Healthcare Payroll PeopleSoft Best Practice Guide – Part One of Two

As many healthcare organizations have begun to focus on how to manage labor expenses (with a goal to reduce) without reducing headcount, I have been asked to share some Healthcare Payroll PeopleSoft Best Practices recommendations and suggestion for PeopleSoft optimization.

The following “Healthcare PeopleSoft Payroll Best Practices Guide” is one of two that offers strategies to establish consistent pay processes, provide predictable results and ensure that payroll process improvements are on the right path to world-class business performance. More importantly, the ability to evaluate, develop and implement solutions based on best practices lowers risk. When Payroll best practices are applied holistically throughout the health system, all gain the ability to integrate key business drivers, which lead to sustainable performance improvements and cost savings.

I, or someone on my team, am available to discuss your specific needs and set you up for success. 

Payroll Best Practices

PeopleSoft Function Questions and/or Considerations
Organizational Setup Is the system set-up as vanilla and as simple as possible?Have defaults been set up to maximize the benefit and reduce the amount of repetitious or redundant data entered?

Does the healthcare entity have a process in place for using correction mode on tables versus adding an effective dated row?  Is the process consistently followed?

A review and assessment of all the Payroll tables should be conducted. Inactivate any codes that are no longer needed and perform data cleanup to remove any demo data in the tables. Develop a business process procedure to ensure that tables are updated appropriately and timely to preserve data integrity within the system.

Review the following are being utilized:

  • Retroactive changes are automatically calculated within the payroll system
  • Business expenses reimbursed through payroll – it eliminates duplicate check processing to same employee one on payroll side one on accounts payable side – reduces cost.
  • Service level agreements are established and monitored with business unit customers and third party services providers
  • Garnishments module integrated and automated with payments and reporting through electronic interface to agencies, where possible to reduce the number of manual checks; reduce potential errors and omissions; improved employee relations with garnishment enforcement agencies; reduce reconciliation; increased efficiency
Installation Table Are the appropriate products turned on?Which eApps are checked?

Are the NA Payroll options appropriately setup?

Company How are the healthcare entity’s companies defined?
Pay Groups The payroll system relies on the information stored in the Company, Earnings, Special Accumulator, Shift, and Pay Group tables to determine how earnings are processed. How has the healthcare entity defined pay groups?Paycheck locations can be selected that work simultaneously with how the employees Pay Group had been set up on the Pay Group Table.
Tax Locations Tax Locations determine the work states and localities that default to employee tax data.  What methodology was used to determine the entries on the Tax Location Table?Are tax location codes configured to default from the entry of another value on the Job Data component or are tax location codes manually maintained on the Job Data component?

If default values have been configured, do they default from the Location Table or the Department Table?  Are the default values serving the customer well, i.e., are the defaults appropriate a majority of the time?

Employee Tax Data Which department maintains employee tax data?Do the users in this department have a solid understanding of the functionality on the Employee Tax Data component?

Assess procedures for maintenance of employee tax data.  Are practices defined governing when to use Correct History?

Terminations Evaluate practices for paying terminated employees.  Do consistently applied practices exist, instructing payroll on severance payments, benefit deductions, and vacation payout?Is the Final Check feature in use?  If not, are the procedures that govern payroll processing for terminated employees compatible with the Final Check feature?
Security What procedures are used to provide security to the application? Is there a regular review to insure only current staff has access?  How are new users added to the system?Do payroll users have access:

  • To the appropriate pages, processes and reports?
  •  To the appropriate page actions?
  • To extraneous pages — pages that contain data that is irrelevant to payroll?
Trouble-shooting Checklist Does your healthcare entity have a troubleshooting procedure or checklist they follow?Determine the Impact of the Problem

  • Is the problem occurring in the production environment?
  • What is the Business impact?
  • Who is affected by the problem?
  • Is there a reasonable workaround?
  • Isolate the ProblemWhat is the specific problem?  What is the expected result?  What result are you getting?
  • Have there been any modifications in this area?
  • Remove unnecessary variables from the test.  Can these steps be duplicated?
  • Can the problem be replicated in a demo database?
  • Has the problem occurred before?  If not, when did it last work?  What has changed since it last worked?

