17.

A. What actions or activities will initiate changes in the payroll master database?
Changes to the payroll database happen whenever something affects an employee’s pay, role, or
work status.
- First, when a new employee joins the company, their details like their job position, salary, tax
info, and bank account are added to the system so they get paid correctly.
- When an employee leaves, the database is updated to include their final day and any remaining
payments. This also helps prevent accidental paychecks after they’re gone.
- If an employee is promoted or moves to a different job within the company, their salary or
department may change, and this needs to be updated in payroll records.
- Direct pay changes, like raises or pay cuts, also require updates to reflect the new amount.
- When an employee signs up for or adjusts benefits (like health insurance or retirement plans),
these choices impact payroll deductions, so updates ensure the correct amount is taken out each
paycheck.
- One-time payments, such as bonuses or commissions, also need to be added to payroll so the
employee receives them in the right paycheck.
- If an employee takes leave, such as unpaid time off, vacation, or sick leave, this affects their pay
and is noted in the system to ensure accuracy.
- Changes in personal details, like bank account numbers or addresses, need updating too, so
paychecks and tax info stay correct.
- Payroll also needs to keep up with changes in tax rates or minimum wage laws to ensure the
company follows current legal rules.
- Lastly, if an employee works overtime or extra hours, these hours are added to the system so they
are paid fairly for their additional work.

B. Which payroll master database changes are the responsibility of the HR department, and which are
the responsibility of the payroll department?
1. HR Department Responsibilities
The HR department is responsible for managing employee-related information that impacts
payroll but doesn’t involve actual payment calculations.
- A new employee is hired: HR enters details like their personal information, job title,
department, and employment start date.
 - Employees leaving the company: HR updates the system with the termination date and
reason for departure, which then triggers the payroll department to stop payments.
- Job Changes: HR updates for promotions, demotions, or department transfers, which can
affect an employee's pay scale or role.
- Salary Adjustments: HR approves salary increases or adjustments, then communicates
these to payroll to update in the system.
- Benefits: HR oversees employee benefits like health insurance and retirement plans,
ensuring payroll knows which deductions to apply.
- Tax Forms: HR collects tax information (like W-4 forms) and updates any changes in tax
withholding preferences.
- Time and Attendance: HR may manage time tracking for hourly employees, forwarding
hours worked and any overtime to payroll for accurate pay calculations.

2. Payroll Department Responsibilities

The payroll department handles all payment-related tasks, ensuring employees are paid
accurately and on time. Their duties include:
- Processing Payroll: Payroll calculates and processes pay based on hours worked,
attendance, and salary data from HR.
- Deductions and Benefits: Payroll applies benefit deductions based on HR’s data, making
sure correct amounts are withheld for health insurance, retirement, etc.
- Taxes and Compliance: Payroll ensures taxes are deducted correctly, following the latest
regulations.
- Final Paychecks: For departing employees, payroll calculates the final paycheck, including
any remaining vacation pay, based on HR’s termination info.
- Bonuses and Incentives: Payroll adds bonuses, commissions, and other incentives to the
paycheck when they’re approved.
- Handling Errors: Payroll investigates and corrects any pay discrepancies, coordinating with
HR if needed.

In short, HR maintains employee data (like job roles, benefits, and taxes), while payroll focuses
on calculating and issuing payments accurately. This separation helps keep the payroll system
organized and efficient.
C. Should the payroll records of employees that leave the company be removed in the month in which
they leave to prevent fraudulent paychecks being issued?

Deciding whether to remove payroll records for employees who leave the company is important for
both preventing fraud and meeting legal requirement.

1. Preventing Fraud
When employees leave, keeping their payroll records active could lead to accidental or
unauthorized payments. By deactivating their records right away, the company can make sure
they don’t receive any paychecks by mistake. This helps reduce the risk of fraud.
2. Deactivating vs. Deleting Records
Instead of fully deleting an employee’s records, companies usually deactivate them.
Deactivation means that their information stays in the system but is marked as “inactive.” This
way, the payroll system won’t process payments for them, but the company can still access the
records if needed.
3. Legal Requirements
Many laws require companies to keep payroll records for a certain number of years, even for
employees who have left. These records might be needed for taxes, audits, or if any issues come
up in the future (like a question about final pay). Deleting records too soon could lead to trouble
with these laws.
4. For Audits and Reports
Companies often need to show past payroll records during audits or when creating financial
reports. If the records are deleted right away, it might cause problems when trying to gather
accurate information for these reports.
5. Keeping Records for Possible Rehires
If an employee returns to the company, having their past information on file can make re-hiring
easier. For example, it’s helpful to see their pay history or benefits from their last time with the
company. Deactivating records rather than deleting them lets the company keep this useful
information.
6. Best Practice: Deactivate Instead of Delete
The best approach is usually to deactivate payroll records when employees leave, rather than
deleting them. This way, the records are safely stored but won’t be used for payroll. Only
authorized people can access these inactive records, helping to protect against fraud.
 In short, it’s better not to delete payroll records right away. Deactivating them keeps the company
safe from accidental payments and meets legal and audit needs while allowing access to past records
if needed.

