In the medical field, which I work there are many different types of compensation depending on your payment structure. The main form of compensation would be your hourly wage. This form of compensation is the most basic and extremely easy to figure out on your own when you’re doing payroll. However, things can get much more complicated if you think about the different components of payment structure, especially if you consider the ramifications of pay associated with large sectors of benefited employees. In a field where payment structure is based on an extremely complicated set of rules automation is a necessity.
In health field it is not unheard of to have payment rules such as overtime, shift differential, temporary shift premiums, preceptor pay, etc. Those structural components based on hourly rules in the sense that over time for some employees is after 8 hours, while other employees it is after 12 hours, and some employees still only receive hourly overtime after 40 hours per week. Finally, these previous rules can be accounted for in conjunction with secondary staffing clauses. An example of which could be after a paid holiday if an employer were to call out then they would not be eligible to utilize their paid time off in that instance. Even if you knew all of these policies by heart it would be nearly impossible to perform the necessary calculations for each employee efficiently enough every Sunday to turn in your pay roll to administration by Monday. In order to automate this process your company should use something like compensation management software.
The initial startup cost for using this software can be quite extensive depending upon the size of your company however in the long run it will save you time and headaches as an administrator. A general model of how the software works is as follows. Employees will punch in and punch out of the computer program from either a punch card sensor or a computer terminal itself with their individualized employee ID numbers. The software will catalog and track the employee’s hours over the course of the pay period. Administrators will then input base rules associated with company policy. These rules will be the compensation factors necessary for computing wages for each employee. For example, if an employee made overtime that week it will organize it catalog it and account for it accordingly. If an employee called out and used paid time off from his bank however also worked extra hours on 2 previous shifts, then it will use the algebraic model to perform the necessary calculations no matter the complexity. Finally, at the end of each pay period the program will automatically generate a complete timecard with individualized breakdowns of each employees pay period. It will then send out these timecards to each employee allowing them to view their own timecard, then allow them the opportunity to acknowledge the timecard is correct, and give them a mode to refute the time card should any sort of issue arise?