in the process.  If you cannot achieve complete automation, take what you can and implement baby steps within the various components of the payroll process.
  • The number of autopaid employees, which is usually reserved for salaried employees and those permanent employees who don’t vary their hours or work overtime greatly.  This is not a benchmark that can usually be addressed by the payroll service, as it is dictated by legislation, award coverage and organisational policy.

Complexity of the Business and Its Payroll

Greater complexity results in a higher volume of business processes and the aim should be minimise and eliminate the complexities, where possible.  Some complexities such as number of business entities or industrial agreements cannot be changed and the objective is to achieve economies of scale in the payroll processes.

When comparing organisations for benchmarking purposes though, it is useful to understand the level of complexity involved in order to truly benchmark one payroll service against another, for example:

  • Company “A” may be a single registered entity, whereas Company  “B” may be made up of fifty separately registered entities.  Company “A” runs 52 weekly payrolls per year, whereas Company “B” is required to run 2600 weekly payrolls per year, which will result in a huge disparity between the two companies cost of payroll production and their efficiencies.

The Level & Volume of Services

One payroll service that processes only uploaded timesheets, does not have payroll accounting or statutory reporting performed within the payroll service and does not have ancillary employees benefits management functions will appear to outperform and be more efficient than an organisation whose payroll service includes manual timesheet entry, a great volume of management and statutory reporting and complex benefits management.

Additionally, the service level demands on the payroll service are hard to measure but definitely come into play in one service’s ability to outperform another.  The difference between an organisation that has a dedicated support line, or a policy where employees can call their payroll representative directly at any time of day and an organisation that has an archaic policy of allowing employees to contact payroll only at certain times of the day will lend weight to the payroll service’s ability to achieve best practice efficiency.

The volume of enquiries is a standard measurement for payroll best practice and will be determined by a multitude of factors, including the level and volume of services provided plus the error rates being achieved by each service and a multitude of other organisational or industrial issues.

The Salary Costs of the Payroll Team

A big factor in the cost of payroll production is the cost of your payroll team, and again requires a multitude of considerations before simply benchmarking one company against another, such as:

  • Does your organisation pay award rates or market rates?  How do the salaries of your payroll team per FTE compare to those you are benchmarking against?
  • Where is your organisation located? A capital city centre will always demand higher salaries than a regional area.
  • What are the positions included in your payroll team?  Do you have only transactional payroll processing staff, or do you have HRIS Systems staff, analysts, payroll accountants, employee benefits administrators, multiple leaders and managers and such?  The inclusion of payroll team members in addition to the purely transactional staff is always going to show a higher payroll production cost per FTE and as such needs to be taken into consideration when comparing the data.

Additional Variables Impacting KPI Analysis

Other variables that need to be analysed contextually include:

  • The number of employees processed and/or supported per Payroll FTE should be interpreted taking into account all of the factors discussed above.  One payroll team member can quite easily produce 1500 pays per week, while another would struggle to produce 250.  This is based not only on the competence of the team member, but also on the level of automation, complexity and what portion of the end to end payroll function each of the team members are performing
  • Data Quality is of prime importance to the achievement of compliance and efficiency and where one organisation is falling behind another due to data quality, a valid argument with cost based analysis can be achieved to highlight the importance of Input = Output.
  • The volume of Out of Cycle Payments and Special Pays as a metric in a report can be read as a poor performing payroll service who clearly needs to implement some payment policies and undertake some cause analysis on these “errors”.  On the other hand, it could also be read that organisational policy or awards dictate a service standard that the payroll service has to adhere to, or that the organisation needs to support the payroll service in having all staff understand the importance of data quality and timeliness.
  • The cost of Out of Cycle Payments and Special Pays will be a key driver for management to address, where they can, the organisational policy to improve the volume and cost of out of cycle payments.  When you consider that an out of cycle payment takes, at the very least, half an hour from calculation to completed payment, this raises the cost of payroll production significantly if you have high volumes.
  • Retrospective payments are a contributor to cost of payroll production whether you have a system that automates the process or not.  Aside from the calculation of retrospective payments, they usually have to be checked as a separate process within the payroll process and cause fluctuations/variations in the payroll (employee and company totals) due to back payments that again have to be manually verified as a separate process step.
  • The employment turnover of payroll staff will add to the costs and efficiency of the payroll service, but is something that will not be understood in the realm of benchmarking.  An individual organisations turnover can only be understood by understanding the data behind the data.

There is No Like for Like in Payroll

Any comparison you make of your KPI’s to others is a subjective comparison and the contributing factors must be taken into consideration, as best you can, to make a considered judgement of your achievements against best practice.

In payroll benchmarking, there is really is no like for like due to the variances in operating systems; policies, processes and practices; complexities; and of the interpretation of “end to end” payroll.

If you have any questions you would like to raise personally, please email Louise Vidler at The Professional Payroll Manager.

© 2014 Louise Vidler T/As The Professional Payroll Manager.  All rights reserved.

