The Following Is the Summary of Changes in HR and Payroll, Post ERP Implementation s1
Oil India Limited
Duliajan
Ref: ERP(A) /394/2005 Date: 16.11.2005
All Heads of Department
Sub: Implementation of ERP in OIL: Changes to existing HR and Payroll Processes
Enterprise Resource Planning (ERP) in OIL will Go-Live on 1st December, 2005 and as already communicated in different forums including the ongoing End User Training Programs, there would be various changes in the business processes which would have to be adopted in the new ERP environment.
Some of the key changes pertaining to HR and Payroll processes are mentioned below:
1. Salary Codes / Registration Numbers / PF Numbers :
i) Presently, all Unionised Employees are identified with Registration Numbers / PF Codes (Kolkata Office) and the Executives with salary codes. After Go-Live of ERP, Registration Numbers and Salary Codes will be renamed as OIL ID. All the existing employees as on the date of Go-Live will retain their same number as OIL ID, except the ‘Slash’ (/) sign, which will be no more there in the number.
ii) As per existing practice, the Salary Codes / Registration Nos / PF nos are in different series for Unionised Employees and also for Executives. For example, Registration Numbers start with 9/, 10/, 15/ ; PF nos with 7 and the Salary Codes start from Srl No 1. After implementation of ERP, the OIL IDs will be running serial numbers automatically generated by the system from 200000 and will be applicable for all new recruits. Therefore, after Go Live (i.e. Dec 2005), if an Unionized Employee joins OIL as the first employee, his / her OIL ID will be 200000 and subsequently if an Executive is hired, his / her OIL ID will be 200001.
iii) In the ERP system, there will be only one employee database. Thus, the OIL IDs being system generated, there will not be any sphere wise differentiation in the employee numbers as is currently followed. Hence, two employees joining the Company in two different spheres / locations as new recruits, will be allotted running serial nos as OIL IDs depending on their time of joining.
iv) Presently, when a unionized employee is promoted to Grade A / SR(A) in the Executive Cadre, the employee gets a new personnel no as Salary Code in the place of Registration Number. Post ERP, the OIL ID of such employees will continue even after promotion to Grade A.
Adopting the above mentioned change is part of Best Business practices as is being followed in different organizations all over the world. This is also a prerequisite for maintaining a single employee database and to facilitate generation of uniform statutory reports like IT Form 16 etc.
2. Attendance related Processes:
i) In the existing system, inputs of employees’ day-wise attendances are prepared as monthly Time-Sheet to process payroll for the unionized employees. In post ERP, all the employees will be deemed present unless a leave / deviation to normal attendance are recorded. This system of ‘Negative Attendance’ will be followed for both Executives and Unionised Employees. The Payroll module of the ERP will directly capture the attendance data for processing of the Payroll and no separate Time Sheet will need to be prepared.
ii) Presently, day-wise overtime as number of hours is entered for all Unionised Employees in the Time Sheet. In the ERP system, the start and the end time of the overtime hours will need to be entered for each employee for each day of overtime attendance. Based on this input, single OT, double OT, holiday OT hours will be computed and paid through the payroll automatically. For example, instead of entering 1 hour of overtime done following the Second Shift, the start time (say 21:00 HRS) and end time (say 22:00 HRS) should be entered for the employee concerned.
iii) Any reports on attendance/ overtime can be directly generated by the departments for their employees from the system.
iv) In post ERP, shift allowances will be automatically computed and paid based on the employees month wise shift plan maintained in the system. Thus, manual input as done at present, will be not be required.
Note: However, for stabilizing the ERP payroll run, it is proposed that the existing payroll will also be processed in parallel to the new ERP payroll. Thus, for the initial one or two months after the Go-Live, the departments will be required to provide the timesheet input as per present practice in addition to providing the inputs in the ERP system for the said period.
3. Leave related processes:
i) Presently, the applications for Privilege Leave after approval from the HOD are forwarded to the Administration / ER Department for record, payroll input and updating of the Leave balance. Two sets of leave records are maintained per employee, one at the employees’ department and the other at ER / Personnel department. In the post ERP scenario, approved PL by the HOD will be entered at the department itself and hard copy information are not required to be sent to Administration / ER Department. Accordingly, the existing Privilege Leave application form is also being modified which will be circulated to all concerned shortly.
ii) In the existing practice, when an employee reports sick, communication is sent from Medical department to ER / Personnel department for recording and approving the paid/ unpaid sick pay. Post ERP, the sick leave / sick pay leave will be entered by Medical department in the system (administration officer in case of other locations where there is no OIL hospitals/ company doctors). The system will automatically calculate the limit of Sick pay applicable as per company’s rule and the input will be automatically processed by payroll. The information regarding the employee’s sickness will be available in the system for the department. Practice of forwarding the hard copy communication will be discontinued.
iii) The quota for Casual leave will be automatically generated by the system and the department will maintain the casual leave availed in the system. The validations for Casual Leave such as prefix / suffix to holidays as per company’s rule will also be carried out by the system automatically.
iv) Presently, employees submit their claims for Leave Encashment with their departments. The same are forwarded to ER / Administration department for approval and sent to payroll section for payment. In post ERP, the encashment input will be entered in the system at the department itself and the same will be processed and paid through payroll. Revised format for PL encashment will be circulated shortly.
