Benefits of HR System vs Payroll System

There are several human resource information systems (HRIS) to choose from – but most health care agencies and nursing homes will typically look at the differences and benefits between a payroll system and an HR system. And you may find the need for both or a combined HR and in-house payroll system are the best to streamline operations and free up your human resources department to focus on employee safety, health, and motivation.

HR System as Human Capital Management (HCM)

Since your human resources department is responsible for a wide range of employee activities and administrative responsibilities, it makes sense to use technology to effectively manage these duties. For instance, performance appraisals, employee recruitment, worker training, and employee benefits programs are all a function of a human capital system. 

The purpose of an HCM program is to maximize the performance of employees and drive strategic decision-making within your HR division. And that’s exactly what an HR platform should deliver, above and beyond a payroll system. This type of HR system should work in conjunction with your automatic payroll system, because attendance and timeliness are key factors in appraising and promoting employees.

As a corporation, you’ve made a capital investment in each and every employee you hire. HR should work to protect those assets and maximize your profit. This is why the HR software solution you select should work to capitalize on employee productivity and engagement to provide the best return on your investment.

Functions of an HR Management System

  • Manage employee salary and benefits package
  • To document job roles and responsibilities
  • Tracking and hiring of new employees
  • Data-driven process to promotions
  • Develop and tracking training program progress
  • To maintain local and federal government compliance 

Functions of a Payroll System

  • Documenting employee hours worked
  • Reconciling payroll data and deposits
  • Reporting of employee and employer taxes
  • Calculates bonuses, overtime, and holiday pay
  • Flags excessive absenteeism or late arrivals
  • Financial record-keeping from hire to retire

When will an HR System and Payroll Overlap?

There are times when HR issues are directly related to payroll activity. In these cases, a cloud-based application is better suited to share and coordinate such an employee who is on vacation or extended illness. And, it is certainly crucial to prevent tampering from an employee who has quit or been fired. Paychecks must be properly processed (and sometimes immediately) in these sensitive circumstances.

Also, both your payroll and HR information systems will hold private and confidential employee data that must be kept from unauthorized access. At the same time, if an employee gets married and has a name change and banking information recorded to payroll, you certainly want this same information updated in all their human resources documentation.