All materials contained on this web site not otherwise subject to copyright of other parties are subject to the ownership rights of Louise Vidler T/As The Professional Payroll Manager. Louise Vidler T/As The Professional Payroll Manager authorises you to make a single copy of the content herein for your own personal, non-commercial, use while visiting the site. You agree that any copy made must include the Louise Vidler T/As The Professional Payroll Manager copyright notice in full. No other permission is granted to you to print, copy, reproduce, distribute, transmit, upload, download, store, display in public, alter, or modify the content contained on this web site.

December 8, 2013

Turn Your Payroll Service into a True “Service Excellence” Centre


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The term ‘Payroll Service’ is often an oxymoron, for in many organisations where there is a payroll department, there is a complete lack of actual customer service.  Please don’t take offence, I know we all work hard and have relenting deadlines to achieve, but we as an industry need to take a good hard look at instilling service excellence, and some individuals in the industry, just need to learn to treat others as they would expect to be treated.

Almost every day of your life you have a customer service experience.  You owe it to yourself and your customers to take stock of these experiences and note how each interaction affects you emotionally and ask yourself honestly, if your customers experience the same emotions in their dealings with you or your team.  The basic emotions people experience in a customer service situation are one of: Joy; Satisfaction; Frustration; Disappointment; or Anger.  It is up to you how each customer walks away feeling.

There are a few things in payroll I am an advocate of: compliance, efficiency, integrity and service excellence.  The first three are relatively easy enough to turn the tables on with some effective management and some good business practices.  Service excellence though, is the tough cookie.  You, your team, your culture, your leadership and your business processes will determine the level of service that is achievable.

Important steps to achieving service excellence are:

  1. Understanding exactly what service excellence means
  2. Understanding the current perceived level of service – yours, theirs and the reality in between
  3. Taking a serious look at your interactions with your customers (every single person or entity you transact with) to identify your “moments of opportunity”
  4. Deciding what service excellence would actually look and feel like at each of those “moments”
  5. Setting the wheels in motion to elevate your service standards and practices

Understanding Exactly What Service Excellence Means

Service is defined as an act of helpful activity; to help or aid; to do someone a service

Excellence is defined as the fact or state of excelling; superiority or eminence

To achieve service excellence, you don’t need necessarily require a budget, you don’t need to employ a management consultant and it’s not entirely necessary to implement an enquiry management system.  You do need however, to make a decision as a team to define what the standard will be and commit to exceeding it, and you absolutely will need to build solid processes and business systems to consistently achieve excellent outcomes.

Understanding the Current Perceived Level of Service

In the standard payroll office, you usually never hear from your main customers – the employees – unless they perceive there is a problem.  You don’t have people ringing in to thank you for a pay well done.  So if your phones are ringing off the hook, you have some serious work to get through to become a service centre of excellence.

If your phone is not ringing off the hook with payroll queries though, don’t think you can sit back and relax.  Are your customers happy?  Are management satisfied with your performance?  Do people in the organisation value your work?  Just because the pays are being processed correctly, does not mean that your customers are happy with your service.

You will need to obtain some brutally honest information from employees and management, such as what they think of your service; what they would like to receive from you; where they think you could improve; and what they think could be done differently.

Going down this road can be a difficult one for some, as you will always receive some seriously negative feedback, at the very least.  Your opportunities though are endless, as you can justifiably and quantifiably turn around the service levels and increase staff morale.  If you ask the right questions, you will receive invaluable information to assist you in turning your payroll process into a valued service centre.

There are various ways to find out how your service is perceived:

  • Conduct a service survey with your management and employees
  • Conduct open feedback sessions with small groups of your customers
  • The simplest one of all – constantly listen to what people are asking and telling you in their daily queries

In addition to understanding what your customer’s perception of your service is, it is imperative to understand your payroll team’s perception of their own service.  Do they think they are providing brilliant service?  Can they identify opportunities for improvement?

As anyone in service or management should know, the key to identifying service opportunities is to understand the “pains”.  Wherever someone experiences an issue, a dissatisfaction or cries out for a better way, these are the where the opportunities to implement improvements exist.

If your customers have difficulty accessing information, this is a “pain” that can be addressed by making it easy for them to access the information they need.  If your payroll team are overwhelmed with enquiries, you can address your team’s “pain” by implementing a FAQ or building a system to ensure the common queries are answered pre-emptively.

If management are consistently seeking reports from your team, build these in to your processes as automated functions and make them available for use by management.  The possibilities to eliminate pain points are endless.

Take a Serious Look at Your Customer Interactions

Once you’ve asked all the right questions of your team and your customers to establish the perception of your service, you then have to fill in the reality between the two, by taking a good hard look at how your service is conducted.  Ask the following questions as a starting point:

  • How does your team interact with customers?  Are they helpful?  Are they respectful?  Do they welcome customer interaction or dread it?  Do they explain or blast policy or rules at them?  Is their conduct of an excellent standard?  Are customer queries an interference to their work at hand?
  • What do you provide? What is the standard of it?  Is it professional?  What purpose does it service?  Is it useful?
  • Is there quality and efficiency in the processes involved in responding to enquiries?
  • What are the commonly asked questions and requests?  Should you be pre-empting these and delivering information and resources to minimise or eliminate the questions and requests?
  • How difficult is it to do business with your payroll service?  Is someone available at all times to respond to questions?  What are the wait times or turnaround times on responses?  Do you enforce unreasonable shut off times?  Do your team members send all calls to voice mail when they are busy?

