Everything you need to know about human resource information system (HRIS).
Human Resource Management Systems (HRMS), Human Resource Information Systems (HRIS), HR Technology or also called HR modules, shape an intersection in between human resource management (HRM) and information technology.
It merges HRM as a discipline and in particular its basic HR activities and processes with the information technology field, whereas the programming of data processing systems evolved into standardized routines and packages of enterprise resource planning (ERP) software.
The Human Resource Information System (HRIS) is a method by which an organisation collects, analyses and reports information about people and jobs. It applies to information needs at macro and micro levels.
HRIS is basically a database system that offers important information about employees in a central and accessible location. When such information is needed, the data can be retrieved and used to facilitate human resource planning decisions.
1. Introduction to Human Resource Information System (HRIS) 2. Meaning of Human Resource Information System (HRIS) 3. Concept 4. Objectives and Need 5. Forecasting 6. Components
7. Steps 8. Functions 9. Factors 10. Computer Aid to HRIS 11. Application 12. Evaluation and 13. Benefits and Barriers 14. Notes.
Human Resource Information System (HRIS): Meaning, Concept, Objectives, Steps, Functions, Benefits, Barriers and Notes
Human Resource Information System (HRIS) – Introduction
In today’s corporate world human resources has come to play a very critical role not only in formulating company policies, but also in streamlining the business process. To make a human resource department more effective and efficient, new technologies are now being introduced on a regular basis so make things much simpler and more modernized. Human Resource Information System (HRIS) merges human resource management with information technology to simplify the decision making process.
The Human Resource Information System (HRIS) is a system which merges the activities associated with Human Resource Management (HRM) and Information Technology (IT) into one common database through the use of Enterprise Resource Planning (ERP) software.
The ERP software that forms the basis for HRIS originates from the software that integrates information from different applications into one universal database. It aims to provide an online or computer-based system for dealing with various HR issues like payroll, management, accounting functions, labour productivity, etc.
It is also known as Human Resource Management Systems (HRMs). The HR department has to acquire and manage different kinds of important information related to various HR activities. In the past this work involved maintaining a large number of files and documents. Any wrong information, entry or misplacement of files would cause much disruption and unnecessary delays in work.
Also manually searching for required information was a time consuming process. Thus, in order to help the HR manager in managing these documents more efficiently, the system of HRIS was developed. HRIS helps the HR personnel to streamline their work, save time and eliminate excess paperwork.
Not only does HRIS facilitate smooth functioning of the HR departments, it also helps in improving communication of the HR department with other departments like finance and IT. HRIS solutions are generally administrative in nature and are therefore useful for all types of organizations.
The needs and requirements of different organizations vary and the HRIS systems can be adapted according to organizational needs. The management may avail of the services of an external IT professional to create an HRIS specifically catering to the requirements of the particular organization.
An organization having a formalized procedure for recruitment, selection, performance appraisal and payroll process will have different needs from an organization that still functions in an informal and traditional manner.
Even though a HRIS system will help any type of organization in streamlining its operations, the management should take care to implement a system that best suits the organizational needs and can be easily integrated with the already existing systems within the organization.
Human Resource Information System (HRIS) – Meaning
Human Resources Management (HRM) is the attraction, selection, retention, development, and utilisation of employees in order to achieve both individual and organisational objectives. Human Resources Information Systems (HRIS) is an integration of HRM and Information Systems (IS). HRIS or Human Resource Information System helps HR managers perform HR functions in a more effective and systematic way by using technology. A human resource information system (HRIS) is a system used to acquire, store, manipulate, analyse, retrieve, and distribute pertinent information about an organisation’s human resources.
The HRI system is usually a part of the organisation’s larger management information system (MIS) which includes accounting, production, and marketing functions, to name just a few. Line managers require good human resource information to facilitate decision-making. The use of Human Resource Information Systems (HRIS) has been advocated as an opportunity for human resource professionals to become strategic partners with top management. HRIS provides better information for decision-making.
Lengnick-Hall and Moritz (2003) have postulated that HRIS will be implemented at three different levels – the publishing of information; the automation of transactions and finally a change in the way human resource management is conducted in the organisation by transforming HR into a strategic activity. In their view, HRIS evolves from information to automation and from automation to transformation.
