Tuesday, July 13, 2010

There is an End to the Money - Payroll Rant

Let's cover the walk through on managing Payroll, maybe you can use this one at work.

The word Budget indicates a finite amount of resources to which one is limited. However, in my experience in management and in HR most people consider a payroll budget a guideline. They know that the company must pay their employees when they work, so they creep over the edges of the budget. Where do they think the money comes from the magic money fairy? If you only have $100 bucks for groceries, let's call them payroll, and the total is $120, $20 worth has to go back. Now, let's get complex. Say you are paid by the hour and this week you only work 36 hours, instead of 40. Now your intake, let's call it Sales, is less than your your expected intake, let's call that Plan. Now you can't even pay $100 for your groceries (payroll), you only made $80. This means you have to adjust to your Sales and spend less on Payroll. Let's replace this whole analogy with one succinct statement. You can only spend what you earn!

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People Platform HR by Marti Nelson is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.