Attendance recording system in most large organisations has gone through a major change in this era of Industry 4.0, as efficient and fool proof systems using the latest technology are available, though they could be expensive, says Dr Rajen Mehrotra.
It was not so in the distant past, when the paper records of every employee in an organisation were stored in personnel files and kept in filing cabinets with the personnel/human resource department of the organisation. Accessibility of the employees' personnel file was also limited to specified persons. There were disadvantages and also advantages in this system. There have been cases where documents relating to date of birth have at times been tampered and/or certain documents went missing in these files and there were also advantages where in all documents were filed chronologically and easily accessible in one file.
In the present digitisation phase written, oral, photographic, pictorial communication/documents can be easily digitised, transmitted and conveniently copied and also stored at different locations and at the same time occupying very little space. Digitised information can also be retrieved easily. This has presently led to a change in the way communication/documentation is undertaken, recorded, transmitted, stored and retrieved by various persons, with reference to the employees' personnel file or other employee information in practically every large organisation.
Contents of personnel file when employee joins
The personnel file in an organisation contains the resume/application from the candidate for employment, along with a filled in standard application form of the organisation; educational and last employment transcript indicating documentary proof of items such as age, qualification, work experience along with remuneration drawn from the previous employer where applicable, plus relieving letter and also response of the referees. Also, the comments of the interviewers that selected the candidate, plus the offer letter by the organisation and the acceptance of the same by the candidate are also kept in this file. Practically every organisation obtains a medical fitness report of the candidate from a medical practitioner and the employment offer is subject to the medical fitness specified specifications and these documents also form part of the personnel file. Certain organisations give a copy of the job description along with job evaluation number to the candidate, who is being employed and this is also a document which finds place in the personnel file apart from the competencies of the candidate as identified. When an employee joins an organisation, the personnel file has all the items mentioned above plus some more with reference to the new employee.
It is not only desirable but essential for every organisation to have details of every employee's residential address, residential telephone number (if available), mobile number, person to be contacted in an emergency and employees' personal email id. This information could be stored in the employee's personnel file or kept separately for all employees. It should be the responsibility of each employee to communicate the change in these items immediately to a specified person / department, in the organisation, so that the information could be immediately updated where it is stored and is easily accessible in the organisation. Experience indicates that employees delay or do not communicate the changes listed in this paragraph and hence it becomes the responsibility of the personnel/human resource department in the organisation to write to all the employees periodically and get the information for updating, if there are any changes.
Attendance Recording & PayRoll
Attendance recording system in most large organisations has gone through a major change in this era of Industry 4.0, as efficient and fool proof systems using the latest technology are available, though they could be expensive. There are organisations wherein "Face Look System" is used, where attendance is recorded and payroll calculations under taken. It is based on face recognition to eliminate proxy recording of attendance. These systems are connected and can be joined with SAP ERP or similar system for automatic generation of pay slips. Some of these systems can generate automatic statutory alarms, for example if a person is asked/tries to work for 10 days continuously the employee's entry at the entrance gate is stopped and the employee forced to take off, unless cleared by the management. Such alarms are useful especially for organisations engaging contract labour and desiring to ensuring compliance of specified labour laws.
Monthly payroll is an important activity of the personnel/human resource department and payroll process starts from compensation design and ends with statutory payouts which includes the input changes, arrears calculation, income tax computation and advise to employee about their investments to avoid heavy income tax deduction at the end of the year. Actuarial data preparation and reconciling the same and handing over this data to an actuary are also part of this activity. In most organisations the activity of payroll processing has been outsourced to an external agency/service provider, who not only handles the payroll processing but also the statutory deductions as applicable, such as provident fund, employees state insurance contribution, professional tax, labour welfare tax and income tax. Even if the activity of payroll is outsourced the personnel / human resource department needs to ensure that up to date data of each employee's payroll and deductions are available with the enterprise with the necessary backup every month, because whenever the external agency/service provider is changed, there should be no difficulty in transition. Payroll back-up should be stored in two different locations to avoid loss of data at any stage.
Every month the annual income tax deducted by the employer from the employee and paid to the income tax department are an important ingredient to be stored and organisations need to ensure availability of this information with them , as there are cases , where disputes on deduction and deposition come up with the income tax department at a later date. Income Tax Deducted at Source (TDS) certificate to the employee is also to be given annually by the organisation. Nomination form data
Nomination form is to be filled by an employee under The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and The Payment of Gratuity Act, 1972 need to be complied with and the record also maintained by the organisation and the individual. The same is the case also for employees covered under superannuation scheme. There is need for a proper documentation and storage of the nomination form by the organisation, employee and also the nominee. Also, every employee needs to be informed that the employee, can change his / her nomination form when he / she desires.