A human resource information system is a computerized, integrated system used to acquire, store, maintain, analyse, retrieve, and distribute information concerning an organizations human resources. It is an integration of HRM and Information System. The generation, transmission, and utilization of information are emphasized. The activities of informatics, statistics, office automation, data processing, MIS, DSS, and computer applications and their networking are emphasized.
Effective management of the HR function is increasingly becoming a source of strategic advantage for organizations. The increasing role of information technology in HR to meet challenges is leading to improved benefits. As a result of the growing need for more and more HR information by the decision-makers, organizations are noted to have computerized their records system in the recent years and named it as ‘HRIS’.
HRIS is defined as a technology-based system that is used to acquire, store, manipulate, analyse, and retrieve pertinent information regarding an organizations human resource. HRIS is noted to be the integration between activities of the HR function and the information system. It merges HR as a function and, in particular, basic HR activities and HR processes with information technology.
HRIS is also called electronic HR (e-HR). It refers to the broad access to a centralized database of HR information accessible and delivered through the web in most work places as the strength of web-enabled data capture and management reporting lies in its ability to provide targeted information to those who need it. It includes a variety of new technologies that help link multiple systems, tools, and databases both inside and outside the organizations.
One of the major effects of web technologies in HR and the dramatic impact of this growth has been the way the employees now receive information through integrated self-service applications. People and processes linked with integrated HR data and tools enable employees and managers to conduct transactions through the portal anytime and anywhere. Thus, HRIS is an integration of HR processes and employee-related information through an electronic enterprise portal – enabling and empowering the HR function to discharge its activities effectively.
The objective of information technology and HR is to implement world-class HR processes and systems, provide HR data in an accurate and timely manner, speed up HR decision-making process, and reduce HR operational costs, while upgrading performance and service.
Human Resource Information System (HRIS) – Concept
Information is the life-blood of an organization particularly in the case of systems and contingency approach of managing. Although there is a tendency to use data and information interchangeably, there is a distinction between the two concepts. Data is raw, unanalyzed numbers and facts about events.
Information, in contrast, results when data is organized or analyzed in some meaningful way. For example, data regarding employee turnover or other events may be collected on per annum basis but these are of no use unless these are analyzed in terms of certain comparable context such as employee turnover to total number of employees during the year, or comparative figures of employee turnover over a period of time.
Such a comparison provides base for making decisions. Since every manager in the organization makes decisions about planning, organizing, directing, and controlling of his functions, he needs information of various types. In order to ensure this, every organization designs information systems which have taken the shape of management information systems (MIS) which integrates information of different functional areas and provides reports in structured form.
The concept of human resource information system (HRIS) has been derived from the concept of management information systems (MIS). MIS is defined as systematic collection, maintenance, and retrieving data for providing support to the operations, management, and analysis decision-making functions in an organization.
Based on this concept, HRIS can be defined as follows:
Human resource information system is a systematic process for collecting, storing, maintaining, and retrieving data needed by an organization about its human resources and various activities that are relevant for their management.
Thus, like any other information system, HRIS has three basic components—input, storage, and output.
Input function provides the capabilities needed to enter data, relevant to managing human resources, into the HRIS. Input function prescribes the procedures for collecting data by whom, when, in what format, and from what sources (internal and external).
Storage function involves storing data in various files and updating data from time to time to keep them up-to-date. Based on storage of data, output in the form of information, relevant to action and decision making, is prepared.
Output function of HRIS is most visible as it is directly relevant to users of HRIS. In a computerized HRIS, output may appear in two forms- hard copy printed on a piece of paper or soft copy visible on computer screen. Whatever form is selected, output is presented in a form which is easily understandable and useful to users.
Human Resource Information System (HRIS) – Objectives and Need
In an organization, information about human resources and their functioning is required basically for two purposes- information that is to be supplied to various government agencies as required by statutory provisions, and information that is useful for managers in taking actions and making decisions on issues related to managing human resources.
It is the latter category of information that is more important from organization’s point of view, though HR information system should be capable of providing both categories of information. Thus, the basic objective of HRIS is to provide accurate, relevant, and timely information about human resources and their functioning in the most cost-effective way.
Objectives of Human Resource Information System (HRIS):
This basic objective of HR information system can be spelled out further as follows:
1. HR information system should provide information in such a manner that it helps in improving one or more decisions, that is, it must cause an appropriate decision to be made and a less appropriate decision to be rejected. Information has no value if the same decision could be made even without it. Thus, accurate, relevant, and timely information is needed.
