Compensation and Reward system plays vital role in a business organization. Since, among four Ms, i.e. Men, Material, Machine and Money, Men has been most important factor, it is impossible to imagine a business process without Men. Every factor contributes to the process of production/business. It expects return from the business process such as rent is the return expected by the landlord, capitalist expects interest and organizer i.e. entrepreneur expects profits. Similarly the labour expects wages from the process.Labour plays vital role in bringing about the process of production/business in motion.
The other factors being human, has expectations, emotions, ambitions and egos.
Labour therefore expects to have fair share in the business/production process. Therefore a fair compensation system is a must for every business organization. The fair compensation system will help in the following:
o An ideal compensation system will have positive impact on the efficiency and results produced by employees. It will encourage the employees to perform better and achieve the standards fixed.
o It will enhance the process of job evaluation. It will also help in setting up an ideal job evaluation and the set standards would be more realistic and achievable.
o Such a system should be well defined and uniform. It will be apply to all the levels of the organization as a general system.
o The system should be simple and flexible so that every employee would be able to compute his own compensation receivable.
o It should be easy to implement, should not result in exploitation of workers.
o It will raise the morale, efficiency and cooperation among the workers. It, being just and fair would provide satisfaction to the workers.
o Such system would help management in complying with the various labor acts.
o The system should follow the management principle of equal pay.
o It should motivate and encouragement those who perform better and should provide opportunities for those who wish to excel.
o Sound Compensation/Reward System brings peace in the relationship of employer and employees.
o It aims at creating a healthy competition among them and encourages employees to work hard and efficiently.
o The system provides growth and advancement opportunities to the deserving employees.
o The perfect compensation system provides platform for happy and satisfied workforce. This minimizes the labour turnover. The organization enjoys the stability.
o The organization is able to retain the best talent by providing them adequate compensation thereby stopping them from switching over to another job.
o The business organization can think of expansion and growth if it has the support of skillful, talented and happy workforce.
o The sound compensation system is hallmark of organization’s success and prosperity. The success and stability of organization is measured with pay-package it provides to its employees.
Any business that employs people will have to process those employees wages when they are due and this is known as
payroll processing. Calculating how much each employee is owed does this, then making the appropriate deductions for tax, NI, pensions etc and sending those to the relevant tax office. Then pay slips need to be printed and issued to employees and all administration then needs to be completed. In addition to this any new starters with a business need to be processed, as do leavers – so in short payroll processing can be a very complicated and lengthy task, which has to be done through software developed by expert professionals in this field.
If payroll processing will be done manually there is lot of chances to commit mistake that creates the problem. This can be anything from employees not being paid the right amount or It is being paid to someone else and later fining the business owner. So it is essential that if you need to have payroll processed for your business that you get it done properly.
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