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Reasons for poor leave management and impact that can cause to the organization

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Incorrect management and administration of employee leave records can have a negative impact on your business. In general (in the business world), calculated risk is a good thing, but taking nonsensical risks remains a frivolous practice.

The employer also has certain administrative obligations for example, when paying an employee’s weekly or monthly salary, the employer must provide verifiable information (on paper or in digital format) describing payroll calculations, deductions to be deducted and hours worked during the period.

Companies continue to take nonsensical risks employers do not recognize the principles of precision licensing as a critical business imperative.

1) Employees can take leave in addition to their rights — they are exposed to intentional and/or involuntary fraud by an employee

The permutations that describe the myriad possibilities of taking excessive leave are too numerous to list. However, to give just one example, in some cases it may be necessary for a company to maintain accurate records of its employees’ leave during the mandatory end-of-year period, i.e. the period during which a company “ceases” all its operations during the December/January holiday period.

In this case, the employer has the right to determine that the annual leave must coincide with the completion period. However, if an employee takes annual leave at a different time of the year, the closing period is considered unpaid leave. This is a payroll run with several administrative challenges.

For the informed reader, such a scenario is well suited to uncover the kind of interpersonal complexities that can arise when an employer tries to make a closure leave fair for a significant number of employees.

Therefore, for this article we should avoid opening the Pandora disease box for an employer: a variety of factors, including sickness certificates (with or without), maternity rules, work-related injuries, etc. The permutations themselves become complex enough to justify writing a future article (see this section) to adequately address the many complexities and abuses that sickness has presented to employers in the past in the areas of human resources and payroll.

2) Retrospective correction of errors in personnel and payroll accounting, which takes an excessively long time — the loss of employee productivity will surely follow

The range of holiday variables to be monitored relevant to an employee’s working time can become extremely complex. This situation is exacerbated when you have more than a handful of employees.

With manual management, there are many possible error permutations that can occur. Thus, the risks of payroll and HR errors remain high, if not unavoidable, when they are managed and administered manually.

For example, assume employees who work less than 24 hours a month are not entitled to annual leave, a leave cycle is 12 months (from the start of employment), but if the entitlement is 21 consecutive days of full-time annual leave, for each annual leave cycle, and if an employee works five days a week, then it is 15 working days, or if an employee works six days a week, then it is 18 working days.

After reading the previous paragraph, you may think: “Stop! Time out! Slow down”, with the point that the complexity of personnel and payroll accounting in manual administration and administration could be quite complex.

3) Inaccurate vacation documents cause employee anger — an unsatisfied workforce and an unsatisfactory work environment are the results

Accurate calculation of employee leave is essential — there is no margin for error. For example, the employer must take into account one of the following two factors in calculating the annual leave provision. 1.25 or 1.5 days per month (depending on whether the employee works five or six days a week). Alternatively, the accumulated annual leave can also be calculated using the equation of 1 hour for every 17 hours worked which also corresponds to one day for every 17 hours worked.

As a reader, you may have already noticed that there is a pattern here: the proof of many basic conditions, rules, and calculations. Although not a cutting-edge science in itself, they can influence the concentration and think of directors. Perhaps even more so, if these calculations and monitoring processes are to be determined again and again and again and again and regularly by an employee of personnel and/or payroll office.

With manual management, the probability of human error is almost inevitable. For these and many other reasons, which are not necessarily addressed in this article, payroll system automation is a wise choice and investment for many small and medium-sized businesses.

Although they are an important aspect of a company’s payroll, vacation and absence do not receive the attention they deserve. Managing it is too ambitious a goal, as many companies don’t even track employee absences! Vacation management processes are an important part of corporate policy, as paid vacation days have a significant impact on the company’s financial results. Apparently, companies have begun to focus more and more on the employee attendance management system and workforce management software as a revolutionary alternative to time-consuming and costly massive paperwork. It also limits the possibility of manual errors.

In general, line managers and HR are jointly responsible for tracking employees’ vacation and presence. However, when planning or making decisions, management is unable to obtain the type of data needed to assess the overall situation. This is because either this data is not tracked at all or the lack of automation leads to data distortion. In addition, all manual work can discourage employees from assuming this additional responsibility. With an employee presence management system, companies can easily solve the big problems associated with vacation and presence management.

Some of the main problems that companies face due to poor vacation management are the following:

Every country has legal regulations for employees’ holidays, which can cause nightmares for any employer who does not adhere to them. Failure to comply with the complex requirements of employee legislation can lead to serious liability. There is always a risk that employees will be prosecuted and punished by the state.

Streamlining resources at the time of project implementation

Without automation, i.e. without existing workforce management software, it becomes impossible to monitor the availability of human resources. This information is critical for managers when making project scheduling decisions.

Financial liabilities

The law stipulates that employees are entitled to paid leave and privileged leave, which after accumulation may increase the financial responsibility of the company. In fact, the company is obliged to reimburse the remuneration for the leave not taken at the time of termination of employment or at the employee’s request. The human resources department must monitor them carefully and report regularly to management.

Impact on employee performance

Both employees who take too much leave and those who do not take enough may have performance problems. The compatibility of work and private life is decisive for a person’s performance. Management may have to intervene if there is a gap. Constructive measures such as coaching can be taken in this direction.

Demotivation through poor management of the holiday system

In this context, the compatibility of career and family is important for the performance of an employee. Employees have personal needs that may require time off from the office. If an employee does not get leave when he or she needs it most, the situation can lead to demotivation and poor morale. The recording of the employee’s vacation and attendance clearly determines the number of vacation days that each employee can take. Both the employee and the employer and the manager can easily decide on the probability of approving the leave.


Ultimately, automated payroll and personnel management system gives owners and investors of an organization the security they need. With specialized electronic software technology, a team of outsourced professionals who have an intelligent and experienced eye on your payroll and human resources management, you and your employees are free to keep things moving forward. This means focusing on your organization’s core business requirements and operational activities.

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