Introduction to Organization Management Organization Management within Human Resource Management Systems (HRMS) serves as the backbone for structuring and aligning the workforce with the strategic objectives of an organization. It involves defining, managing, and optimizing the organizational hierarchy, which includes departments, teams, roles, and reporting structures. This module is critical for: Strategic Alignment: Ensuring that the workforce structure supports the company’s strategic goals. Operational Efficiency: Streamlining processes like workflow approvals, reporting, and resource distribution. Compliance: Facilitating adherence to both internal policies and external regulations by defining clear roles and responsibilities. Budgeting & Cost Allocation: Using the organization structure, costs for activities, projects, departments or cost centers can be allocated for compensation and expenses. Importance in Larger Organizations In larger organizations, the complexity of managing a diverse, often geographically dispersed workforce necessitates robust organization management: Scalability: Large organizations typically have multiple layers of management and varied operational units, requiring a system...

Career planning has long been a cornerstone of individual and organizational success. Its origins date back to when individuals began charting their professional paths, aligning their skills and aspirations with opportunities for advancement. Over time, career planning evolved into a structured discipline, integrating personal ambition with organizational strategy. Today, advanced technologies and enterprise systems like Interact HRMS play a critical role in making career planning more effective, data-driven, and aligned with long-term goals. This blog explores the origins of career planning, its evolution, and the technologies that support it. It examines how career planning interlinks with talent management functions like succession planning, performance management, competency frameworks, and learning & development. Finally, it dives into how the Interact HRMS Career Planning Module supports comprehensive, structured career development, meeting the needs of modern organizations. The Origins of Career Planning In the mid-20th century, career planning became a structured and influential area within...

Employment contracts are fundamental to the employer-employee relationship, delineating the rights, responsibilities, and expectations of both parties. These legally binding agreements serve as the cornerstone for defining job roles, compensation, benefits, and other critical employment terms. The structure and enforcement of employment contracts vary significantly across different countries, influenced by local labor laws, cultural norms, and economic conditions. Purpose of Employment Contracts The primary purpose of employment contracts is to establish clear terms of employment, thereby minimizing misunderstandings and disputes. Key objectives include: Defining Roles and Responsibilities: Clearly outlining job duties and expectations to ensure mutual understanding. Establishing Compensation and Benefits: Specifying salary, bonuses, benefits, and other forms of remuneration. Setting Employment Terms: Detailing the duration of employment, probationary periods, and conditions for termination. Protecting Confidentiality and Intellectual Property: Including clauses to safeguard sensitive information and proprietary assets. Ensuring Compliance with Legal Requirements: Aligning with labor laws and regulations to...

A probationary period is a designated timeframe at the commencement of employment during which an employer evaluates a new hire’s performance, suitability, and overall fit within the organization. This period serves as a critical phase for both parties to assess the employment relationship before confirming a permanent position.  Depending on the regulatory environment, the probationary period may be subject to different labor laws than the period which follows when an employee is deemed to be working under a regular employment contract. Purpose of Probationary Periods The primary objectives of implementing a probationary period include: Performance Assessment: Employers can monitor and evaluate the new employee’s job performance to ensure alignment with organizational standards. Cultural Fit Evaluation: It provides an opportunity to assess how well the employee integrates with the company’s culture and team dynamics. Training and Development: The period allows for the identification of training needs and the provision of necessary...

The Critical Role of Onboarding in Large Organizations Onboarding is the process through which new employees become integrated into an organization, both operationally and culturally. This critical phase sets the tone for an employee’s relationship with the company, impacts their productivity, and influences long-term retention. In large organizations, onboarding is especially complex due to the scale of operations, diverse job roles, and varied departmental needs. For organizations in industries such as healthcare, education, law enforcement, and other highly regulated sectors, the stakes are even higher as onboarding must not only be thorough but also comply with industry-specific regulations and standards. Effective onboarding goes beyond a simple orientation or training session. It encompasses everything from administrative setup, to ensuring appropriate licensing and competencies are validated, to fostering a sense of belonging. For large organizations, this process can help align new employees with corporate goals, ensuring they contribute effectively and stay engaged....

