Human Resource Management

Unit 10

Unit 10

Human Resource Information System

Structure: 10.1 Introduction Objectives 10.2 Concept of Human Resource Information System 10.3 Components of Human Resource Information System 10.4 Types of Human Resource Information System 10.5 Application of HRIS in Human Resource Management 10.6 Implementation of Human Resource Information System 10.7 Benefits of Human Resource Information System 10.8 Impact of Implementation of Human Resource Information System 10.9 Summary 10.10 Glossary 10.11 Terminal Questions 10.12 Answers 10.13 Case Study

10.1 Introduction
In the previous unit, we discussed the concept and objectives of job evaluation. We also learnt competency and the various job evaluation methods. Information is the unrefined material of planning. A quality planning effort cannot be done without proper and adequate information. Information is provided in an organisation by an inter-related set of procedures and process known as an information system. An information system especially developed for the human resource management function is called an HRISHuman Resource Information System. HRIS has become one of the most important tools for many businesses. Even a small, 20-person office needs to realise the benefits of using HRIS to be more efficient. Many firms do not realise how much time and money they are spending on manual Human Resource Management (HRM) tasks until they sit down and take inventory of their time. HRIS is advancing using Information Technology (IT). It allows companies to cut costs and offer more information to employees in a faster and more efficient way. Especially in difficult economic times, it is critical for companies to become more efficient in every sector of their business and Human Resource (HR) is no exception.
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An information system is an interrelated set of procedures and processes to provide information for decisions. Information is data that has been processed so that they are meaningful. It adds to the representation of an idea. It corrects and confirms previous information. It tells us something which we did not know. Many organisations have computer-assisted information systems. HRIS refers to software packages that address HR needs with respect to planning, employee information access and employer regulatory compliance. The following text begins with a discussion of human resource planning, followed by human resource management systems. The HRIS is basically a database system developed to assist HR in decision making and reporting. It is normally one of the elements of the overall management information system of an organisation. It is an IT enabled HR service available to the HR managers for data analysis and to help in the decision making process. HRIS helps the HR managers to make an effective decision by ensuring them an adequate and timely availability of all relevant information. This information system use to improve the performance of overall organisation and improve relationships among organisation. An effective HRIS provides information on anything the company needs to track and analyse about employees, former employees and applicants. In this unit, we will discuss the objectives, components and types of HRIS. We will also learn the application of HRIS in HRM, benefits of HRIS and the process of implementing HRIS in an organisation. Objectives: After studying this unit you should be able to: analyse the objectives of an HRIS list the components and types of HRIS describe the applications of an HRIS in human resource management evaluate the benefits of an HRIS explain the HRIS implementation analyse the impact of implementation of HRIS

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10.2 Concept of Human Resource Information System

HRIS, HR Technology or HR modules are an intersection between HRM and IT. It merges HRM as a discipline and in particular its basic HR activities and processes with the IT field, whereas the planning and programming of data processing systems evolved into standardised routines and packages of Enterprise Resource Planning (ERP) software. On the whole, these ERP systems have their origin in software that integrates information from different applications into one universal database. The linkage of its financial and human resource modules through one database is the most important distinction to the individually and proprietarily developed predecessors, which makes this software application both rigid and flexible. HRIS has become significant for decision-making and policy formulation as well as for ensuring fairness and equity in HR policies and practices. There is an increasing realisation that for organisational survival and growth in a competitive environment, human resource is the most critical resource. This coupled with the increase in the cost of hiring, retaining, developing and motivating people to perform at their best has pushed organisations to base their HR decisions on sound logic and thereby, on proper information. HRIS becomes a major asset from this point of view. The growing need for transparency among the employees and the society is another factor that is compelling organisations towards proper management of information in all areas, including HR. HRIS is a key management tool which collects, maintains, analyses and reports information on people and jobs. It is a system because it integrates all the relevant data, which otherwise might have been lying in a fragmented and scattered way at various points in the larger system, converts this data into meaningful conclusions or information and makes it accessible to the persons who need it for their decisions. This incorporation of data can be at the large-scale level at the level of a nation or on broader level- at the level of an industry or at the smaller level, that is, at the level of an organisation. HRIS includes all the HR functions of the organisation, namely, recruitment and selection, training and development, wages and salary administration, incentives and benefits, grievance resolution, human resource planning and
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succession planning. It has three elements, namely, input, process and output. HRIS can be defined as an automated system for gathering, storing, retrieving, analysing and disseminating HR-related data for facilitating operational, managerial and strategic decision making that impacts human resources. The objectives of an HRIS are to: increase the ability of the human resource management to influence new emerging opportunities and challenges in the business world. ensure efficient collection, storage and distribution of HR-related information in a paperless environment. facilitate the HR managers to devote more time to strategic issues by relieving them from routine operations through the employee self-service system. facilitate employees direct and online access to information on training, payroll and other relevant matters.

