Role of HRIS in Improving Modern HR Operations

Role of HRIS in Improving Modern HR Operations

 

Abstract

The role of HR is becoming pivotal in the 21st century. As organizations face stiff market and other external pulls and pushes, the HR becomes vital source for managing future challenges. A strategic HRIS provides important information about human resources needs and capabilities; this information assists the management team in establishing the organizational mission and setting goals and objectives in motion. Considering this framework, this paper aims to study the use of HRIS in improving HR operations. Particularly, it focuses on the need of HRIS in the performance of HRM functions at the lowest possible cost and also at a fast rate, which pose increased challenges for HR professionals. Organizations have started to automate these functions by introducing HRIS technology.

Keywords: Strategic HR Planning, Information Systems, HRIS Applications

Information Systems for Human Resources Management :

Information is an essential tool for managers in the retention, recruitment, utilization and evaluation of human resources in organizations. Since they support the goals and objectives of the organization, information systems play an important role in planning and management of human resources. These systems will serve as an important personnel administration operational programs, including employee record keeping, budget control, compensation, benefits management, and government reporting. A human resources information system (HRIS) is the integration of software, hardware, support functions and system policies and procedures into an automated process designed to support the strategic and operational activities of the human resources department and managers throughout the organization.

An HRIS database maintains an inventory of people, job skills, and positions and its system draws on these inventories for transaction processing, reporting, and tracking. The HRIS provides a foundation for a set of analytical tools that assist managers in establishing objectives and in evaluation the performance of the organization's human resources programs. The well designed HRIS will serve as the main management tool for aligning human resources department goal with long term planning goals.

Development of HRIS :

HRISs are systems used to collect, record, and store, analyze, and retrieve data concerning an organization‟s human resources. The collection of information on aspects of work life as diverse as salary and payroll, compensation, leave, accidents, superannuating and employee benefits has always been part of the human resource manager‟s function.

In the early development of human resource management, information systems, although often accurate and comprehensive, were mainly used for administrative and operational purposes. Forms were used to collect leave requests, workers compensation and accident data, and salary variation and superannuation entitlements. During the 1970s and 1980s, several factors radically changed attitudes towards human resource information systems. The increasing complexity of payroll systems in this period demanded more flexibility in, and access to information system. In large organizations, centralized payroll processing sections began to be separated from other human resource functions. Some organizations contracted their payroll responsibilities to external payroll bureaus with greater technological expertise, and for reduced costs.

Nature and Benefits of HRIS:

Modern human resource information systems are comprehensive, accurate and accessible systems for recording employee and work data relevant to HRM, HR and organizational planning. HRIS is the system used to acquire, store, manipulate, analyze, retrieve and distribute pertinent information regarding an organization‟s human resources. Its purpose is to facilitate, or support, straight, tactical and operational decision making, to avoid litigation, to evaluate programs, policies, or practice and daily operations Specific benefits of such systems include:

1.Improved planning and program development using decision support software.

2. Decreased administrative and HR costs

3. Accuracy of information

4. Enhanced Communication at all levels. Not all systems fulfill all these requirements, nor is such a complete system suitable for all organizations. Essentially however all HRIS contain information on:

 Employees

 Jobs and work conditions

 Positions

 HR events (e.g. recruitment. training and development, performance appraisals, and terminations).

Comprehensive and integrated HRIS can be used widely -in administrative, operational and strategic fields by HR and other managers. On the operational level HRIS data can be used to identify potential internal applicants for job vacancies, saying external recruitment costs and assuring employees of career opportunities. Strategically, such information may be used to gauge the effectiveness of current recruitment or promotional systems, their costs and/ or benefits, and enable subsequent changes of direction in line with proposed organizational strategies.

