PAYROLL MANAGEMENT

SYSTEM WITH REFERENCE TO

NSIC CO. LTD
 Chapter 1

THE NATIONAL SMALL INDUSTRIES CORPORATION LTD

“AN OVERVIEW”

Origin of NSIC

Considering the significance of Small Scale Industries in the economic

development in 1953 the Government of India invited an International planning team of
experts to visit the country and study the problems confronting the Small Scale Sector in
the country. One of the recommendations of the team was the constitution of an
autonomous corporation with the regional offices for serving SSIs in obtaining a fair
proportion of Government Contracts. As a result, Government of India in order to
promote small and budding entrepreneurs of the post independent India decided to
establish a government agency which can mediate and provide help to SSIs. The agency
so created came to be known as, “The National Small Industries Corporation Ltd.
(NSIC)”.

It was established by the Government of India in February 1955 with seed money of 20
lakhs, which was entirely subscribed by the Government of India.

Now the NSIC has grown up many folds. As per the statement of accounts pertaining to
the financial year 2019-20, the corporation is having a subscribed and paid up share
capital of 46,298.80/- lakhs.
The Corporation occupies a unique position among the Institutions set up to aid SSIs.
NSIC has been working to fulfil its mission of promoting, aiding and fostering the growth
of small scale industries, now commonly known micro, small and medium enterprises –
MSMEs in the country.

Over a period of five decades of transition, growth and development, NSIC has proved its
strength within the country and abroad by promoting modernization, up-gradation of
technology, quality consciousness, strengthening linkages with large medium enterprises
and enhancing exports - projects and products from the small and medium enterprises.
Mission / Objectives

The NSIC was started with initial objectives of:

a) Supplying imported and indigenous machines and equipment’s to the SSIs on
easy instalment basis;
b) Encouraging the SSIs in internal and export marketing of their products,
c) Assisting the SSIs in getting a fair share of government purchase by
participating in the central government purchase programme;
d) Imparting training to the skilled workmen and technicians;
e) Developing proto-types and the latest technology based, machine tools and
equipment’s and transfer of technical knowhow for the production of such machines on
commercial basis; and
f) Testing and common servicing facilities to SSIs.

With the enactment of the MSMED Act, 2013, medium enterprises also came into its
ambit. Later, the NSIC too extended objectives of providing complete MSMEs
entrepreneurial solutions in line with its strategic objectives, for which the Corporation
amended its mission to include the following “to aid, counsel, assist, finance, protect and
promote the interest of small industries in India.”
Organisational Set-Up

The policy guidelines to the NSIC are provided by the Board of Directors
consisting of a full time Chairman-cum-Managing Director; two Functional Directors;
two Government Nominee Directors, one SIDBI Nominee Director and six Non-official
part time Directors. The Corporation is manned by a dedicated team of professionals at
different levels and it operates through 123 offices located all over India and one office
located at Johannesburg (South Africa). The total manpower of the organisation as on 31 st
March 2020 was 899 as follows:

Table of Employees particulars NSIC Ltd as on 31st March 2020

Sl. Description No. of Employees as on 31.03.2020

No.
1 Managerial 451

2 Supervisory 192

3 Non-Supervisory 256

The National Small Industries Corporation operates through 9 Zonal Offices, 33

Branch Offices, 14 Sub Offices, 10 NSIC Business Development Extension Offices, 5
Technical Services Centres, 3 Extension Centres and 2 Payroll Technology Parks
supported by a team of over 500 professionals spread across the country. To manage the
operations in African countries, NSIC operates from its office in Johannesburg.
Capital Structure & Borrowings

The authorized capital of the organisation as on 31 st March 2020 was 535.00 lakhs equity

share of `.100/- each. The subscribed and paid up capital of the corporation at the same

date was 462.99 lakhs shares of `.100 each. Loan from financial Institutions and banks

were of the order of `.1, 46,627.47 lakhs. Repayment of instalments and interest due till

31st March 2020 in respect of all loans were promptly made on the due dates.

Government Grant and Subsidies

The need of the hour for Indian MSMEs is to upgrade their technology, quality and
adoption of modern management techniques to keep pace with the global changes
Investment is the prerequisite to bring about transformation. The availability of adequate
credit at an affordable cost, thus, becomes critical for Indian MSMEs. It needs grants and
assistance from the sponsoring organisation.
 Table of Government Grants and Subsidies to the NSIC Ltd category wise for the
Period from 2004-05 to 2019-20

(In Lakhs)

Promotional Marketing Commercial

Year
Activities Promotions activities
2004-05 1,144.56 420.00 507.91
2005-06 1,168.92 450.00 1,339.58
2006-07 1,294.70 470.00 294.89
2007-08 1,303.89 600.00 237.57
2008-09 1,383.65 631.02 488.24
2009-10 1,668.01 817.30 595.45
2010-11 1,676.07 700.00 124.02
2011-12 1,657.08 729.51 -
2012-13 2,713.91 700.00 -
2013-14 2,253.30 - -
2014-15 1,581.24 - -
2015-16 2,231.75 - -
2016-17 3,562.93 - -
2017-18 5,526.12 - -
2018-19 6,050.60 - -
2019-20 8,609.67 - -
CAGR 14.40 6.59 (20.94)
Average 2,739.15 613.09 512.52
Standard Deviations 2,162.56 139.29 401.12

Form of grants and subsidies to this sector through NSIC for promoting MSMEs by
taking up Marketing Activities, Commercial Activities and General Activities. The details
on the grants and assistance received are given in table which provides the details on the
status of grants and subsidies received for a period of sixteen years (from 2004-05 to
2019–20).

It revealed that in the initial period under study, the government released the grants under
three separate heads,

1) MSMEs common promotional activities;

2) MSMEs Marketing Activities and

3) MSMEs Commercial Activities.

Considering the growth potentials for MSMEs’ contribution to GDP, its export earning
capacity and thereby stabilizing the balance of payment in the international trade,
capabilities to promote entrepreneurship and creation of employment, the government
support for MSMEs in the form of grants and subsidies through the NSIC increased
substantially over years.
Schemes of the Corporation

To enhance the competitiveness of MSMEs, the NSIC provides integrated support

services in the areas of Marketing, Technology, Finance, etc. It is implementing various
schemes which include Marketing Assistance and Performance & Credit Rating on behalf
of the M/o MSME.

In addition, NSIC has set up Training cum Incubation Centre. With a large professional
manpower, it provides a package of services as per the needs of MSME sector. It carries
forward its mission to assist small enterprises with a set of specially tailored schemes
designed to put them in a competitive and advantageous position. The schemes comprise
of facilitating marketing support, credit support, technology support and other support
services. It operates through countrywide network of offices and Technical Centres.

Marketing Support to MSMEs

Marketing as a strategic tool for business development is critical to the growth and
survival of small enterprises in today's intensely competitive market. NSIC acts as a
facilitator to promote small industries’ products and has devised a number of schemes to
support small enterprises in their marketing efforts, both within and outside the country.

Raw Material Distribution

In order to fulfil one of its prime objectives the NSIC is assisting the SSIs in getting a fair
share of government purchase by participating in the central government purchase
programme. It has made arrangements with the large manufacturing firms like Steel
Authority of India Ltd. (SAIL);
Rashtriya Ispat Nigam Ltd. (RINL);
National Aluminium Company Ltd. (NALCO),
Sterlite Group;
Indian Oil Corporation Ltd.;
Hindustan Zinc Ltd. and
Bangalore Petrochemical Corporation Ltd. etc.

For procuring raw materials like steel, aluminium, zinc; petrochemical products and coal
etc., in bulk and to distribute to the SSIs which enable the MSMEs in reaping economic
benefits. These arrangements are, thus aimed at making available raw materials to
MSMEs at reasonable prices and in small quantities.