Self Assessment Questions 1. HRIS has three and_______. elements, namely _________, ___________

2. Objective of HRIS is to increase the ability of the ________________ to influence new opportunities. 3. ________ facilitate the HR managers to devote more time to strategic issues.

10.3 Components of HRIS

In the previous section, we discussed the concept of HRIS. Let us now discuss the components of HRIS. HRIS performs three interconnected activities as a database: i) receiving inputs in the form of data from different sources. ii) storing and processing data with the purpose of transforming them into meaningful information iii) generating output in different forms, as required by the users.

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Figure 10.1 depicts the three activities that an HRIS performs.

Input

Data storage and processing

Output

Fig. 10.1: HRIS Activities (Source: Pravin Durai, Human Resource Management, Pearson Publication, New Delhi .2010.)

Input Input refers to all employee-related data. HR policies, procedures, corporate goals and information about the statutory provisions entered into HRIS for conversion into the desired form of output. Data processing Data processing refers to the storing and processing of data by a computer with the help of the software that issues instructions for processing. Output Output refers to the generation of reports in the form desired by the users. This is the final stage of an HRIS process. Activity 1: Interview a HR manager in a company, and ask how HRIS is facilitating them in HR functions? Hint: Refer Section 10.2

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Self Assessment Questions 4. ________ refers to all employee-related data. HR policies, procedures, corporate goals and information about the statutory provisions entered into HRIS for conversion into the desired form of output. 5. __________ helps in storing and processing of data by a computer with help of the software that issues instructions for processing. 6. ______ is the final stage of an HRIS process.

10.4 Types of HRIS

In the previous section, we discussed the components of HRIS. Let us now discuss the types of HRIS. Some organisations may use HRIS only for data storage and report generation, while some others may use it in decision making processes and in simulation. HRIS supports management at three levels of an organisation. 1. The electronic data processing level The purpose of HRIS at the electronic data processing level is collecting, storing, manipulating, analysing retrieving and distributing relevant information of human resources in the organisation. 2. The Management Information System (MIS) level MIS is the next level of HRIS in which HRIS has much wider and advanced applications. It is a system that provides information to managers, who use it for decision making. 3. The decision support system level The last level of an HRIS is decision support system. The primary users of this level are mainly top management and executives. It helps users in simulating situations and making decisions. Self Assessment Questions 7. The purpose of HRIS at the _______ level is collecting, storing, manipulating, analysing retrieving and distributing relevant information of human resources in the organisation. 8. _________ is a system that provides information to managers, who use it for decision making. 9. __________ helps users in simulating situations and making decisions.
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Activity 2: Analyse existing records, reports and forms in a company to determine the requirements for data in the HRIS.

10.5 Applications of HRIS in Human Resource Management

In the previous section, we discussed the types of HRIS. Let us now discuss the applications of HRIS in HRM. HR needs to handle many things in an organisation including increasing numbers of employees and different HR activities. It became important for many organisations to bring almost all HR activities under HRIS. Different applications of an HRIS are as follow: Applicant tracking system Many organisations are now gradually adopting and installing applicant tracking system software. The purpose of this system is to give support to recruitment process and to streamline the overall recruitment process. Training and development system The purpose of a training and development system is to help the employees gain new knowledge. HRIS facilitates workplace e-learning by the employees as part of their training programme. Compensation management system The compensation management system aims at computing employee payments through an integrated payroll system. This compensation system normally considers employee working hours, attendance and productivity for computing the salary of the employees. Performance management system The main goal of the performance management system is to track employee performance reviews and due dates for next reviews. Manpower planning system The manpower planning system manages the employee inventory and supports several HR activities. Succession planning system The succession planning module brings the identified and selected employees into the succession channel.

