HUMAN RESOURCE SUBSYSTEM

HUMAN RESOURCE SUBSYSTEM
OVERVIEW
The Human Resource Subsystem deals with generating and maintaining
HR-related data for all employees of the company. This includes the hiring, promotion,
and termination of employees. Upon hiring of employees, employee profile is being
created through the system which updates the Employee Master File. It is constantly
updated upon initiating activities which triggers necessary alterations or adjustments.
The Human Resource Subsystem does not involve computations of pay. Its main
focus is on recording and storing data of employees for the company’s use. Activities
under this subsystem are done by the HR Department personnel for distinct execution
of duties. Transactions that require manual processing and authorization are done
through the use of manual forms and all else are done through the automated system,
which is employed only when encoding processed and approved data, initiating system
changes, and updating the master files. For instance, Employees are made to fill out
Leave Request Slip or create a resignation letter when requesting for leave or
resignation respectively, which is to be approved by the Human Resource Manager.
The Human Resource Manager is the person responsible to provide for approval or
authorization on tasks like staffing, leave and overtime requests, promotion, resignation
and termination. In the same way, the Controller, General Manager, and the Finance
Manager give additional approval depending on the nature of transaction.

Information under the Human Resource Subsystem can be used to support strategic
decision making, avoid litigation, evaluate programs or policies, or support daily
operating concerns.
Summary of Tasks
Task 1: Request for Addition or Replacement of Employees
Task 2: Hiring of Employees
Task 3: Establishment of Employee Master File, Employee Time Record File and
Payroll Master File
Task 4: Employee Loan Application- Social Security System
Task 5: Employee Loan Application- PAG-IBIG
Task 6: Cash Advances
Task 7: Employee Promotion and Change in Employment Status
Task 8: Processing of Termination/Resignation/Retirement

INTERNAL CONTROLS
Control Objectives:
The main objective of having a human resource management is to provide the company
with accurate number of employees required, matching them with skill requirements to
accomplish the establish goals of the organization as a whole. The following adheres to
the objectives:
● To ensure that there is an appropriate supervision of staff;
● To ensure that formal procedures are established to physically secure and
protect master file information;
● To ensure that policies and guidelines are maintained for the hiring, promotion,
transfer, and termination of employees;
● To ensure that access to accounts are restricted to authorized personnel only;
● To ensure compliance with rules and regulations;
● To ensure transactions are authorized and documented properly
General Controls
Segregation of Duties
● In the termination of employees, the Human Resource Clerk is responsible for
the request of payment for employee benefits. The RFP is approved by the
Treasurer
● Additional requests for employees are processed by the Human Resource Clerk,
endorsed by the Finance Manager, and approved by the General Manager
Authorization, Verification, and Approval
● Proper authorization is required in the process of requesting additional
employees. The Staffing Request Form should contain the signature of the Commented [U1]: Signature of the?
General Manager
● Proper verification of the job applicant’s skills are implemented
● Background information of applicants are checked and approved by an
authorized personnel
Compliance
● Documents are reviewed for compliance to employment laws
● Employees are well-oriented regarding company’s policies and procedures and
government-related employment laws
Documentation
● Thorough documentation of hiring procedures are established
● All supporting documents are kept and filed
Access controls
● A unique user account name and password are given to each employee
● Passwords are changed periodically
Employee Fraud Prevention
 Employees are properly educated of the fraud risk policy and the consequences
associated with them
 Employees are not allowed to disclose any company information
 Disciplinary actions are taken against employees in contrary to company’s
policies and procedures
 Every employee has access to control procedures and are properly trained
 Employees are informed of the whistleblowing policy act of the company
Physical Controls
 Picture IDs are implemented to be used by every employee.
 Security cameras are set up on certain areas of the company’s vicinity

 Physical security, such as locking premises, personal offices, filing cabinets
and safes are established
Application Controls
Input Controls
● An error statement appears for any missing required data
● Every employee has his own username and password when accessing the
system
● Biometrics is used when logging onto employees records
● Only authorized personnel are allowed to input data
Processing Controls
● Stored Master Files are matched with input data
● Error messages appear in case of account mismatch.
Output Controls
● All forms and documents are pre-numbered and filed in order

Task 1: Request for Addition or Replacement of Employee
Respective Department
Requesting Department Manager
1. Assesses department’s need for addition or replacement of employees
2. Creates the Staffing Request Form (SRF)
3. Writes name and signs on the ‘Requested by’ portion
4. Forwards the SRF to Human Resource Manager
Human Resource Department
Human Resource Manager
5. Receives the SRF from the Requesting Department Manager
6. Reviews and discusses with the Requesting Department Manager matters
concerning the request
If SRF is denied
7. Informs the Requesting Department Manager about the reason of disapproval
8. Files the rejected SRF
If SRF is approved
9. Signs the SRF as endorsed
10. Forwards the SRF to the Finance Manager
Finance Department
Finance Manager
11. Receives the SRF from the Human Resource Manager
12. Checks if request is within the budget
a. The system automatically looks up the Budget Master File
If request is within the budget