In this regard, it is seen from the table that the material distribution recorded an increase
from 2, 29,018 MTs to 7, 83,309 MTs with compounded annual growth @ 27.88% per
annum over the period of five years. As presented in the table, raw material distribution
by the NSIC during the last five financial years yielded an average of 4, 79,953.83 MT’s
with the highest being 7, 83,309 MTs during the financial year 2019-13. Its more than 3,
03,355.17 MTs compared to its average for past five years material distributions.
 Table of Raw Material Distribution by NSIC Ltd to Indian MSMEs for the period
from 2014-15 to 2019-20

Year Raw Material Distribution In Annual Increase in

MTs Percentage

2014-15 2,29,018.00 7.48

2015-16 3,02,164.00 31.94

2016-17 3,55,719.00 17.72

2017-18 5,24,534.00 47.46

2018-19 6,84,979.00 30.59

2019-20 7,83,309.00 14.36

CAGR 27.88 13.92

Average 4,79,953.83 24.92

Standard Deviation 2,21,837.50 14.54

There has been a tremendous improvement in this respect in the last two years. Raw
material distribution during the last two years of the study accounted for 50.99% of last
five years total distribution which show very positive trends and growth in this segment.
This shows that the organisation, in line with its objectives, is doing remarkable job in the
raw-material distribution to the MSMEs in the country.
 Raw Material Distributions in MTs

Raw Material Assistance

Raw Material Assistance Scheme aims at helping MSMEs by way of financing the
purchase of Raw Material (both indigenous & imported). This gives an opportunity to
MSMEs to focus better on the manufacturing of quality products. NSIC facilitates raw
material requirements of the MSMEs by making arrangements with bulk manufacturers
for procuring the materials and supplying the same to MSMEs. In case they need any
credit support, NSIC provides financial assistance for raw material procurement by
making payment to the suppliers. It facilitates financing for marketing activities such as
Internal Marketing, Exports and Bill Discounting to MSMEs. Under above mentioned
schemes.
 Raw Material Assistance given by NSIC Ltd to Indian MSMEs for the period from
2014-15 to 2019-20

Raw Material Assistant Annual Increase in

Year ` in lakhs Percentage
2014-15 19,40,000 N/A
2015-16 30,60,000 57.73
2016-17 57,80,000 88.89
2017-18 98,30,000 70.07
2018-19 157,28,955 60.01
2019-20 206,85,840 31.51
CAGR 60.54
Average 95,04,132.50 61.64

The table also reveals that material assistance is showing a steadily increasing trend. The
average annual growth rate recorded in this respect being 60.54% for the five years
period, it can be stated that the NSIC has been doing increasing a remarkable job for the
benefit of MSMEs. The annual growth rate being the highest in the financial year 2016-
17 shows impressive increase of 88.89% over the previous year.

Consortia and Tender Marketing

Micro & Small Enterprises (MSEs) in their individual capacity face problems in
procuring and executing large orders, which deny them a level-playing field visa a visa
large enterprises. NSIC in order to overcome this lacuna formed the consortia of small
units manufacturing the similar products, thereby pooling in their capacity which
provides comfort level to MSEs (suppliers) and also to the buyers. The Corporation
applies for tenders on behalf of the consortia of MSEs and secures orders for bulk
quantities. These orders are then distributed amongst MSEs as per tune with their
production capacity. Testing facilities are also provided to enable MSEs to improve and
maintain the quality of their products conforming to the standard specifications of the
buyers. During 2016-17, marketing assistance of `. 28.13 Crore was provided to the
MSEs and during the financial year, up to 31st December, 2017, assistance of `.12.77
crore was provided.

Single Point Registration for Government Purchase

NSIC operates a Single Point Registration Scheme under the Government

Purchase Programme, wherein the registered small enterprises get purchase preference in
Government Purchase Programme. The small enterprises registered under this Scheme
get the following facilities:-

i. Issue of tenders free of cost.

ii. Advance intimation of tenders issued by DGS&D.
iii. Exemption from payment of the earnest money deposit.

Up to the financial year 2016-17, cumulatively 47,736 units were registered under the
Scheme and the same increased to 49,703 by 31st December, 2017.

Exhibitions
 To showcase the competencies of Indian MSMEs, NSIC facilitates their
participation in International Exhibitions, Fairs, etc. on concessional terms under the
Marketing Assistance Scheme of the M/o MSME by partially meeting the cost towards
rent of stall as well as air the fare. Participation in these events exposes MSMEs to
international practices and enhances their business prowess.

Through participation in these events, MSMEs are also facilitated to capture new
markets making them globally competitive. Last two financial year (2018-19 & 2019-20),
NSIC organised 12 International Exhibitions in India and 24 International Exhibition
abroad, 230 Domestic.

Buyer – Seller Meets

Large and institutional buyers such as Railways, Defence, Communication

Departments and large companies are invited to participate in buyer-seller meets to enrich
MSEs knowledge regarding terms and conditions, quality standards, etc., required by the
buyers. These meets are aimed at vendor development from MSEs for the bulk
manufacturers. During the financial year 2019-20, the NSIC organised 16 such meets in
the interest of the targeted customers.

Technology Support
 Technology is the key to enhancing a company’s competitive advantage in today’s
dynamic information age. MSMEs need to develop and implement a technology strategy
in addition to financial, marketing and operational strategies and adopt the one that helps
to integrate their operations with their environment, customers and suppliers.

NSIC offers MSMEs the following support services through its Technical Services
Centres and Extension Centres:

(i) Material testing facilities through accredited laboratories.

(ii) Product design including CAD.
(iii) Common facility support in machining, EDM, CNC, etc.
(iv) Energy and environment services at selected Centres.
(v) Practical training for skill up gradation.

A total of 8,255 units were served under Common Facility Services during the year 2016-
17 and up to 30th November, 2017, 5,247 units were served.

Credit Support to MSMEs

 One of the major challenges faced by MSMEs is inadequate access to finance due
to lack of financial information and non-formal business practices. To overcome these
problems, and to meet the credit requirements of MSME units NSIC has entered into a
Memorandum of Understanding with various Nationalized and Private Sector Banks.

Credit Facilitation done by NSIC Ltd through Nationalised and Private

Banks for the period from 2014-15 to 2019-20

Year
Annual Increase in
Credit Facilitation ` in
Percentage
Lakhs
2014-15 42,10,000.00 N/A
2015-16 68,80,000.00 63.42
2016-17 105,60,000.00 53.49
2017-18 234,90,000.00 122.44
2018-19 382,34,226.00 62.77
2019-20 439,20,223.00 14.87
CAGR 59.84
Average 212,15,741.50 63.40
Standard Deviation 168,43,681.91

Through syndication with these banks, NSIC arranges for credit support (fund or
non-fund based limits) from banks without any cost to MSMEs. Credit facilitation
enabled the MSMEs to avail credit to the tune of 42, 10,000/- lakhs in 2014-15 which
increased almost tenfold over a period of six years and stood at 4, 39, 20,223/- lakhs in
2019-18 growing at the rate of 59.84 per cent per annum.
 MOU with Nationalized and Private Sector Banks.

