This is the third article in the “Guide to HR Technology” series.  The goal of the series is to provide information on the state of HR software in 2021 and how it can positively impact your organization.  This article will explain the principles of decentralization and how to implement them using HCM software. 

What is Decentralization?

Simply put, decentralization is the opposite of centralization.  Centralization is the concentration of duties – decentralization is the distribution of duties.  For most organizations, employee-related and administrative duties are centralized in the HR department.  Since this department does not generate revenue, the tendency is to stretch staffing.  The result of this is an over-worked HR staff, or worse, neglected HR duties.

In most cases, the administrative duties do not require any HR expertise to complete.  If these duties were distributed through the organization, HR staff would have more bandwidth to handle the duties that do require expertise.

How to distribute duties with HCM software

A key feature of all HCM software is access control.  Access control is the selective restriction of access to information.  In practice, this feature prevents users from seeing information to which they are not privy.  This allows for duties to be distributed safely throughout an organization.  Let’s use the example of time off requests:

  • When an employee needs to request a day off, they create a time off request in the HCM.
  • The HCM calculates the number of paid time off hours available to the employee
    • The HCM also maintains a calendar that shows approved time off requests for employees in the same department.
  • Once the request is created, the employee’s manager must approve or reject the request
  • Before approving or rejecting, the manager can view the requesting employee’s hours balance
    • They can also view the calendar and see any pending or approved requests for that day

In this example, the employee can see other approved time off requests for their department, but not for other departments.  The manager can see time off hours for their direct report, but no other personal information.  Due to this restriction of information, this administrative duty can be safely delegated outside of the HR staff.

Duties can be delegated between departments as well.  Let’s look at a typical Monday on a payroll week:

  • The Managers of Department A, B and C review and approve the time sheets for the hourly employees in the HCM
  • After all timesheets are approved, the HR Manager conducts an HCM-assisted audit of the time sheets that checks for pending time off request, missing punches, and other abnormalities
  • The HR Manager approves and locks the time sheets, preventing any further changes prior to payroll
  • At this point, the Finance department can begin payroll processing
  • The HCM will create pay statements, copy the hours from the employee time sheets and populate the time on the pay statements.
    • This eliminates input errors
  • Standard and custom payroll reports are automatically generated and ready to review, prior to payroll finalization.

HCMs also offer a suite of employee self-service tools, which allow employees to manage items like their direct deposit accounts, tax withholding forms and benefits selection.

These are only a few examples of decentralizing HR functions – the possibilities are endless!

At Cello HR, we are experts in the strategic deployment of HCMs.  If your HR team is burdened with administrative tasks and needs help, click the “Schedule an Introduction Meeting” at the top of the page.