HRIS enables the human resource department to make a more active role in organizational planning. Computerization will make forecasting more timely, cost effective, and efficient. Integration and storage in a single database all of the human resources information. HRIS will accelerate the process of comparing costs and benefits of human resources activities.. An effective HRIS will facilitate the east storage and retrieval of human resources records that are very vital for operations. Human resources information systems (HRIS) can play an important part in acompany‟s HR function. After all, we live, work and play in the information age. Implementing an effective HRIS can be sure-fire for HR to stay on the cutting edge in its bid to deliver more effective and streamlined service.

HRIS can assist human resources in numerous ways, but particularly in their day-to-day duties by streamlining workflow processes through control processes, system interfaces and database validation. One of the most common HR gripes is being bombarded with mundane e-mail and administrative work that takes away from the actual practice of „walking the floor‟. For instance, a HRIS can automatically route e-mails to a generic mailbox that anyone in HR might open up and see what processing and transactions have been going on. For those e-mails that need approval it can use the information structure within the HR database to work out which person works in which division, who has approved it initially and who to forward that approval to the next person.

In this instance a database can also maintain all the rules, so if the e-mail is not acted on for several days, the HRIS then escalates the issue and goes to the next in charge or works out what it needs to do, which in turn reduces paper flow. When a new employee comes on board, for instance, the HRIS creates e-mails that need to be generated so that security knows about the new employee, switchboard is notified and the legal department is advised about if there are any compliance or registration issues.

With continued technological breakthroughs HRIS systems are becoming increasingly advanced. One of the most core HRIS functions is intranet HR self-service. Some larger companies use their intranet today for online appraisals, career management, sentiment surveys, training registrations and publishing people related company information, HRIS can also integrate with desktop applications including e-mail, word document merges and schedules via triggered actions within the HRIS, so that events and actions are monitored, documents generated, appointments booked and checked and emails prepared and sent (online analytical processing databases), real time systems, web GUI‟s and scanned data.

Types of Human Resource Information (HRIS)

Operational HRIS:

Operational human resource information systems provide the manager with data to support routine and repetitive human resource decisions. Several operational-level information systems collect and report human resource data. These systems include information about the organization‟s positions and employees and about governmental regulations.

1. Employee Information Systems: The human resource department must maintain information on each of the organization‟s employees for a variety of decision and reporting purposes. An employee profile usually contains personal and organization-related information, such as name, address, sex, minority status, marital status, citizenship, years of service or seniority data, education and training, previous experience, employment history within the organization, salary rate, salary or wage grade, and retirement and health plan choices. he employee inventory may also contain data about employee preferences for geographical locations and work shifts. Another part of an employee information system is an employee skills inventory. The skills inventory contains information about every employee, such as work experience, work preferences, test scores, interests, and special skills or proficiencies.

2. Position Control Systems: A job is usually defined as a group of identical positions. A position, on the other hand, consists of tasks performed by one worker. The purpose of a position control system is to identify each position in the organization, the job title within which the position is classified, and the employee currently assigned to the position. Reference to the position control system allows a human resource manager to identify the details about unfilled positions.

3. Applicant Selection and Placement Information Systems: After jobs and the employee requirements for those jobs have been identified and after a suitable pool of job candidates has been recruited, the candidates must be screened, evaluated, selected, and placed in the positions that are open. The primary purpose of the applicant selection and placement information system is to assist human resource staff in these tasks.

4. Performance Management Information System:

Performance management information systems data is frequently used as evidence in employee grievance matters. Performance management information can lead to a number of decisions beyond merely supporting the operational decision to retain, promote, transfer, or terminate a single employee.

5. Government Reporting and Compliance Information Systems: Government Reporting and Compliance Information Systems provide information needed both to maintain compliance with government regulations and to improve productivity and reduce costs associated with employees.

Tactical HRIS:

Tactical information systems provide managers with support for decisions that emphasize the allocation of resources. Within the human resource management area, these decisions include recruitment decisions; job analysis and design decisions, training and development decisions, and employee compensation plan decisions.