Deciding What Service Excellence Will Actually Be

You, as the Manager, need to determine what the acceptable service standards will be and what “excellence” will look like.  Based on your team members, your opportunities and constraints, based on the outcomes required of your position and based on the political arena of your organisation.

If you have a Service Level Agreement (SLA) in place, obviously you will need to ensure you continue to meet, or exceed, the service levels defined in the agreement, but in the process of transforming your service levels, this may also be a great time to revise the SLA and make it more meaningful and service oriented.

One of the things I am always astounded by is that payroll teams are happy enough to shout that payroll is a “critical” business process when it comes to requiring the support of IT and other teams to get the payroll into the bank accounts on time, but they don’t always assume the same “critical” determination to an individual employee whose pay has been missed or short paid.  This is a key area for improvement and would be one of the employee’s greatest pain points in many organisations.

Recognise that while a non-payment or a short payment to an employee may simply be perceived as a transactional error to someone in your team, who has more important tasks to achieve today, to the employee though, this may mean the difference between feeding their children or putting petrol in the car for another week.  It is never our job to judge, but to deliver on the promise of on time and in full payment of wages.

Setting the Wheels in Motion to Becoming a Service of Excellence

Implementing a Service Charter or a Service Standard would be a great starting point for determining the base line of your service levels.  As the Payroll Manager, you must start with a foundation of what you want your Customer Service Charter to be and then involve your staff to help build it.

I would recommend calling for submissions, then building a draft document for your team to work on further.  This approach shows them that you value their input and gives them ownership from the onset.  Once the charter or standard has been established, have it printed and have all team members sign the document.  Post this document in a prominent position in your work area and if you are really committed, hand it out to your customers.

Further to the Charter or Standard, you then need to start drilling down on particular pain points and moments of opportunity, and start working out how you can transform your service with each of these.

Included in the foundations to great customer service is creating relationships with them and respecting them.  Work on ways to get your staff to meet, to learn about and to put faces to the names they interact with on a daily basis, such as:

  • Include staff members on site visits
  • Place photos of customers and little snippets of information where your team can see it constantly and ‘get to know’ their customers
  • Keep a database on your customers and log all their calls, issues, complaints, praises
  • Have your staff take turns to ensure that every single customer is contacted on a regular basis to ask if there is anything they can do for them to improve the service.

Embed the achievement of service standards into your team’s position descriptions, performance objectives and outcomes and as a baseline measurement for salary reviews to “encourage” your team to deliver on the standards and to understand the importance of servicing their customers well.

Start building the tools, resources and processes to deliver your new levels of service.  Begin setting in motion as many small changes as you can, while simultaneously working on the larger scale improvements.  Here are just a few ideas for you:

Employees

  • One of my pet hates is “onboarding”, where there seems to be a fairly common care factor of zero that a new employee is desperately waiting on their first payment.  The number one task of a payroll service is to pay employees correctly and on time and many fail to achieve this for new employees.  New employees sometimes have no idea when they will receive their first payment.  If they were lucky enough to have completed their paperwork prior to commencing, they presume they are set up in the system.  Communicate with them and with the person responsible for their paperwork, make it easy for them, give them expectations and delight them with your efficiency
  • Attempt to be available to your employees during their working hours, which is difficult if your business has 24/7 shifts, but technology exists to stretch your opening hours beyond 9-5
  • Give them information that assists them to make informed and timely payroll decisions and submissions
  • Don’t shut off the phones because you are busy processing payrolls or having a meeting.  Always have someone available to pick up the calls
  • Make it easy for people to reach the right person, post it on the lunch room walls, post it on the intranet, print it on the pay slips, give your supervisors and managers a handbook, do what you have to do.  Let them know who is who and who is next up the line if they run into issues
  • Build an employee handbook or an intranet knowledge base to share deadlines, FAQ’s and include updates on information such as taxation changes, public and school holidays, employee benefits and more
  • Employee self-service is still unheard of in many businesses even though the benefits and ROI are well documented.  If you haven’t got it, start pushing for it and if you have, start exploiting it for all it is worth.  I know of major organisations who refuse to allow their employees to edit certain areas of employee self-service, specifically bank accounts as they believe it will cause more drama if the employees enter them incorrectly.  Make the employees explicitly aware of the format required and the consequences of getting it wrong and you shouldn’t have any major issues, considering it’s in the employee’s best interest to get it right

Internal Customers

  • Become a vital information resource for the business units you serve by understanding what the information requirements are and finding ways to consistently provide automated information that they can access, rather than continually request from you
  • Understand the deadlines that others are working to in order to prioritise the requests for information
  • Understand what business managers are attempting to do with the information they request, so you can provide it all correctly in the first instance and not have to reproduce reports or rework data and calculations

External Customers

  • Requests for information from external sources and verification of employment queries can be a relentless and time consuming exercise.  Put in a system to simplify the process, mandate internally what the target turn-around times will be and create a report in your HRIS system that automatically produces the data to make the process efficient.  If you have the luxury to do so, allocate these automated tasks to a junior level team member.