2. Apart from decision making, HR information system should supply HR information which is required by statutory provisions or other agencies like industry associations, research organizations, etc. Besides, there may be ad hoc query from internal employees to know their current status like leave account, overtime worked, provident fund account, and so on.
3. HR information system should provide information in the most cost-effective way. An information has benefit but it has cost too. Benefit from information is derived in terms of improved decision making and satisfaction of other requirements. Cost of information is in terms of its collection, processing, storing, and retrieval.
If the benefit of information is more than its cost, it adds value to the organization. In alternative case, it is a drag on the organization.
Need of Human Resource Information System (HRIS):
1. Costly Exercise:
Personnel records, when kept manually, do not offer up-to-date information at short notice. It is difficult to make entries on forms and returns continuously and keep pace with ongoing changes on a daily basis. The clerical work involved is quite labour-intensive and costly.
The manual transfer of data from one record to another may increase the chances of errors. Entries may be made twice, data may be transferred to wrong documents – leading to confusion.
Information is not available at a central, easily accessible place since records are kept at separate locations, handled by different persons in different departments.
4. Difficult to Analyse:
The manual analyses of data are time-consuming and quite often not readily available for decision-making purposes. When the organisation grows in size, the manual systems fail to offer reliable, accurate data at short notice.
Human Resource Information System (HRIS) – Forecasting at Macro and Micro Level
An HRIS is an integrated approach to acquiring, storing, analyzing, and controlling the flow of information throughout an organization. In other words it is an organized approach for obtaining relevant and timely information on which to base human resource decisions. An effective HRIS is crucial to nearly all HRM functions.
It typically employs computers and other sophisticated technologies to process data that reflect the day-to-day operations of a company, organized in the form of information to facilitate the decision-making process.
An HRIS should be designed to provide information that is timely, accurate, concise, relevant and complete. A system possessing all these characteristics enhances the case and accuracy of the decision making process.
The HRIS might contain an applicant tracking programme, a skills inventory, a career planning programme, and employee service programmes such as – an electronic bulletin board. Their applications are almost endless.
The database required for purposes of making forecasts of manpower at the macro level is indicated below:
Forecasting # 1. Macro Level:
Database for Demand Forecasting:
i. Population statistics
ii. Economic parameters
iii. Existing technologies
iv. Emerging technologies.
Database for Supply Forecasting:
i. Age at entry and exit
ii. Annual enrolment and out turn
iii. Attrition rates
vii. Labour force participation rates.
The main agencies and institutions for providing data at the macro level are –
The Planning Commission, The Ministry of Labour, The National Sample Survey Organization, The Institute of Applied Manpower Research. The National Labour Institute, Universities, Other institutions at the state level.
An essential step in improving the effectiveness of manpower planning and policy at the macro level lies in taking decisive measures to raise the quality and reliability of labour market information. Existing sources of statistical information suffer from serious lapses, inadequacies and redundancies etc.
These deficiencies need to overcome for meaningful manpower research and quality and effectiveness of manpower planning at macro level lies on the accuracy and adequacy of the information inputs in the formulation of plans and policies. The need is not only to build computer based data banks, but to improve the quality of current bench – mark data sources viz., at the institutional levels such as – the apex level institutions.
Forecasting # 2. Forecasting at Micro Level:
HRIS serve multiple management needs, and its objectives are broad based. In this the HR staff has a major role to play in collection, storage, retrieval and analysis of personnel data. In fact, a carefully designed information system can provide better control over human resource functions, and create a positive climate where the value of human resources of the organization is clearly understood and recognized at various levels of management decision-making.
Now let us consider some steps in designing a HRIS. These steps are not separate and distinct, in fact, they overlap considerably. Development of an HRIS is not merely contingent on proper designing of the system, without a major commitment from top management, creating a smoothly functioning and operational HRIS is next to impossible.
The following steps can result in a HRIS design that could become effective if supported by top management:
(1) Study the Present System:
In defining requirements or assessing the existing information system, three questions need to be answered; what is the present flow of information? How is the information used? How valuable is the information to decision making?
(2) Develop a Priority of Information that Managers Need:
Once the current system is understood well it is used to develop priorities. A manager must have certain information in order to make proper decisions. Other information is nice to have but is not essential to the manager’s decision-making. The HRIS must ensure provision of high priority information. Lower priority data should be generated only if the benefits exceed the costs of producing it.