1. Job Analysis and Design Information Systems: The information inputs to the job analysis and design information system include data from interviews with supervisors and workers and affirmative action guidelines. Inputs also include information from sources external to the firm, such as labor unions, competitors, and government from sources external to the firm, such as labor unions, competitors, and government agencies. The outputs of the job analysis information system are job descriptions and job specifications. These outputs provide managers with the basis for many tactical human resource decisions.

2. Recruiting Information Systems: To direct the recruiting function, the organization needs to develop a recruiting plan. The plan specifies the positions to be filled and the skills required of the employees for these positions. To develop the plan and to monitor its success, a recruiting information system is necessary to collect and process the many different types of information needed to construct the plan, including a list of unfilled positions; the duties and requirements of these positions; lists of planned employee retirements, transfers, or terminations; information about the skills and preferences of current employees; and summaries of employee appraisals.

3. Compensation and Benefits Information Systems: The Compensation and Benefits Information Systems may support a variety of tactical human resource decisions, especially when compensation and benefits information is related to information from internal and external sources. Compensation and benefit plans can play an important part in improving an organization‟s productivity. Tying employee productivity to pay or encouraging increased productivity with incentive pay plans can often improve an organization‟s productivity substantially.

4. Employee Training and Development Systems: The training offered by the employee training and development systems must meet the needs of jobs available in the organization as identified through the position control system and the job analysis and design system. The training should also be directed at those persons interested and capable of benefiting from it, as identified by the skills inventory and human resource files.

Strategic HRIS:

1. Information Systems Supporting Workforce Planning: Organization involved in long-term strategic planning, such as those planning to expand into new market areas, construct  factories or offices in new locations, or add new products, will need information about the quantity and quality of the available workforce to achieve their goals. Information systems that support workforce planning serve this purpose.

2. Information Systems Supporting Labor Negotiations: Negotiating with craft, maintenance, office, and factory unions requires information gathered from many of the human resource information systems. The human resource team completing the negotiating needs to be able to obtain numerous ad hoc reports that analyze the organization‟s and union‟s positions within the framework of both the industry and the current economic situation. It is also important that the negotiating team be able to receive ad hoc reports on a very timely basis because additional questions and tactics will occur to the team while they are conducting labor negotiations.

3. Specialized Human Resource Information Systems Software: A great deal of software has been specifically designed for the human resource function. This software is available for all types and sizes of computers, including microcomputers. Software specifically designed for the human resource management function can be divided into two basic categories: comprehensive human resource information systems software and limited-function packages that support one or a few human resource activities. These software packages can be used in computer-based training programs designed by human resource department for training specific employees in-group and independent study programs.

 

4.Comprehensive HRIS: In the last few years, the software industry has produced several products that organize the various human resource information systems into integrated software referred to as human resource information systems, or HRIS, software. In general, the computerization of HRIS has resulted in an integrated database of human resource files. Position files, employee files, skills inventory files, job analysis and design files, affirmative action files, occupational health and safety files, and many other human resource files are constructed in a coordinated manner using database management systems software so that application programs can produce reports from any or all of the files. Thus, the human resource management director can produce reports listing likely internal candidates for open positions by running an application program that queries position files, job requirements files, and skills inventory files.

 Limited-Function HRIS: Numerous commercial software packages are sold for use on mainframes, minicomputers, and microcomputers that are designed to handle one or a small number of human resource functions. Microcomputer versions of these single-function software packages are relatively inexpensive and easy to operate and allow the human resource manager to automate a function quickly and easily. 

1. Training Software Many training software packages are available for all types and sizes of computers to provide on-line training for employees. They include  Management training software  Sales training software  Microcomputer training software  Word processing training software These software packages can be used in computer-based training programs designed by human resource department for training specific employees in-group and independent study programs. Computer-based training aids often simplify the trainer‟s job and allow the trainer to individualize instruction more easily than in traditional, group-based training classes.