D. Why does management say that unexpected high employee turnover results in additional costs to the
company?

When employees leave suddenly or more often than expected, it creates extra costs for the company.
Here is why:
1. Hiring New Employees
When someone quits, the company has to spend money to find and hire a replacement. This
includes posting job ads, using recruitment agencies, and spending time interviewing
candidates. These costs add up, especially if employees are leaving frequently.
2. Training New Employees
New employees need training to understand their job and how things work in the company.
Training takes time and resources, and it often means other employees or managers have to take
time from their work to help train the new hire. During this period, the new employee isn’t fully
productive yet, which can affect the team’s overall performance.
3. Lost Productivity
When an experienced employee leaves, it can take time to get a new hire up to the same level of
skill and efficiency. This can lead to slower work or even mistakes, which can impact the quality
of products or services. In the meantime, other team members might have to take on extra work,
which can lower overall productivity.
4. Impact on Team Morale
When people leave often, it can affect the mood and motivation of the team. Remaining
employees may feel stressed or overworked, which can lead to burnout or even cause more
people to leave. This cycle can make it hard for the company to keep good employees.
5. Customer Impact
If employees who deal directly with customers leave, it can disrupt customer relationships.
Customers may notice changes in service quality or feel less confident in the company’s
stability, which can hurt customer satisfaction and loyalty.
6. Higher Salary Expectations
 In areas with high turnover, companies might need to offer higher salaries or better benefits to
attract new employees and keep current ones from leaving. This adds to the company’s costs,
especially if they are constantly having to raise salaries to stay competitive.

E. Why are there differences in the processes of determining employee remuneration? What are these
differences?

Employee pay and benefits (remuneration) vary across roles in a company for several reasons:
1. Job Role and Responsibilities
Different jobs have different responsibilities. For example, a manager with more duties usually
earns more than an entry-level worker.
2. Hourly vs. Salary
Hourly workers are paid per hour and get extra for overtime. Salaried employees get a set
amount each pay period, regardless of hours worked.
3. Performance-Based Pay
Some roles, like sales, include bonuses or commissions based on performance. This motivates
employees to meet targets.
4. Experience and Skills
More experienced or skilled employees often earn higher pay, even within the same role.
5. Industry Standards
Competitive industries pay more to attract talent, especially for in-demand skills.
6. Location
Employees in high-cost areas, like big cities, often receive higher pay to cover living expenses.
7. Benefits
Different roles come with different benefits, like health insurance or retirement plans. Higher-
level positions may include extra perks.
8. Legal Requirements
Laws affect pay, like minimum wage and overtime rules, which vary by region.

F. Why is it important to link the goals of incentive schemes, bonuses, and commissions to the
objectives of the company?

Linking incentives like bonuses and commissions to the company's goals is important because it
motivates employees to work toward the same objectives as the company. When employees know
 that they can earn extra rewards by helping the company reach its goals, they are more likely to stay
focused and work harder on the tasks that matter most.

For example, if the company's goal is to increase sales, offering commissions for higher sales
numbers encourages employees to push for more sales. This way, employees’ efforts align with what
the company wants to achieve. It also helps build a sense of teamwork, as everyone is working
toward shared goals. Additionally, linking incentives to company objectives can improve
productivity, as employees are more likely to stay engaged and perform well when they see that their
efforts directly contribute to both their own rewards and the company’s success.

G. Why do companies invest in source data automation if information can simply be entered manually?
Companies invest in source data automation because it makes data entry faster, more accurate, and
more efficient compared to manual entry. With automation, information is captured directly from the
source (like scanners, sensors, or software) and entered into the system automatically, reducing the
chances of human errors that often happen with manual input. This saves time and helps ensure that
data is more reliable.

Automated data entry also allows employees to focus on more valuable tasks instead of spending
time on repetitive data entry. Additionally, by improving data accuracy and speed, companies can
make better and quicker decisions based on real-time data. So, while manual entry is possible,
automation helps companies save time, reduce mistakes, and improve overall productivity.