Once you start implementing service focussed improvements into your operations, your customers will see and feel the shift.  You will earn greater respect from your customers because they will know you value them.  You will enjoy stronger business relationships with people throughout your organisation and while your team may not be so thankful in the beginning, they will be once you’re on the right track and they are under much less pressure.

Service excellence is achieved by doing the thousand little things right, and working your butt off to consistently do all those little things with excellence.

If you have any questions or some thoughts you would like to raise personally, please email Louise Vidler at The Professional Payroll Manager.

© 2013 Louise Vidler T/As The Professional Payroll Manager.  All rights reserved.

All materials contained on this web site not otherwise subject to copyright of other parties are subject to the ownership rights of Louise Vidler T/As The Professional Payroll Manager. Louise Vidler T/As The Professional Payroll Manager authorises you to make a single copy of the content herein for your own personal, non-commercial, use while visiting the site. You agree that any copy made must include the Louise Vidler T/As The Professional Payroll Manager copyright notice in full. No other permission is granted to you to print, copy, reproduce, distribute, transmit, upload, download, store, display in public, alter, or modify the content contained on this web site.

March 16, 2012

Bringing in the WOW! Factor


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People can smell emotional commitment from a mile away. Tom Peters, Author

Compiled with edited extracts from various works of Tom Peters, as who else could describe the WOW Factor better than the man who invented the term.

The ‘WOW Factor’ is a registered trademark of the author Tom Peters, who coined the phrase some ten years ago. He came to fame as the co-author of In Search of Excellence and has since published multiple brilliant books on how to deliver ultimate customer service in all facets of business operations.

What is the WOW Factor?

  • It is that feeling where your heart races and your face smiles when you have received fantastic or even brilliant service.
  • It is when people or companies have stepped out from the crowd of look alikes and done something to make you smile!
  • When something is done or said to make you a brilliantly satisfied customer (or employee)!
  • It is when something is done to make you a devoted customer!
  • It is when something is done that you simply did not expect!

How do I get the WOW Factor happening?

  • Make the words glow, tingle, thrill, dazzle, delight and wow the primary basis for evaluating the quality of your products and services.
  • In the age of email, supercomputer power, the internet and the global village attentiveness – a token of human kindness – is the greatest gift we can give someone.
  • Obsess on the little stuff! 1000 little things are greater than one big thing
  • It is simply when you walk out as a customer and just say… WOW!

How do I get the staff customer focussed?

  • Forget barking orders.
  • Forget issuing a Customer First Vision Statement.
  • Prominently post customer statistics all over the place.
  • Distribute all good and bad customer letters to everyone.
  • Plaster pictures of customers (buyers, products, facilities, etc) all over the place.
  • Start making weekly awards for little acts of customer service heroism

If employees are inundated with practical customer information rather than vague exhortations, they won’t be able to keep their distance. They’ll begin to ‘think customer’ – and maybe even ‘dream customer’.

March 14, 2012

Creating a Payroll Knowledge Base


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“Ask yourself who uses what you do and how valuable to them is what you do.  Then ask yourself whether they recognise themselves as your customer.”  Anonymous

Note: I have attempted to eliminate usage of country specific names and terms for ease of reading by a global audience.

 A knowledge base, for those that haven’t seen one previously, is exactly what it sounds like: a base point where knowledge is stored, to be accessed by those who need to understand information, requirements, policies, procedures and so on.

If you are in a large organisation, there has probably been a great deal invested in the design and creation of an intranet to service as a knowledge base for all the business and support units.  Smaller organisations may not even have an intranet, in which case your knowledge base can be provided in print format in the form of Employee Handbooks, New Employee Packs, Information Handouts, Administrator & Manager Guides to Payroll and internal Payroll Operations Manuals.

Why bother?

Our first reason to bother with a knowledge base is to provide service excellence.  Organisations invest millions and go to extreme lengths to implement customer service policies and programs for their external customers.  These same organisations espouse strongly their commitment to their most valuable assets: their employees, but what level of human effort or monetary investment is contributed to providing decent customer service to internal customers?  For payroll teams, these internal customers are the employees you pay, the management you report to (hierarchically and the provision of actual reports) and the dealings you have with all other people that “touch” your payroll service.

You’ve all heard the maxims: Fore armed is forewarned; Knowledge is Power; You can’t manage what you don’t measure.  A good knowledge base will contribute to organisational effectiveness and work as a response to each of these maxims.

