Students improve payroll process
The Lean Six Sigma project team has been working on a process to reduce payroll-processing errors for the UH System payroll department.
Team members, who are enrolled in the Quality Improvement in Project Management course, have ironed out the wrinkles for a smoother process and have helped prepare the UH Payroll Department for a rollout of a new electronic payroll process later this year.
“Lean Six Sigma concentrates on improving efficiency and reducing variability in all types of business processes,” said Jami Kovach, an assistant professor in the Project Management Program. “This level of performance is a tremendous improvement over where most organizations currently operate.”
The department’s investigation, which began last year, was looking for ways to implement electronic time reporting for biweekly employees. However, members soon found that major process advances were needed before employing a new system.
While investigating, it was discovered that the payroll department was continually running payroll, sometimes as much as twice a week during off-cycles. After analyzing their findings, the team members found more efficient ways to address the need for major improvements that would allow preparations for a new electronic system to begin.
“Initially, it had been a great idea to run more payroll cycles and meet employees’ needs to get paid on time, but the growing over-dependence on going around our established process to serve our customers presented another set of problems,” said Joan Nelson, executive director of human resources. “Our challenge was to figure out a way to reduce the number of off-cycle payrolls without causing payment delays for employees.”
The Lean Six Sigma project team is based around a business philosophy that focuses on a specific methodology. Their success is based on a formula utilized for a business approach.
They define the problem, measure the process performance, analyze the cause of the problem, improve the process and then control the improved process and fix the problem permanently.
“Being able to implement these strategies in a real-life setting has proven to be a valuable learning experience for our students,” Kovach said. “There is no better way to learn these kinds of things.”
Using this system, the team developed strategies to reduce the cause of errors, which include online orientation for students and implementing an employee acknowledgement form to alert new employees to the payroll process.
With the improvements put into place, payroll-processing errors decreased to 6.77 percent from 10.35 percent and the amount payroll processing cycles was reduced by 50 percent.
“We learned an efficient method to improve our process by partnering up with our students,” Nelson said. “We are very proud of our students and we know they will have great success in their transition to the real world.”