Sl. Name of the Bank Website

No.
1 Axis Bank www.axisbank.com
2. Bank of Maharashtra www.bankofmaharashtra.in
3. Central Bank of India www.centralbankofindia.co.in
4. China Trust Bank www.chinatrustindia.com
5. HSBC www.hsbc.co.in
6. Oriental Bank of Commerce www.obcindia.co.in
7. State Bank of Hyderabad www.sbhyd.com
8. UCO Bank www.ucobank.com
9. Bank of India www.bankofindia.com
10. United Bank of India www.unitedbankofindia.com
11. Bank of Baroda www.bankofbroda.com
12. Yes Bank www.yesbank.in
13. IndusInd Bank Ltd. www.indusind.com
14. Vijaya Bank. www.vijayabank.com
15. Federal Bank. www.federal-bank.com
16. Corporation Bank www.corpbank.com
17. State Bank of Travancore www.statebankoftravancore.com
18 Allahabad Bank www.allahabadbank.in
19. Indian bank www.indianbank.in
20 Punjab and Sindh Bank www.psbindia.com
21 Indian Overseas Bank www.iob.in
22 Syndicate Bank www.syndicatebank.in
23 Canara Bank www.canarabank.in
24 State Bank of India www.sbi.co.in
Performance & Credit Rating Scheme for Small Enterprises
 On behalf of the M/o MSME, NSIC is implementing “Performance & Credit
Rating Scheme” for Mses The scheme is being operated through accredited rating
agencies i.e. CARE, CRISIL, FITCH, ICRA, ONICRA, Dun & Bradstreet and SMERA.
The fee to be paid by the MSEs for the rating, is subsidized by the Government to the
extent of 75% of the rating fee up to a maximum of Rs.40, 000/- for the first year of
rating. The scheme has become quite popular and getting good response. During 2016-17,
a total of 7,531 units were rated under the Scheme, and up to 31st December, 2017, 7,827
units were rated.

The rating serves as a trusted third party opinion on the unit’s capabilities and
credit-worthiness. A good rating enhances the acceptability of the rated unit in the market
and also makes it to have access cheaper credit quickly and thus helps in economizing the
cost of credit. The scheme is becoming popular and more units are coming forward for
getting rated.
Support Services to MSMEs

NSIC has been doing a yeoman service in the development of MSME for more
than five decades and it is observed that one of the problems faced by the entrepreneurs is
the scarcity in availability of suitable space where they can set up their offices or can
exhibit their products for their wider publicity and easy marketability under one roof. In
order to give a boost to MSMEs, NSIC has taken step forward by taking judicious
decision to set up the following projects:

1 Construction of ‘Marketing Development -cum-Business Park’ (MDBP)

At NSIC Complex, Okla. Industrial Estate, New Delhi.

NSIC is establishing “Marketing Development-cum-Business Park” (MDBP) at

Okla., New Delhi. MDBP will be a state-of-the-art building having a total covered area of
approx. 37,000 sq.

2 Exhibition-cum-Marketing Development Business Park (EMDBP) at

Hyderabad

NSIC has set up an Exhibition-cum- Marketing Development Business Park

(EMDBP) at NTSC Campus, Hyderabad a prominent and well developed place in the
city. This is a five storied building with a covered area of approx.15, 000. The ground
floor of the building has an exhibition hall and the upper floors have been given on lease
and license basis to MSMEs/service providers, IT and ITES/BPOs and financial
institutions/banks etc.

3 Info-media Services under B2B portal for MSMEs

Information plays a vital role in the success of any business. However, MSMEs
have limitations in accessing such information. NSIC provides Services to MSMEs.
Besides hosting a website (www.nsicindia.com), NSIC has hosted sector specific portals
for focused information dissemination.
 It has hosted a B2B Web Portal (www.nsicindia.com) which provides
comprehensive and integrated facilities to MSMEs for business to business (B2B)
relationship. It has also hosted a dedicated B2B web portal to promote International
Trade, wherein it has posted data of 28 foreign partners. Potential beneficiaries would be
MSMEs seeking business collaborations and coproduction opportunities, joint ventures,
exporters and importers and those looking for technology transfers.

Some of the salient database searches; Sector specific domestic tender notices
with alert factors; Country specific global tender notices from World Bank, United
Nations Organization, ILO etc., Business Trade Leads from more than 200 countries;
Automatic Match Making for Product, Services & Technology; Virtual Exhibition; Self-
web development tool; Expert chat, Buyer/Seller chat & Video Conferencing; Global
Trade Shows Information; WAP services for GPRS activated Mobiles; SMS Alerts;
Trusted Seal for NSIC Members (Gold, Trust features of this portal are: Product specific
Members); Centralized Mail System for each member; Customer Support through Call
Centre; Mirroring facility and Payment Gateway for membership subscription. Further
enhancement of this Portal is also being undertaken.
Performance

National Small Industries Corporation Ltd (NSIC), a Government of India

enterprise under the aegis of Ministry of MSME, achieved record operational and
financial performance in terms of gross volume of business and profitability.

Sales Revenue Generated through Commercial Activity by NSIC

Ltd MSMEs for the period from 2004-05 to 2019-20
(In Lakhs)

Net Profit After

Year Gross Sales Net Revenue
Tax

2015-16 54,069.37 60,777.85 602.29

2016-17 77,538.38 69,887.27 2,427.34
2017-18 81,753.38 99,311.09 2,978.42
2018-19 1,08,748.71 1,34,688.80 4,121.14
2019-20 1,20,938.04 1,58,113.91 6,235.50
CAGR 22.29 27.00 79.38
Average 88,609.58 1,04,555.79 3,272.94
Standard Deviations 33,191.88 41,600.45 2,087.48
CV% 29.93 39.79

Net revenue includes income from other services / activities.

Financial year 2019-20. The year witnessed the Corporation achieving new heights on all
parameters. There were substantial improvement in enhancing the company’s outreach
and its volume of operations.

International Cooperation Activities

NSIC is providing consultancy services in diverse areas namely:
Policy and Institutional Framework,
Business Development Services,
Capacity Building of Institutions engaged in MSME development.

NSIC’s New Initiatives

1 Global Partnerships for sharing of Best Practices

NSIC, further, strengthened its Web Portal on International SME Development,

which can be accessed on www.nsicpartners.com. The website provides a unique
platform where the recognized partners of NSIC in 28 countries keep exchanging
information to facilitate sustainable collaborations amongst MSMEs of respective
countries.

2 NSIC - Training - cum - Incubation Centres (NSIC-TICs) for

Small Enterprise Establishment under Public-Private Partnership
(PPP) Mode

NSIC continued its initiative to set up new Training-cum-Incubation Centres

(NSIC-TICs) under PPP mode for the purpose of inculcating entrepreneurial skills among
unemployed persons by imparting training for making them employable or to enable them
to set up their own small enterprises. During 2016-17, 24 new Training cum Incubation
Centres were set up making the total number of NSIC-TICs 45. In the current financial
year up to 31st December, 2017, 5 more centres were set up making the total number of
NSIC-TICs 50.
Awards and Recognitions

As a result of its consistent good performance the GOI has accorded “Mini
Ratna” status (Category – II) to NSIC. It is first of its kind in the history of MSME
Sector. The “Mini Ratna” status gives NSIC a higher degree of autonomy to provide
greater services through its innovative schemes for the growth and development of
MSME sector in the country.

In recognition of the services rendered by the NSIC for the development of

MSMEs, it was awarded India Pride Award, 2020. NSIC received “Icon of the year
Award” from the Institute of Cost and Works Accountants of India (ICWAI). The award
was conferred on the NSIC by the Institute in recognition of the services in implementing
various innovative schemes for the promotion and development of MSME sector in the
country.

Hon’ble Chief Minister of Delhi conferred “Meri Dilli Award” to NSIC in

recognition of the innovative NSIC Incubation programme for Small Enterprise
establishment launched by NSIC for creating new employment opportunities,
employment and the growth of MSME sector in the country. NSIC received the ‘Small
Business Mentor of the Year’ at the National Convention for Small Business &
Entrepreneurship organized by Zee TV and Indian Franchise Association held in
Mumbai.

