Businesses have been hard pressed in the past few years to find ways to improve operations, increase profits, and streamline processes. Companies spend vast amounts of time coming up with plans and roadmaps that will help them to achieve these goals, yet many fail because they simply don’t appreciate how significantly workforce management influences their performance.
That’s one of the reasons why it’s time for SMEs to change their thinking about human resource management. According to Grant Lloyd, MD of Softline Pastel Payroll, many business owners believe that implementing an HR software solution is too costly, and that a stretagic focus on HR management will introduce too much red tape into the business.
“It’s a fallacy that HR software costs an unjustifiable amount to buy, and implement,” Lloyd says. “While the market is hardly flooded with cost-effective entry-level HR software, there are vendors who have successfully extended payroll functionality into the realm of HR, providing a simple, easy, and logical starting point.”
Make payroll a priority
No matter what type of business you’re running, payroll is an essential monthly activity involving complex calculations, deductions and statutory regulations. Sandra Swanepoel, sales director, Softline VIP, says that while buying good payroll software to manage this in-house saves a lot of money, even more important is the legislative knowledge a small business will receive from a reputable payroll provider.
“Payroll administration is much more than just knowing your software product. In any industry, experts in their field are hired to lessen the risk of non-compliance to the business and the same should apply in the payroll industry,” she says. “Employ a payroll administrator who knows the legislation, who knows payroll best practice and who is able to apply this to the company’s specific payroll requirements.”
Lloyd concurs. “Labour legislation, competitive markets worldwide, increased competition for skilled human resources and generation gaps mean that sound HR strategies, coupled with flexible, easy-to-use and extendable software that supports all related functions, are no longer discretionary – they are essential.”
The solution a company chooses should be able to handle all the aspects of payroll reporting. The software must be able to integrate into the accounting system, and it’s important to look for a payroll product that will serve your business’s needs for the long term.
“Choosing the right payroll solution doesn’t have to be a daunting task,” Swanepoel says. “What is important is to match the product’s functionality with business needs, and this means looking beyond all the bells and whistles vendors often put on the table.”
Training is vital
To operate effectively and get the most from software products, companies should not only invest in a good solution, but also implement best practice procedures as part of that solution. “Often companies do not use the software to its full capacity, resulting in a poor return on their investment,” Swanepoel points out.
“Training employees to use your payroll and HR software is one of the most cost-effective decisions you can make. If everyone knows how to optimally use these solutions, you can save time and money while increasing skills. By investing in software that will last the company a long time you not only make sure that the return on your investment is great, but payroll administrators will feel that they are equipped to do their jobs if they have been well trained. Having your payroll expertly administered builds trust among employees – everyone appreciates being paid correctly and on time,” she says.
It’s good for business
Training, education, salary, benefits, incentives, career-path and performance criteria are important to just about everyone. “Implementing HR and payroll software demonstrates the employer’s equally serious commitment to these aspects of the employer-employee relationship,” says Lloyd. “A sound HR base encourages excellence in products and customer service.”
Interestingly, until a few years ago, formal payroll qualifications were lacking in South Africa, something Swanepoel believes “old school” work processes had a lot to do with. Payroll administration was always seen as a back-office job which required little expertise – an “add-on” to someone else’s job, where the tricks of the trade were learnt through trial and error. However, over the past ten years changes in payroll legislation have greatly affected the way the job is done today and, more importantly, by whom it’s done.
“The new legislation introduced skills levies and brought significant changes to tax and labour laws, as well as UIF reporting. Companies were suddenly faced with the realisation that in order to avoid penalties for non-compliance, they had to bring payroll administration out of the attic and into the boardroom. Payroll is now a priority business process in which no risks could be taken.”
Related: Dealing with Poor Performance
Charity Begins At Home This Festive Season
3 Ways to invest in your own employees.
We often only think of corporate social investment (CSI) as an organisation’s actions in the surrounding communities (philanthropy and volunteering), but CSI is also inward facing. By promoting employee well-being, your business can be a vehicle for change, not only in the society around it, but also directly in the lives of those working there.
Here are some ways you can invest in your own employees during the festive season:
1. Involve your employees in a higher purpose
This might sound like a bit of circular reasoning, but studies have shown that involving employees in CSI activities has several benefits. People involved in meaningful activities tend to be more motivated and willing to go that extra mile because of the higher good associated with the work. CSI programmes also:
- Increase co-operative behaviour and employee relationships
- Enhance the sense of company identity
- Improve employee retention and commitment
- Create an attractive company culture.
2. Provide the space for physical and mental breaks
The end-of-year and festive period is often a very stressful period. Balancing festive and family duties with increased pressure at work due to colleagues taking leave, looming year-end targets and planning for the next year can take a toll.
You, as the employer, can ease this stress by ensuring that there are systems in place that define holiday working policies. Promote time and productivity management to plan workflows and keep the momentum going in these last weeks of the year. Also make sure you have effective communication strategies in place for plans that are in the pipeline for the new year, so that employees can get their heads around upcoming changes. This will allow employees to plan ahead and build in time to switch off, knowing that all of the boxes have been ticked.
3. Constructive feedback/motivation
Also, take the time to acknowledge and show appreciation for the hard work that your staff has put in throughout the year. As the saying goes “valued employees are valuable employees.”