Position Budgeting and Control: A Comprehensive Overview Position Budgeting and Control (PBC) is a strategic practice critical to workforce planning, particularly in organizations that rely on structured manpower plans. This blog will delve into its origins, evolution, applications, benefits, challenges, and how enterprise software solutions, such as Interact HRMS, have transformed its management. Let’s begin with understanding its roots. Origins of Position Budgeting and Control The concept of Position Budgeting and Control can be traced back to the early 20th century, during the industrial revolution, when large organizations like manufacturing plants and government bodies sought to manage labor costs effectively. As workforce structures became more complex, organizations began to allocate resources based on predefined roles and positions rather than individuals. Initially, this practice was a manual exercise. Managers would allocate budgets for specific job positions in ledgers or rudimentary spreadsheets, ensuring that every hire aligned with financial constraints and strategic...

Recruitment is the lifeblood of any organization, whether public or private. It drives growth, innovation, and organizational success by ensuring the right people are in the right roles at the right time. But the recruitment process is often fraught with inefficiencies, inconsistencies, and technological challenges—particularly when relying on stand-alone recruitment systems. Modern enterprises are increasingly embracing recruitment management portals that are fully integrated into comprehensive Human Resource Management Systems (HRMS) like Interact HRMS, which address these challenges. This blog delves into the broader context of recruitment, contrasts approaches between government and private enterprises, and highlights why integrated recruitment systems are superior to stand-alone solutions. Recruitment in Enterprise Settings: Purpose and Approaches Recruitment is the process of identifying, attracting, assessing, and hiring the best candidates for an organization. While the basic principles remain consistent, recruitment strategies can vary significantly depending on the type of organization: Private Enterprise Recruitment In the private...

Overview In the last blog we have discussed the impact of Payroll Input Data on the payroll outcome, and explained if there are errors in the Payroll Input Data, the payroll process outcome will not be correct. In this blog, I shall explain why it is critical to have a Trial (Simulated) Payroll Process. The Trial Payroll (TP) Process enables the user to run the payroll in a simulation mode and to review the outcome of the payroll including the payroll register, pay slips, direct bank deposits, and payroll JV journal. And if the payroll process outcome is incorrect, the user can go back and make any required corrections to the Payroll Input Data, and rerun the payroll in a simulation mode again. And this trial payroll process run will continue until the desired payroll outcome is achieved. The objective from the Trial Payroll Process is to ensure that the...

Overview The Payroll process is used to produce employee paychecks/pay at the end of a pay period. There are a number of input variables (input data) that are used to execute the payroll. These variables, if not correct can negatively affect the outcome of the payroll (payroll process), how correct are the paychecks produced by the payroll process. The input variables to the payroll include employee timesheet during the pay period, leaves taken during the pay period, changes in compensations and/or deductions, and changes in tax status of the employee. As well as pay exceptions during the pay period, such as a onetime compensation or deduction.  The following is the list of variables/data that are used by the payroll process: Pay Period Type Change Employee Timesheet Employee Leaves Employee Expenses Compensation Changes Deduction Changes Organization Change Job Change Employee Name Change Address Change Tax Status Change Marital Status Change Onetime...

Overview Procuring and implementing the correct HRMS solution for your organization is costly. The total cost of ownership (TCO) of an HRMS solution needs to be justified to the senior management in term of the return on investment (ROI). If the ROI is not high enough, the budget/funding of procuring and implementing the desired HRMS solution will not be approved. Management is not interested in implementing new technologies and practicing new trend just for the sake of technology. Management is interested in solutions including technology based solutions comprising HRMS, when these solutions, (1) Increase the Revenues of the Company, (2) Reduce Company Expenses (Savings), (3) Improve Products and Services Quality, and/or (4) Improve Client Satisfaction. Unlike other systems/solutions such as Sales Management Systems, Customer Relation Management Systems, Manufacturing Systems, Financial Systems, Procurement Systems, and others, HRMS does not directly deal with the company’s customers/clients, products, and services, and finances of...

Overview In the last blog , we have described HRMS contents and its classification, sources, format, and what type of contents can be generalized and which cannot be, and derived which content can be part of HRMS Built-in-Contents. In this blog, I want to discuss the relationship between Contents and HRMS Implementation Time as I have been asked many times in the past, how long does it take to implement Interact HRMS. The answer to this question is not straightforward as it depends on many variables/parameters, and most of all the Complexity of HR and Payroll Content and its Quality. Thus, Implementation Time of HRMS is a direct function of Contents Complexity and Quality. Thus, the more complex is the contents, the more time it will be required to implement HRMS. Similarly, the lower the quality of the contents the more time will be required to Implement HRMS. In this...