Documents in the Life Cycle of Employment
During the course of employment various documents and letters dealing with the employees training and development needs, training programmes attended, development programmes undertaken, geographical transfers, functional transfers, annual performance appraisal with goals set and goals achieved, salary revision, performance bonus, promotions, rewards, punishments, contracts if any signed with the employee , major medical sickness record do need to find place as a document / letter in the personnel file of the employee.
Digitisation in the personnel / human resource function is not restricted to the documents of the personnel file, but has moved to all processes of the employee life cycle and is well managed through SAP ERP or similar system. The greatest benefit of digitisation is the use of data for various purposes such as attrition rate, creating skill inventory of the employees and deploying employees where required. HR analytics has become a very useful tool for sharing various types of employee data which can be expeditiously retrieved from the system. For example, when business is growing, every business desire to hire additional employees. There is need to look at existing employee availability in the organisation, and this information can be easily tracked in the digitised system, before recruiting additional employees. Also, with the help of these systems, one can digitise the entire HR process right from recruitment to departure. Digitisation in many ways has reduced laborious work on crunching of data, whether it is in the exercise of budgeting, appraisals, demographics, etc.
Digitisation has benefitted the response time and speed for the personnel / human resource function in meeting expectations of the internal customer. However, the accuracy of the data and information will depend, how disciplined is the personnel / human resource function in the documentation and use of digitisation.
Movement to Digitised Records
It is in the mid 90's, that most organisations have moved from a paper personnel file to an electronic folder i.e. digitisation of the personal record of each employee. In companies that had paper records of personal files and then moved to digitising the records, one does find a dual system, where part records are in the paper files and part records electronically kept, unless the previous paper documents / letters have been transformed to a digital mode.
In the past, the main worry was that employee details at times were not filled fully in the system. Presently for digitised records, when an employee logs in, it says that his / her profile is filled only to certain percentage and identifies the missing data and warns the employee that the employer is not responsible for any problems faced by employee, if employee profile is incomplete. This ensures that the employee profile is 100% completed. This is particularly useful, because employees at times do not specify nominees in case of provident fund, gratuity and superannuation and the employer finds it difficult to solve this, when any untoward incident happens.
Digital records score over manual records, as statistical analysis is easy and online. For example, if an organisation needs blood donors of certain group from their employees, it is very easy to generate such information and approach employees to donate blood.
There are lot of organisations, especially the new age organisations which rely only on digital form. There is a need to have discipline in data management, as the various transactions affecting the employee life cycle need to be captured and stored in an electronic folder personnel file. There are many advantages of having these records in electronic PDF form, as they cannot be tampered with or be misplaced, once they are placed in the electronic folder personnel file. Organisations must have systems in place for maintaining these records.
In the paper record system whenever a document / letter concerning an employee was raised, then a copy was always marked to the personnel file and the document / letter would be filed in the personnel file of the employee. This at that time was an effective and efficient system, but times have changed and this is history for most organisations. However, this discipline needs to be imbibed in the electronic folder phase of personnel files.
In the present electronic folder phase of personnel files, most communication is sent by emails and it is essential that the communication needs to be marked appropriately for it to enter in the electronic folder personal file of the employee. If this discipline is not maintained, this creates problems at a later date, as employees' question the validity of information being furnished by the personnel department. Most employees' keep their personal data bank up to date by keeping electronic copy / print outs of mail that they wrote or / and received, and this leads to a credibility gap for the personnel / human resource department, as they at times fail to have accurate and updated information about the employee.
Secrecy of data is another challenge, which at times does become an issue and hence proper controls need to be in place. Enough security is presently built in the system, so that employee information remains confidential. Paper documents may have less risk if stored under lock and key with a single user. There are few cyber securities needs to be kept in place from misuse of data which could migrate once digitised. Protecting confidentiality is essential with reference to employee data, as it could at times be hacked / sold or shared unlawfully. Since, digital data is easily accessible to the party implementing the system, one needs to be careful and ensure that the data is not misused or leaked out.
There is need to maintain all important and relevant communications in the personnel file of the employee, and at times it has become passT these days as individuals desire relying at times more on memory. Employees at times may not have trust on the electronic versions, when there is a chance of a miss or a subsequent communication changing the decision, which may not have been recorded because of an absence of a strict discipline of recording. However, this has more to do with the general discipline and long term thinking of certain individuals today vs the version of having a hard or soft copy of the personnel file.
In my corporate career, I had occasion to work with both (i.e. paper folder phase of personnel files and electronic folder phase of personnel files). I must admit that it is following of a discipline in data management which leads to success whether the data is stored in hard or soft copy.
About the author
Dr Rajen Mehrotra is an Immediate Past President of Industrial Relations Institute of India (IRII), Former Senior Employers' Specialist for South Asian Region with International Labour Organization (ILO) and Former Corporate Head of HR with ACC Ltd and Former Corporate Head of Manufacturing and HR with Novartis India Ltd. Email: firstname.lastname@example.org
Published in June 2019 issue of Current Labour Reports & Arbiter.