3687 – Lean Six Sigma Green Belt

Assignment 2

Student name:

Student number:

Date
❑Purpose of Process ❑Metrics
The purpose of payroll process is to make sure that ➢ Primary Metric
each employee within the organization is paid on
- Automation and paperless in Payroll process
time and accurately, employees' personal info is
secured and validated. Organization complies with
all government and tax regulations at each pay
period and at year end. Organization files and
➢ Secondary Metrics
submits payments to various government - Shorten payroll process time
departments on time. Payroll provides various
- cost saving
reports to different users and provides data to
Finance and HR for analysis on a regular basis and as - Compliance with government regulations
required.
- Single view of employee data
Organization achieves automation of payroll
processes as much as possible, and the goal of - Various standard reports /data/analysis
digitization of documentation in payroll, HR and
Time attendance process.
Payroll process
Payroll sends out notification to timecard approvers for timecard approval before payroll cut off time. Timecard approvers
check, review and approve hourly employee timecards and submit signed paper timesheets along with Absenteeism forms to
payroll for process.
Payroll checks to see if there are any adjustments and corrections from previous payroll pay period that should be processed
on this pay period, and new requests.
After first round of review, payroll sends out requests to HR and department managers for any info that needs to be
corrected and need further approval.
Payroll contacts HR for new employee info. HR provides new employee’s contact information, personal info, SIN number,
bank info, badge number…etc., a copy of employment contract, benefits enrollment contract, tax form and Pension plan to
payroll.
For the resignations and terminations, Payroll contacts HR for last payment info and ROE detail, will process ROE in payroll
and change employee status to inactive.
For the promotion, bonus, commission, change in rate and salary, rewards, taxable expenses reimbursements, HR needs to
provide signed copy to payroll for process.
After preliminary checking, payroll uploads payroll period hours from Timeclocks to payroll system.
Payroll runs and reviews the entire pre-pay payroll register/data to ensure all changes are accurately processed and all
employees are included, then sends the copy of pre-pay payroll register report to HR and Finance to approve.
Payroll process Cont’d
Once the pre-pay payroll register report is approved by Finance, payroll uploads the payroll data to payroll provider’s portal
to process.
Payroll checks payroll provider’s portal for any error messages. If there is an error message notification sent from payroll
provider, payroll needs to get technical support to fix errors. From payroll provider’s portal, payroll downloads and saves
the payroll register report and sends a copy of it to Finance to book journal entries.
Payroll provider mails pay stubs and ROE(s) to company. Payroll notifies supervisors/managers once receives them.
Supervisors/Managers picks up from payroll and distributes to their team members. Payroll gets ROE signed and mails one
copy to Service Canada, one copy to employee, and one copy to HR.
Payroll updates Attendance records on the shared excel sheet which is used to track employee’s Time off balance, and Time
off policies if employee hits anniversary or milestone for vacation.
Payroll sends Finance the benefits invoice info, WSIB, EHT, WCB and QHST info/reports to record, reconcile and pay.
On a periodic basis, Payroll provides and submits various reports, such as payroll trend, payroll expenses analysis, benefits
dashboard to various report users within organization.
SIPOC
Payroll process
Who supplies the input to What does the process deliver to the Who are the customers for the output?
What do the suppliers provide? What are the major steps in the process (Who does it)?
process? customer? What are their requirements for performance?

Supplier (5) Input (4) Process Step (1) Output (2) Customers (3) Customers' Requirements (6)

approved timesheets,
approved and locked
Supervisor/HR/D
Supervisors/Departmen timecards, approved Payroll sends out notification about the current payroll period Payroll cut off notification need to be notified by 1-2 day
S1 I1 P1 O1 C1 epartment R1
t Managers/HR absenteeism form, all info of cut off time email prior to payroll cut off time
managers
changes that need to be
processed in current payroll
correct any mistakes, provide Payroll checks the completeness and accuracy of payroll data ensure hours are correct
Supervisors/Departmen need to be paid accurately,
S2 I2 missing info / supporting P2 and info, contact related department manager/supervisor/HR O2 and supporting documents C2 Employees R2
t Managers/HR employee's info must be accurate
docs to payroll for any info that needs to be corrected, provided are received