Overview Research has shown that employees’ procrastination cost companies billions of dollars per year. Further, research has shown that on average, employees waste 1.5 hour per day procrastinating. So, let’s assume that your company has 100 employees, and each employee is wasting 1.5 hour per day (7.5 hours per week per employee), that is a total of 750 hours (7.5 x 100) of lost time per week.  Assume that the average pay rate per employee is $18.00 per hour, so the company is incurring a loss of $13,500 per week, which translates to an annual loss of approximately $702,000. This loss addresses the loss resulting from lost time, where employee delays doing his/her work by doing something that is irrelevant to his/her work and to the company business such as checking his personal emails, facebook, twitter, chatting with friends, etc. The impact on the business in term of loss of...

Overview In our previous blog, we have explained the main challenge in implementing a Global HRMS such as Interact HRMS, and this challenge is the Contents. In brief, we have explained that HRMS Software is the Container while Labor and Tax Laws and the Company Policies for which the Global HRMS is being implemented is the Contents. Further, we have explained the difference between Country-Specific HRMS and Global HRMS, and this difference is mainly in the Contents. While Country-Specific HRMS come with Built-In Contents, Country-Specific HRMS comes with the Labor and Tax laws build-in in the software for the country that software is targeting, and this is out of the box. No need for any setup except for the company’s specific polices. While a Global HRMS, comes with no country-specific contents. The reason, for the later, is that a Global HRMS is designed for use by every country and provide...

Overview The challenges that we face when implementing a Global HR and Payroll System (Global HRMS) are significant, but not insurmountable. A Global HR and Payroll System is defined as an HRMS that supports the labor and tax laws of every country and industry. And since every country has its own labor and tax laws, the said global HR and Payroll system must comply with these laws. The technology to support these laws is available in most enterprise HRMS systems provided you are ready to define these laws to the system, meaning to do the setup of every policy and/or law applicable to the said country, state, province, county, and city. The challenge at hand is not the technology, but the Contents. The technology (HRMS) is the Container, the Laws and Policies relevant to each country, state/province, county, city, and client are the Contents that must fill the Container is...

Overview Interact HRMS is pure Web/Internet application comprising more than 70 integrated applications that cover all aspects of Foundation Management, Core HR, Leave & Time Management, Payroll Management, and Talent Management. Interact HRMS uses layered software architecture, built using open source software development tools and database.  Development technologies used to implement the said architecture include PhP, DHTMLX, CSS, XML, Smarty, HTML, Ajax, and MySQL Database. Object Oriented Design and Programming is extensively used to share components and optimize code for performance and efficiency, and Rapid/Agile Development, Testing, and Deployment.   Figure-1: Interact HRMS Architecture Architecture Layers As shown in figure-1 and figure-2, Interact HRMS Architecture consists of the following layers: Presentation Layer Security System Layer Application Business Objects Layer Workflow Layer Database Access Layer  Figure-2: Interact HRMS Architecture Presentation Layer – This layer is used to implement the User Interface to communicate between the User and the Application. The presentation...

Overview Interact HRMS including Core HR, Foundation Apps, Time and Leave Management, Payroll, and other applications can be Implemented and Deployed in support of single employer or multiple employers within a single enterprise. And Enterprise can be viewed as a group of companies, where each company is considered a single independent operating unit with its own organization, financial, operational and management structure. Figure-1: Enterprise Structure Each company within the enterprise is considered a separate employer as each company can have its own hiring, time and leave, and payroll policies. Example of an Enterprise, J&J Corp, which is a global diversified company, that owns four separate companies including J&J Retail, J&J Consulting Services, J&J Oil & Gas, and J&J Construction. Each of the four companies will have different structure and different HR and Payroll policies as their line of business is different. You can support such an enterprise in Interact using...

Overview Interact HRMS is an enterprise system with more than 70 Integrated HR, Talent Management, Time and Leave Management, and Payroll management applications. Interact HRMS is a pure web applications that is deployed using Apache, PhP, and MySQL Database. Interact HRMS can be deployed in the Cloud, Hosted, or On-Premise. The configuration of the servers to support Interact HRMS for optimal performance depends on many variables. To name few: Number of Employees that will be supported by the system? How many Interact Applications will be deployed? How many Self-Services users will be accessing the system? How many Internal Users will be accessing the system? How many External Users, users accessing the system using the Internet? Distribution of Internal Users by application? Employees Baseline Database size? Database Growth Rate? Online and Batch Transactions usage distribution? Batch Processes (e.g, Payroll), Cycle and Frequency? Once the above variables/parameters are defined, then you can...

