1.

1 Back ground of the study Currently the accounting professional tasks are dynamically changing in an exciting and complex environment due to progress in Information Technology occurring in a rapid rate (Romeny and Steinbart, 2003). Organizations are changing their method of operation and human resource management system to meet the needs of an increasingly competitive environment. Managing employees, since they are most valuable assets of an organization, is the heart of almost all the real life management problems (Verman, 2008). It is important for organizations to have a well designed human resources management and payroll system. Because the knowledges and skills of employees are valuable assets and must be carefully managed, developed and maintained. And also the payroll system must be designed to meet the governments regulation and management information needs. Thus, an effective and efficient payroll and human resource management system is crucial to organizations to satisfy the needs of users to decision making and to assign appropriate employees to different tasks and to facilitate monitoring the continuous development of the organization intellectual assets (Romeny and Steinbart, 2003). Human resource management and payroll cycle is defined as a recurring set of activities and related data processing operations associated with effectively managing the employee work force (Romeny and Stenibrt, 2003). The most important tasks includes: recruiting and hiring new employee, training, job assignment, compensation, performance appraisal and discharging of employees. The knowledge and skill of employees affects the quality of goods and services provided to users. In fact, in professional service organizations such as engineering, management consulting, tax advisory, law firms, hospitals and universities employees knowledge and skills are the principal components of companys product, and labor costs represent the major expenses incurred in generating revenues. Therefore, it is not surprising to find that some analysts believe that an organizations human resources may be worth the several times the value of tangible assets like machinery, equipment and buildings. Accounting Information System has not traditionally measure or report the value of human resources on the financial statement. The reason is asset reported in the financial statement represents the resources the organization owns but not yet consumed. So that employees are not owned by the organization and recognized at the time they are either recorded as wages and salary expenses. However, the situation is changing now a day (Romeny and Steinbart, 2003).

1.2. Purpose Statement The general purpose of the case study was to assess and investigate the management of human resource and payroll cycle of Bahir Dar University. Specific objectives were: Bring out issues involved in the management of human resource of Bahir Dar University. Discuss aspects which are basic to human motivations to work and in fulfilling the career aspiration within the organization. Examine issues right from selection-placement to performance appraisal, salary-career management, and training, etc of the employees in the organization. Review records and process use to pay employee for their service. 1.3. Scope and Limitation of Case Study Now a day, managing human is at the heart of almost all the real life management problems of both private and public organizations (Verman, 2008). Bahir Dar University, as an organization has both academic and administrative; and contractual and permanent employees. In addition, the university follows different procedures, and directives for recruiting, hiring, training, assigning, compensating, promotion, evaluating and discharging of all employees. The finding of the case study will be more fruitful and dependable if it is conducted in the context of the whole employees of Bahir Dar University. However, due time, finance and other constraints it would be out of the reach of the case study team to incorporate all the employees of the University. Therefore, the case study is delimited on the assessment of only human resource management system and payroll cycle of permanent academic staffs of the university. 1.4. Significance of the Case Study The case study focuses on human resource management and payroll cycles of Bahir Dar University so, it is expected to have importance for the organization and the investigator to have a clear understanding of the process of HRM/payroll cycle. First, the case study is expected to provide useful information for the organization in managing human resource. Secondly, it can provide information regarding the major activities in the payroll cycle. Finally it used as an input for the case study team to relate the theoretical aspects that are discussed in the class with the current practice of human resource management cycle and payroll system of the organization 1.5. Methodology This section presents an overview of the method used in the case study. The area covered includes: the source of data, the data collection procedures, and method of data analysis and presentation procedure. 2

