How to make payroll system in Vietnam work effectively?

In this article, we will talk about the trend in creating payroll services in Vietnam. Following articles are discussion on problems when creating payroll system in Vietnam and mistakes need avoiding.

Mistakes need avoiding when designing payroll system in Vietnam

1. Trends in creating payroll system in Vietnam

In 2010 – 2011, payroll services in Vietnam is created based on “3Ps salary” because employees will be paid based on three factors:

- The importance of job positions

- Capacity

- Working result

However, not all enterprises can meet the requirements of 3Ps rule. There are 4 points resulting from observing the current state of enterprises’ benefits:

- Meeting the requirements of 3Ps rule through 2 factors:

+ payroll services in Vietnam’s enterprise is created based on assessing working values

+ Create quantified indicators to payroll

- There are rules but not compensation package. There are many regulations which do not help employees see their overall income.

- Ineffective communication

+ Just focus on law regulations. Many enterprises pay attention to law procedures, business registrations and forget to explain principles and answer the questions.

+ HR department cannot play advisory role. There are questions of staffs taken directly to the directors instead of to the HR department. The reason can result from the following reason.

+ The direct manager plays no role in communicating to employees

- Has yet to solve main problems

+ Standardize office title system to provide the basis for assessing the working value

+ Manage and use salary fund effectively

Above results come from numerous businesses’ reasons but main reasons that you can see are:

- The time of implementing system meets the time of recession. Enterprises cannot make much profit to pay more than previous period. It is easy to let employees misunderstanding that new system affect their salary.

- Creating payroll system in Vietnam but not standardizing wage structure

- Wanting fairness but not wanting to assess

- Wanting transparency but not wanting to notifying regulations

- Wanting to change system but not wanting to change people