M.J. Arul
Institute of Rural Management, Anand, India.
On completion of his post-graduate diploma programme in management, Raju joined as Accounts Manager (Trainee) in the Head Office of a manufacturing company. After a few months at the Head Office he was asked to go down to one of the two manufacturing divisions of the company to study the activities in the finance section there and come up with suggestions for improvements in systems.
He moved around the department, spent a day or two at each table and learnt what different persons did and how they did it. He also volunteered to do some of their job. He acquainted himself with the various activities in the department. During this process he came across a problem that the pay-roll unit was facing: 400 to 500 cases of under and over payments to workers had to be rectified every month by supplementary payments during the second week of the following month. The computer-output pay slips were more often than not erroneous about the leave positions of workers. Workers started cursing the computer and the EDP men were blamed.
Workers were paid their monthly salary on the 6th of the following month. Attendance for the month was the basis for calculation of salaries and the time cards and leave letters were the basis for assessing the attendance. About three days' time was needed to tabulate the attendance and make adjustments for days of absence on the basis of leave letters received. The data from this tabulated Time Sheet had to be submitted on the first day of the following month to EDP, which was located about 80 kms away. In order to have this lead time, actual attendance was closed three days before the end of the month and presumptive attendance on some arbitrary basis was granted to every worker for the last three days of the month. Erroneous output with regard to the leave positions of employees (and therefore the erroneous payments) was a result of the presumptive attendance and delayed receipts of authorised leave letters. The general impression among the workers, however, was that the computerisation was to blame.
Being personally convinced of the merits of computers, Raju wanted the computer services to continue and attempted to tackle the problem in the payroll unit itself. He suggested the following:
1. To minimise the lead time:
i) Paint the department numbers and employee numbers serially on the time-card rack itself. This will obviate the need for serially arranging the cards after collection.
ii) Mark only absence and authorised leave on the Time Sheet. This cuts down 1/3 to one half of the time taken by the present style, in which an 'X' is marked for days attended, an 'A' for absence, and 'CL', 'SL', or 'VL' for the types of authorised leave taken.
iii) Institute stricter control over the employees of the pay-roll unit to do their job without idling; or introduce ad hoc OT.
iv) Alternatively, time cards may be used for direct punching with some liaisoning between the pay-roll unit and EDP.
2. To facilitate timely receipts of authorised leave letters:
Have just one form rather than separate forms for CL, SL, and VL, as we presently have. This will reduce needless scrutiny and the number of forms to be signed by the supervisor and facilitate quicker forwarding of the forms to the payroll unit. From the gross indication of the number of days of authorised leave it is possible for the payroll unit to make the best combination of SL and VL or grant CL and the worker will not be disadvantaged (see exhibits 1 and 2 for Statistics of Leave and Leave Rules).
3. To eliminate presumptive attendance:
Introduce "pay months" : make payment for the period between 27th or 28th of a calendar month to 26th or 27th of the next calendar month.
Raju sincerely believed that his suggestions 1, 2, and 3 would individually mitigate and, as a package, solve the problem. So he put up his report.
A couple of weeks later, Raju--knowing not what had become of his report--went to Mr. Himcha, his boss. The boss was busy, going through some papers. Raju broke the silence after a minute or two: "Sir, did you read my report--the report about the pay-roll unit? I just came to find out when we can implement it."
The boss was busy with his own work as Raju talked. When Raju finished, the boss looked up and said, "Yes, your report," pulling out the report from his right-hand drawer the boss continued, "Good work, but there are some problems. The EDP has certain difficulties and people have lost faith in it; OT is not permitted as a matter of policy; introduction of 'pay months' has certain legal aspects to be looked into; unilateral leave adjustments by the pay-roll unit will dissatisfy workers; ...you had better look into these problems and we shall discuss the matter again."
Raju opened his mouth to say something about the anticipated problems (which Raju says he had already discussed very clearly in the report itself), but noticed that Mr. Himcha had got back to his work. So Raju said "Okay, sir", and left the room.
Raju contacted the Maintenance Department and got the time-card rack serialized permanently. Days passed and months went by, but no more discussion took place about the pay-roll issue.
Exhibit 1
Statistics of Leave
.................Month -----Total No. ---V.L. ------S.L. ----Notices of SL
............................of cases ----notices ---notices---for >2 days ---------------------------------------------------------------------------
...............March 1978 ---400 --------100 --------300 ----------Nil
...............April 1978--1,400 --------500 --------900 ----------Nil
...............May 1978 ---2,700 ------1,000 ------1,700 ----------Nil
_______________________________________________________________________
The above statistics were compiled after checking the leave notices individually for cases in which SL exceeded 2 days. This statistics further substantiates that departments need send us only VL availed during the month. SL and CL can be automatically adjusted even without notices being received, based on the VL utilised and reported by the employees during the same period.
Exhibit 2
Leave Constraints
Casual Leave
a) Maximum of 3 days can be availed at a stretch.
b) Cannot be merged with either Sick or Vacation Leave.
c) Prior permission is required.
Sick Leave
a) Maximum of 2 days can be taken, without medical certificate.
b) Sick leave availed for more than 2 days will bring in half day salary cut.
c) Intervening holidays will be counted as sick leave availed also.
d) Does not require prior permission.
e) For Attendance Bonus, Sick Leave with Casual Leave should not exceed 7 days, but only Basic pay will be paid.
Vacation Leave
a) Any number of days can be taken with prior permission.
b) Prior permission in all cases is warranted.
c) Can be encashed only once in a year and is more beneficial than Attendance Bonus because Dearness Allowance is also paid.
d) Can be combined with Sick Leave.