Tuesday, December 11, 2012

Soft Skills for Payroll Professionals.....



Introduction

To work in any profession, one should not only have “Subject Matter Expertise” but also personality, behavior, decorum, mannerism, attitude, professional approach, and thinking to work efficiently and to sustain in that given profession. Failing which, irrespective of your knowledge, education and background you will never be able to grow in that profession. This is also true for PAYROLL Profession. There are some minimum expectations from PAYROLL Professionals, in the way they carry themselves, behave and present themselves that can hamper or lift their image and professional graph. Some of those traits and attributes I have mentioned in this article. Though, to a large extent I have covered all the attributes but still I consider this list as INCLUSIVE and not EXCLUSIVE. The need is to benchmark your Personality and Behavior. Respect can only be earned and not “asked for”.

Nine Qualities all PAYROLL Professionals Should Have


1) Clarity of Thoughts – In most of the situations and circumstances, we come across two options; either we want to do or we don’t want to do; either we agree to it or we don’t agree to it; either it is acceptable or it is not acceptable; either you want or you don’t want. It has been seen that many PAYROLL Professionals are confused. They are not clear, where they want to take their company. They don’t know what role they like to play in the organization. They don’t have clarity of role. They don’t have clear expectations, neither from themselves, or from their team or from their internal customers (employees). With this confusion, they fail to take decisions. They fail to take stand.

2) Efficiency in Time Management - PAYROLL professionals is expected to be efficient in time management. They are expected to set time-frame and meet those expectations. Most of the time, I have seen that they don’t give any time limit. You approach them for any work and they respond by saying, “Ok, it will be done”. But when? I agree that “Good PAYROLL Professionals” have many things to do. Recruitments, Employee Relations, Talent Management, Career Development, Benchmarking, etc are the things, which takes lots of time. But, all goals, all dreams, all activities, all commitments looks good and are achievable, if there is a closing date for that. For Example, I want my company to be in top-10 companies in the world. It’s a Vision. It’s a good dream. But, if I don’t specify, by which year or in how many years, I want to achieve that goal, it will only remain as a dream and will never become a reality. Uncertainty, Ambiguity, Open-Ended commitment, Confusion, these are things, that are not expected from any PAYROLL Professional.

3) Compare Performances / Compare Situations & Circumstances but do not compare individuals / People – Knowingly or unknowingly but quite often, instead of Circumstances and Situations, we tend to compare two different people. Instead of analyzing the behavior of a person we tend to analyze them as an individual and take this as our right. The very basic principle of science and management says that no two individuals are same.

4) Knowledge about the Business and Industry – Everybody should be aware of their strengths and weaknesses. They should be aware as what they want in their life and career. It is a well known fact and has been proved in various surveys that PAYROLL professionals don’t care to understand the business of the company and the industry that they are working in. According to the survey done by Virgin Management Consultancy 67% PAYROLL Professionals in USA and 83% PAYROLL professionals in India do not know the nitty-gritty of their company’s business. They don’t know from where the revenue is coming. They don’t know the business model of their company. I think, as it is important to know about the city and country that you are traveling to; it is equally important to know and understand the business of the company that you are working with.

5) Vision and Goal for the Department, Team and Organization – What you want to do for the organization? Are you planning to implement a competitive compensation plan? Do you want to take your company in the bracket of 25 “Best Employers in the Country”? Are you planning to acquire best of the talent from market? Do you think that you need to control the growing Attrition Rate of your company? Have you thought about “Organization Development” and “Talent Management”? Usually, that is the confusion. PAYROLL professionals and PAYROLL heads don’t have that vision. They want to do something in PAYROLL but don’t know what they can do or should do. They should have vision for the organization for PAYROLL perspective and goals for their department and team. It’s a must have. Until and unless you are sure about your destination, you cannot take the path.

