This article provides a general overview of the human resources and payroll system in businesses, aiming to help managers and business directors understand the human resources and payroll management system that needs to be implemented in their enterprises.
1. The role of the human resources and compensation system in a business.
Human resource and compensation management plays a huge role in the business operations of an enterprise; it is a deep-seated activity within the enterprise, yet it determines the business results.
The human resources and payroll system in a business is a system that includes the following work functions:
1.1. Recruitment
In business, successful recruitment—finding people who are truly a good fit for the job—is of immense importance. A company with a qualified workforce capable of performing their assigned tasks well contributes to its survival and growth. Those hired for jobs that match their skills and strengths will be enthusiastic and secure in their work.
Conversely, if recruitment is not done properly, it will have negative impacts that directly affect both the company and the employees.
1.2. Human resource training and development
Training and development are two fundamental aspects of improving the professional skills of employees. Additionally, it includes employee education within the company.
Businesses need to focus on training and developing their personnel because in this era of rapid scientific and technological advancements and constant technological innovation, to keep up with the times, people need to be equipped with certain knowledge and skills in their profession; this is both a need and a responsibility.
1.3. Personnel evaluation
Employee evaluation is one of the most important aspects of human resource management. It is key for businesses to plan, recruit, develop, and reward their workforce. Evaluation is a standardized procedure, conducted regularly to gather information about each individual's professional abilities, work performance, personal aspirations, and development potential.
1.4. Employee Compensation and Benefits
Employee compensation and benefits are aimed at motivating employees to improve labor productivity, enhance business efficiency, and achieve company goals.
Each individual and group comes to a company with their own goals and desires. Each person has their own priorities and constraints. As a human resources manager, with these specific individuals and groups identified, we need to determine the motivational goals for each group and individual in order to provide appropriate, sufficient, and timely support to achieve the desired results.
Compensation is expressed in two forms: material compensation and spiritual compensation.
2. The wage system in the enterprise
System payroll managementA salary system, or wage system, is a system comprising tightly organized constituent elements designed to implement the overall wage policy applied to the workforce.
Directors and business owners have full discretion in choosing how to manage their company's payroll; however, regardless of the method used, the company's payroll system must legally ensure it meets two requirements:
- It must be effective.
- It must comply with relevant legal regulations.
2.1. The wage system must be efficient.
An effective salary system is one that is appropriate and sufficiently good to help a business successfully build a workforce for its production and business operations. Therefore, when building a salary system, it must meet certain requirements. 4 basic requirements or:
- Salaries should reflect market competitiveness.
- Salaries should be commensurate with each person's abilities and contributions, ensuring fairness within the company.
- The salary structure must be flexible, with both hardware and software components that allow for adjustments up or down as needed.
- The method of calculating salaries should be simple, easy to understand, and clear so that everyone can understand and check their salary.
2.2. The wage system must comply with relevant legal regulations.
The company's wage system must ensure that its implementation meets the following legal requirements:
- Regulations on labor and wages in the Labor Code;
- Regulations on compulsory insurance (social insurance, health insurance, unemployment insurance) in the Social Insurance Law, Health Insurance Law, and Employment Law;
- In order for salaries to be accounted for as business expenses and presented on financial statements, the Accounting Law and the Corporate Income Tax Law must be followed.
- Salaries are subject to personal income tax, and therefore must comply with the Personal Income Tax Law.