“NSIC -Rourkela was awarded for “Excellence in Service” to MSMEs 2016-10 for
providing yeoman service in the promotion and development of MSMEs in the State of
Orissa by Hon’ble Minister of State (Independent Charge), Food Supplies & Consumer
Welfare, and Orissa. FSIA – V.B. Gulati Award was conferred on H.P. Kumar,
Chairman-cum-Managing Director, NSIC for services rendered to the MSME sector. The
award was given by Faridabad Small Industries Association (FSIA) in recognition of
services in implementing various innovative schemes by NSIC for the promotion &
development of MSME sector in the country.
 “India Pride Awards 2018 & 2020 ”: CMD, NSIC was awarded Gold Medal at
the India Pride Awards, 2018 (a Dainik Bhaskar initiative) for excellence in creating
impact in the Indian Economy and Society from Shri Montek Singh Ahluwalia, Deputy
Chairman, Planning Commission. “Award of Excellence”: An award of Excellence was
conferred on NSIC for its role in the direction of promoting, developing and financing of
MSMEs in the country. Council of Arab League, an organization of Arab States in North
and Northeast Africa and Southwest Asia (Middle East) comprising of 22 countries
conferred “Council of Arab league Award” on CMD, NSIC in recognition of his
outstanding contribution in the field of MSME sector in the region especially for his
innovative Rapid Incubation Program for creation of self-employment opportunities
which has been found very useful in many countries of Africa.
 HR roles over the payroll

Ensures timely and accurate preparation of all Institution payroll operations and works closely
with the Human Resources Office to ensure that payroll actions are in conformance with
employment and benefits practices and accounting procedures.

Oversees preparation of all federal and state payroll tax reports, including quarterly
and year-end returns; determines taxability of non-wage payments and serves as in-house
contact for technical tax compliance issues, including tax liabilities of foreign nationals.

Interprets Institution employment policies and government regulations in connection

with payroll activities and makes recommendations on modifications to senior management
as appropriate.

Handles federal and state agency audits and maintains close contact other regulatory
agencies to ensure that the Institution has accurate information and is in compliance.

Maintains all payroll records, reports, computations and audits, including periodic
internal audit tests of labour utilization; works closely with internal and external auditors to
ensure compliance with relevant tax laws and government regulations.

Interfaces routinely with Human Resources on employee benefits issues (deductions,

retirement payments, etc.) to ensure timely and accurate processing.

Works closely with Management Information Systems on developing payroll

applications that ensure internal controls and facilitate the implementation and maintenance
of payroll and HR master files.

Provides periodic analysis of payroll and disbursement records to ensure that

adjustments are in accord with management's criteria.

Supervises Payroll Office staff and operations; provides on-going assistance to

Institution employees in tax-related payroll matters.

Participates in business re-engineering activities to support the establishment and

integration of electronic information processes and principles at the Institution.

Performs other related duties as the supervisor may deem necessary.

 Payroll Methodology

 SAP-source is a Payroll-Talent payroll service provider which can take best of the

 Available Payroll to suite client need.

 We can use any payroll Payroll with strong methodical service orientation.

 To believe sensitive activity like payroll service is more important than the tool used.

Execution Objective

 To build methodical & service oriented approach in execution of Payroll as it is a sensitive

activity and needs to be executed.

 Timely & consistently.

 Correctly to the last detail.

 To fulfil statutory obligations/compliances.

 To give complete picture every month to management and employee.

 Supportively & predictably.

 Methodical structured approach to payroll outsourcing.

 To help us Access, Analyse and to Build solid execution.

 Payroll Back Office
Scope of services

 Maintenance and updating of employee information sheet / salary register

 Calculation and preparation of monthly salary sheets.
 Calculation and deduction of statutory deductions like Provident Fund,
 Profession Tax, Income Tax etc. as and when they are applicable.
 Calculation of withholding tax, statutory and non-statutory deductions on salary.
 Monthly pay-slips to employees.

Why Payroll used?

Need

    • Speed in processing payroll tends to be slow.

    • Prone to mathematical errors that could consume much time than it should and could cause
financial or legal trouble.
    • Tallying of time cards is done manually.
    • Time consuming in double checking the consistency of all the reports.
    • Difficult and time consuming in keeping up-to-date in taxes and other deductions.
    • Storage of files is susceptible to be damaged as well as loss of data.

Importance
    • Speed in processing payroll will have a faster performance by means of decreasing the
manual input areas.
    • Mathematical errors will be prevented by automatic computations that the proposed system
will provide and you may not have to worry about having financial or legal trouble.
    • Tallying of time cards will be done automatically by including a computerized employee log-
in system in the proposed system which will be responsible in computing the time the employee
worked.
    • The proposed system will record all data in all reports at the same time so you can make sure
they are consistent and it also saves time.
    • Employers will never have to spend much time in keeping up to date with taxes and
deductions because the system will be designed updated to such deductions.
    • Storage of files will be safe and secured with “username and passwords” and can easily be
accessed.
 CHAPTER - II

REVIEW OF LITERATURE

The economic development achieved by many developed countries can be linked directly to the growth of

this sector. In India the small-stale industrial sector has registered rapid growth. In view of the importance

of small-scale industrial sector, the growth and development has attracted a good deal of academic

attention. A large volume of literature thus available on the different aspects of small-scale industries has

been studied at length. A brief review of such important studies is made here.

Review of literature can be classified into four categories and each is classified into four parts i.e. Review

of Research Studies, Review of Articles, Review of Books and Review of Thesis.

1) Studies Examining the General Problems and Prospectus of Small-Scale

2) Studies Evaluating the Functional Performance of Institutions Financing SSI

3). Studies Analysing the Role of Financial Institutions

4). Studies on Sickness of Small-Scale Industries.

Studies Examining the General Problems and Prospectus of Small-Scale Units

 A)Review of Research Studies

A study conducted by Bhati (1976) states that in a majority of cases, units outside the industrial estates,

showed higher rates of surplus Graham Bannock [1981] presents a vivid picture of the practical problems

of the individual small business, showing how they relate to the wider issues of economic policy. He

believes the release of the economic dynamisms inherent in the Small business sector could help to

generate the social and economic change needed for the resumption of inflation-free growth.

Chuta Envying Chita and Carl Lied Holm [1985] in a comprehensive study of SSI in Sierra Leone

provide a new insight into the role of SSI in providing production, employment and earning opportunities.

Besides giving an overview of the role of the rural and urban Industry in Sierra Leone, the determinants of

the demand for and supply of SSI products are examined.

Sandesara (1988) a study of assistance programmes for small-scale industries. The study revealed that

units producing items in the reserved list did not show away superior performance over other units, mainly

because the easy entry for new small-scale units had intensified the competition among the small units.

Siddhartha Shankar Dash and others [1990] in a study under taken in Balouris district in Orissa attempt

to analyse the operational problems in launching SST units. They conclude that although policies are good,

often delay in implementation and faulty implementation upset the entrepreneur's plan and in many cases

lead the production process to a standstill.

Sharma (1990) in his study made an effort to make an over view of sports goods Industry, Micro Industry

c-f selected centres, problems at different levels, role of institutions and future perspective.

In a study conducted by Berry, Albert and Mazumdar Dipek (1991) states that small-scale industry has

been important in the successful development of many of the economies of East and South Asia, both in

cases like Japan, Korea and Taiwan where import-substitution preceded and / or accompanied the

manufactured exporting phase and in Hong Kong, the only essentially Laissez Faire economy in the region.

An important general characteristic of the small-scale sector and one long commented upon in the Japanese

case, is the presence of subcontracting relationships either with larger manufacturing firms or with traders.

Tambunan Tulus (1991) examines the role of small-scale Industries in Economic development of

Indonesia. This survey as the macro - level leads us to a much less pessimistic view c f the performance of

SSI units in Indonesia though obviously imperfections in comparison with medium and large-scale

Industries do exist. It also gives attention to a critical question of appropriate policies needed to support this

sector.

Steel William. And Webster Leila. (1991) investigates the hypothesis that small enterprises play an

important and dynamic role in the structural adjustment process and in Africa's Industrial development. It

discusses the role of small enterprises in the industrial development and introduces the adjustment context,

the evolution of large and small-scale Industry in Ghana, and the Economic recovery program and its

impact.

Balla (1992) in his study discusses the centralised vs. decentralised policy towards small and medium

enterprises, technological policy for small and medium enterprises in China.