One approach would be to have individual managers develop their own priority lists and then integrate them into a list for the entire organization. Certain departments will find that the information they identify as top priority would be far down the list for the organization as a whole. Here the needs of the entire organization might be the controlling factor.
(3) Develop the New Information System:
The organization wide priority list should govern the design of the HRIS. Information not worth the cost is excluded. A system of required reports should be developed and diagrammed. The entire organization is treated as a unit to eliminate duplicity of information.
(4) Choose a Computer:
Today, it is reasonable to assume that HRIS of most organizations will be computerized. Because of the increasing reliance on computers, the HR managers should be computer literate. The presence of computers is far too pervasive and their usefulness far too great for human resource managers to ignore their capabilities. Human resource software for personal computers is almost always the responsibility of the HR department.
The modern day complexities involved in managing a global labour force makes developing an effective global HRIS a necessity. Information concerning many factors affecting human resource must be shared. This information must be relevant and timely to assure that the best HR decisions are made.
Human Resource Information System (HRIS) – Top 4 Components: Databases, Screens, Modules and Query Programs
A human resource information system for a larger organization is comprised of the following components and capabilities:
a. Computerized Database Management System
b. Screens for cross-checking
c. Modules for performing specific functions
d. Query programs for requesting special information
Components of HRIS and Features:
1. State of the art Relational Database Management Systems (RDBMS) can reduce the need to keep and maintain duplicate data.
2. With the use of database systems, information appears only once, in an appropriate table; for e.g., a table on employment information, a table on benefits or on employee skills.
1. Each module in the HRIS will have its own screens for data entry and retrieval
2. Screen for basic personnel data can be effectively organized employee-wise.
1. Most systems in the HRIS would have a number of modules that perform specific functions and produce regular reports.
2. The most basic module, which virtually all systems have, contain employee information such as age, sex, date of appointment.
3. And the like which can be accessed by other modules as needed.
d. Query Programs:
More sophisticated HRISs do not just produce regular reports; they also can produce special reports, answer queries and play an important role in support of the decision-making process.
It involves the extent to which HRIS caters to the task of manipulating the human resources data to appear in the appropriate format and then delivering the data to the appropriate destination or individual for important HR decisions.
Human Resource Information System (HRIS) – 10 Important Steps to Implement HRIS: Inception of Idea, Feasibility, Project Team, Defining the Requirements and a Few Others
Step 1—Inception of Idea:
The idea of having an HRIS must originate somewhere. This should be followed by preparation of a preliminary report showing the need for an HRIS and what it can do for the organization.
Step 2—Feasibility Study:
Feasibility study evaluates the present system and details the benefits of an HRIS. It evaluates the costs and benefits of an HRIS.
Step 3—Selecting a Project Team:
Once the feasibility study has been accepted and the resources allocated, a project team should be selected. The project team should consist of an HR representative, who has in-depth knowledge about the organizations HR functions and activities and about the organization itself, and representatives from both MISs and payroll. As the project progresses, additional clerical staff from the HR department can be added.
Step 4—Defining the Requirements:
A statement of requirements specifies in detail exactly what the HRIS will do. A large part of the statement of requirements normally deals with the details of the reports that will be produced. Naturally, the statement also describes other specific requirements. This typically includes written descriptions of how users collect and prepare data, obtain approvals, complete forms, retrieve data, and perform other non-technical tasks associated with HRIS use. The key here is to make sure that the mission of the HRIS truly matches the management’s needs for an HRIS.
Step 5—Vendor Analysis:
This step determines what hardware and software are available that will best meet the organization’s needs for the lowest price. This is a difficult task. The best approach is usually not to ask vendors if a particular package can meet the organization’s requirements but how it will meet those requirements. The results of this analysis will determine whether to purchase an ‘off-the-shelf’ package or develop the system internally.
Step 6—Package Contract Negotiation:
After a vendor has been selected, the contract must be negotiated. The contract stipulates the vendor’s responsibilities with regard to software, installation, service, maintenance, training, and documentation.
Training usually begins as soon as possible after the contract has been signed. First, members of the project team are trained to use the HRIS. Towards the end of the implementation, an HR representative will train managers from other departments in how to submit information to the HRIS and how to request information from it.
Step 8—Tailoring the System:
This step involves making changes to the system to best fit the needs of the organization. A general rule of thumb is not to modify the vendor’s package, because modifications frequently cause problems. An alternative approach is to develop programmes that augment the vendor s programme rather than alter it.