1.5.1. Sources of Data The source of data for this case study was only secondary data. These secondary data was obtained by reviewing the related documents like polices, rules, procedure and legislation of the human resource management process of Bahir Dar University. 1.5.2. Data collection Procedure The case study team assesses the current profile of managing human resource system and payroll cycle of Bahir Dar University. Hence, the case study method is believed to be appropriate method because it enables the conduct of detailed analysis using secondary data. we review of relevant documentspolicies, rules, procedure and legislation related to employees hiring, training, promotion, payment, demotion and termination from the university was served as a means of generating secondary data. 1.5.3. Method of Data Analysis and Presentation After careful collection of secondary data from the relevant documents, it has been analyzed using descriptive analysis. 2. Profile of the Organization 2.1 Back Ground of Bahir Dar University Bahir Dar University was established by merging two former higher education institutions; namely the Bahir Dar Polytechnic and Bahir Dar Teachers College. The Bahir Dar Polytechnic Institute, which has transformed itself into Technology and Textile institutes, was established in 1963 under the cooperation between the Government of USSR and the Imperial Government of Ethiopia. The institute was a premier institute in producing technicians for the nation. The Bahir Dar Teachers College, by then known as the Academy of Pedagogy, was established in 1972 by the tripartite agreement of the Imperial Government of Ethiopia, UNESCO and UNDP and started actual work in the following year under the auspices of the Ministry of Education and Fine Arts. Its general objective was to train multipurpose primary education professionals capable of adopting primary education to rural life and rural development. Its specific objectives were to train primary school teacher trainers, supervisors, educational leaders, adult education organizers and community development agents. The two institutions of higher learning were integrated to form the Bahir Dar University following the Council of Ministers regulation no. 60/1999 GC. The University was inaugurated on May 6, 2000. Bahir Dar University is now among the largest universities in the Federal Democratic Republic of Ethiopia, with more than 35,000 students in its 57 undergraduate and 39 graduate programs. Bahir Dar University has four colleges, three institutes, three faculties and one school. The academic units of the University include College of Science, College of Agriculture and Environmental Sciences, College of 3

Medical and Health Sciences, College of Business and Economics, Institute of Technology, Institute of Textile, Garment and Fashion Design, Institute of Land Administration, Blue Nile Water Institute, Faculty of Humanities, Faculty of Social Sciences, Faculty of Education and Behavioral Sciences and School of Law. 2.2 Vision of Bahir Dar University The Vision of the Bahir Dar University is to become one of the ten Premier Research Universities in Africa in 2025 recognized for its quality education, research and outreach activities. 2.3 Mission of Bahir Dar University The mission of Bahir Dar University is to contribute substantially for social, cultural, economic, political, scientific and technological development of the nation through the provision of high quality education, active engagement in research and outreach activities for the betterment of life, while offering our employees conductive and rewarding working environment that values recognizes and appreciates their contribution. 2.4 Core Values Quality - University product should be of high quality and the University staffs continuously strive for excellence in their academic and administrative endeavors. Integrity - in all our activities we will act with the quality of being honest and with strong moral principles Transparency- rules, regulations and decision makings at all levels to be transparent. Accountability- University staff performing duties in an accountable manner and taking full responsibility for actions and decisions they take thereof. Rule of law-University community believe in rule of law and act accordingly. Equity the University is an equal opportunity employer and teaching institution regardless of gender, status in society, ethnic background or religious affinity. The University management never discriminates among its employees and treats them on merit bases and respects their contributions. Promote diversity-Advancement of human and intellectual diversity to enrich the academic community and to overcome the barriers separating individuals, populations, and cultures.

2.5 Goals and objectives In order to insure the journey toward the set vision and mission the university has the outlined five major goals that includes: Developing a favorite environment for learning and teaching. Ensure the quality and expansion of education straining. Advance research and consultancy works in various fields. Improve service to the community. Increase revenues and reduce costs The university shall have the following objectives: Providing skilled man power in quality and quantity that will be served the country in different professions. Makes efforts to develop and disseminate the culture of respect, tolerance and living together among people Ensure the participation of all concerned bodies in administration, decision making, creates and promotes participation culture. Lays down on institutional system that ensures the accountability of the institution. Expands higher education services that are free from any discrimination of race, religion, sex, political and other similar grounds. Lays down problem solving educational system that enables to utilize potential resource of the country and undertake study and research.( http://www.bdu.edu.et/ )