6) Love for Number / Data / Figures / Calculations / Analysis / Projections – You talk to any person in any other profession and tell them that you are in PAYROLL; two things will automatically flash in their mind – Theory and Politics. One reason why PAYROLL professionals in India have not been able to enter into the Board Room and make their presence felt in the organization is because though they have ideas, they have strategies and policies but they are not able to support those strategies with data. (It is because there is no mathematics and calculations involved in this subject that many people [mostly females] love to join this profession).

For example, if I have a “Retention Strategy” and I want to implement in the organization. I need to show, how much the implementation of that strategy will cost; by what percentage the company will be able to increase the employee retention and decrease the attrition; which are the companies that are using this particular strategy and how effective it has been in their cases. If, I am going with this data, calculation and analysis, I am sure that my strategy will be implemented.

Hence, PAYROLL professionals need to be more analytical, data oriented and good in calculations. They should not be subjective and theory oriented.

7) Enthusiasm to Share / Develop / Coach and Mentor – We have heard and read in our schools and colleges that “Knowledge is a wealth; the more you distribute/share the more you gain”. In this profession of PAYROLLM & D; we are privileged and are in a very unique position where we can develop people. We can develop their career. We can develop their life. We can help them in changing their perception and behavior. We can groom them, so that they can be successful in their life. Don’t you think that we have very important and crucial role to play?? How many of us have actually thought of those lines? Do, think about it, you have one life, give what you can. If 10 people will remember me once I bid adieu to this world for helping them in developing their life, I will consider my life as successful.

8) Self Discipline – This again is a common quality that everyone should have, irrespective of their respective professions, but it is more appreciable in PAYROLL Professionals and is like a must have. They need to set standards for others to follow; they need to benchmark their own behavior and if they start flowing with water, everything else will go for a toss and things will go out of control. I have heard, people saying that I am doing this or that because others are also doing it but that is not expected from PAYROLL Professionals. Discipline in life is a must to grow, prosper and being successful. So, set standards and don’t just flow.

9) Trust Worthy – This is very important quality and must have for all PAYROLL Professionals. Candidates, at the time of interview share important information with PAYROLL; Employees share lots information, personal, professional, ideas, suggestions, future related, dreams etc. Imagine, if the PAYROLL professional keep sharing that information with everyone in the team of PAYROLL; will that employee ever comeback to PAYROLL to share anything with him. NEVER. PAYROLL professionals need to win that trust and then maintain and keep that trust. This is very true for PAYROLL Professionals, who are working in “Employee Relations”. Relation of any kind, be it with employees, is based on trust and honesty. If ever, you break that trust, you will never be able to win it again.

5 traits that any PAYROLL Professionals should not have…traits that can hamper their Growth


1) Ego or Attitude: Larger than role attitude – Well, where you are working with people, interacting with people and the number of people that you are interacting with is large, you cannot afford to have ego. You need to come down from your level and talk. It is not easy, just next to impossible to match with the expectations of everybody. In this profession, people will hate you, ignore your contribution, blame you but in spite of that you cannot afford to have ego. I have seen PAYROLL professionals who are over-flowing with ego. When they start talking, it appears as if they are doing any favor by interacting with you, communicating with you and updating you with new strategy or policy. This is another reason, as why PAYROLL professionals are not able to make that impact in this profession to make them counted.

2) Should not be emotional – “Touch everyone’s heart and don’t let them touch yours”. “Be empathetic but don’t cry with your employees”. Every human being is emotional and it’s only irony that to be effective and focused, PAYROLL Professionals should not be emotional. By emotional, there is a chance and high probability that they will not be able to do justice with their work. They are like that fish, which need to swim in water to survive but should not get wet.

3) I know everything (I don’t need to learn from you) – This is another negative trait of PAYROLL. They present themselves in a way, as if they know everything. That is not an end, the irony is that neither do they have “Subject matter expertise” nor they are good in “Human Relations” and nor do they want to learn anything. This reminds me one story of goat and lion. Goat, whenever she see or come across lion, she closes her eyes and assume that once I close my eyes, lion will not be able to see me. So, that is a situation of PAYROLL Professionals.