Jamuar (1992) in his study discusses the development of small-scale and cottage Industry in India and the

role of small-scale Industry in India, the present position and problems of small-scale Industry with special

references to Industrial sickness, government policy and measures to develop small-scale and cottage

Industry and new Industrial policy on small-scale and cottage Industry.

Rama Swamy (1993) in his study examines three hypothesis regarding small- scale manufacturing units,

namely: small firms use more labour per unit of capital, they produce more output per unit of capital and

small firms use resources more efficiently than large firms in to total Factor Productivity. The analysis

indicates that capital intensity and partial productivities are sensitive to alternative measures of firm size.

And total factor productivity is not found systematically related.

Ramabijoy (1993) in his study analyses government support, capacity underutilization marketing and

financing power and transport of small-scale Industries and also the entrepreneurship and management of

sickness.

Pillai (1994) in his study analysed the future role of small-scale sector in the evolving economic setting and

the challenges it may have to face to sustain its place as an important contributor to the development

process.

Rao (1995) reported that the potential for investment related to technology requisition and transfer in small-

scale and medium sector has assumed considerable significance in their interest to face the challenges of

liberalisation and globalisation of markets.

A study conducted by Hayami, Yujiro, and others (1998) reveal that marketing channels be established

which connect small rural producers with large urban and /or foreign demand. This ,study investigates

various forms of production and trade contracts being practiced at the grass root level in the metal craft

manufacturing industry on the outskirts of Greater Manila in the Philippines.

Balasubrahmanya (1998) in his study describes the elements of India's small industry policy with specific

reference to protective measures, and reviews its impact on the growth and efficiency of the sector.

Datey (1999) in his study titled practice manual to small-scale Industries discusses the importance of small-

scale industries, clubbing of clearances of SSI and an overview of income tax, central sales tax, Finance to

SSI and management of SSI units.

Mali. Koshy and Mary Joseph (2000) in their study reported that the considerable increase in the numl3er

of women entrepreneurs is a result of the various support measures extended by governmental and non-

governmental agencies and the changing attitude towards women entrepreneurship, however, women

entrepreneurship registers low level in backward districts.

B) Review of Research Articles

The Japanese delegation, which visited India (1961), found that most of the facilities and concessions

provided were in excess of their requirements and they warned that it would lead to continuous dependence of

these units on the government.

Seventh Plan (1985) had found that the efforts of the government have not met with the same degree of success

in different parts of the country nor have they removed the basic weakness of the small-scale sector.

A study conducted by Benjamin Solomon (1991) explores the small-scale Industry that has grown and thrived

in informally developed communities of rudimentary buildings and dirt roads surrounding the city of Delhi. It

presents an overview of Delhi's informally developed suburbs, called unauthorized colonies, discuss their

growth and regularization, and introduces the setting in which small-scale manufacturing exists within such

colonies.

Dias Syriani (1991) examines the scale, nature and effects of current sub-contracting linkages between sme11

and large Industries in Sri-Lanka, In general weaker relationships exist between large and small industries,

however strong links exhibit with respect to more organised few large firms. The reason for this weaker

relationship is the immaturity of small Industries in meeting the requirements of large Industries in terms of

technology, production cost, and quality and delivery services.

Ahmad Jaleel (1993) made an attempt to throw light on the question as to whether trade and industrial policies

in developing countries discriminate against the development of small and medium scale industry. This is done

by a detailed examination of the structure of tariff and non-tariff Protection as well as industrial policy measure,

such as foreign exchange allocation and licensing.

Schmitz, Hebert (1995) in their study are concerned with the growth of small local industry in developing

countries and explores one particular route for understanding and fostering such growth. It focuses on the

clustering of firms and the competitive advantage, which they derive from local external economies and joint

action, captured in the concept of collective efficiency.

The international prospective planning team (1995), which made an extensive study of India's small-scale

industries, was of the opinion that Government; efforts for the promotion of this sector were largely scattered

and dealt with only isolated segments of the problem.

Parsed and Kushik (1997) have traced out locus of comprehensive policies and programmes of the small-scale

sector during the 50 years of independence.

Sindhu Hina (1998) in their study state that, employment generation has increased over a period of time. The

other findings of the study are related to decline in employment in the household industries, and a decline in the

contribution of the large-scale sector to employment generation.

Mathew (2000) reports that small Industry policy in India is ambivalent. Divergence of interests and their

expression through lobbying is a characteristic of any democratic policy. It is also not correct to consider the

government as a machinery to immune such influences.

Vasandhara Raje (2000) states that credit is an essential input for the working of small-scale Industries. Any

delay or inadequate supply of credit is detrimental to the growth of the SSJ units. Therclbre timely and adequate

availability of credit is of crucial importance for setting up and for expanding the existing SSI units.
 C) Review of Books

Roy Roth Well and Water Zegveld (1982) reveal that SME have been and in general, continue to be,

technologically innovative. Technology based new SMEs plays an important part in the emergence of new

technology and in economic growth SME, particularly, young technology based SMEs also make an

exceptional contribution to employment creation. Independent SME, and their larger counterparts, does

represent an important vehicle for regional generation.

Ram Vepa (1983) in his study reports that over the last 25 years a network of institutions and policies has

been developed in the country but not all of them have been successful. But taken in totality, they have

provided a well-organized frame works in which the small and cottage industry have been allowed to grow.

The task force on small-scale industries (1984) found that available subsidies and concessions are rot

distributed to eligible units at the right time. Such assistance announced by the government is badly delayed

for several reasons such as delay in issuing detailed orders, inadequacy of budget provisions etc.

Tara Nand Singh Tarun and Devandra Thakar (1986) reveal that the fundamental problem of Industrial

development in India is the problem of transplanting and acclimatizing the fruits of technology so as to raise

the whole level of productivity.

Nisar Ahmad [1987] has made an effort to critically examine, both at micro and macro levels, the

operational and other problems of the small-scale and cottage Industries in India with special reference to the

state of Jammu and Kashmir.

Ram Vepa (1988) in his study discusses the growth of small-scale Industry, organisational structure, some

key issues, and field planning for small-scale Industry and its prospectus for nineties.

Nasir Tyabji (1989) analyses the structure of small-scale Industries and role of small Industry policy as a

component of the Indian development process and changes in the structure of Industry and nature of small

enterprise development.

Prem Kumar, Asit Ghosh (1991) in their study on management of small-scale Industry explains the

management practices and performance of small-scale Industries and their relationship with demographic

features, production, planning and control of SSI, financial planning; and control and /Institutional structure

for assistance of SSI and also the technology change for SSI.
 D) Review of Thesis

Reddy Narayana (1983) in his doctoral thesis reports that SST units are to equip themselves with better and

improved methods of marketing, disseminated through proper training programmes conducted by the

Institute of Marketing, which may be started exclusively. Hence there is a need for creating the Institute of

Marketing for small industry at national level.

Vinayak, Shankarrao Bhoyar (1984) states that programme of Co- operative industrial estates coupled with

Co-operatives in other related fields is a powerful instrument, which possesses the capacity to transform the

backward area into advanced ones.

Ashok Kumar Singh [1985] in his thesis made an effort to study the incentives and assistance provided by

the government and the infrastructure facilities available in Bihar. A brief account of the potentialities and

prospectus of SSI in Bihar is also given.

Theophilus. (1990) observed that the operation of SSIs in India and Nigeria encounter similar incidences

and show the same environmental characteristics for their progress. He suggests that there should be a

separate ministry exclusively for SSIs at the central level headed by a central minister in both countries.

Venugopal (1993) observed that Governmental agencies set up for promoting village and cottage Industries

are inactive and their performance is below the level of expectations. He argues that the survival of village

and cottage industries depends on their ability to become competitive. Their efforts should be to reduce cost

and improve quality through technological up gradation.