13. Signs the SRF as endorsed
14. Sends the SRF to General Manager
Top Executives
General Manager
15. Acquires the SRF from Finance Manager
16. Reviews and authorizes the SRF by affixing signature
17. Sends the Signed SRF to the Human Resource Department
Human Resource Staff
18. Receives the Signed SRF from the General Manager
19. Creates advertisement for job opening together with the application
procedures, requirements and schedule
20. Files the SRF
If request is not within the budget
Finance Department
Finance Manager
21. Notifies the Human Resource Manager that the request is not within the
budget
22. Sends SRF back to Human Resource Manager
23. Receives the SRF
24. Informs the Requesting Department Manager about the insufficient budget
25. Files the SRF

Task 2: Hiring of Employees
1. Receives applicant’s resume, application letter and other requirements
2. Selects qualified applicants based on qualifications and requirements by
segregating documents of qualified applicants from those that are not
3. Forwards documents of selected applicants together with the Staffing Request
Form to Human Resource Manager
4. Acquires shortlisted applicants’ documents and Staffing Request Form from
5. Calls in applicant for interview and conducts interview
6. Deliberate and choose on which applicant to hire
7. Fills in ‘Date Filled’ and ‘Selected Applicant’ on Staffing Request Form
8. Forwards shortlisted applicants’ documents and filled in Staffing Request
Form to Human Resource Staff
9. Receives shortlisted applicants’ documents and filled in Staffing Request
Form from Human Resource Manager
10. Notifies hired applicant
11. Files all documents

Task 3: Establishment of Employee Master File, Employee Time Record File and
Payroll Master File
1. Creates list of hired employees
2. Sends the list of newly hired employees to the Human Resource Manager
3. Receives the list of newly hired employees from the Human Resource Staff
4. Reviews and endorses list of newly hired employees
5. Sends back the list to the Human Resource Staff
6. Receives list from Human Resource Manager
7. Encodes employee data, salary and wages on the corresponding employee’s
profile, and sets up employees’ biometrics into the system
a. The system automatically updates the Payroll Master File, Employee
Master File and Employee Time Record File
b. The system automatically notifies the General Manager of the Payroll
Master File
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General Manager
8. Receives notification from the system
9. Retrieves and reviews information from the system
a. The system automatically looks up the Payroll Master File
10. Enters authorization code to the system and locks access

a. The system automatically updates and locks access to the Employee
Master File and Payroll Master File

Task 4: Employee Loan Application-Social Security System
Requesting Employee
1. Fills up the Employee Loan Application-SSS form and gives other
requirements for loan application
2. Forwards the form and other requirements to the Human Resource Staff
3. Receives and reviews the Employee Loan Application and other requirements
4. Obtains authorization from Human Resource Manager to process the loan
5. Receives and reviews the documents
6. Gives authorization to process the employee loan application
7. Sends back the documents to the Human Resource Staff
8. Receives the documents
9. Processes the loan application with the corresponding loan agency
10. Obtains approved loan application, check and the transaction record from
Social Security System (SSS)
11. Disburses the check to the appropriate employee
12. Files the transaction record and the approved loan application
Requesting Employee
13. Receives the check

Task 5: Employee Loan Application-PAG-IBIG
Requesting Employee
1. Fills up Employee Loan Application-PAG-IBIG
2. Forwards the form and other requirements to the Human Resource Staff
3. Receives and reviews the Employee Loan Application-PAG-IBIG form and
other requirements
4. Obtains authorization from Human Resource Manager to process the loan
5. Reviews the documents
6. Gives authorization to process the Employee Loan Application
7. Sends back the documents to the Human Resource Staff
8. Receives the documents
9. Processes the loan application with the corresponding loan agency
10. Obtains the approved loan application, check, and the transaction record from
PAG-IBIG
11. Disburses the check to the appropriate employee
12. Files the transaction record and approved loan application
Employee
13. Receives the check

Task 6: Employee Promotion and Change in Employment Status
Department Head
1. Makes Employer Recommendation for Employee Promotion and Change in
Employment Status (EREPCES)
2. Forwards EREPCES to Human Resource Manager
3. Receives and reviews the EREPCES
4. Endorses the EREPCES to General Manager for approval
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General Manager
5. Received endorsed EREPCES
6. Authorizes EREPCES
7. Forwards approved EREPCES to Human Resource Staff
8. Obtains approved EREPCES
9. Encodes promotion details to the system
a. The system automatically updates Employee Master File
b. The system automatically updates Payroll Master File
10. Files EREPCES