Read this axiom.
If he don’t know and don’t know that he don’t know, he is arrogant, AVOID him.
If he don’t know and know that he don’t know, he is a student, TEACH him.
If he knows and know that he knows, he is sleeping, WAKE him up.
If he know and know that he knows, he is a LEADER, Follow him.


I think, in this axiom, I have given the message that I want to convey to my fellow PAYROLL Professionals.

4) I am GOD; I am THE Kingmaker –
If you are hiring someone;
If you are paying salary to someone;
If you are giving promotion and growth to someone;
If you are nice to someone
You are not doing any favor to him. He deserves, that is why he is getting. If you are giving, even though he do not deserve, then you are CORRUPT.
Many of PAYROLL Professionals send across this message to the shop-floor that “Don’t mess with me, I can spoil your career” or “I have done favor for you. Respect me”.

5) Should not be biased (No Favoritism; No Grapevine; No Office Politics) – PAYROLL Professionals, most of the time keep themselves engaged in “Office Politics”. They initiate “Grapevine”, water this grapevine and believe in this grapevine. Whatever might be the reason but it is a gray area and they need to improve on that. This is another reason that no one take PAYROLL professionals seriously. I know, in one of my previous employment, when we started “Employee Relations” and “Employee Communication”, all employees use to consider this PAYROLL Representative as “Company ka jasoos” (Detective from management). In office politics, most of the time PAYROLL Department is considered as “Hub of All Politics”. PAYROLL Professionals need to come up, and increase their level of thinking. They need to be more matured.

Conclusion

As I have mentioned in the introduction, this is INCLUSIVE list of qualities that all PAYROLL professionals should have. In one of my previous article, I have mentioned that for PAYROLL professionals to stand-up and get counted, there are miles to go. Some PAYROLL professionals have started this journey but many have still to take that “FIRST STEP”. Believe me, we are in a very good profession and if we can try we can changes in many ways. We have an opportunity to give jobs, give careers, professional growth, coach and mentor people. On other hand, we can increase productivity, motivate employees, manage talent, build brand for the company and also make the company “Best Company to work for”.

So, kindly stand-up, take that first step and get counted.

Looking forward to your comments and feedback

Siddharth Desai
(BLOG: http://desaisiddharth.blogspot.in/ )
(Email: desaisiddharth09@gmail.com)

Monday, October 8, 2012

What is My Salary Structure?....

When I asked many people which is the most memorable day of there life and 50% people answered when I got my first salary of my career and why not it should be. But I observed  many people don’t know there salary structure, many fresher as well as  experienced people after getting salary come to me with there salary slip and appointment letter and ask siddharth please tell me what is my CTC,what is my gross salary, why I got less salary, I am really confused.

HR just explained them once at the time of joining and hand over the appointment letter and employee also doesn’t care and after getting salary slip they get confused for what reason they got less salary.

Here will see in very simple language how salary structure is designed.

Salary structure varies from company to company but anonymously consist of five parts:
1. Gross Salary
2. Variable
3. CTC
4. Total deduction
5. Net Pay

1. Gross Salary: Gross Salary is nothing but your fixed salary. Gross Pay is total pay for that period before deduction and taxation.
   a. Basic Salary (40% of CTC as per rule)
   b. DA (Dearance allowance)(20 % of Basic as per rule)
   c. HRA (50% of basic or 40% of basic as per rule)
   d. Medical reimbursement (1250 pm as per rule)
   e. LTA (depends on company norms)
   f. Special allowance or City compensatory allowance
   e. Food coupon (depends on company norms)
   g .Conveyance or Transport allowance(800 pm as per rule)
   h. Education allowance (200 pm as per rule)

2. Variable: Variable means extra salary apart from gross given by company . It consists
   of  following components
   a. Performance based bonus (8.33 to 20% of gross as per rule)
   b. Incentives (depends on company norms)
   c. Employer’s contribution to PF A/C (13.61% of basic as per rule)
   d. Employer’s contribution to ESIC A/C (4.75% of basic as per rule)
   e. Mediclaim (depends on company norms)
   f. Gratuity (depends on company norms)

