Could you help me on the way how to handle and manage payroll and compensation system for employees?

You may manage the leave record + add the remuneration + deduction sheet in excel separately and then combine them through VLOOKP in one sheet if you are a small company otherwise go for an ERP.

Any payroll or compensation system should have a basic payment and incentives.

·         There should be a basic pay. It would be based on no of days worked. A person who is present for all the working days and there is no roster non adherence would get the full basic pay.

·         There should be incentives for star performers( In the sales dept sometimes  incentives are more than the salary). Time rate(incentive based on more hours worked) , piece rate (incentive based on extra units produced over standard)are some of the elementary incentive schemes used.

·         Incentive should not hamper the quality of work. For that there has to be strong quality control.

·         Performance bonus should be calculated on a monthly basis and also on a yearly basis for the annual  appraisal .

Any payroll or compensation system should have a basic payment and allowances

There should be a basic pay. It would be based on no of days worked

Any ERP system  is the best tool to manage (posting and track) employees payrol and compensation system