Step 9—Collecting Data:
Prior to start-up of the system, data must be collected and entered into the system.
Step 10—Testing the System:
Once the system has been tailored to the organizations needs and the data entered, a period of testing follows. The purpose of the testing phase is to verify the output of the HRIS and to make sure it is doing what it is supposed to do. All reports should be critically analysed for accuracy.
Start-up begins when all the current actions are put into the system and reports are produced. It is wise to attempt start-up during a lull period so that maximum possible time can be devoted to the HRIS. Even though the system has been tested, some additional errors often surface during start-up.
Step 12—Running in Parallel:
Even after the new HRIS has been tested, it is desirable to run the new system in parallel with the old system for a certain period of time. This allows for the comparison of outputs of both the systems and examination of any inaccuracies.
It normally takes several weeks or even months for the HR department to feel comfortable with the new system. During this stabilization period, any remaining errors and adjustments should be handled.
After the HRIS has been in place for a reasonable length of time, the system should be evaluated. At this stage, it is best to seek an answer to the question – Is this HRIS right for the organization and is it being properly used?
Human Resource Information System (HRIS) – Functions
Typically, the Human Resource Information Systems (HRIS) provide the following functions, namely:
1. Management of all employee information.
2. Reporting and analysis of employee information.
3. Company related documents such as employee handbooks, emergency evacuation procedures and safety guidelines.
4. Benefits administration including enrolment, status changes and personal information updating.
5. Complete integration with payroll and other company financial software and accounting systems.
6. Applicant and resume management.
HRIS can help HR professionals of various organizations effectively monitor:
1. Attendance and PTO use,
2. Pay raises and history,
3. Pay grades and positions held,
4. Performance development plans,
5. Training received,
6. Disciplinary action received,
7. Personal employee information, and occasionally,
8. Management and key employee succession plans,
9. High potential employee identification, and
10. Applicant tracking, interviewing and selection.
An effective HRIS provides information on just about anything the company needs to track and analyze about employees, former employees and applicants. Any organization which needs to implement a suitable HRIS would essentially need to customize it to meet the needs of effectively managing its human resources.
With an appropriate HRIS, Human Resources staff enables employees to do their own benefits updates and address changes, thus freeing HR staff for more strategic functions. Additionally, data necessary for employee management, knowledge development, career growth and development, and equal treatment is facilitated. Finally, managers can access the information they need to legally, ethically, and effectively support the success of their reporting employees.
Human Resource Information System (HRIS) – Factors Contributing: Adequacy of Information, Specificity, Relevance, Flexibility, Comprehensiveness and a Few Others
The effectiveness of HRIS in an organization depends on several factors, namely:
1. Adequacy of Information- This mainly caters to the HR information available in the organization. Any organization in order to successfully implement a HRIS should emphasize on the adequacy of the relevant HR information that should be fed into the databases for future decision-making. The HR managers and executives should take outmost care so as to choose the right information for feeding into the organization’s HRIS.
2. Specificity- The success of a HRIS would also depend on the specific functions in terms of outputs to be derived from the system. The HR managers associated with the use of the HRIS application must be sure what type of HR functions they need to automate by the use of the HRIS.
3. Relevance- The HRIS and its features should be strictly customized according to the needs of the organization. Hence the software provider should emphasize on a needs assessment survey before installing the application in their client’s office.
4. Flexibility- The HRIS should be flexible enough to instigate any form of change or modifications as and when needed by the organization with respect to its HR practices and organizational change and development related decisions.
5. Comprehensiveness- The HRIS should be comprehensive in terms of covering all aspects of the HR functions and procedures in the organization.
6. Reliability- One of the most important criteria of a HRIS is its reliability. The information collected from a HRIS and the outputs generated should facilitate the management to take vital decisions with respect to the management of the organization’s human resources.
7. Delivery- The HRIS should be result oriented in its delivery and should help the HR managers to take HR decisions both in terms of qualitative as well as in terms of quantitative parameters.
8. Promptness- The HRIS should be able to provide the management prompt responses in terms of queries made by the users. The system should provide easy and fast data retrieval as when required.
9. User Interface- The HRIS should provide a very simple and effective user interface for its users for their ease. Each modules and functions should have special online help and guideline manuals so as to facilitate users.
