Cornerstones of HR Value Chain (HR Service Delivery) Part - 4

In continuation to Cornerstone of HR Value Chain (HR Service Delivery) Part - 3. I'll cover Payroll in this post. It is imperative to have a structured payroll process in place.

The term 'payroll' encompasses every employee of a company who receives a regular wage or other compensation. Some employees may be paid a steady salary while others are paid for hours worked or the number of items produced. All of these different payment methods are calculated by a payroll specialist and the appropriate paychecks are issued. Companies often use objective measuring tools such as timecards or timesheets completed by supervisors to determine the total amount of payroll due each pay period.

Processing payroll can be one of the most complex tasks facing an organization। Besides simply paying your employees, you will need to file taxes, submit reports and process year-end data for tax-reporting purposes.
There are three basic types of payroll systems.

1. Manual payroll
2. Computerized payroll
3. External payroll service/ Outsourced to payroll company

While processing payroll, it is imperative that we have a broad understanding of compliance related to Employees Provident Fund and Misc. Provisions Act, 1952, The Payment of Bonus Act, 1965, The Contract Labor (Regulation & Abolition) Act 1970 · The Child Labor (Prohibition and Regulation) Act 1986 · Employees State Insurance Act 1948 · Maternity Benefit Act 1961 · Payment of Gratuity Act 1972 etc. I shall touch upon in details on these as well as other relevant
acts from business stand point when I start a series on Legal Aspects of Employment Laws.

In my next post i'll cover other facets of HR Service Delivery like Digitization and Process Mapping.


  1. Hi Raj,

    Interesting post...
    Managing payroll is one of the most complex tasks in any organization, irrespective of size. Large, medium size and SMEs can save considerable amount of time and money by payroll automation

  2. It needs more elaboration as Payroll or Compensation Management is a comprehensive topic and one of the major dimensions of HRM.

  3. Pay Roll Systems, in most organizations, are handled and controlled by the Accounts Departments, based on the time sheets provided by HR Departments. Of course, in recent modern organizations, particularly the IT Sector, it has become one of the main functions of HR Department.

    With the automation and IT, Pay Roll System, though complicated and comprehensive, has become easy and more accessible by the Companies without any flaws.

    Anyway, good exposure by Raj.