3. DATA ANALYSIS AND PRESENTATIONS This part of the study deals with the presentation and analysis of data gathered from the organization documents. The data for this study came from official document analysis and observations. The HRM function is a process and an ongoing procedure that tries to keep the organization supplied with the right people, in the right positions, at the right time and these have to be guided by proper HRM policies and detailed procedures(CSRP, 2002). The following are some of the elements of HRM policies and procedures. These are:AA Human Resource Planning:- Human resource planning (HRP) is a systematic reviewing of human resource requirements to ensure that the required numbers of employees with the required skills are available when needed. Human resource planning involves matching the internal and external supply of people with job openings anticipated in the organization over a specified period of time. In spite of this, it has been identified in the AS-IS process that Bahir Dar University does not have a well defined and structured human resource planning process by which all the human resource requirements are organized. Thus, developing a human resource planning system is required that need to be developed in a participatory way and based on the universitys strategic plan, and internal and external assessment of customer needs. The following process describes how the human resource planning is executed starting from the lowest university organ up to a university wide level where information flows in a bidirectional way. Human resource planning process flow 1. A unit (definition.): a. reviews its HR requirement and prepares short, medium and long term HR plans on the bases of: BDU strategic plan Program needs Profile of employees (level and composition of skills, academic rank,specialization,diversity,retirement, projection of employee turnover, etc. b. Submits its HRP to the budget center as per the planning calendar. 2. A budget center: a. Schedules and conducts budget defense according to the planning calendar b. Reviews and approves HRP of each unit c. Consolidates and submits a budget center HRP to the central HR d. Communicates each unit its HRP approved by the Universitys executive body 6

3. Central HR: a. Prepares and distributes planning calendar a year ahead of the next fiscal year b. Schedules and conducts budget defense according to the planning calendar c. Reviews and prepares University-wide HRP d. Submits the same to the Universitys executive body e. Communicates the approved HRP to each budget center B. Recruitment:-is the development of a pool of job candidates in accordance with a human resource plan. For effective recruitment and selection, there should be a sound policy that clearly specifies the responsibilities an over all organizational human resource requirements and gaps. In this regard the first public service proclamation for recruitment and selection in Ethiopia was the proclamation No.1 of 1962(3) (Getachew, 1997).The FCSC and Regional States had subsequently issued their directives. According to these documents recruitments and selections should be based on merit. Presently in the BDU recruitment and promotions are made on the bases of the following procedures (RCSC, 2004). These are: 1. Public announcement is made; 2. The qualifications of applicants for the completion are examined; 3. Examination is given for those suitable and qualified candidates; 4. On the bases of examination, a list of selected candidates is submitted for approval to the Head of the department; and 5 only approved by the Head of the department the person will start the job. C. Socialization (Orientation):-is the way that new recruits introduced with their job, responsibilities and informed about the organization policies, cultures, expectations etc (Stoner, James,.Edward Freeman, and Daniel Gilbert, 2002). D. Training and Development:-refers to activities, which aim to increase employee's abilities to contribute to organization effectiveness. While training is defined as systematic advancement of the knowledge, skill and attitudes of an individual to adequately perform a given task, development is the nurturing of special skills of individuals or preparing employees for higher positions (CSRP, 2002: 1006). Training (on-the-job and off-the job) helps to equip individuals with the necessary skills for immediate interests, and development aims at equipping people with the necessary skills and abilities for the future (Stoner, James, Edward Freeman, and Daniel Gilbert., 2002).As it has been stated clearly the reason of giving training is to improve the capability, achieve better performance, to prepare a person for higher responsibility based on career development (Proclamation No.262/2002). While 7

Training programs are more concerned to maintain and improve current job performances, development programs are designed to equip skills needed in future jobs. Performance appraisal, job requirements, organizational analysis and human resource surveys are factors that determine training programs (ibid:405). E. Promotion: - is a motivating tool that assists individuals and organizations to improve the skills and abilities for effective performance. Employees take promotion as a reward and recognition to assume higher positions and responsibilities. Getachew (1997) cited Reddy and Graham explained that if promotion does not give employees higher responsibility, commensurate authority and pay, it is invalid (Getachew, 1997). Promotion also should be based on the organization interest and it should be transparent, objective, and serve the purpose of development (Proclamation No.262/ 2002:1663; and RCSC, 2004).However, in some countries like the Republic of China, in the civil service, promotion is given to those who are politically conscious and loyal to the party and professionally competent civil servants and with great emphasis to performance results (Zhu,1995). According to the rules and directives issued by the legislation of Bahir Dar university promotions should be made based on the following criteria:-Result of Performance Evaluation, Cleanness (neatness) of personal record ,Tests (practical and/or written),Affirmative action for women, and Recommendation by immediate boss F. Transfer:- is traditionally used for the purposes of rewarding, punishing or avoiding conflict between subordinates and superiors. Transfer improves communication perception and individual development. It is used to widen the experiences of a manager, to fill vacant positions, and to relocate employees whom the organization does not need to demote, promote, or fire (Stoner,James,.Edward Freeman,and Daniel Gilbert.,2002 and Getachew, 1997).However, the absence of uniform directives and regulations governing transfer at Bahir Dar university, usually leads to personal contract rather than merit prevailed. G. Discipline and Grievances: An employee could be punished when ever he/she violates rules and regulations of the organization and falls short of work expectation. Discipline comprises of different stages such as warning,reprimand, probation, suspension, disciplinary transfer, demotion, and discharge. These actions are taken until the problem is solved or eliminated. In addition, for inefficiency and capacity problems, training and development programs may be important (Stoner,James,.Edward Freeman,and Daniel Gilber.,2002). The Public Service Regulation No. 1 of 1962 (3) and the 1977 directives are the ones that defined duties and rights of public servants, clarifies the mechanism of appeal, the range of penalties in case of breach of discipline.