Task 7: Employee Shifting Schedules
Human Resource Management
1. Makes three shifting blocks per branch (2 copies).
a. First shift is from 7 in the morning until 3 in the afternoon. An hour of
lunch break is given to the employee.
b. Second shift is from 2 in the afternoon until 11 in the evening. An hour
of lunch break is given to the employee.
c. Third shift is from 11 in the evening until 7 in the morning.
2. Checks the records of the employees of every branch owned.
3. Assigns shifting schedules and encode to the Shifting Schedule File.
4. Gives Shifting Schedules (2 copies) to the area head.
Area Head Commented [U2]: What department?
5. Confirms with the shifting schedules made.
6. Prompt the system if details are in line with the coded ones.
a. If agrees with the details, proceed with assigning the shifting schedules
to branch staffs.
b. If not agrees with the details, notify HR Officer about the
inconsistency.
Human Resource Management
7. A notification sent to HR Officer due to inconsistency of the details.
a. Details being corrected to the Shifting Schedule File, if corrections are
done, proceed with the same process to Area Head.

Area Head
8. A notification sent to Area Head regarding the corrected details. If polished,
proceed with assigning the shifting schedules to branch staffs.

Task 8: Processing of Termination, Resignation or Retirement
Requesting Employee
1. Prepares a Resignation Letter
In cases of involuntary termination, the Department Head’s Request for
Employee Termination replaces the Resignation letter.
2. Submits the Resignation Letter to Human Resource Manager
3. Receives Resignation Letter from resigning employee
4. Informs Department head of employee resignation
5. Discuss with the Department Head in respective roles in termination process
6. Informs Payroll Clerk of employee termination
7. Forwards Resignation Letter to the Payroll Clerk
Finance Department
Payroll Clerk
8. Checks approved and used overtimes from the system
9. Generates summary of monetized leave absences and benefits
10. Runs the system for computation of termination pay
a. The system automatically computes Employee Salaries, Wages and
Employees’ and Employers’ monthly contributions.
b. Data is stored automatically in Payroll Master File
c. The system automatically computes termination pay
11. Forwards summary of Total Payments and Resignation Letter with supporting
documents to Human Resource Staff

12. Creates Request for Payment through the system
a. The system automatically updates Request for Payment Scratch File
b. The system automatically notifies the Treasurer of the Request for
Payment Scratch File
13. Sends Total Payments, Resignation Letter and other supporting documents to
the Treasurer
Finance Department
Treasurer
14. Receives notification from the system of the Request for Payment Scratch File Commented [U3]: Ga scratch file ta?
15. Receives Total Payments, Resignation Letter and other supporting documents
from the Human Resource Staff
16. Reconciles the details of the Request for Payment Scratch File with the Cash
Advance Slip
17. Assesses if request for payment is reasonable
a. The system automatically looks up the Budget Master File
If Request for Payment is rejected
18. Ticks the status on the Request for Payment Scratch File to “Disapprove”
through the system
a. The system automatically closes the Request for Payment Scratch File and
notifies the Human Resource Staff of the rejected request
If Request for Payment is approved

19. Ticks the status on the Request for Payment Scratch File to “Approve”
through the system
a. The system automatically closes the Request for Payment Scratch File
b. The system automatically creates Request for Payment Transaction File
c. The system automatically notifies the Human Resource Staff of the
approval of the Request for Payment
the Human Resource Staff
21. Receives notification from the system
from the Treasurer
23. Generates Check Voucher through the system
a. The system creates the Voucher Transaction File (based on the approved
RFP)
b. The system automatically notifies the Controller of the Voucher
Transaction File
the Controller
Finance Department
Controller
from the Human Resource Staff
26. Receives notification of the Voucher Transaction File through the system
27. Confirms and reviews the details encoded in the Voucher Transaction File
a. The system automatically looks up the Voucher Transaction File and
Request for Payment Transaction File
If Voucher is not approved
28. Denies the Check Voucher through the system
a. The system automatically updates the Voucher Transaction File
If Voucher is approved
29. Approves the Check Voucher through the system
a. The system automatically creates/updates Voucher Transaction File
b. The system automatically notifies the Human Resource Staff of the
verified Voucher in the related Voucher Transaction File
c. The system automatically creates/updates Check Voucher Register
the Human Resource Department
31. Receives notification and retrieves information from the system
a. The system automatically looks up the Voucher Transaction File
d. The system prints two (2) hard copies of the corresponding Check Voucher
from the Voucher Transaction File
32. Forwards the Check Vouchers to the Controller
Finance Department
Controller
33. Receives, reviews, and signs the Check Vouchers
34. Forwards the signed Check Vouchers to the Cash Disbursement Officer
Cash Disbursement Officer
35. Receives the signed Check Vouchers
36. Prepares the Check and attaches the signed Check Vouchers
37. Encodes check details into the system
a. The system automatically creates/updates the Check Register
38. Forwards the Check and Check Vouchers to the Controller
Controller
39. Receives the Check and Check Vouchers
40. Reviews and signs the Check for verification
41. Forwards the Check and Check Vouchers to the Treasurer
Treasurer
42. Receives the Check and Check Vouchers from the Controller
43. Signs and sends the Check and Check Vouchers to the Cash Disbursement
Officer
Cash Disbursement Officer
44. Receives Check and Check Vouchers from Treasurer
45. Sends check to employee
46. Secures employee’s signature for the Check Voucher as proof of receipt of
check
47. Files one (1) copy of Check Voucher and sends the other one to the Payroll
Clerk
Payroll Clerk
48. Receives Check Voucher from the Cash Disbursement Officer
from the Controller