 CHAPTER 3

ORGANISATION PROFILE

Irrigation & Drainage Systems Engineering

Definition of small-scale industry

The small-scale industry evokes different meanings for different agencies and the financial
institutions. However, the definition of small industry is an important aspect of government
policy as it identifies the target groups. The first official criterion for small-scale industry dates
back to the second Five Year Plan when it was in terms of gross investments in land, building,
plant and machinery and the strength of the labour force. Subsequently, on the recommendation
of the of the Federation of Association of Small Industry of India (FASSII), an apex level
organization of small-scale industry, set up under the aegis of the Ford Foundation team. Only
the investment in fixed assets in plant and machinery, whether held in ownership terms or by
lease or by hire-purchase instead of fixing the limit on overall investment, was considered for
granting the status of a SSIs unit.

From time to time, there have been many changes in the ceiling limit of investment in plant and
machinery in the beginning, for a small scale industry the investment level was Rs.5 lakhs and
employment limit of less than 50 persons when using power and less than 100 persons without
using power. As per government of India notification 1999, an industrial undertaking in which
the investment in plant and machinery. There was a drastic change in the definition of SSI in
2006. Comprehensive act was enacted during the year 2006 named as Micro Small and Medium
enterprises development act, 2006 which bring these three segments under a single
comprehensive legislation. The micro and medium enterprises have been defined for the first
time in India.

Current definition of small scale industry

The Micro, Small and Medium Enterprises Development Act, 2006 was enacted on 16 th
June 2006. The Act has empowered the government to establish a National Board for micro,
Small and Medium Enterprise.
 As per Micro, Small and Medium Enterprises Development Act 2006, the earlier concept
of “industries” has been changed to ‘enterprises’.
Manufacturing enterprises have been defined in terms of investment in plant and
machinery (excluding land and building) they are classified into:

 Micro enterprises-investment up to 25 lakhs.

 Small enterprises-investment above 25 lakhs and up to 5 crores.
 Medium enterprises-investment above 5 crores and up to 10 crores.
 Small enterprises-investment above 10 lakhs and up to 2 crores.

Small-scale industry and five year plans

The small-scale sector has been assigned an important role in the industrial economy of the
country on account of some of its inherent advantages like low capital intensity, high
employment generation capacity, regionally balanced development and even distribution of
wealth and income. Special emphasis has been laid on the promotion and development of small-
scale sector during the various plan periods. Various measures taken by the government to
promote small scale sector under Five Year Plans are described as under.

Small-scale industries in five years plan

The plan outlay for the development of the small-scale industries from the first five year plan to
the eleventh five year plan.

First Five Year Plan (1951 to 1956)

During the First Plan period, new centres for small-scale production were opened and steps were
taken to provide facilities for finance, research and training to the small-scale sector. Various
Boards were established to assist and advise the small-scale industry in the formulation of its
policies and programmes. The outlay on village and small-scale industry was amounted 42.00
crores, which was 2.14 per cent of the total outlay.
Second Five Year Plan (1956 to 1961)
During the second Five Year Plan period, three-tier organization was developed in order to
strengthen the state departments of industries. Such organizations include:
 Ministry of Commerce and Industry,

 State Department of Industries, and

 State Board of Industries.

The co-ordination committees were set up in almost all the states and officers were appointed at
blocks and district levels. A number of new programs were also conducted to create confidence
in the minds of the small entrepreneurs about the assured marketability of their products.
Certain varieties of items were reserved for the production of the small-scale industry. The outlay
of the small-scale industry during this Plan period was Rs.187.00 crores, which was four per cent
of the total outlay.

Third Five Year Plan (1961 to 1966)

In the third Five Year Plan period, the total outlay of 241.00 crores was spent towards the
organization of various programmes for promotion of small-scale industry. Employment
opportunity for about 6.3 lakhs persons was given on full time basis during this plan period.

Fourth Five Year Plan (1969 to 1974)

The main objectives of the Fourth Plan were to correct regional imbalances, to create more
employment opportunities and to reduce inequalities in income and wealth further. In the Fourth
Plan period, a total outlay of 693.00 crores was allocated for the development of village and
small-scale industries. Out of which, 293.00 crores was from the public sector and 400.00 crores
was from private sources.

Fifth Five Year Plan (1974 to 1979)

During the Fifth Plan Period, the shortcomings of the programmes formulated and organized for
the promotion of small-scale industry during the first four Plan periods were found out and a
strategy was formulated to remove those shortcomings.
The main objectives of the programme were
1. Developing and promoting entrepreneurship and providing a package of consultancy
service.
2. Improving the production techniques of small-scale industry in order to bring them to a
viable level.
3. Facilitating the maximum utilization of the equipment’s and skill of the persons employed
in small-scale industry.
4. Promoting small-scale industry in selected places in backward, rural and semi-urban areas.
The Fifth Plan was terminated in the year 1978 instead of 1979 due to the introduction of
the Rolling plan.

Sixth Five Year Plan (1980 to 1985)

The sixth Five Year Plan also marked a significant stage in the promotion of small-scale
industry. The total outlay of Rs.1829.90 crores was made available for small-scale industry
during this plan period which was 1.70 times higher over the outlay during 1974-78.

The draft Plan for village and small industries was formulated keeping in view the new industrial
policy. This programme was aimed at the generation of employment opportunities by developing
and revitalizing the existing small-scale industry. A special emphasis was laid on increasing the
earnings level of rural artisans, handloom weavers, craftsman and weaker sections of our
community and to promote these industries in small towns and rural areas.

Seventh Five Year Plan (1985 to 1990)

During the Seventh Plan period, a special emphasis was laid on the up gradation of technology
and modernization of small-scale sector. The small scale industry made a steady progress over
the years.
The number of units in 1987-88 was.15.76 lakhs and in 1988-89 it was estimated to have
increased to 17.01 lakhs. Employment in the sector was 107 lakh persons in 1987-88 and in
1988-89 it was estimated to have increased to 113 lakh persons. The share of small-scale sector
in total export was about 28.8 per cent during 1987-88.
Eighth Five Year Plan (1992 to 1997)
For the Eighth Plan, a sum of Rs.6334.20 crores was allotted for the village and small-scale
industries. In absolute terms, this amount seems to be very large. But in terms of proportion of
the total expenditure in the Plan, it is very negligible. The amount is barely 1.46 per cent of the
total outlay of the Eighth Plan; and this share has come down from 1.45 per cent in the Seventh
Plan.

Ninth Five Year Plan (1997 to 2002)

The provision in the Ninth Plan is of the order of an outlay of Rs. 69972 crores which is slightly
lower than the amount allotted to this sector during the Eight Plan period. Besides Plan-
resources, quite a large investment has taken place on private account financed party by
government financial institutions, and party from promoters own financial and non-financial
sources.

Tenth Five Year Plan (2002 to 2007)

The expected overall annual growth of industry in the Tenth Plan period at around 8.7 per cent
fell short of the targeted growth rate of 10 per cent for the Plan period.

Eleventh Five Year Plan (2007 to 2012)

Given the recent performance, however, the Eleventh Plan target of 10 per cent annual industrial
growth appears eminently achievable. As the country enters into the first year of the 11 th Plan, the
sustained growth of the industrial sector is crucially dependent on removing the infrastructural
impediments, especially, in the power sector. Capacity additions through investment are critical
for accelerating growth in industry. The investment scenario looks quite optimistic, particularly
with rising domestic savings rates and FDI inflows sustained economic growth, fiscal
consolidation and an enabling policy environment will continue to provide incentive to capacity
addition in industry and sustaining its high growth.

Adequate expansion of employment in the industrial sector, particularly in the organized

segment, requires attention. The development of appropriate skills through a wide variety of
vocational training as well as optimal degree of flexibility of labour laws are important aspects in
this regard. Progress on these fronts will determine how much progress is made in generating
employment in the organized industry in the years to come.
Polices of government on financing of small-scale industries
The Government policies towards SSIs sector is pronounced through industrial policy
resolution/statements. They have been formulated to promote industrial growth and also to
determine the pattern of state assistance to small industries for fulfilling various socio-economic
objectives under different plans. The small-scale industrial policy would reflect the direction and
pattern of development of small-scale industries in the country. The policies help one to realize
the economic, social and political objectives of national development. The government policy
incorporates all related subjects relating to small-scale industries, covering all segments.

