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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

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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 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

Human Resource Department

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

Human Resource Department

Human Resource Staff

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

Human Resource Manager

4. Acquires shortlisted applicants’ documents and Staffing Request Form from

Human Resource Staff

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

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

Human Resource Department

Human Resource Staff

1. Creates list of hired employees

2. Sends the list of newly hired employees to the Human Resource Manager

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

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

Respective Department

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

Human Resource Department

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

Human Resource Manager

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

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

Respective Department
Requesting Employee

13. Receives the check


Task 5: Employee Loan Application-PAG-IBIG

Respective Department

Requesting Employee

1. Fills up Employee Loan Application-PAG-IBIG

2. Forwards the form and other requirements to the Human Resource Staff

Human Resource Department

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

Human Resource Manager

5. Reviews the documents

6. Gives authorization to process the Employee Loan Application

7. Sends back the documents to the Human Resource Staff

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

Respective Department

Department Head

1. Makes Employer Recommendation for Employee Promotion and Change in

Employment Status (EREPCES)

2. Forwards EREPCES to Human Resource Manager

Human Resource Department

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

Human Resource Department

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 Department

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 Department

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

Respective Department

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

Human Resource Department

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


Human Resource Department

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

20. Sends Total Payments, Resignation Letter and other supporting documents to

the Human Resource Staff

Human Resource Department

Human Resource Staff

21. Receives notification from the system

22. Receives Total Payments, Resignation Letter and other supporting documents

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

24. Sends Total Payments, Resignation Letter and other supporting documents to

the Controller

Finance Department

Controller

25. Receives Total Payments, Resignation Letter and other supporting documents

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

30. Sends Total Payments, Resignation Letter and other supporting documents to

the Human Resource Department

Human Resource Department

Human Resource Staff

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

49. Receives Total Payments, Resignation Letter and other supporting documents

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

Human Resource Department

Human Resource Staff

53. Receives Resignation Letter from Payroll Clerk

54. Asks for authorization from Human Resource Manager

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

Human Resource Manager

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.