The uneasy marriage of payroll and HR

Reviewing the relationship’s history to understand the present and predict the future.
By Gerson Safran
|Canadian HR Reporter|Last Updated: 04/12/2001

The relationship between payroll, HR and finance is a result of an evolutionary process. To understand their present positions in many organizations and possibly predict their future, we have to understand their origins and evolution to date.

Back in the mists of time before computers (as recently as 50 years ago), payroll and HR, then usually called personnel, still existed. The payroll process was much the same as it is today — a wage or salary was calculated based on preset rates affected by various deductions. The key outputs were, as they are today, a regular payment to employees, payroll registers and other reports and journal entries to the general ledger.

The main job of the personnel function was to track time and attendance, with emphasis placed on absenteeism. It was also involved in maintaining employee records, the initial screening of new employees, terminations, miscellaneous other employee-related activities (longevity awards, Christmas parties and summer picnics, disciplinary actions, union grievances) and, of course, involvement in union negotiations.