As you read through the article you will come to understand how a well thought out, constructive knowledge base, that is marketed well, can also significantly impact each of the following:

  • Building the payroll teams’ knowledge and capabilities
  • Improvement of payroll efficiency, compliance and integrity
  • Contribution to the minimisation of Error Rates
  • Provision of value added services
  • Empowerment of payroll team members, employees and participants in the payroll process
  • Provision of transparency in the payroll process
  • Contribution to the protection of intellectual property and business processes
  • Assisting in the building of  business relationships
  • Contribution to the credibility of the payroll process
  • Highlighting the complexity of the payroll process
  • Education of your customers on the importance of compliant data inputs
  • Reduction of your daily reactive fire fighting activities and a turning of the tide into pro-activity

Who are we supposed to serve with a Knowledge Base?

A knowledge base should service the payroll team, all contributors to the payroll process and our multiple customers including the employees we pay, the managers we provide reporting to and the other support units of the organisation including the Finance and Human Resources teams.  Depending on the size and diversity of the organisation, additional support units could include departments that specifically handle Workers Compensation, Corporate Governance, Statutory Taxation, Payroll Accounting, IT or Payroll Systems Administration and others.

For the benefit of simplicity, we will focus on our primary customers:  employees, managers and administrators of payroll information.

How complex does a Knowledge Base need to be?

Stick to the KISS (Keep It Simple Stupid) principle every time.  The less complicated a knowledge base is, the more it will be accessed and utilised.  The volume of content you place in it will be driven by the degree of complexity in each payroll or business and the extent of employee benefits the company provides.

What information could employees possibly want out of it?

Ask yourself what problems your employees commonly have.  What are their primary concerns and challenges in the payroll process?  How can you help?  You can build enormous credibility by pin-pointing and addressing your employees’ pain points.  The provision of information that benefits employees and assists them to make informed payroll decisions and transactions, shows that you are empathetic to them and focused on servicing them.

The first place to look for employee pain points is to analyse your most consistent payroll errors and queries and establish what the constants are.

If, for example, you are consistently baffled by the inability of employees to correctly complete a tax form, then this is a must have on your knowledge base.  In Australia, the tax file number (social security number in the US) declaration form has an information sheet attached explaining how to complete the form, but there are always the same issues presenting themselves by employees not completing the forms correctly.  Additionally, if an employee submits their form incorrectly, by law, we are to interpret it using the worst case scenario which can result in taxing the employee at the highest marginal rate.  Living by this rule is easy enough from compliance and processing perspective, but it causes great personal grief to employees, which is then imparted onto the payroll officer handling the aggrieved employees query.

This can be resolved simply, with the introduction of a document on your knowledge base titled “Understanding the Tax File Number Declaration”.  Within the document, an explanation of how the taxation will be applied by certain answers and what the implications will be of not providing a tax file number within the required time limit.  This simple task reduces so much grief and calls employees to action, as it is in their highest interest not to be taxed half of their pay.  I have seen in the US, it is common for employees to misunderstand the W2 and W4 forms, this can be resolved by explaining the difference between, and the importance of, the two forms.  If you need the explanatory note to be a little more “in your face”, attach it to the front of the relevant forms in the New Employee Packages or have it pop up online prior to them accessing the relevant online form.

The key to providing information that calls for action is to use minimal words, maximum impact and the strongest motivators.  Remembering that many people are visual beings, include pictures!  There’s not a lot you can do about the auditory beings, but technology might assist in that one day.

In Australia a few years back, salary packaging was extended by legislation, to all staff of hospitals and charitable organisations, in an attempt to counteract the low award wages and attract people to the industry.  The biggest issue that came out of this though for employees, was the impact the seemingly attractive salary packaging had on their student loans, child support, child benefits and any other welfare payments they may have been claiming.  Employees took up the salary packaging option without realising that it increased their assessable income for all of these other aspects of their lives.  Once the end of the financial year arrived and they started submitting their tax returns, all hell broke loose.  People were being assessed on their ordinary earnings, plus the grossed up fringe benefits and finding they had been overpaid social security payments and were underpaying student loans and child support.  These industries are full of university graduates and also sadly have a high percentage of welfare recipients, in comparison to other industries.  It was chaos.

To counteract this for the future, a guide titled “Understanding Salary Packaging” was introduced to explain these issues and each employee had to sign that they had read the guide prior to taking up salary packaging options.  In the guide, there were massive STOP signs and warning symbols to highlight the potential issues for them.  We provided little tips on how to circumvent future welfare or student loan debts, by explaining how to contribute extra tax to account for the salary packaging impacts.

Another constant query is new employees asking when they will be paid, which should be addressed in induction or orientation programs, but can be added to your knowledge base.