How Medical Savings Accounts Are Changing – For The Better
By Jeremy Yatt, Principal Officer of Fedhealth
The concept of medical savings accounts (MSA) emerged in the industry in the early 1990s, reputedly when Discovery founder Adrian Gore was working at Liberty. At that time medical scheme benefits for different kinds of day-to-day healthcare were specified, so for example, you’d get a certain amount of Rands to spend on your over-the-counter medicine, or for optometry services. But this was problematic, as people’s daily medical needs are all so different. So, you’d have medical aid members calling their medical schemes saying, “I haven’t used my spectacle limit this year, so can I transfer it to use on medication instead?”.
The idea for MSAs was to pool these separate benefits into a total Rand amount, that you could then spend how you wanted, and more importantly, retain if you didn’t use them all. Initially, medical schemes were reluctant to follow this idea, as they thought it would lead to under-servicing: medical aid members might be unwilling to spend their savings, and so might not get the proper day-to-day medical attention until it became a crisis and they were hospitalised. However this was not the case, and MSAs proved very popular.
At first, there was no real limit on how much of your contributions as a member could go into your MSA, so most schemes allocated around 40-50%. Many schemes also pushed major medical procedures like MRI scans into savings, which was effectively a way of forcing members to self-fund these costly medical expenses. As a result, the Medical Schemes Act was amended in 1998 to impose a 25% limit on the benefits that could be put into MSAs, which largely forced the schemes to be responsible for these major costs.
Under the previous structure there was no disincentive not to use your benefits, particularly as they didn’t roll over from year to year like Medical Savings do. It was therefore not uncommon for a call centre to get queries from members asking how much was available in their different benefit areas, so that they could make sure they used them all up.
MSAs solved these sorts of problems by giving medical aid members increased convenience and autonomy, which is why schemes have been using them for the past 20+ years.
The concept of an MSA isn’t far removed from a loan. Like a loan, an MSA lets you use a sum of money when you want to, but you still have to pay for it regardless of whether you use it or not. It forms part of the registered gross contribution to the medical scheme. Take the example of a member who has R12 000 they can access in their MSA each year. Effectively they are paying for this “loan”, contributing R1000 a month, starting in January. However an MSA means they can use all of that R12 000 upfront, such as if they need expensive dental treatment (crowns etc.) at the start of February that costs R12 000.
In this situation, the member has only paid for R1000 worth of that R12 000 “loan” (with their January contribution), so they effectively “owe” the medical scheme R11 000, which they then pay off over the remainder of the year. If the member left the scheme straight after their dental work, the scheme would then contact the member to repay the R11 000, as they still owe that amount.
The concept of giving members access to medical financing led us to develop our new MediVault offering for day-to-day medical expenses. Describing it as a loan holds negative connotations for some, but it’s not that different from the concept of an MSA: in fact, we see the MediVault as a natural evolution. All it means is that you won’t need to pay for day-to-day savings upfront. Instead, you’ll be allocated money for these everyday medical expenses in your personal MediVault and, once you’ve taken the money out, you only have to pay it back over a period of 12 months – completely interest-free. This is a far better option than taking out an expensive loan from a traditional loan company, or getting it from an unscrupulous loan shark.
Our MediVault offering is not at all about loaning funds to people irresponsibly. We’re not creating a monster that’s going to indebt you – we’re just changing the way you can access funds for your healthcare. After all, health is everyone’s most worthwhile investment, and we want to give people the flexibility to make it their top priority.
Year-End Reviews Are Not Always A Positive Experience
This is largely due to parties entering into it without proper preparations, thinking that it can be done in one meeting.
Performance reviews are similar to entering a race. It’s all about race day, but what you put in before the event (the discipline to wake up and train, the commitment to push yourself and stick to your training plan) is what makes race day either a great positive journey or a terrible experience. The same principle applies to performance reviews. It should not be a once-a-year meeting. It should be part of the monthly job description for both the manager and employee to be able to compare, adjust and review on an ongoing basis. Then, once a year, all the insights gathered during the year should be reviewed to plan for the next year.
Performance excellence reviews contribute to the culture of a company
We always say that attitude determines outputs or achievements. Personal attitudes, and the character of the business, is the culture. A great culture will lead to great achievements.
Performance excellence reviews are the tool we use to compare, adjust and shape what we want to achieve and then benchmark to know if it has been achieved.
Employee performance reveals a lot about the business’ achievements. A business is great when it is profitable, cares about and looks after their people, and contributes towards the wellbeing of society and/or the planet. It is all about performance. What you put in is what you get out. And this is what we need to understand.
Related: How to Set Up Employee Assessments
Performance excellence reviews can be a positive experience
Know the individual and their needs. There are really no one size fits all generic option.
There are however a few general good practices :
- Managers should firstly understand the value that performance excellence reviews contribute towards overall achievements.
- When the manager is positive about the reviews and the value it adds, automatically the employees follow.
- On a monthly basis, review the employee’s feedback relating to the progress of the functions / tasks.
- Be understanding as a manager – not all functions might haven been able to be completed due to job changes or the complexity of a growing job function.
- As employee, understand that a manager is employed to manage the performance of the team, the department and the business. This entails understanding the employees’ performance.
- New employees need to be reviewed more frequently eg. Bi weekly. When the employee has found their feet, review monthly or bi monthly.
- Do not review performance once a year only. Review frequently, and once a year have a focused meeting around performance to discuss what was achieved during the last 12 months.
- Managers should be responsible, and held accountable, to get all staff to complete their reviews (monthly, quarterly etc). It is the managers responsibility and it should be one of their functions.
- Employees should know that performance reviews are simply there to understand the job, and help to align the job and the person’s talents to get the best outputs. It’s about continuously striving towards efficiency and effectiveness.
- As a manager: Communicate progress feedback and offer assistance.
- Be consistent. Review frequently.
- Celebrate achievements.
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