3.CTC: CTC is nothing but your gross plus variable. When people go for an interview many times      get confused  between gross salary and CTC 

so always remember Gross plus variable will give you CTC

4. Total deduction: Now total deduction means deduction happening from employee’s pocket. It     contains
a. Employees contribution to PF (12% of basic as per rule)
b. Employees contribution to ESIC (1.75% of basic as per rule)
c. Income Tax means TDS (As per income tax rules)
d. Professional Tax (As per income tax rules)

5. Net Pay : Net pay is payment received after total deduction from gross salary.It directly gets    credited into your account.

Example,Mr.X working with a Pvt.firm and has CTC is 4.75 LPA now will design his salary structure

Components
Per month
Per annum
Basic Salary
14000
168000
House Rent Allowance
7000
84000
Transport Allowance
800
9600
Medical Reimbursement
1250
15000
Education Allowance
200
2400
Special Allowance
9570
114840
Meal Coupon
1100
13200
LTA
1080
12960
Gross Salary
35000
420000
Bonus
2917
35004
E.R. contribution to PF
1680
20160
CTC
39596
475152

Now will see few allowances each of gross in detail how actually calculate to reduce the tax liability:
  1. Allowances/ Reimbursements- Allowances are normally paid irrespective of the employee actually incurring them. These are fully taxable if no bills are provided. However, if the expenses are incurred actually and bills provided, they are not taxable up to a specified limit under each head.
  2. Conveyance: For conveyance, up to Rs.800 per month is allowed as deduction without providing any bills.
  3. Medical Allowance: Bills have to be provided; up to Rs.15,000 per annum is allowed as deduction. This can be claimed for self, spouse, children, parents and siblings who are dependent on the assessee.
  4. Leave and Travel Allowance:2 trips in a block of 4 years is allowed and only travel within India can be claimed as deduction. So unfortunately you won't be able to claim for those Myrtle beach flights! It can be claimed for self, spouse, children, parents but only if the employee (assessee) is travelling along with them. There is no maximum limit on this, but the unutilized amount will be paid once the block is completed (after deducting taxes).
  5. Education Allowance: An amount of up to Rs.2,400 per annum is tax-free.
  6. Qualification Allowance: An amount of Rs.24,000 per annum is tax-free.
  7. Training Allowance: An amount of up to Rs.14,000 per annum is tax-free if the employee provides relevant bills.
  8. Telephone Allowance: An amount of Rs.12,000 per annum is tax free if the phone is used for official purposes and bills submitted.
  9. HRA: House Rent Allowance can be claimed if one lives in a rented premises and the rent exceeds 10% of the salary. The actual HRA exempted from tax is least of the following:
    • The actual amount of HRA received.
    • 40% of salary. This increases to 50% if you are renting out the house in Delhi, Mumbai, Chennai or Kolkata
    • Rent paid minus 10% of salary (basic component + dearness allowance)
    • Salary for the purpose of HRA means: Basic + D.A (only if it is forming part of salary for retirement benefits) + commission (if it’s a fixed % of sales turnover).






Thursday, October 4, 2012

Hello All

Let me introduce myself I am Siddharth Desai working as Assistant Manager Payroll with an MNC,after spending many years into India Payroll I thought why not to share some information, latest news and my experience in Payroll to those who are looking to make career in Payroll through this blog. 

First of all let me tell you I am not from finance background or I am not B.com or M.com graduate,I am a plane B.Sc.graduate,I came into payroll indecently.So its nothing to do with the graduation to become a good payroll specialist.

But yes one should have some inbuilt skills which of course you will not get from any institution or not from any degree.You need to be very active,alert and focused that's it.I am going to share what are the qualities one should have to become a Payroll professional in my next post.

Feel free to ask any of you queries on Payroll related issues,on taxation I will answer those as per my information and of course you comments are equally important to me so please comment on each post.

Regards,
Siddharth