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How to implement successful payroll management practices
Benchmarking is a technique designed to generate information that will help an organization improve. To this end, it does more than establish yardsticks that make it possible for organizations to assess themselves or for third parties to verify the performance of the processes being examined. Benchmarking implies analyzing activities in terms of their organizational environment with a view to distinguishing effective practices from those that are less effective. It is also intended to identify organizational factors impacting on the performance of the organization's current practices.
Moreover, to be an effective management tool, benchmarking must be a disruptive process in that its results must, to a certain extent, create a cognitive dissonance. Organizations must become convinced that improvement is within easy reach, and this belief must be strong enough for management to foster change and be implemented immediately.
Let us consider the business process of payroll management. Every organization has to manage its employees' payroll, sometimes by having it processed through a specialized firm. However, even where an organization subcontracts the payroll function, organizations still have to manage it, and their management is sometimes more expensive than the cost of the subcontracted duties. In fact, the activities performed prior to the actual processing of an organization's payroll, but part of the payroll management process, generally cost between four and five times more than the simple processing of the payroll. The payroll management process includes three sub-processes, i.e. managing the employee record, managing the data and processing the payroll (see Three Steps to Payroll Processes).
Disruptive information Benchmarking deals with business processes, making it possible to study a given process within organizations of various sizes that are active in industries that may have nothing in common. Moreover, although multinational organizations may be willing to adapt practices used by firms with an organizational environment completely different from their own, many other organizations are not. For small or medium-sized organizations, information taken from a study has more impact on management if it relates to organizations of comparable size.
Indeed, the most often quoted excuse used by senior executives for not reacting to a benchmarking study is that the best practices described in the study come from organizations working in a...