In your knowledge base, include explanations for employees on “what if”, “how to” and “what do I do” scenarios for the common pay queries:

  • What do I do if my pay is short
  • What do I do if I haven’t been paid
  • What do I do if I lose my pay card
  • How to change your bank details
  • How to apply for salary packaging
  • How to apply for leave (and leave payments in advance)
  • Why have you taken garnishees or child support out of my pay without telling me
  • How to complete your timesheet correctly (and preferably legibly)

The pay office is the first point of call invariably, and in most cases we have to redirect the employee back to their supervisor or bank or other area to establish some key facts first.  Minimise these queries, by including the steps they should take, such as talking to their supervisor about incorrect pays as the first step so they can ensure the timesheet was correctly submitted in the first place.

Incorrect bank account details can cause serious headaches and can be addressed with a simple explanation note on the bank details form, or by having employees attach a deposit slip or cancelled cheque to the bank form for verification.  When payments are rejected from bank accounts, it causes distress for employees and wastes valuable time that payroll officers could be utilising adding value to the payroll service.

Once you’ve established some vital information on your knowledge base that serves to eliminate pain points, go above and beyond and provide information that further empowers them, such as:

  • Contact details for the pay office, taxation departments, medical funds, superannuation providers, etc
  • Every single form an employee may need to access in their employment lifetime
  • Updates on legislative or procedural changes that directly affect them
  • New employee packages that explain what they need to know and do (and when they will get paid)
  • Nice to know information from superannuation funds, medical funds, employee share schemes, etc
  • If membership of any third party creditor comes with additional benefits, let the employees know (such as discount offers, insurance offers, etc)
  • Handy website links to government schemes or aide programs affecting your employees (in Australia: Paid Parental Leave, Lost Super, Centrelinks’ Emergency Assistance lines for employees suffering from environmental or personal emergencies and so on)
  • A listing of the coming years’ public holidays
  • Details of your Workplace Giving Program and why they should be a part of it
  • An invitation for feedback or ideas from your employees

What Information Would Managers Want?

Again, start with your pain points – yours and theirs.  Whatever causes grief, can be addressed by arming the right people with the right information.  From my experience, I have learned that these are the kinds of things that Business Managers want from payroll:

  • No noise or fuss (just get it done correctly, every time, and don’t cause me any fuss in the process)
  • A miraculous discovery of how to halve payroll costs (good luck with that one!)
  • Advance notice of any potential IR, ER, HR (and many more R’s) issues that may arise through payroll
  • Assurance that employees are paid compliantly
  • Assurance that the correct number of employees are being paid from the payroll system
  • Correct allocation of all costs associated with the payroll
  • Assurance that the correct amounts are paid for income tax, superannuation, payroll tax, workers compensation insurance, fringe benefits tax, etc
  • Assurance that correct termination entitlements are paid out to employees
  • To spend less time on payroll processing and payroll queries
  • To reduce the overall cost of payroll production
  • Accurate calculation and accumulation of leave liabilities
  • Timely reporting of significant dates (i.e. probation review expiries, special anniversary dates, etc)
  • Advance notice on legislative changes that will affect future payroll costs
  • Budgetary comparisons
  • Overtime, Absence and other payroll costs as a percentage of total payroll costs
  • Assistance with salary reviews via the simplest feedback system possible
  • Information of absenteeism that enables them to pinpoint people and favourite days and see the cost absenteeism is contributing to their bottom lines
  • Workers compensation reporting for submission of annual earnings data to insurance companies
  • Workers compensation reporting on highlights of current workers compensation payments
  • Key employee statistics (average age, years of service, mgt to production ratios, etc)
  • Payroll Issue or Error rates of business units (Name this report carefully in order to build business relationships)
  • If you are a Shared Services Business or Payroll Outsourcer, management want to identify ways to reduce the payroll processing fees (which you can counteract with brilliant service options to again increase them)
  • Effective head count reporting that provides:
    • an overview of the company divisional allocation
    • exact reporting of total employee number
    • alert management to non paid employees left sitting on the payroll
    • alert management to ghosts on payroll
    • highlight volume of new employees and terminations
    • show turnover rates

These are just a few of the things that management want from you.  All you need to do now is start answering these needs one by one.  Your goal is to understand the management teams’ WIFM – “What’s In it For Me” and create reports that are “decision drivers“.  If you haven’t already, learn about Business Dashboards and provide key metrics and statistics that management can easily interpret to know if action needs to be taken to implement improvements.

Talk to, and listen carefully to your management team and learn what information can be provided in value add reports that can drive their operating costs down.  If management discard your expertise at the outset, create the reports and deliver them anyway and managers worth their salt, who understand the numbers, will begin conversation themselves and your reports will come to have some impact.  Ensure you don’t send volumes of information out, as it won’t be welcomed.  Stick to short, sharp numbers and brief highlights of what the information is telling you (i.e.: Absenteeism in Department X is 78% higher than all other departments) to elicit calls to action from management.  The business should welcome your attempts to open discussion about improvement areas.  Word your highlights carefully, as you want to maintain and improve business relationships, not create enemies.

One major consideration in the gathering of data for management reports like these, is the ability of your payroll or HRIS system to extract the data easily and how you present the data.  If you know Microsoft Excel fairly well, you can create some great reports from pitiful payroll data extractions.