 Information System (IS) Applications in Human Resource Management (HRM) The system of applications of Information Technology (IT) in HRM is referred to as Human Resource Module. HRIS merges some of HRM functions with the IT field, wherein the planning and programming of data processing systems have evolved into standardized routines and packages of Enterprise Resource Planning (ERP) software. ERP integrates the human resource module with finance, production, and sales and administration modules. Generally, traditional HRM functions are common to all organizations. They consist of tracking data regarding personal histories, family details, skills, capabilities, experiences, pay, benefits and grievances. Performance of these functions are increasingly complex, must be performed at the lowest possible cost and also at a fast rate, which pose increased challenges for HR professionals. Organizations have started to automate these functions by introducing HRIS technology. Development of client -server HRIS enables HR executives to assume responsibility and ownership of their systems compared to client-server architecture, which came largely in the form of mainframe computers and necessitated heavy capital investment to purchase program proprietary software. HRIS is developed around six main areas of human resource management viz., e-recruitment/applicant tracking, e-training, e- payroll, e-benefits, e-self service and e-time and labour management. HRIS is developed around six main areas of human resource management viz., e-recruitment/applicant tracking, e-training, e- payroll, e-benefits, e-self service and e-time and labour management. 

1. E-recruitment / Applicant Tracking: E-recruitment manages job descriptions and job vacancies, search for candidates and the interview process. E-recruitment maintains profiles, searches for and refers jobs to colleagues and follows the recruitment process. E-recruitment/applicant tracking system reduce administrative tasks, cost and time required to perform recruitment activities. It is also referred to as an applicant-tracking system; this is a web-based application that enables the electronic handling of organizational employment needs. These activities include posting job advertisement on web sites to stimulate and attract candidates, known as job boards. Job boards allow candidates to apply on-line and the candidates‟ data are stored on a database that allows searching, screening and filtering of applications. The application tracking system shortlists the candidates and arranges for interview and recruitment-related activities. A company must organize itself internally before starting any applicant tracking systems evaluation process. When preparing to evaluate an applicant tracking system, it is essential to form a collaboration of stakeholders and give these decision makers time to arrive at an informed decision. 

2. E-training: E-training provides a complete, scalable and open infrastructure that allows organizations to manage, deliver, and track employee training participation in on-line or classroom-based environments. Trainees interact with content and/or trainers at their own

pace. Managers set the business flow from order processing to delivery and performance management to training output automatically. E-training systems deploy content to global learners; make use of mixed media and multiple discrete sites on a single instance of the application, define competencies attained by trainees, and update the trainees‟ competency profiles. It aims to ensure that HRM provides the right resources, competent and experienced trainers, and consolidate training initiatives on a scalable and cost effective basis. In addition, it aims to measure training effectiveness. E-training, provides learning opportunities not only to employees, but to customer and all other stakeholders by providing one-stop administration & automated data. 

3. E-payroll: E-payroll models automatically collect data regarding employee attendance and work record for the purpose of evaluating work performance, they calculate various deductions including tax, and generate periodic pay cheques and tax reports. By preparing paperless online pay slips, the system is able to reduce administrative costs and time for the total operations. Employees too can view their exclusive data and get personalized reports. Payroll systems can define standard rules for automatically assigning and changing employee salary by using simple formulae. They are able to control processing rules and calculations using fast formula and use logic for complex cases. They can manage global compensation with one application by implementing a core payroll engine and installing local extensions to add the necessary functionality, reporting and process for individual countries. E-payroll is able to process from data, simultaneously, fully reconciled results and multiple employee groups. 

4. E-benefits: E-benefits administration models enable HR professionals to track and administer diverse and complex benefit plans, employee benefit programs which may involve transpiration medical and health care, insurance, pension, profit-sharing, and stock option benefits. Such modules, through internet-based automation, can enable HR to improve benefits support and analysis whilst reducing time and costs involved in the administration, while increasing the consistency decisions on compliance issues at various levels across the organization. 

