Reference no: EM135627

Though most medium and large companies have implemented HRM systems and sophisticated payroll like the one described in this chapter, many smaller companies still maintain HRM systems and separate payroll that employ many manual procedures. Typical of such small companies is the Kowal Manufacturing Company, which employs about 50 workers and has the subsequent payroll procedures:

 The factory supervisor interviews and hires all job applicants. The new employee purpose a W-4 form (Employee's Withholding Exemption Certificate) and provides it to the supervisor. The supervisor writes the hourly rate of pay for the new employee in the corner of the W-4 form and then provides the form to the payroll clerk as notice that a new worker has been hired. The supervisor vocally advises the payroll department of any following pay raises.

• A supply of blank time cards is kept in a box near the entrance to the factory. All workers take a time card on Monday morning and fill in their names. In the week they record the time they arrive and leave work by punching their time cards in the time clock located near the entrance to the factory. At the end of the week the workers drop the time cards in a box near the exit. A payroll clerk retrieves the finished time cards from the box on Monday morning. Employees are routinely removed from the payroll master file when they fail to turn in a time card.
• The payroll checks are physically signed by the chief accountant and then given to the factory supervisor, who distributes them to the employees. The factory supervisor arranges for delivery of the paychecks to any employee who is not present on payday.
• The payroll bank account is reconciled by the chief accountant, who also prepares the several quarterly and annual tax reports.