50. Encodes Resignation/Termination details to update check status in the Check
Register
a. The system automatically updates Check Voucher Register, Payroll
Master File, Cash and Cash Equivalents Master File, Voucher
Transaction File and Cash Disbursements Transaction File
51. Files the Check Voucher, Total Payments and other supporting documents
52. Sends the Resignation Letter to Human Resource Staff
53. Receives Resignation Letter from Payroll Clerk
54. Asks for authorization from Human Resource Manager
55. Receives notification from the system and Resignation Letter
56. Authorizes Human Resource Staff to update employee profile and sends back
Resignation Letter
Human Resources Staff
57. Encodes Termination, Resignation or Retirement details
a. The system automatically updates Employee Master File
b. The system automatically notifies Human Resource Manager of the
system change
58. Files Resignation Letter
59. Receives notification from the system of the database change
60. Reviews changes
61. Approves changes through the system

a. The system automatically saves changes and disables Human Resource
Staff to create any changes on employee profile.

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The Human Resource Subsystem deals with generating and maintaining

and termination of employees. Upon hiring of employees, employee profile is being

updated upon initiating activities which triggers necessary alterations or adjustments.

resignation respectively, which is to be approved by the Human Resource Manager.

Manager give additional approval depending on the nature of transaction.

decision making, avoid litigation, evaluate programs or policies, or support daily

Task 1: Request for Addition or Replacement of Employees

Task 2: Hiring of Employees

Payroll Master File

Task 4: Employee Loan Application- Social Security System

Task 5: Employee Loan Application- PAG-IBIG

Task 6: Cash Advances

Task 7: Employee Promotion and Change in Employment Status

Task 8: Processing of Termination/Resignation/Retirement

● To ensure that there is an appropriate supervision of staff;

● To ensure that formal procedures are established to physically secure and

protect master file information;

transfer, and termination of employees;

● To ensure that access to accounts are restricted to authorized personnel only;

● To ensure compliance with rules and regulations;

● To ensure transactions are authorized and documented properly

● In the termination of employees, the Human Resource Clerk is responsible for

endorsed by the Finance Manager, and approved by the General Manager

Authorization, Verification, and Approval

● Proper authorization is required in the process of requesting additional

● Background information of applicants are checked and approved by an

● Documents are reviewed for compliance to employment laws

● Employees are well-oriented regarding company’s policies and procedures and

government-related employment laws

● Thorough documentation of hiring procedures are established

● All supporting documents are kept and filed

● Passwords are changed periodically

Employee Fraud Prevention

associated with them

 Employees are not allowed to disclose any company information

 Disciplinary actions are taken against employees in contrary to company’s

policies and procedures

 Employees are informed of the whistleblowing policy act of the company

 Picture IDs are implemented to be used by every employee.

 Security cameras are set up on certain areas of the company’s vicinity

and safes are established

● An error statement appears for any missing required data

● Biometrics is used when logging onto employees records

● Only authorized personnel are allowed to input data

● Stored Master Files are matched with input data

● Error messages appear in case of account mismatch.

● All forms and documents are pre-numbered and filed in order

Requesting Department Manager

1. Assesses department’s need for addition or replacement of employees

2. Creates the Staffing Request Form (SRF)

3. Writes name and signs on the ‘Requested by’ portion

4. Forwards the SRF to Human Resource Manager

Human Resource Department

Human Resource Manager

5. Receives the SRF from the Requesting Department Manager

6. Reviews and discusses with the Requesting Department Manager matters

concerning the request

7. Informs the Requesting Department Manager about the reason of disapproval

8. Files the rejected SRF

9. Signs the SRF as endorsed

10. Forwards the SRF to the Finance Manager

11. Receives the SRF from the Human Resource Manager