DESIGN AND IMPLEMENTATION OF A COMPUTER BASED DYNAMIC SALARY PAYMENT SYSTEM

1.1 Introduction

A Dynamic Salary Payment System is software which organizes and arranges all the tasks of employee payment and the filing of employee taxes. These tasks may include keeping tracking of hours, calculating wages, withholding taxes and deductions, Net pay, Payroll software plays several roles for the user, the employees and the company. Dynamic Salary Payment System is the heart of any Human Resource System of an organization. The role of Small and Medium-Scale Enterprise (SMEs) in the national economy cannot be underestimated. These enterprises are being given increasing policy attention in recent years, particularly in third world countries partly because of growing disappointment with results of development strategies focusing on large scale capital intensive and high import dependent industrial plants. Small firms marketing practices have been assessed in the context of existing models based on large firm practices.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitations of the Study and Definition of technical terms.

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1.2 Background of Study

Small and Medium Scale Enterprises (SMEs) have been acknowledged the world over as the driver of economic development and growth. This is because these enterprises have great potential for employment generation, economic empowerment, poverty alleviation, improvement of standard of living, substantial local capital formation, achievement of high levels of productivity and capacity, means of achieving equitable and sustainable industrial diversification and dispersal, appreciable contribution to gross domestic product, increase harnessing of local raw materials and technological and export diversification (Ekpo, 2000; Essien, 2006; Butt, Hunjra and Rehman, 2010; Akpakpan, 2012). Not only do they provide employment and income for the bulk of the population, they have been recognized as critical breeding and nurturing ground for domestic entrepreneurial capacities, technical skills, technological innovativeness and managerial competencies for private sector development (Derinola, 2008; Ojo, 2010; Olorunshola; 2014).

Generally, therefore, SME’s are the pivot for achieving economic development of any nation. This is because, they create employment opportunities for teeming youths and self reliance for owner managers, contribute to gross domestic product (GDP) through their outputs (production of goods and services), development and inculcating entrepreneurial spirit, as well as better living standard of the populace through poverty alleviation.

The role of SMEs in the developing economies has also assumed a major significance in recent years. Studies have indicated that developing countries including Nigeria, show increased interest in the promotion of SMEs due to three main reasons: the failure of past industrial policies to generate efficient self- sustaining growth; increased emphasis on self-reliant approach to development and the recognition that dynamic and growing SMEs sector can contribute substantially to a wide range of development objectives (Sanni, 2009; Uwonda, 2013).

According to Onuoha, (2008), Etim, (2010); Kishore (2010), SMEs form the great majority of businesses in almost all countries in the world and hold the promise for the development and transformation of our economic in terms of domestic capital formation and industrialization. In many developed countries, more than ninety-eight percent of all enterprises belong to the SMEs sector (Uwonda et al, 2013); eighty percent of the total industrial labour force in Japan, fifty percent in Germany and forty six percent in USA are employed in smaller firms (Udechukwu, 2014). In the USA, SMEs employed about 25 million people in 2004, and contributes nearly thirty nine percent to the national income (Whah, 2006).

In an organization, there are several departments and each department has a payroll section to manage its payroll activities. Each section has to perform necessary personnel operations like data collection and preparation, entry, updates, monitoring and reporting of data. Many of these existing practices and procedures need to be reassessed at this time of changing needs, changing demands of employees and changing technologies So an organization needs an integrated web based Dynamic Salary Payment System that would integrate personnel and pay- roll related data collection, processing in individual departments and payroll audit in a more efficient and streamlined way. With this computer based Dynamic Salary Payment System, payroll section would be able to keep a record of employees including their personnel data, pay band, allowances, deductions, savings and taxes etc.. Net pay of each employee is calculated by using the information about his allowances and deductions. All these complex calculations have been incorporated herein. Many optional allowances and deductions for the employees are added by specifying the corresponding details.

It is understood that organizations are tired of managing thousand of odd papers, pay slips, payroll reports, and salary details and so on. Imagine that organizations have a payroll processing system which will generate our pay slips and payroll reports within seconds. An organization can help others automated Dynamic Salary Payment System by developing a customized payroll application that suits their specific requirements.

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1.3 Statement of Problem

Investigation revealed the problems of the existing system which are stated as follows:

1. Calculating salaries through manual operation is burdensome and stressful.
2. Difficulty in handling personnel records and inaccessibility of information when needed
3. Overpayment/Underpayment of salaries and less security in the manual system.
4. Delay in payment of staff salaries because too much time is spent in preparation of the payroll.
5. The use of paper to keep pay details about each employee which results in too much paper work.

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1.4 Aim and Objectives of the Study

The aim of the study is to design and implement a Computer Based Dynamic Salary Payment System for Small and Medium Scale Business. In achieving this aim, the following specific objectives were laid out as follows to develop an application software that will:

1. Calculate the basic salary and allowance of staff.
2. Provide an easy way not only to automate all functionalities involved,
3. Manage the leaves and salary payment for Small and Medium Scale Business employees.
4. Provide full functional reports to the management of the school with the details about usage of leave facilities.
5. Accurately stores employee data and retrieves salary payment history when needed.

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1.5 Significance of Study

The major importance of the study is to improve the efficiency of dynamic salary payment management and to quickly find out information of an employee details to provide easy and faster access information, also to provide user friendly environment for staff workers during payroll activity. Department can use it sitting at different locations simultaneously.

The study will aid in reducing errors, fraud, increase speed and also aid growth in organizations if successfully implemented. Manual Dynamic Salary Payment Systems in organizations will be totally eliminated with this Web based system in place.

This study will also be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.

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1.6 Scope of Study

The study focuses on the Design and Implementation of a Computer Based Dynamic Salary Payment System for Small and Medium Scale Business.

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1.7 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this institution to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
3. Research material: availability of research material is a major setback to the scope of the study.
4. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
5. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).

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1.8 Definition of Terms

Salary: This is usually a monthly payment for regular employment on a yearly basis.

Shift Allowance: This is the allowance granted to an employee who works on shift basis.