Payroll runs the preliminary payroll run to check if there is any

accurate payroll data, is
S3 Payroll provider I3 technical support P3 errors in payroll data batch, contacts payroll provider to fix O3 an error-free payroll batch C3 payroll R3
acceptable by payroll provider
them
Payroll submits pre-pay payroll register report to HR and a complete, accurate and
S4 Payroll I4 Payrollpre-pay data/report P4 O4 C4 Finance and HR R4 a final version of payroll pay data
Finance to approve error-free payroll batch
confirmation of successful Payroll uploads approved payroll data to payroll provider's confirmation of acceptance needs confirmation of successful
S5 Payroll provider I5 P5 O5 C5 payroll R5
submission of payroll data portal of payroll data submission of payroll data
An accurate balance of their Time
Enters time off info on an updated Attendance
S6 Payroll I6 P6 Payroll updates Attendance records O6 C6 Employees R6 off balance for each Time off
Attendance book records
policies, and milestone
distributes/mails pay stubs Payroll receives paystub and ROEs from payroll provider, Employees, HR,
S7 Payroll I7 P7 O7 pay stub, ROE C7 R7 must recive them before deadline
and ROE distributes them accordingly Service Canada

Payroll provides Finance with payroll reports, WSIB, EHT, need timely, accurate and
S8 Payroll I8 various payroll reports P8 O8 Various reports C8 Finance R8
WCB, HSF…ect. For them to process in Accounting complete reports/info
A3 REPORT (workbook is attached at the end of presentation)
Implement an automatic cloud-based HRM and Payroll system Owner & Date: Tina Cao, Nov.8, 2020 Prepared For: Finance department
1. Background 5. Proposed Countermeasures
The current manual and paper-based payroll process has been a chronic

0.292407407
Sum of NA Duration
issue, it takes up lots of resources to complete the payroll process at each

0.2434375
0.35 Sum of Value Add Duration

0.1915625
payroll cycle, and the non-valued added time is around 47.37% of entire 0.3

Manual and paper-based payroll

0.097951389
0.25

0.094606481
course of payroll process. Our goal is to reduce the Non-value added Countermeasures

0.06306713
0.052314815
0.2

0.017997685
0.007210648

0.007118056
activities to a minimum level by implementing an automatic cloud-based
0.15
0.1

payroll and HR managment system, centralize all documents on web. 0.05

WHO Countermeasures

0
0

Attendance record timecard approvers Implemente an automatic cloud-

Timecard Managers based
2. Current Conditions Employee profile HR HRM/PAYROLL/ATTENDANCE
New hires HR system which can provide one
single set of employee data, and
Compliance and tax filling Payroll
system can be accessed anytime

6. Implementation Plan
Implementation Plan
Deliverables Who Sep Oct Nov Dec
There are about 70% of wastes coming from tw0 main types of wastes in our current payroll process.
One is overprocessing, 17.04%; the other is waiting time, 53.95%. Implement an automatic cloud-based
HR and Payroll
HRM and Payroll system

3. Goals / Targets Biometric attendance device HR and Payroll

Validate system configuration HR and Payroll
Non-value added Target Process KPI Target Validate Time off policy HR and Payroll
0.6 0.539539247 Validate employee info HR and Payroll
VALUE ADDED - TARGET 0.9
HR, Payroll and
0.4 Validate employee timeoff balance
NON-VALUE ADDED - TARGET 0.1
0.170415928
Managers
0.2
VALUE ADDED - CURRENT 0.5263
0.05 0.05 Validate payroll configuation HR and Payroll
NON-VALUE ADDED - CURRENT 0.4737 0 Validate group benefits HR and Payroll
Over processiong - Over processiong - Waiting - current Waiting - Target
0 0.2 0.4 0.6 0.8 1 current Target
Reconcile government info

4. Analysis 7. Followup

The accuracy of employee's

data and payroll's data are the
Follow up plan Who Jan Feb March April
foundation of company's Update taxtable Payroll
compliance and tax filling.
Implementing an automatic First/Second payroll run simulation Payroll
cloud-based HRM and Payroll
system can eliminate this issue Training on new system HR and Payroll
to minimum level as this type
system can provide a Go live Entire company
centrailized and one single set
of employee data because all Payroll, HR and all
systems are fully intergrated
Follow up with users
including HRM, Time and
users
Attendance and Payroll, data
flow among them are timely
and seamlessly.