Wednesday, May 19, 2010

Cranky About Benchmarking

I think Wednesdays are going to be interesting days for the blog. Best practices is an area where we can agree to disagree and maybe even be a little “cranky” sometimes. I think this is one of those “cranky” days. I am in the process of conducting a survey of 200 or so payroll professionals on benchmarking. Benchmarking is a best practice by all means and one that is very much in vogue right now. I am doing the survey for an annual benchmarking report for which I am the editor. But why am I cranky about this best practice? I am cranky because I am actually getting e-mails saying that the survey is much too long, or too much work, or a lot of trouble. You see I think some people in payroll are not getting the concept of benchmarking and best practices. It appears they think that all you have to do to benchmark your payroll department is answer a few quick questions and abra cadabera you are benchmarked!

But the survey is asking for the cost of manual checks, how long between getting new hire or termination paperwork and the payment, or how many errors occur on average in the payroll department. These are the processes that have to be benchmarked so you can determine best practices and make improvements. You have to know what goes on with every process or procedure in your department to know what needs to be improved. And it takes a lot of work to get to the point where you can say “it costs this much money to cut a manual check” or “we have three errors on average per payroll of 10k checks”. In other words it takes months of work just to determine where you stand so you can improve from there.

I guess my worry or the cause of my crankiness or angst is that there are some in payroll who still feel that just pushing paper around to pay people is good enough to run the department. That having to know the inner workings, the actual numbers, the essence of the department is too much work. And it shouldn’t be.

What do you think? Are you benchmarking?

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