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Grievance management system The grievance management assists the management in pre-empting employee grievance by analysing the nature, sources and frequency of earlier grievances.

Self Assessment Questions Fill in the blanks 10. ____________ is to give support to recruitment process and to streamline the overall recruitment process. 11. The ________ aims at computing employee payments through an integrated payroll system. 12. The ______ module brings the identified and selected employees into the succession channel.

10.6 Implementation of Human Resource Information System

In the previous section, we discussed the applications of HRIS in HRM. Let us now discuss about implementing an HRIS. Many organisations have realised the need to apply technology to human resource management in order to develop human resources as strategic tools to survive and grow in an extremely competitive market. In fact, there is a general expectation that the future success of human resource depends on how effectively it is integrated with technology. Generally, implementation of HRIS is expensive for an organisation; they need to be careful in deciding its installation, each company has their own approach to implementation of HRIS. Following stages can be considered for HRIS installation: Determination of the need for HRIS Before implementing an HRIS, the management must clearly decide the need for an HRIS in the organisation. First it needs to assess the present HR operations that require systemenabled support and then the extent to which these operations require such supports. Factors such as size of the organisation, strength of the workforce, present level of HR efficiency and the problems an organisation is facing in current HR operations need to be considered carefully before HRIS implementation. Select a project team for implementation It would be a major effort to find and select the HRIS that will meet the organisational needs. The
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problem is that an organisation rarely gives enough thought into choosing who will implement the HRIS. The management needs to choose a specialised team for this purpose. The main task of this team is to supervise the entire operation from planning to execution of the project, including postinstallation monitoring. It is extremely important that the organisation put the same effort into picking who will handle the implementation that they did in selecting an HRIS application. Following steps can help to get the best HRIS implementation: Find out exactly who will be doing the HRIS implementation and check their background It is very important to know how many implementations have been done by the team. It is a tough job for an organisation to find an expert or a team who can perform well in handling HRIS implementation. The team may be certified on HR system and/or HR payrolls, but until they have performed a large number of installations they will not be able to handle all the pitfalls and issues that inevitably arise. It is also a good idea to ask for references about the individual who will be working on the HRIS implementation. Set HRIS implementation expectations First it needs to be verified that the HRIS implementation consultant and/or staff are qualified enough to handle the job - the organisation needs to make sure that both sides are in full agreement as to what is included in the scope of the project. Avoidable misunderstandings regarding expectations create cost overruns and can lead to poor implementations. Make sure everything is in writing and specifically they should provide a detailed list of project requirements and an estimated time of completion for each. Most companies will provide a low and high expected range (two to three months, for example). HRIS implementation project cost versus hourly or daily HRIS implementation projects are typically quoted either on daily rate basis or by project basis. Project costing has some advantages, because organisations would not go over the quoted amount unless needs arise that are outside of the projects original scope. The disadvantage of project costing is that companies are going to charge a higher rate since they have to quote the project on the high side. Daily or hourly quotes for consulting are fine, but make sure to get a detailed plan on the consulting time. Employers can break down the hours according to each
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step in the implementation process: half a day for network installation, one day for code table setup, one day for benefits setup, etc.

Preparation for HRIS implementation Before the organisation begins the implementation, make sure all information and data that the consulting staff will need is ready. It would not be good for a consultant doing nothing while waiting for data on benefits plans. Organisations should provide all the facilities that the consultant or the implementation team will work with during the process (IT staff especially - make sure they know when their services will be needed). Stay on track As an HRIS system implementation is taking place and the customers are learning more and more about the capabilities of their new HR software, make sure they dont get off track with work that is outside the scope of the project. They need to finish the core project first and then determine how much quoted time is left for other considerations.

Self Assessment Questions 13. ________ must clearly decide about the need for an HRIS in the organisation. 14. Implementation of HRIS is __________ for an organisation. 15. ________ projects are typically quoted either on daily rate basis or by project basis.