Overview Timesheets are used to record and report time worked by employees. The purpose from recording and reporting time is to pay the employee for time worked including regular hours and overtime hours for hourly employee and to track attendance. Additionally, it is used for client billing and project management and labor distribution for labor costing. The timesheet applies primarily to hourly employees as hourly employees are paid by the hour and expected to be paid for overtime work. On the other hand, salaried employees, in most cases, do not submit timesheets as they are not paid for overtime. However, in some instances, salaried employees submit timesheets for client billing and attendance tracking and labor distribution and costing. Additionally timesheets may be used to record specific allowances such as travel allowance, food allowance, and leave time, both paid and unpaid time-off. The timesheets captures critical time data which is processed...

In a recent Wall Street Journal article titled “Why There Is No Science In Your Salary.”, Lauren Weber writes: “Only 38% of employers have a formal compensation structure or philosophy guiding their pay decisions, according to PayScale Inc., which examined data from some 7,600 firms, mainly from the U.S., Canada and United Kingdom. The issue is especially acute in salaried roles, say compensation experts, because managers have more leeway to put a figure on an employee’s skill, experience and performance than they do with hourly positions. Yet as the labor market improves, and as fair-pay laws in California and elsewhere put a spotlight on corporate pay practices, firms are starting to rethink the way they set salaries. Among employers with no formal strategy in place, PayScale found that 34% are developing one.” Pay equity has always been an important element in employee satisfaction, isn’t it surprising then that so few...

  In the article, The Payroll Miracle, I have provided the definition of Payroll processes, and provided the calculation method of the employee Net Salary as well as the variables and functions used in calculating the net salary and the payroll data types, and sources. In this article, I shall describe Interact Payroll System Framework as it relates to the Payroll Definition described in the previous article. It is important to understand that each payroll system has its own framework and not all payroll frameworks are created equal. Some payroll frameworks are rigid and limited, while others are flexible and agile as they provide more flexibility accommodating multiple types of payroll setups to support specific payroll requirements of the organization, industry, business type, and country. Interact Payroll System Framework is highly flexible, it is policy driven, where all payroll rules and associated calculation methods are defined as policies during the payroll...

  The other day, I read an article that states that a new HR Company has developed a Payroll System in 60 days that runs the payroll by itself without any user intervention and it does it by using HR data with the click of a button.  Well, well, I said to myself, this is really genius and magic. If someone can do that, that is not only disruptive, but revolutionary – that is like saying that I have developed a magic stick that you can put in the ocean and it will turn ocean salt water to drinking water in a second. Wow that is incredible and miraculous. Since I have spent most of my adult life dealing with payroll and the intricacies of payroll in many countries, I said to myself I should write this blog to explain the payroll, its meaning, and its complexities, and why it cannot...

  Before you commence Interact HRMS implementation and setup, you need to understand the Implementation Framework and Stages of Interact HRMS as this understanding is very critical to conducting a successful and timely implementation. This section describes the Implementation Framework and Stages of Interact HRMS. Implementation Framework Interact HRMS Implementation Framework is defined by the components that need to be defined in order to implement Interact HRMS. These components are defined as follows and as shown in figure-1: Figure-1: Interact Implementation Framework Foundation These are the business entities of the company/organization within which Interact HRMS will be implemented and to which the company HR and Compensation and Payroll policies will be applied. These business entities or foundation elements consist of the following: – Enterprise – Employers – Organization Units – Employee Groups – Job Classification – Cost Centers – GL Accounts – Chart of Account Structure – Fiscal Year and Periods...

Ease of Use is a key concern for us at 2Interact and we make sure that while we offer very sophisticated functionality that is global and therefore highly configurable and generic, we also keep a laser focus on simplicity and ease of use.   Many software providers take the easy road by creating unlimited screens and forms for every feature under the sun and thereby drown their users in complexity.  It’s much harder to design an enterprise Payroll that not only has depth and breadth in its functionality, but is also simple to use.  In other words… you shouldn’t need a PhD to run a Payroll in a good enterprise system. That brings us to the different pay cycles and different types of payroll.  Interact HRMS supports any Pay Cycle / Pay Period you can dream of (Weekly, Biweekly, Semi Monthly, Monthly, Quarterly or custom-periods), these Pay Cycles/Periods can of course all be managed...