Registration of small-scale industries

There are two types of small-scale industries for which registration certificates are issued by the
Department of Industries and Commerce as per the guidelines issued by Development
Commissioner, Government of Indi, and New Delhi. They are provisional certificate to the
proposed units and permanent small-scale industries registration certificate to the established
small-scale industries units will be issued after commencement of production. This provisional
SSI registration certificate (valid up to 5 years from the date of issue) is issued to the proposed
SSI units so as to enable them to get all clearance from the statutory department, to get financial
assistance from financial institutions for implementing the proposed projects and also power
connections from electricity board on priority basis. It means, by using this provisional SSIs
registration certificate, the units is not entitled to claim incentives and subsidies from the
governments, to import raw materials, to get advances license and also allotment of raw materials
from the respective sources of the government.
 RESEARCH METHODLOGY

RESEARCH GAP

A gap analysis assesses the ongoing operation of a business procedure compared to its expected
performance levels. A payroll gap analysis applies this methodology to examining a small
business's payroll system. The payroll gap analysis, especially when conducted by a consultant or
outside firm, may offer ideas on eliminating inefficiencies and conserving resources. When
effectively applied, a payroll gap analysis works as an easy yet useful tool for finding gaps and
discovering payroll system improvements.

STATEMENT OF THE PROBLEM

The old system is outdated and no longer adequately manages the payroll process and the entry
of employee time card information. Therefore, manual intervention is required to process the
payroll. In addition to the pre-existing category of salaried employee, which the current payroll
process does support, our organization now accommodates two new types of employees: those
employees working on commission, and those employees working on an hourly basis.

OBJECTIVE OF THE STUDY

The main objective of our project is to prepare a record of all employees working in a
firm.
1. To understand the payroll system used at NSIC Co. ltd
2. To study the factors which influence the cost of the payroll system and the database used
in NSIC Co. ltd

3. To study the employee online feedback system.

4. To recommend and give suggestions to payroll management system with reference to
nsic co. ltd.
HYPOTHESIS

• H0:

There is no significant difference between social-economic variables and the perception

of the management and employees on payroll management system.
• H1:

There is a significant difference between social-economic variables and the perception of

the management and employees on payroll management system.

TYPE OF STUDY

Qualitative data: the study through the questionnaire, observation and document review
are the most common and widely used for the data collection.

Method of data collection

Primary Data: The primary data will be collected from the respondents by
administrating a structured questionnaire and also through observation, interview and discussion
with the concerned staff.

Secondary Data: Books, journals, websites etc., will be consulted for getting relevant
data.
The researcher will adopt the following of methods to obtain other data.
DATA ANALYSIS

Data collected from various sources were carefully analysed and tabulated with the use of
charts, diagrams, graphs, Historical analysis. Etc.

METHOD OF SAMPLING

Convenient sampling method is used for this research work.

SAMPLING SIZE

The data collected from 25-50 sampling of questioner of the company

LIMITATIONS OF THE STYDY

• The data provided by the company’s considered to be trustworthy.

• The art of data security and time consuming.
 CHAPTER 4

ANALYSIS AND INTERPRETATIONS

LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

SATISFIED 45 90
DISSATISFIED 3 6
NEUTRAL 2 4
Table No.4.1 Reasons for satisfaction/dissatisfaction level towards the Measurement

of Payroll usage.
CHART NO.4.1.1

Measurement of Payroll usage.

SATISFIED DISSATISFIED NEUTRAL

90% of the Employees are satisfied by the Payroll and we need to more focus on the 6 %
dissatisfied and 4% not yet responded.

Table No.4.2 Reasons for satisfaction/dissatisfaction level towards, whether the

Payroll system is user friendly.

 LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

YES 41 82
NO 9 18
CHART NO.4.2.2

User friendly or not.

NO.OF RESPONDENT % OF RESPONDENT

Among 50employees 82 % of the employees are satisfied with the Payroll system helps
for future growth that they had improved themselves after the program. 18 % of the employees
are not satisfied with Payroll system helps for future growth.

Table No.4.3 Reasons for satisfaction/dissatisfaction level towards the

Measurement of complaints regarding loading of pay sheet in Payroll.
 LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS
SATISFIED 45 90
DISSATISFIED 0 0
NEUTRAL 5 10
CHART NO.4.3.3

Loading of pay sheet

90 % of the Employees are satisfied by the Payroll and we need to more focus on 10% not
yet responded.

Table No.4.4 Reasons for satisfaction/dissatisfaction level towards the

Measurement of clients requirements by the organization.
 LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS
YES 35 70
NO 15 30

CHART NO.4.4.4

Measurement of clients requirements by the organization.

70 % of the Employees are satisfied to meet the client’s requirements and we need to
more focus on 30% of employee.

Table No.4.5 Reasons for satisfaction/dissatisfaction level towards the usage of

new Payroll for payroll process.
 LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS
SATISFIED 38 76
DISSATISFIED 12 24
NEUTRAL 0 0
CHART NO.4.5.5

Payroll process.

76 % of the Employees are satisfied with the calculation and we need to more focus on
24% of employees dissatisfied

Table No.4.6 Reasons for satisfaction/dissatisfaction level towards the Measurement

of delivery of payroll report to clients.

 LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS
SATISFIED 30 60
DISSATISFIED 5 10
NEUTRAL 15 30

CHART NO.4.6.6

Measurement of delivery of payroll report to clients.

60 % of the Employees are satisfied by the delivery and we need to more focus on the
10% dissatisfied and 30% not yet responded.

Table No.4.7 Reasons for satisfaction/dissatisfaction level towards the Measurement

of complaints rectification.

LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

 SATISFIED 20 40
DISSATISFIED 5 10
NEUTRAL 25 50

CHART NO.4.7.7

Measurement of complaints rectification.

40 % of the Employees are satisfied by the Payroll and we need to more focus on the 10%
dissatisfied and 50% not yet responded.

Table No.4.8 Reasons for satisfaction/dissatisfaction level towards the usage period

of Payroll.

LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

YES 47 94
NO 3 6
 CHART NO.4.8.8

The usage period

94 % of the Employees are satisfied by the service provided for the Payroll complaints
and we need to more focus on the 6 % dissatisfied.

Table No.4.9 Reasons for satisfaction/dissatisfaction level towards the Measurement

of team’s coordination with Payroll technology team.

LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

YES 48 96
NO 2 4
 CHART NO.4.9.9

Coordination

96 % of the Employees are satisfied by the Payroll development and we need to more
focus on the 4 % dissatisfied.

Table No.4.10 Reasons for satisfaction/dissatisfaction level towards the Measurement

of clients input.

LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

YES 42 84
NO 8 16

CHART NO.4.10.10
 Measurement of clients input.

84 % of the Employees are satisfied by the clients input records and we need to more
focus on the 16 % dissatisfied.

Table No.4.11 Reasons for satisfaction/dissatisfaction level towards the Measurement

of training given to employees.

LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

YES 30 60
NO 20 40

CHART NO.4.11.11
 Measurement of training given to employees.

60 % of the Employees are satisfied by the Payroll training and we need to more focus on
the 40% dissatisfied with training.

Table No.4.12. The way in which the organization and clients discuss for

re-engineering the Payroll for future growth.

LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

YES 45 90
NO 5 10

CHART NO. 4.12.12

 Future growth.

90 % of the Employees are satisfied by the re-engineering and we need to more focus on
the 10 % dissatisfied.

Table No.4.13. The way in which the organisation maintains records as per

government norms.

LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

YES 50 100
NO 0 0

CHART NO.3.13.13
 Maintains records as per government norms.

100 % of the Employees are satisfied by the organization maintains all reports according
to government norms.