10.7 Benefits of Human Resource Information System

In the previous section, we discussed about implementing an HRIS. Let us now discuss the benefits of HRIS. An HRIS, which is an interaction between human resource and information technology, is an important tool for developing competitive advantage out of human resource. HRIS keeps the organisation healthy by monitoring and optimising the human resources available in the organisation constantly. The benefits of HRIS are as follows: Effective use of human resource: HRIS standardises the processes for key HR functions which ensure that there is uniformity in the performance of HR activities in the entire organisation.
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Ability to manage voluminous data: An HRIS can handle large data. This requires reconciliation with high speed and great accuracy. Reduction in labour cost: HRIS has an ability to reduce the labour requirement in the HR department significantly. Faster and effective HR decisions: HRIS is capable of generating alternative decision possibilities. Better supervision and control over human resources: the effectiveness of supervision and control exercised by the managers over human resource is higher than in a manual environment. Accessible: HRIS enables its users to have anytime, anywhere access with multiple channels.

Self Assessment Questions 16. HRIS _____ the processes for key HR functions which ensure that there is uniformity in the performance of HR activities in the entire organisation. 17. HRIS has an ability to reduce the _________ in the HR department significantly. 18. HRIS enable its users to have anytime, anywhere access with __________ channels.

10.8 Impact of Implementation of Human Resource Information System

In the previous section, we discussed the benefits of HRIS. Let us now discuss the impact of implementation of HRIS. HRIS has a great impact on organisations that implement them. Most often, organisations replace several related systems, such as employee database, payroll and benefits systems, with one HRIS that does it all. Many companies go through a process of comparing and evaluating several HRIS packages using a team of analysts or managers from various departments affected HR, payroll, benefits, employee relations, training, etc. The HR department looks for improved reporting of employee data, while payroll would be concerned with the systems paycheck calculations and regulatory reporting, and benefits may be looking for a more streamlined enrollment process. The hiring process is a good example. As a person is recruited,
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hired and paid, each department may have its own specialised system and process for managing the employee data. As the team evaluates an HRIS software package, it begins to get a better grasp on what the companys business processes are, and therefore what the company might require in an HRIS. The team will most likely find that HRIS evaluation team members spend most of their efforts building selection criteria and choosing an HRIS, instead of setting expectations and building executive support. There are three primary activities in an HRIS implementation: Configuring the HRIS for the organisations business processes and policies. Interfacing data with other systems and converting historical data into the HRIS. Preparing the organisation for the HRIS.

An HRIS comes with built-in processes for most HR activities, but an organisation needs to customise the system to process according to their specific needs. For example, every HRIS supports the process of benefits open enrollment, but the system does not come delivered with a companys specific benefit providers and eligibility rules. Configuration tasks then become a process of understanding the companys business processes well enough to programme that logic into the HRIS. This mapping of business processes and policies into system control tables requires people who understand both the business process and the HRIS typically the existing IT support and HR business analysts. The HRIS project team must track progress not only on the technical aspects of implementing the HRIS, but also on the softer side of managing the organisation as a whole to accept the new business processes that come with the HRIS. Companies typically underestimate this changemanagement effort. From the very beginning there must be a focus on preparing the organisation and the employees for the new HRIS. For example, HR and payroll may have reported to separate areas of the company, and parts of HR business processes were scattered throughout various departments. But once HRIS is implemented, the previous organisations are transformed to report to a single authority and a sharedservices group is established to perform the integrated work processes that
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were once scattered. This is a common, but often unexpected, result of HRIS implementations. During the implementation phase, organisation should also be determining what their support model will look likewhat kind of organisation will be required to support in HRIS. All of the items mentioned so far force HR managers to become involved in what is usually perceived as an IT project. They may be accustomed to pushing responsibility for such projects onto IT managers, but implementing an integrated HRIS requires the HR managers participation and active involvement in scoping, implementation, cutover, resourcing and management. HRIS leads to more integrated reporting of employee data, which can lead to efforts that benefit the companybetter reporting of employee costs, skills and requirements, time-keeping and recording, etc. It gives information to senior managers that can be used to improve the application of HR policy or to cut costs. The user should be properly trained before using HRIS. He/she must know the business process and how it relates to the HRIS. In most companies, a certain portion of users will be able to do analytical thinking where as others will not. The resulting shakeout has to happen, and it is most often painful, either for the employees themselves or for the HRIS support organisation. If a more centralised, integrated HR organisation doesnt surface during the implementation period, the organisation will tend to evolve in that direction. Most HRIS packages rely on relational data models, higher-level programming languages and interactive data management, presenting technical requirements for which some IT analysts may not be ready. The HRIS may have proprietary languages or facilities, requiring new IT skills. Often these skills will be in high demand, driving a premium rate of pay. Internal resources may opt to leave the company for a higher pay or they may demand higher pay at the company. The higher pay might be outside the HR guidelines for fair salary. The resulting dilemma can create retention problems. HR usersthe analysts in HR, payroll and benefitsmust take a more active role in ongoing support and system changes.