H. Performance appraisal:-is an evaluation of individuals job performance against the stated standards or objectives where low performers need corrective action like additional training, a demotion, or separation and high achievers may merit a reward, such as raise, bonus, or promotion(ibid: 398). Generally, the employees value to the organization can be reflected through promotions, transfers demotions and separations. For instance, while good or high performers transferred or promoted to help enhance their skills, poor performers may be demoted or transferred to less important positions, or even separated.All of which will in turn, affect human resource planning (Stoner,James,.Edward Freeman,and Daniel Gilbert,2002). 3.1 Detailed processes of Human Resource Management in Bahir Dar University This newly designed human resource management system will curtail the lengthy processes that were practiced in human resource functions such as employment, promotion etc and will enable to meet customer and organizational needs in a smooth, transparent and accountable manner. In view of this, the envisaged human resource management system will be precise, concise and flexible and this will enable the University to have competent and dedicated staff in order to meet the newly anticipated stretched objectives. This will further enable to achieve and sustain excellence in all areas of its teaching-learning, research and community services. It will also focus on recruiting, retaining and rewarding staff of the highest caliber in the academic staff so as to foster their motivation, morale and continued development. By doing so, the new HRM system will enable the university to meet its vision, mission, goals and objectives. The new process is classified in to three major sub-sub processes namely: Filling vacant positions; Training, Education and Development; and Compensation, Benefits and Employees affairs. These subsub processes also include the following micro processes: (A) Human Resources Planning (HRP) (B) Filling vacant positions:-it includes Employment, Promotion, Leadership, Transfer Human Resource Development, Human Resource Performance Appraisal, Human resource training and education, Compensation, Benefits and Employees Affairs Compensation and benefits, Grievance handling ,Disciplinary case handling Separation and HR information system with the objectives of ensuring and addressing customer needs, the human resource management system that is organized here under considers use of automated system backed up by consolidated human resource data base and human resource information systems. It also anticipates empowering units, the lower organs in the university system. It also anticipates a well thought and planned process which ensures understanding, sharing common interests (common vision), and commitment between and among its employee who 9

will perform to exceed needs and expectations of customers and stakeholders. 3.2 HUMAN RESOURCE MANAGEMNET CYCLE OF BAHIR DAR UNIVERSITY HRM comprises of a broad range of functions and activities like job analysis and design, staff selection and recruitment, career and succession plans employee transfer, promotion, training, performance evaluation, remuneration, appeal and grievances handling, human resource planning, safety and health, equal employment opportunity etc (Getahcew, 1997; Ivancevich and Williams G., 1989). The HRM Process in Bahir Dar University is described under:

3.3 Compensation, Benefits and Employees Affairs (payroll processing) It is the policy of the University that an employee's base annual salary is full remuneration for the Performance of his/her regular duties. However, the scope of work that is expected of an academic staff includes teaching, research and university/community service where the load is defined at the unit/budget center levels. The University recognizes, however, that when employees undertake work at times that is distinctly beyond their regular responsibilities, it requires establishment of standards under which an employee performing additional assignments may receive extra compensation or benefits. This is so, because achievement of goals of an organization is largely accomplished through a compensation system. The new human resource system envisages that central HR reviews and revises the compensation and benefit packages periodically. It also assumes differential pay and gives room for negotiation for identified scarce human resource requirements. Employees affairs are also one of the milestones in human resource management which will gear harmony and belongingness to the work situation. The 10