4. Payroll related processes:
i) Presently, payroll for Unionised Employees are processed locally and the same for Executives are run centrally at Duliajan. In the ERP environment, the same will be processed together for Unionised Employees and Executives in the respective locations. Therefore, any payroll related queries will be settled with the payroll administrator in the location. The payroll locations will be Duliajan, Moran, Guwahati, Kolkata, Delhi, BEP, GVP, and Rajasthan.
ii) At present, employees are required to submit their claims for Children Education Allowance and Child Merit Scholarship with their departments. The same are sent to ER / Administration department for approval. The approved claims are sent to payroll section for payment. Post ERP, the claims will be entered in the system by individual departments which will be processed and paid through payroll. However, the hard copy and supporting documents will need to be forwarded to ER / Administration department for verification and records.
iii) The claims for mileage reimbursements for Executives will be entered in the system by individual departments which will be processed and paid through payroll. However, the hard copy with supporting documents if any, will need to be forwarded to Payroll section for verification and records.
iv) As per existing practice, employees can have income tax re-fund if the annual tax commitment computed in March of a financial year is more than the tax deducted between April and February of the financial year. Post ERP, no income tax re-fund is possible from payroll system. To avoid re-fund scenarios, the following system is being institutionalized. All employees will need to declare their proposed investments in a financial year at the beginning of the financial year (say in the month of April or May). They should also declare their actual investment (with investment proof) by Dec / Jan of financial year. Those investments done in the month of March should be declared to the payroll section before March payroll run.
v) Employee advances and various claims are presently paid through their personal accounts. After implementation of the ERP, all employee payments will be paid through Off-Cycle payroll (which can be run on any day of the month) and the payment will be credited to the employee’s bank account. Employee personal accounts will continue to be used only for disbursement of departmental advances issued against an employee.
vi) Presently, increments in the Basic Pay are effected by payroll users based on hard copy advice from ER / Personnel. In the post ERP Scenario, the same will be directly maintained by ER / Personnel department in the Employee data base for processing in payroll.
vii) Allowances:
In the post ERP scenario, the methods for providing other inputs as mentioned below for monthly payroll for the employees are as follows:
· Traveling Time Allowance
Inputs for TTA are to be prepared in a customized MS Excel sheet provided for the purpose and forwarded to Payroll for processing. The wage types for the different kilometer slabs as applicable in TTA are configured in the SAP System as follows:
Kilometer Slab / Wage Type10 – 20 km / 1455
20 – 30 km / 1650
30 – 40 km / 1655
40 – 50 km / 1660
50 – 60 km / 1665
60 – 70 km / 1670
Above 70 km / 1675
The data will be required to be forwarded to Payroll in the following format:
Employee Number / Date (month-end date) / Travel km category / Wage Type / Number of days92000 / 30.11.2005 / 10-20 / 1455 / 2.00
103456 / 30.11.2005 / 30-40 / 1655 / 1.00
98877 / 30.11.2005 / 60-70 / 1670 / 0.50
105678 / 30.11.2005 / 20-30 / 1650 / 3.00
70874 / 30.11.2005 / 30-40 / 1655 / 1.50
70532 / 30.11.2005 / Above 70 / 1675 / 2.00
Note that the applicable rates are for 2 ways. Hence if the travel was for one way only, enter the number of days as 0.5.
· Waiting Time Allowance
Similarly, for Waiting Time Allowance, the input for payroll will be required to be prepared every month in the following format in MS Excel and forwarded to payroll for processing :
Employee Number / Date (actual date or month-end date) / Number of hours / Wage type98765 / 30.11.2005 / 1 / 1460
103654 / 30.11.2005 / 2 / 1460
94321 / 30.11.2005 / 2 / 1460
70234 / 30.11.2005 / 1 / 1460
Note that
1. Either the individual hours for the each waiting time can be entered or the cumulated number of hours for the entire month can be entered as one record. If entered as one record the date to be entered is the month-end date.
2. The wage type applicable for the purpose is 1460.
· Acting/ charge Allowance
Acting/charge allowance is calculated based on the number of days. Similar to the table above it would be required to provide the number of days (in the month) in case of each applicable employee.
· Far Flung Allowance
Far flung allowance is similar to traveling time allowance in that the number of days are captured based on the kilometer slab. The kilometer slab for far flung is ‘less than 45 km’, ‘45 – 60 km’ and ‘greater than 60 km’. The numbers of days for the various kilometer slab categories need to be filled for each employee in the month.
5. Other processes:
i) Presently, Promotion and Confirmation letters for Unionised Employees are issued by the Head of the department to which the employee belongs. Post ERP, the same will be centrally issued by ER Department for Fields and Administration / ER section in other spheres. The HODs will however be intimated to forward the appraisal for the employee concerned.
ii) Presently, Growth Oriented Promotions are being initiated by the departments to which employees belong. Post ERP, the same will be initiated by ER / Admin department. The offer letter will be sent to the employee through the Head of the Department concerned by ER Department for Fields and Administration / ER section in other spheres.
6. Above changes will be applicable w.e.f. December ’05 in all the locations of OIL except RP and BEP, where ERP will go live. The changed processes and practices to be followed in the ERP environment are being explained in detail to the participants undergoing End Users’ Training at Duliajan.
7. For any further clarification, you may please contact the ERP HR team at OIL Phone No 7175 or .
8. Kindly give wide publicity of the above changes amongst the employees of your department, so that the change over from the existing system to the ERP system can be done smoothly and effectively.
(AN Saikia)
General Manager (ERP)
Copy: CMD
D(ED)/ D(F) /D(O)
GGM
All GMs