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Some companies depend too much on consulting firms or contractors to perform an implementation. Given the level of change such a project will create, there will be areas that resist the implementation. This should motivate other employees to follow their colleagues paths and will discourage internal system experts leaving the company for a higherpaying consulting job. Training programmes can help employees to understand the system well. Many organisations also find it useful to defend the steering committee past HRIS implementation and into the productive life of the HRIS. The steering committee is an excellent group to monitor the ongoing quality of HRIS operations, manage relationships with the HRIS vendor and clear the path for later HRIS upgrades or enhancements. It may take years for a firm to adjust to a new HRIS. As it does, most will see that their organisational structure will tend to reflect the HRIS structure. This is natural managers for years have organised their departments to fit the way work is done and the organisational culture often reflects that structure. When the way that work is done changesand an HRIS will engender that changeits natural for the organisation to change as well. Structural and cultural changes might be painful, and people will resist, but its hard to fight these natural tendencies. Instead of fighting them, managers need to be aware of what is happening and proactively prepare for this new world. Activity 2: Read the article HRIS Helping HR and prepare a list of benefits of using HRIS. Refer: http://www.employeeeconnect.com/pdf/sept.2001employeeconnect.pdf Self Assessment Questions 19. _______ has a deep effect on organisation that implements them. 20. Some companies depend too much on _________ to perform HRIS implementation. 21. __________ help employees to understand the HRIS well.

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10.9 Summary
Let us recapitulate the important concepts discussed in this unit: HRIS includes all the HR functions of the organisation, namely, recruitment and selection, training and development, wages and salary administration, incentives and benefits, grievance resolution, human resource planning and succession planning. A HRIS performs three interconnected activities as a database: (i) receiving inputs in the form of data from different sources. (ii) storing and processing data with the purpose of transforming them into meaningful information. (iii) generating output in different forms, as required by the users. HRIS supports management at three levels of an organisation. The electronic data processing level, the management information system level, and the decision support system level. Different applications of an HRIS are applicant tracking system, training and development system, compensation management system, performance management system, manpower planning system, succession planning system and grievance management system. Important benefits of HRIS are effective use of human resource, ability to manage voluminous data, reduction in labour cost, faster and effective HR decisions, better supervision and control over human resources, and easily assessable. Implementation of HRIS is expensive for an organisation. They need to be careful in deciding about its installation, each company has their own approach to implementation of HRIS. The stages that can be considered for HRIS installation are determination of the need for HRIS, selecting a project team for implementation, who will be doing the HRIS Implementation, setting HRIS implementation expectations, HRIS implementation project cost versus hourly or daily, preparation for HRIS implementation, stay on track. HRIS have a deep effect on organisation that implements them. Most often organisations are replacing several related systems, such as employee database, payroll system and benefits system, with one HRIS that does it all. Many companies go through a process of comparing and evaluating several HRIS packages using a team of analysts or
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managers from the various departments affected HR, payroll, benefits, employee relations, training, etc. The HR department looks for improved reporting of employee data, Payroll is concerned with the systems paycheck calculations and regulatory reporting, while benefits may be looking for a more streamlined enrollment process. The hiring process is a good example. As a person is recruited, hired and paid each department may have its own specialised system and process for managing the employee data. As the team evaluates an HRIS software package, it begins to get a better grasp on what the companys business processes are, and therefore what the company might require in an HRIS.

10.10 Glossary
Enterprise resource planning: Enterprise Resource Planning (ERP) is an integrated computer-based system used to manage internal and external resources, including tangible assets, financial resources, materials, and human resources. Management Information system: It is a computer based or manual system that transforms data into information useful in the support of decision making. Payroll: The total amount of wages and salaries paid by a company to its employees.