new system is sought to ensure safe, healthy and secured working environment. It also paves the way to having mutual respect among one another recognizing policy issues, diversity and multiculturalism. Be it as it may, as no one works forever, separation is inevitable. Separation in the new system is companioned only ineffectual membership or individual preference which will be conducted in a smooth and fast way; and with consideration of the separated as an alumni and powerful Ambassador of the University. 3.3.1 Compensation and benefits Process Flow for Academic staff 1. Unit a. Based on the human resource plan and the current situation assesses if there is any human resource gap. b. Submits to the budget center for budget clearance. c. assigns additional work load on competition basis. d. Communicates to the employee about the workload to make necessary preparations. e. Reports the case to the budget center. 2. Budget center a. Reviews the assignment made by the unit for additional workload. b. Approves the request for additional workload. f. Forwards the decision to the unit for implementation. g. Effect necessary benefits for the workload based on the standards. Payroll and HRM systems are separate in many companies because integration was generally not feasible using early data processing technology. Also, different events generate data and two different professions were interested in using the data. As a result, many companies (and their employees) became accustomed to having payroll data processed by the accounting function and personnel data processed by the human relations function. Now that modern information technology makes integration more feasible, employees in some companies are still likely to resist suggestions for change because they are comfortable with the old way of doing things. In addition, employees within the accounting and personnel functions probably feel some degree of "ownership" of "their" data, and this is taken away when control of these data is transferred to a centralized data base function. Reasons for integrating the personnel and HRM systems include the following: It is logical, since both systems are organized around the same entity: the employee. By eliminating the perception that a specific organizational function has ownership of a particular set 11

of data, it should provide improved data access. It should facilitate the retrieval and utilization of employee data when the data required would otherwise have to be obtained from both data bases. It should facilitate the process of updating employee data, since a single update process would replace two separate updating processes. It should simplify the development and implementation of more complex compensation schemes, such as flexible benefits or incentive pay. Centralizing the administration of employee data under the control of data base management software should enhance data security. It should minimize or eliminate the cost of storing identical data in two different databases. Integration will improve decision-making by providing access to more of the relevant data needed for monitoring employee development. It should minimize or eliminate the confusion that might otherwise arise when two different databases use different data definitions, or report different values, for the same data item. 4. Conclusions The main purpose of the case study was to assess and investigate the management of human resource and payroll cycle of Bahir Dar University. Emphasis was given to different aspects of HRM like recruitment, promotion, discipline, evaluation, training and grievances handling mechanisms at the university. The academic staffs have lacked appropriate support to successfully perform their duties and responsibilities as per the civil service rules and directives. It is believed that the the university legislation should give much attention and devote their time and knowledge to equip the the academic staff committees and grievances handling and inspection units so that they could enhance fair and just human resource practices and contribute to foster good governance at the university level. Some departments of the university were understaffed in terms of adequate and qualified human resources. Judged from the number and qualifications of existing councilors, civil servants and committee members and compared with the delegated powers and responsibilities to the university, it may be safe to conclude that the university weak to effectively carry out the responsibilities given to it. The case study revealed that there is a total neglect of employees' statutory rights at the university. The general disregard of the academic staffs from management of the university level may have a negative repercussion on the morale and initiative of employees and could impede on the smooth service delivery at the university level. Currently, the University is working hard to meet the rising needs for qualified teaching staff in many higher learning institutions of Ethiopia. It has, however, been evident that with the current institutional setup and workflows, the 12

University hardly satisfies the demands of the customers/stakeholders and effectively carries out the responsibilities bestowed up on it by the government. With this in mind, the University is undertaking a radical change-Business Process Reengineering (BPR) in different core and support processes. Human Resource Management (HRM) is one of the sub-process that emphasis on establishing a seamless, efficient, effective,and responsive human resource management processes. The purpose of this Team is to assessthe current human resource management process that is being followed at the University which includes, human resource planning,employment, training and development, compensation and benefits, promotion and transfer,archives and documentation, and values and . In line with this, the HRM sub-process reengineering aims at autonomous governance and management system to meet the challenges from the competitive environment and meet the changing demands of stakeholders while addressing the Universitys core processes, which include Teaching and Learning, Research and Community Services.

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