5. E-self service human resource: E-self service HR modules collect process and manage all other kinds of data and information. or example, employees‟ demography profiles and addresses recruitment, selection training, development, promotions, capabilities, skill mapping and compensation planning. Such a module would allow individual employees to update and use employee-specific information, personalized to an individual‟s role, experience, work content, language and information needs. This module helps employees in managing everything from profiles including skills, resumes, contact details, self-appraisal data, bank data, learning, benefits and payroll. It empowers managers to operate transfers, employee training enrollment, performance appraisals, competency mapping, career planning and development and terminations. Thus, individual employee and managers are empowered to update information in order to streamline business processes, reduce costs and errors, increase speed, and enhance service.

 6. E-time and labour: E-time and labour automates entire time and attendance records keeping process and operations through an automatically generated virtual time card. The time and labour management module, by interacting with information technology, collects and evaluates time and work information. It supports policies for holidays, over-time, and rounding. It improves reporting, extracting, and processing with a single database of employee time-related information. It provides an intuitive, web-based interface. The labour management module, by interacting with information technology, collects and evaluates time and work information. This module provides broad flexibility in data collection methods, human resource distribution capabilities and data analysis, and helps in establishing organizational cost accounting capabilities. This module allows entering time via web browser, mobile device and time card. It defines rotation plans based on shifts and work plans and employee mobility among departments or units. It supports policies for holidays, over-time, and rounding. It improves reporting, extracting, and processing with a single database of employee time-related information. This module is integrated automatically with other modules of human resource management like payroll and benefits.

 Strategic HR Planning & HRIS :Proactive HR managers ensure that their HRIS contributes to organizational performance. A recent development in the uses of HRIS in many has been the linking of „benchmarking‟ practices to the design, choice and implementation of such systems as a directly strategic initiative. Integration with organizational strategic objectives is achieved by the subsequent establishment of performance targets and quantitative measures. As a strategic „tool‟, HRIS can be used to contribute to the development and modification of HR plans, on both quantitative and qualitative bases, and to feed into specific HRM functions. 

Relationship of HRIS with Overall MIS: Information is the backbone of healthy and efficient business management. An information system allows the collection and processing of data to produce useful information for designated users at each level of management. Information management must conform to well-defined principles, run on appropriate software, and be completely adapted to your organization within an integrated system usually known as Management Information System (MIS). Management Information System is the entire set of systems and activities required to manage, process, and use information as a resource in the organization. HRIS is the part of MIS that provides the information regarding workforce in the organization and facilitates the decision makers in decision making process in this regard. 

Strategic HR Planning and HR Information Systems: Proactive HR managers ensure that their HRIS contributes to organizational performance. A recent development in the uses of HRIS in many has been the linking of „benchmarking‟ practices to the design, choice and implementation of such systems as a directly strategic initiative. Integration with organizational strategic objectives is achieved by the subsequent establishment of performance targets and quantitative measures. As a strategic „tool‟, HRIS can be used to contribute to the development and modification of HR plans, on both quantitative and qualitative bases, and to feed into specific HRM functions. HR data, if collected effectively and contained within computerized, accessible systems, can both compare organizational HR „bottom line‟ outcomes by HRM function, between functions and with national or international performance benchmark

Purposes of HRIS: All organizations and their HR mangers need to consider whether their HRIS will be primarily used for collecting, analyzing, interpreting or reporting employee information. The nature of the system chosen should reflect this primary purpose, based upon a realistic analysis of needs prior to its introduction. Small organizations with stable workforces and secure markets do not require complicated data analysis, but can benefit from comprehensive and accurate databases for reporting purposes. On the other hand, large organizations in competitive and dynamic industries demand strategic HRIS. Every organization needs to assess its particular needs and identify the most appropriate information system for its chosen purposes. 