How Can We Serve Providers of Payroll Inputs With A Knowledge Base?

The key to providing a completely correct payroll service is the quality of the data inputs coming in to the process.  This information alone should be enough to convince you that the payroll team should partner with every contributor to the payroll process to ensure the quality of the inputs.

Help yourself by helping the administrators of payroll information to understand what the requirements are by giving them a guide that steps through the process from their perspective.  Outline the deadline requirements and explain in simple terms how it should be done.  Not everyone that processes timesheets for a business unit understands the complexities of payroll or industrial agreements.  They only know what they know, and that might not be enough to allow for a seamless payroll process.

Information in the “Administrators Guide to Payroll Processing” should also include helpful items such as:

  • Contact names and numbers of people they can reach for help
  • Payroll processing deadlines (including shut down periods and public holidays)
  • Frequently Asked Questions to enable them to handle simple payroll queries as the first point of contact for many employees
  • “How To” instructions on common issues or queries that they should be addressing
  • Identify common errors and omissions from administrators and let them know the impacts these have on the payroll process (nicely)
  • Any other information that impacts the quality data being delivered by them to the payroll team

What Other Information Would Our Customers Want?

To find out what your customers want to know, there are two simple steps to take.  Firstly, you ask them!  You can ask your employees, managers and other customers what information would help them and then work to provide it.

Sometimes, people do not really know what product or service they need, but have a problem that needs a solution, so secondly, you listen to them.  Listening to your customers should be a systematic, daily process that is built into your personality, let alone your daily functions.  One persons’ anguish or confusion could result in another valuable piece of information that many others could utilise.

Building a Knowledge Base for the Payroll Team

To achieve our end goal of providing a compliant, correct, on time payroll, we need to arm our Payroll Team with the knowledge they require to achieve that end goal.  So many payroll teams operate from disjointed processes that usually vary between payroll officers.  They’ve collected bits and pieces over time and invariably the loss of a payroll officer from the team also results in a loss of valuable knowledge of the intricacies of the process.

To ensure the preservation of organisational knowledge and the competence of your payroll team as a whole, invest your time in collecting, documenting and publishing vital information such as:

  • Documented payroll processes, checklists and deadlines
  • Orientation or induction program contents
  • Master forms used in the payroll process
  • Policies and Procedures relating to payroll processing
  • Legislation and Employment Agreements/Industrial Instruments that relate to your organisation
  • How To Guides (How to Calculate Tax on Termination, How to Pay Upon Death of an Employee, etc)
  • Tax rates and calculators that you need to perform all of your tasks with
  • Links to helpful sites that provide additional information
  • Answers to everything they need to know to serve your customers at their best

How Do We Actually Get People to Start Using the Knowledge Base?

Once you’ve created your knowledge base, the next step is to ensure you drive people to use it.  You have to promote it and refer people to it regularly…  If people ring with questions, you can refer them to the knowledge base on the intranet (or a document that you can email them) and walk them through it.  Over time, this will encourage people to use the knowledge base as their first point of call, until the time comes when your queries start with this conversation – “I’ve just searched the knowledge base and I couldn’t find any information on …”

Encourage your own team to utilise the knowledge base by eliminating all other sources of personal notes and individual processes and holding your payroll teams’ knowledge in the central knowledge base (in print or online format).  Every time someone has a question, a chorus of voices should either say “It’s in the knowledge base!” or “That needs to be in the knowledge base!”

Let’s Get Started Then…

To assist those of you following this series, I’ve opened a conversation on the Linkedin group “The Professional Payroll Manager” and welcome questions, comments or suggestions on the discussion board, so we can all work together to improve our global payroll world.

If you have any questions you would like to raise personally, please email Louise Vidler at The Professional Payroll Manager.

© 2012 Louise Vidler T/As The Professional Payroll Manager.  All rights reserved.

All materials contained on this web site not otherwise subject to copyright of other parties are subject to the ownership rights of Louise Vidler T/As The Professional Payroll Manager. Louise Vidler T/As The Professional Payroll Manager authorises you to make a single copy of the content herein for your own personal, non-commercial, use while visiting the site. You agree that any copy made must include the Louise Vidler T/As The Professional Payroll Manager copyright notice in full. No other permission is granted to you to print, copy, reproduce, distribute, transmit, upload, download, store, display in public, alter, or modify the content contained on this web site.

March 8, 2012

12 Best Practices to Totally Transform Your Payroll World


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My recent articles have aroused passionate discussion and poignant feedback from the payroll industry globally. Overwhelmingly people claimed that payroll as a function is held in low esteem and many who perform the often-thankless task, are not deemed professionals by those that employ and manage them.

Crystal balls and magic payroll buttons aside, the question left at the end of the day is “How do we turn the tide?” Well here’s how! If we utilise all of our previously unobserved knowledge to deliver first-rate value add products, services and insights for employees, business managers and other stakeholders, there will be a paradigm shift. Guaranteed! People will begin to acknowledge the complexity of payroll and come to value the true worth of our knowledge.