Diagnose the Problem

  • Compare program files & sizes to make sure you are using the correct version.
  • Use diagnostic tools such as traces and audit programs.
  • Search Customer Connection to determine if this is a known problem.

Fix the Problem

  • Correct the data (employee, table setup)
  • Correct the program and apply the fix

Test the solution

  • Test the fix under relevant conditions
  • Test in the development environment
  • Test in the production environment
Updates and Fixes Are fixes and patches reviewed and applied on a regular basis? Managing the application of updates and fixes procedures and strategy should include:

  • An approach to reviewing changes that are being released to determine applicability.  This will help determine the appropriate timing for applying these changes.
  • Process for notifying system application owners/users of upcoming fixes. This notification should include a description of the fixes being applied, the expected changes to system functionality and anticipated timing of the event.
  • Standard testing strategy, including definition of required regression testing, standard test scripts and test participants. HR users should participate in the testing activities.  Identify a testing group responsible for creating and maintaining test scripts, developing familiarity with key functionality in the system, defining detailed test plans each time system modifications are made and executing the majority of the testing activities whenever they are required.
  • Database backup and restore procedures
  • Method and timing for replicating fixes through all environments
  • User notification process
  • On-line documentation of fixes via project definitions, etc.
  • The procedures used for applying updates and fixes in most organizations are similar, if not identical, to development procedures used for other system changes. These procedures will help ensure that updates and fixes are consistently applied and that reasonable precautions are taken to reduce risk of system failures and minimize required system down time.
Tax Updates Tax updates are the primary vehicle for ensuring compliance with federal, state, and local governments with regard to tax calculation, withholding, remittance, and reporting.  Maintaining currency with tax updates is vital for companies using NA Payroll. Is the application up to date with the latest tax updates?Assess procedures that surround the tax update process.  Consider the following aspects:

  • Is anyone tasked with identifying available tax updates?
  • Are appropriate resources identified for analyzing, applying and testing tax updates?
Query / Reporting Do the right individuals have query access and are they adequately trained to know which tables to use and how to use effective dates and prompts?Are public queries maintained?

Is there a process in place to request a public query?

Customizations Are customizations justified and documented?  Are training materials and help text available on-line, especially for customizations? This section provides you with a high-level analysis and overview of the healthcare entity’s customizations.  Answer the following for each customization type in the subsections below:

  • Review the documentation (has the customization been documented on-line and in a customization document?)
  • Identify the business need for the customization
  • Determine if the requirement could have been met using delivered functionality
  • Could a process change have met the requirement?
  • Did the healthcare entity investigate these opportunities?
  • Are there any other business needs that are not currently being met that will require customizations?
  • Has the customization been uniquely named?
  • Have reports and processes been saved in a customization directory?
  • Is the current code for custom programs stored in a library to prevent overwriting?
  • Are custom processes assigned to the process scheduler and an appropriate menu?  Are recurring jobs scheduled?
  • Can users manipulate interface or report data?
  • Do processes run in an acceptable amount of time?
  • Review On-Line Customizations
  • Review Batch Customizations
  • Review Custom Interfaces
  • Review Customized Report

Sierra-Cedar’s approach to PeopleSoft Payroll process improvement for a healthcare entity is to focus on business operational (that is the processes) “best practice” and what is required to take a health system from their current state to an optimized organization that fully utilizes their software investment.  Sierra-Cedar does this through assessment and validation of the healthcare entity’s requirements as the first crucial step, e.g., focus on “strategic business objectives (reduce turn-over, provide key business matrix to business owners, optimize staffing, etc…).

Note: Information on standalone 9.2 features can be found in Peoplebooks, Oracle Cumulative Feature Overview tool, other blog posts and Oracle’s 9.2 site www.peoplesoft92.com.

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