Common HRIS Functions: Mainly following functions are performed by the HRIS in different organizations.  Job analysis information can be placed in the HRIS.  The program can write job descriptions and job specifications.  Constant monitoring of compliance with EEO legislation.  Maintain records of rejected applicants.  Saves money and time in compiling reports.  Ensure that women and minorities or not be adversely affected.  Track minority hiring, recruitment, and advancement.  Forecast supply and demand of labor from both the internal and external labor markets.  Useful for internal recruiting.  Can post job opening for employees to access.  Can search for match between job specifications and applicant qualification.  Applicant tracking system.  Administering and scoring ability tests.  Scanning resumes submitted online (web based or e-mail) or in person (or mail).  Structured interviews.  Matching qualifications with open positions (finding a good fit).

 Also, consider budgetary concerns.

 Help with registration, tracking training, monitor training costs, and schedule training.

 Used to deliver training.

 Career and managerial succession planning.

 Used to provide assessment tests to help employee‟s plan their own career.

 Predict career paths.

 Provide PA instruments and results.

 Comparisons between employees, groups, or supervisors ratings.

 Monitor attendance.

 Monitor compliance with Labor Standards.

 Individual sale data can be accessed (tracking commissions).

 Benefits can be managed and administered by computers.

 Planned raises and wage histories.

 Provides reports for Occupational Safety and Health Administration (OSHA).

 Track hazardous materials.

 Track accidents and costs of accidents.

 Record employee safety training.

 Record employee exposure to various conditions and chemicals.

 Track disciplinary actions and grievances.

HRIS Vendors:

Many firms today offer HRIS packages. At the Web site for the International Association for Human Resource Information Management (mentioned Earlier) for instance Automatic Data Processing Inc. Business Information Technology, Inc., Human Resource Microsystems, Lawson Software, Oracle Corporation, PeopleSoft Inc., Restrac Web Hire, SAP America Inc., and about 25 other firms are listed as HRIS vendors. 

HRIS Security & Privacy:

The HR department must develop policies and guidelines to protect the integrity and security of the HRIS so that private employee information does not fall into the wrong hands. To maintain the security and privacy of HRIS records, companies should control access, develop policies and guidelines that govern the utilization of information, and allow employees to check their records.

A combination of written policy and effective use of your system's security features is needed to manage issues of data integrity and privacy. Because employee records are increasingly maintained in computer files, the traditional recordkeeping policies and practices need to be reviewed and updated in light of these technological times. Often more complete than paper records, computer records are full of information that needs to be protected from inaccurate actions as well as from unwarranted use. Three areas, in particular, need to be re-examined: employee right to privacy, management information and legal restrictions. 

1. Employee right to privacy. An electronic system makes it easier to produce lists, combine data and share information. These very qualifies can contribute to a breach of privacy. What constitutes confidential information should be defined in a company privacy policy. For example, some employees may prefer that their personal addresses and telephone numbers not be published on a list. Medical information, for instance, should always be carefully protected. 

2. Management information. Businesses generally want to be close-mouthed about their affairs because of competition and actions management is considering. A primary goal of automation is the ability to produce better management information, but safeguards should exist to protect both the data and ability to produce reports. 3. Legal restrictions. The type of data that is considered confidential varies from state to state; the HR department should have a current list of the state requirements for employee record-keeping. Safeguards for data entry and use of the information can be handled by written policy and security. 

Limitations of HRIS Implementation: Implementation of a sophisticated information system is often more of a challenge than client expects, and several potential pitfalls account for this. Cost is one problem: for example, a representative from “All state Insurance Company” reported that the costs of moving to a new HRIS had increased 10% per year for five year and that additional investment would be required to make the transition. Other systems run into management resistance. Inadequate documentation or training can undermine the system‟s utility and increase resistance to the system by exactly those employees and managers who are supposed to aid in its use. Installing the HRIS therefore needs to be viewed as a whole but also as a process composed of separate projects, each of which must be planned and realistically scheduled. Given these sorts of hurdles a careful needs assessment obviously should be done prior to adopting an HRIS. Particularly for firms with less than 150 employees, consideration should be given to depending more of individual software packages for managing separate tasks such as attendance, benefits and payroll.

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