10.11 Terminal Questions

1. Discuss the concept of HRIS and its objectives. 2. Discuss the types of HRIS. 3. Explain the applications of HRIS in human resource management. 4. Discuss of the benefits of HRIS in an organisation. 5. Explain the stages of HRIS implementation. 6. Discuss the impacts of HRIS implementation in an organisation.

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10.12 Answers
Self Assessment Questions 1. Input, process, output 2. Human resource management 3. Human resource information system 4. Input 5. Data Processing 6. Output 7. Electronic data processing 8. Management Information System 9. Decision Support System 10. Applicant tracking system 11. Compensation management system 12. Succession planning 13. Management 14. Expensive 15. HRIS Implementation 16. Standardises 17. Labour requirement 18. Multiple channels 19. HRIS 20. Consulting firms 21. Training programme Terminal Questions 1. HRIS includes all the HR functions of the organisation, namely, recruitment and selection, training and development, wages and salary administration, incentives and benefits, grievance resolution, human resource planning and succession planning. For more details, refer section 10.2. 2. HRIS supports management at three levels of an organisation. The electronic data processing level, the management information system
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level, and the decision support system level. For more details, refer section 10.4. 3. Different applications of an HRIS are as follow, applicant tracking system, training and development system, compensation management system, performance management system, manpower planning system, succession planning system, and grievance management system. For more details, refer section 10.5. 4. Important benefits of HRIS are effective use of human resource, ability to manage voluminous data, reduction in labour cost, faster and effective HR decisions, better supervision and control over human resources and easily assessable. For more details, refer section 10.7. 5. Implementation of HRIS is expensive for an organisation; they need to be careful in deciding about its installation, each company has their own approach to implementation of HRIS. The stages that can be considered for HRIS installation are determination of the need for HRIS, selecting a project team for implementation, who will be doing the HRIS implementation, set HRIS implementation expectations, HRIS implementation project cost versus hourly or daily, preparation for HRIS implementation, stay on track. For more details, refer section 10.6. 6. The HR department looks for improved reporting of employee data, payroll is concerned with the systems paycheck calculations and regulatory reporting, while benefits may be looking for a more streamlined enrollment process. The hiring process is a good example. As a person is recruited, hired and paid each department may have its own specialised system and process for managing the employee data. As the team evaluates an HRIS software package, it begins to get a better grasp on what the entire companys business processes are, and therefore what the company might require in an HRIS. For more details, refer section 10.8.

10.13 Case Study

Sridhar Pharmaceuticals Limited is a company engaged in the production of healthcare products for the past 15 years. This company has been offering competitive compensation packages to its employees and has excellent array of HR policies and practices. Yet, its track record in employee hiring

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has not been very impressive for some time since some of the new entrants performance was simply dismal. The management was not impressed by the explanations provided by the HR department. So it appointed an external HR expert to look into the problems of the HR department. The external HR expert, who audited the HR policies, procedures and performance of the HR department, recommended the introduction of an HRIS in a phased manner. As a first response to the recommendation of the external HR auditor, management decided to implement the applicant tracking system in the recruiting section of the HR department. It instructed the HR manager to plan and implement the system in a hassle free way in close consultation with the trade union. Discussion Questions: 1. If you are in the position of HR manager in Sridhar Pharmaceutical how do you find HRIS is going to help you in the recruitment process? (Sources: Durai, P. (2010). Human Resource Management. New Delhi: Pearson Publication.) References/ E- references: Durai, P. (2010). Human Resource Management. New Delhi: Pearson Publication. Kavamagh, M. J., and Thite, M. (2009) Human Resource Information System. New Delhi: Saga Publication. Fisher, S, and Shaw. (2010). Human Resources Management. New Delhi: Cengage Publication. Aswathappa, K. (2010). Human Resource Management. New Delhi: Tata McGraw Hills. Wayne, C. F. (1998). Managing Human Resource. Irwin/McGraw Hills.

E-References: http://www.hr.howard.edu/HRIS/default.htmHuman Resource (Retrieved on 26 February, 2012) http://www.insightcp.com/res_09.html(Retrieved on 26 February, 2012) http://www.egyankosh.ac.in/bitstream/123456789/35600/1/unit-16.pdf (Retrieved on 26 February, 2012)
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