Human resources and payroll are two discrete functions within an organisation. Nevertheless, the responsibilities of both these departments often tend to intersect or are performed by the same individual. Whilst this might sound a good thing for a business, i.e. fewer staff to compensate, it can pose a number of issues.
Fact is that whilst HR and payroll are two different roles, they often ought to work out hand-in-hand. Now as a business owner, you ought to identify the thin line that differentiates these two functions in terms of functions as well as terminology to ensure that they work in harmony and efficiently.
Payroll, the term says it all. It refers to the procedure where employees receive their monthly or weekly pay. Payroll department and its staff is responsible for processing, reconciling, looking after taxes and managing pay data in co-ordination with the accounting department. They calculate reimbursements such as overtime, holiday pay, sick leaves, expenses etc. due on monthly, yearly or weekly basis. They also look after salary deductions, payroll verification and record keeping before disbursing paychecks. Once processed, they generate and distribute payslips whilst meticulously keeping abreast with tax and all the necessary deductions.
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The prime responsibility of the human resources department and its people is employee management within the organisation. In other words, their job revolves around bringing out the best in your workforce, finding and retaining new talents and address employee grievances. HR department is also accountable for motivating your employees to perform at their optimum best. This may require devising a reward program or employee benefits scheme that may include bonuses, extra holiday benefits, commission or compensation. Not to forget, your human resources department is also responsible for developing and executing training programs for both the new recruits as well as existing workforce ensuring that employee performance and skills are in line with the organisation’s goals. They also ought to engage the workforce by organising team building events, gigs, etc. on a regular basis.
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As mentioned above, HR and payroll will need to work in tandem for a number of tasks. For instance, if the human resources department develops some commission scheme for your sales department, the payroll folks should be informed about the same in order for them to know the commission to be included in the paychecks. In fact, a number of payroll concerns are related to the human resources issues including salary inconsistencies, bonus, recruitment, sick leaves, holidays, deductions and much more. Most importantly, both these departments have access to the confidential employee data that they ought to deal with caution.
The Great Breakup
One of the prevalent differences between payroll and HR exists in the type of folks you recruit for these responsibilities, since each role requires different skill sets. Payroll is a monetary based role that requires hands-on and good experience in numbers and sound knowledge of tax laws. So a payroll department requires people, who possess excellent mathematical and logical expertise. On the other hand, the HR’s primary focus is on employee management, so you need people who are good at communication and are people-oriented.
At Pocket HCM, we offer a cloud based payroll software to ease the lives of both HR and payroll people ensuring that your people are paid on time and accurately. For more information, you can write to us at firstname.lastname@example.org or give us a shout out at Twitter or Facebook.