Mahatma Ghandi said “Be the change you want to see in the world.”. So let’s do it payroll professionals! Let’s be, and lead the change!

Reading the Linkedin and other feedback from the “magic payroll button” article left me saddened more often than not. There are people who have committed to getting the job done through hell and high water for as much as 40 years and still feel that no-one truly understands the effort or personal commitment it takes to get the job done. We endure late nights, miss out on our family and postpone life. Many of us are refused leave at Christmas time and work public holidays year in and year out.

At the other end of the spectrum, there seems to be an abundance of those same payrollers with an absolute sense of humour and the ability to brush off the negative, step up and say “OK! What’s next?”

So here it is! Here’s the “What Next”. Over the coming 12 weeks, starting on Monday, I’m delivering a payroll innovation per week for you to implement. To some of us, these are hardly innovative, but every time I’ve stepped into an organisation, many of these are usually the first steps I take to quickly turnaround the perception of the service. They are easy wins. Take 12 weeks or 12 months to implement these ideas, it’s your call, but you will begin to live in a new world when you start to move down this path.

The 12 payroll innovations were selected to not only highlight your expertise to all “customers” of the payroll service, but also as they are key areas for time and cost efficiency gains and they will see you on your way to delivering service excellence. Any decent benchmarking program will focus on these areas as measurables. Here’s the list of the 12 innovations that are coming (and not necessarily in the same order):

1- Creating a knowledge base (for employees, managers, administrators and your payroll team)
2- Give your employees a “pay rise” by implementing programs with tax advantages
3- Becoming a vital information resource for Business Units and Finance
4- Creating a seamless New Employee Process for the whole organisation
5- Identifying and eliminating pain points for your team and customers
6- Creating valuable services and staff benefits via your third party creditors
7- Implementing error rates analysis to reap the rewards of superior service and cost and time efficiencies
8- Automation 101 – The Essentials of Automating Payroll Processes
9- Utilising Your HRIS or Payroll System for all its worth
10- Extracting the absolute maximum out of a limited training budget
11- Creating functional masterpieces with excel
12- Restructuring your payroll processes to create efficiency gains and service specialisations

While you await the first article, I will intoduce you to author Ron Kaufman and his book “Up Your Service!”. It’s an absolutely brilliant game changer! I came across this book years ago and now it’s a well worn management tool. Do yourself a favour and sign up for the Up Your Service! Insights newsletter at http://www.RonKaufman.com At the very least.

Ron explains the term “perception points” and how to radically shift other peoples’ perception of us by spending some quality time analysing our perception points. He does this in the easiest to read, bite sized and palpable chunks. If you are not converted by page 5, I’ll be surprised. In a rather large nutshell, the book tells us, if we didn’t realise already, that we have to accept some of the responsibility for how we are perceived. Absolutely every tiny detail we present to the world matters!

Step one in changing others perception of ourselves, is to look within and to examine what we are projecting. With the Up Your Service! book in hand, you will be keen to scrutinise yourself carefully, your team and your physical surroundings. You will understand the absolute importance of ensuring total professionalism in the end product of your services and begin to look at everything from the perspective of your customers service experiences and their five senses.

The whole concept of Ron Kaufmans “perception points” is that every time someone experiences a sight, smell, taste, sound or a feeling they are perceiving and your job is to ensure the perception you aspire to.

To begin the process, stop being the payroll manager for a moment, put your customer hat on and start observing your service. Stand at the entry door to your pay office and be your customer. What do you see? What do you hear? What do you feel? Is your office or workspace organised? Are your people welcoming? What do people get to physically see and touch from you? Does it make you proud? Cringe? Or just acknlowledge that it could be a little better?

Are your emails professional? Do you have forms that look like they’ve been photocopied a trillion times over the last 20 years? Are there archive boxes, filing and enough piles of paper around your office to give your Safety Representative a heart attack? Does everything you present say we are professionals and we are proud of our work?

Listen to the phone calls and empathise with the person on the other end of the phone. Attempt to understand if there is a deeper layer of concern to the questions being asked or objections being put forward. Are you and your team providing superior service or are you simply telling customers to buzz off in the nicest possible way? How do you show them that you actually exist to serve them?

To stand up and be noticed, we need to be someone of worth, or do something of worth. It’s time to change the course of history and start putting payroll on the corporate agenda… but it’s up to us to work on changing our world from the inside before we can start expecting the slightest change of mindset by a majority of those on the outside.

Join us on the journey by following this blog (top left of this page) or joining The Professional Payroll Manager group on Linkedin and each Monday your next step will be in your Inbox. I would love to have actual conversations along the way about your successes, your issues and any ideas and questions you want to share.

I am also trying to purchase bulk copies of Ron Kaufmans books, so if you would like to purchase through me via paypal, message me at any of my social media contacts and I’ll keep you posted when I’ve received a definitive reply.

(C) 2012, Louise Vidler

Follow on Twitter @louisevidler
Join the discussion via Linkedin group: The Professional Payroll Manager

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