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HUMAN RESOURCE PROCESS OVERVIEW 117

case, it is also an economic decrement event). Once the revenue is collected, it is made
available to the Financing process and, in turn, is used to pay for the labor acquired by
the Human Resource process. For this to happen, the Human Resource process must
include at least one economic event that transfers in the labor (i.e., an increment event).
This is the acceptance of the labor services. It must also include at least one economic
event that transfers out the cash for wages and salaries (i.e., a decrement event). This is the
payroll event (i.e., the payment for the labor services). The Human Resource process for
all firms is similar regardless of whether the firm is engaged in manufacturing, in service,
or in retail.

Tragg's Custom Surfboards

Additional Background Dan Tragg has gathered a small but dynamic and enthu-
siastic workforce for his company. Most of the employees have been with him since the
company's inception. Dan is the President and Chief Executive Officer of the company.
Casey Cameron, Dan's sister, is the company's Managing Director. Sara Tierno is the com-
pany's Marketing Director. Paul Kalmann is the Production Supervisor. Miguel Santana is
the Controller. They are all full-time, salaried employees. The remaining employees are
also full-time but they are paid on an hourly basis. Brenda Chan, Nancy Wood, and John
Walker comprise the sales force. David Sinclair, Theresa Chung, and Juan Santiago are the
three full-time production employees. Edward Israel is the accounting clerk.

Model the Payroll Cycle Using REA Tragg's Human Resource process is rela-
tively simple. If the company needs to hire new employees, Cas~ Cameron, the Managing
Director, places an advertisement in the local newspapers. They also rely on referrals from
their existing employees. Casey is responsible for interviewing all potential employees.
If they have the appropriate qualifications, she then refers them to the appropriate super-
visor (i.e., sales candidates to the Marketing Director, production candidates to the
Production Supervisor, and accounting candidates to the Controller). She discusses the
candidates with the appropriate supervisor and makes the final decision with regard to
hiring the individual.
When an employee is hired, the accounting clerk enters his or her personnel infor-
mation into the database. The sales force, production team, and accounting clerk are paid
on an hourly basis. Tragg's pays all employees for holidays and pays the hourly staff time-
and-a-half for overtime. All employees are paid Qll...!~ 15~ and the last day of the month.
On payday (the 15th or the last day of the month or the first business day following
that day), the supervisor for each department verifies the accuracy of each employee's
timecard and inputs the hours for each into the database. One copy of the timecard is filed
in the department and another is sent to the accounting department for filing. (It is impor-
tant to note that this part of the process is not actually part of the payroll process but rather
actually part of the conversion process and is, therefore, not described in Figure 5-1.)
The database automatically calculates payroll based upon the information that has
been entered into it. The accounting clerk is responsible for verifying the gross pay, with-
holdings, and net pay dollar amounts that are calculated by the database and for printing
the payroll checks.