Table No.4.14. The maintenance of client details confidentially.

LEVEL OPTIONS NO.OF % OF

RESPONDENTS RESPONDENTS
YES 46 92
NO 4 8

CHART NO. 4.14.14

 The maintains of client details confidentially

92% of the Employees are satisfied by the maintains of client inputs and we need to more
focus on the 8 % dissatisfied

Table no.4.15.The way in which the employee’s interface with HR department for

payroll process of clients.

LEVEL OPTIONS NO.OF RESPONDENTS % OF RESPONDENTS

YES 32 64
NO 18 36

CHART NO.4.15.15
 Employee’s interface with HR department for payroll
process of clients.

64% of the Employees are satisfied by the clients HR and we need to more focus on the
36% dissatisfied.

Statistical tool applied:

CHI-SQUARE TEST

Satisfied Dissatisfied Neutral/pass Total

Yes 38 2 1 41
2
No 7 S.no 1 Oi Ei
1 (Oi-Ei)
9 (Oi-Ei)2
Total 45 3 2 50 Ei
1 38 36.9 1.21 0.0327
2 2 2.46 0.2116 0.0860
3 1 1.64 0.4096 0.2497
4 7 8.1 1.21 0.1493
5 1 0.54 0.2116 0.39185
6 1 0.36 0.4096 1.1377
Total 50 50 2.04775
 CALCULATION:

Degree of freedom (m-1)*(n-1) = (3-1)*(2-1) = 2

Tabulated value of D.F=2 @ 5% level of significance is 5.991.

Therefore Ho is accepted because the calculated value is less than tabulated value.

Hence there is no significant difference between observed frequency and the expected frequency.
Hence the Payroll used is good.

Ho: The Payroll is effective and accept at random in sequence.

H1: The Payroll is not effective and not accept at random in sequence.

sE9r) = 2(41) (9) + 1

41+9

= 15.76

S.E (r) = √ 2(41) (9) [2(41) (9)-41-9]

(41+9)2 (41+9-1)

= 2.0358

Z= r- E(r)
 S.E(r)
= 14-15.76
2.0358
= [-0.8645]

Z5% for degree of freedom ∞ = 1.96

0.8645 < 1.96
So, accept H0
Hence the Payroll is effective are accept at random in sequence

CHAPTER – V

FINDINGS, SUGGESTIONS & COCLUSION

FINDINGS

1. The effectiveness of the existing Payroll system is measured by using the following
variables,

 Payroll (sap)
 Import of data in Payroll
 Payroll calculation
  Accept & implement change
 Flexibility
 Company policies
 Education &Computer Skills
 Client Relation.

 78 % of the Employees are satisfied by the Payroll and we need to more focus on the 4 %
dissatisfied and 18% not yet responded.

 Among 50 employees 90 % of the employees are satisfied with the Payroll system helps
for future growth that they had improved themselves after the program. 10 % of the
employees are not satisfied with Payroll system helps for future growth.

 90 % of the Employees are satisfied by the Payroll and we need to more focus on 10%
not yet responded.

 70 % of the Employees are satisfied to meet the clients requirements and we need to more
focus on 30% of employee

 76 % of the Employees are satisfied with the calculation and we need to more focus on
24% of employees dissatisfied.

 60 % of the Employees are satisfied by the delivery and we need to more focus on the
10% dissatisfied and 30% not yet responded
 40 % of the Employees are satisfied by the Payroll version and we need to more focus on
the 10% dissatisfied and 50% not yet responded

 94 % of the Employees are satisfied by the service provided for the Payroll complaints
and we need to more focus on the 6 % dissatisfied.

 96 % of the Employees are satisfied by the Payroll development and we need to more
focus on the 4 % dissatisfied.

 84 % of the Employees are satisfied by the clients input records and we need to more
focus on the 16 % dissatisfied.

 60 % of the Employees are satisfied by the Payroll training and we need to more focus on
the 40% dissatisfied with training.

 90 % of the Employees are satisfied by the re-engineering and we need to more focus on
the 10 % dissatisfied.

 100 % of the Employees are satisfied by the organization maintains all reports according
to government norms.

 92% of the Employees are satisfied by the maintenance of client inputs and we need to
more focus on the 8 % dissatisfied.

 64% of the Employees are satisfied by the clients HR and we need to more focus on the
36% dissatisfied.
 SUGGESTIONS

1. In order to improve the Payroll skills of employees the organization should create more
awareness and to provide feedback regularly to the employees about Payroll system.

2. Proper training should be given to the employees, in order to increase their knowledge
about the usefulness of the Payroll system.

3. Top management shall continually review the Payroll according to the client
requirements, which shall be seen as positive support to the system by the employees as
well as clients.
4. After Payroll testing, if there is any changes, the employees should be informed by the
Payroll team.

5. The delivery of clients output should be on time.

6. Latest Payroll should be implemented in future to fight with the competitors and retain
their clients.

CONCLUSION

 The study had confirmed that the company is having a good Payroll System.

 From this study, it is found that majority of the workers were satisfied with Payroll used.

 To make the Payroll system more efficient and excellent, the company should give
importance to the clients and create awareness among employees and it shall consider
some of the ways and means suggested by the employees like addition of parameters such
 as short cut for calculation PF, ESI, TAX, etc. Dependability and conducting regular
training program on the Payroll usage.

 I hope that the suggestion given in the report may be implemented in future course for the
benefit of the employees and the company.

 The company should conduct the similar type of research at regular interval to know the
changing Payrolls and to know about the latest technology like ban Payroll etc.

BIBLIOGRAPHY
BOOKS

 Fisher shoe felt Shaw-Human resource management-4th edition-Macmillan Press

limited.

 Kothari C.R research Methodology-Methods and techniques (2 nd edition)-new age

International (pvt) limited.

 Bratton John and Gold Jeffery (1994)-HRM-Theory and practice, 6 th edition-

Macmillan press Limited.
  Memorial C.B-Human Resource Management-Himalaya publishing home, 11 th
edition 1993.

Websites
 WWW.HVS INTERNATIONAL JOURNALS.COM
 WWW.Google.com

APPENDICES

INTERVIEW QUESTIONS

1) Does the clients are satisfied with the Payroll used for the pay roll processing?
Satisfied Dissatisfied Neutral
2) Is the Payroll user friendly?
YES NO
3) When do you get complaints regarding the loading of pay sheet Payroll? Whether satisfied?
Satisfied Dissatisfied Neutral
4) Has the organization defined its payroll process Payroll to meet client’s requirements
services?
YES NO
5) Are you satisfied with the Payroll to calculate the pf, esi etc?
Satisfied Dissatisfied Neutral

6) How about the delivery of payroll report?

Satisfied Dissatisfied Neutral

7) How long you have been using the Payroll? Whether it is satisfied or not?
Satisfied Dissatisfied Neutral

8) Whether your complaints are rectified by the company?

YES NO

9) Whether works closely with Management Information Systems on developing payroll

applications that ensure internal controls and facilitate the implementation and maintenance
of payroll and HR master files.

YES NO

10) Whether clients Provides periodic analysis of payroll and disbursement records to ensure that
adjustments are in accord with management's criteria.

YES NO

11) Whether Supervises Payroll Office staff and operations; provides on-going assistance to
Institution employees in tax-related payroll matters.
 YES NO

12) Whether clients and employees Participates in business re-engineering activities to support
the establishment and integration of electronic information processes and principles at the
Institution.

YES NO

13) Whether company maintains all payroll records, reports, computations and audits, including
periodic internal audit tests of labour utilization; works closely with internal and external
auditors to ensure compliance with relevant tax laws and government regulations.

YES NO

14) Whether Maintenance and updating of client information sheet / salary register
confidentially?
YES NO

15) Whether the employees Interfaces routinely with Human Resources department on client
benefits issues (deductions, retirement payments, etc.) to ensure timely and accurate
processing

YES NO