Payroll

Who writes this rubbish? Media jump the shark over Novopay

TVNZ has an article about Novopay, I swear to go it must have been written by an embedded union flunky. Look at this:

A new bug in the beleaguered Novopay system could see education staff sacked at the end of the school term.

The glitch is threatening to terminate contracts on April 21, many of them the contracts of permanent teaching staff.

Epsom Girls Grammar School is among the affected schools, with 21 staff members scheduled for termination.

Really? A software system can over-ride legal and statutory obligations, not to mention contractual employment conditions and unilaterally “sack” staff. What a load of horseshit. However it doesn’t get any better.

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Teacher Payroll Whining Same Old, Same Old

The teacher unions are kicking up a stink because of ongoing problems with Novopay…of course they have never been happy with even the previous provider.

Check this press release from the NZPF in February 2008:

The New Zealand Principals’ Federation has criticised the Ministry of Education, following major payroll errors which have created a bureaucratic nightmare across the country.

Datacom is contracted by the Ministry of Education to provide payroll services to more than 80,000 New Zealand teachers. The latest payroll round – the first of the school term – is filled with errors, says NZPF President Paddy Ford.

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A Contrarian view on Novopay

A reader emails about Novopay:

Having observed the Novopay debacle over the last few months I have been dismayed by the lack of cold hard facts that would enable us to make an informed decision on this. Sure Parata has not handled it well but is the Novopay system actually that bad. The press has not told us what error rates are acceptable, what Novopay are achieving or what Datacom did before them. In frustration I did a quick bit of research online can came up with the following.

From two separate US studies I found an acceptable payroll error rate of 1.8%-2% is standard. Lets use 2% as it makes the maths easier. To be fair to Novopay we should probably use 3-4% in their first 6 months.

[Table 22 & 23 are relevant. Table 23 has the 1.8%. Table 22 actually shows around 95% first time error free which is really a 5% error rate.]

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A good idea

Once, every now and then, David Farrar comes up with a good idea. Today he has solved the teacher payroll problem.

The performance of the new payroll system does appear to have been not satisfactory. Having said that, have to be careful to make every single error a major story. I imagine the old payroll system would always have a dozen or so errors in it, out of 60,000 or so teachers paid. What I’d be keen to see reported is how many errors have occurred each pay period since it was implemented.

I do feel very sorry for those teachers and schools that have to cope with not being paid. Worse of all for them, there is nothing they can do about it.

That is why I have a solution. Bulk Funding. If we delegated salaries to every school, then each school would choose its own payroll provider (or do it themselves) and they could simply not use a company like Novopay, if there performance is not satisfactory.

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