10. Training and Software Maintenance Support- The application/software company installing the HRIS in an organization should ensure that they provide adequate training and orientation to the employees associated with the use of the HRIS. Training should focus on the overall use of the HRIS and also on system maintenance and administration.
Human Resource Information System (HRIS) – Computerized HRIS
Any information system, including HR information system, can be either manually operated or computer based. However, with the emergence of low-cost personal computers (PCs, known as microcomputers in technical jargon), the trend is to have computerized HR information system.
Even smaller organizations use computers for maintaining employee records, payroll processing, etc. This is because computerized HR information system has certain advantages over manually-operated HRIS.
A computer aids HR information system in the following ways:
1. Because of computer, there is ability to process data with accuracy and high speed even though it requires complex computation, analysis, comparison, and summarization. Though there may be manual processing of data, it is slow and, in many cases, even inaccurate. As contrast to this, computerized processing has speed and accuracy.
2. There is organization and updating of huge mass of data of different types, derived from various sources, both internal and external. In manual system, maintaining such huge data would be quite difficult.
3. Input data stored in a computer can be processed into a number of ways to serve different purposes. The computerized system is so designed that information users at different levels and in different units of the organization are in a position to obtain information in a form in which they want.
4. In computerized system, time required for information storing, processing, and retrieving is shortened and information users have quick access to information needed. Thus, in the time context, the value of information increases.
5. Computerized HR information system reduces the size of infrastructure required for the operation of an efficient HR information system; lesser number of personnel are required to maintain records of various types; office space is reduced.
Designing of HR information system, particularly computerized HR information system, is a long-drawn process and requires the use of computer specialists.
Computerized HR information system development process goes through the following stages:
1. Project Definition:
Project definition stage determines whether or not the organization has a problem relating to HR information system and whether or not the problem can be solved with the existing HR information system. Thus, at this stage, need for a new system is recognized.
The basis for a new system is the recognition of a need for improving the HR information system or procedure. This need leads to a preliminary survey or initial investigation to determine whether an alternative system can solve the problem. It entails looking into the duplication of efforts, bottlenecks, inefficient existing procedures, or whether parts of the existing HRIS need computerization.
2. System Analysis:
At this stage, an analysis of the problems of the existing HR information system is undertaken, and how the new HR information system is likely to overcome these problems is specified. For this purpose, a system analysis is undertaken which is a detailed study of various operations performed by the system and their relationships within and outside the system.
During analysis, data are collected about the available files, decision points, and transactions handled by the existing system. Once this analysis is completed, the analyst has a firm understanding of what can be done to overcome various problems. Various alternatives are evolved and feasibility study is undertaken to determine their suitability.
3. System Design:
System design is the most creative and challenging stage in developing computerized HR information system. System design describes how a chosen system will be developed. It prescribes the technical specifications that will be applied in the chosen system. It also includes the development of computer programme and its testing.
System design involves certain steps. The first step is to determine how the output is to be produced. The second step involves designing input data and database that meet the output requirements. Data processing phases are handled through programme development and testing, including the list of the programmes needed to meet the system’s objectives.
System implementation is less creative than the design phase. It is basically related to user training, site preparation, and file conversion. Conversion from old to new system takes place either at the time of user training or little later.
5. Post Implementation:
After the new HR information system is installed and user staff is adjusted to the changes created by the new system, post-implementation stage begins which consists of mainly evaluation and maintenance. Evaluation involves an analysis of whether the new system is achieving its objectives originally envisaged.
Maintenance involves maintaining hardware, software, and other devices with a view to have their optimum life. Post-implementation may also involve enhancing the capacity of the present system either by updating hardware and software or by adding balancing equipment or both.
While computerized HR information system is beneficial, it has certain problems also.
Therefore, before installing it, these problems should be addressed to adequately which are as follows:
1. Initial investment involved in computerized HR information system is high. It may be necessary for large organizations but may be a luxury for small organizations unless other organizational functions are computerized and HR information system is linked to them.
2. Users of output of computerized HR information system should have computer literacy, that is, they must be aware how information from computerized HR information system can be retrieved. Those who are not comfortable with computers experience difficulty in computerized environment.
3. In the absence of adequate control and security measures, there is a threat for sensitive and personal information. In the absence of proper control and security measures, anyone can have access to such information.
4. Often, in many organizations, data are updated on a batch basis after considerable lapse of time. In such a case, data may be stale.
Human Resource Information System (HRIS) – Top 3 Applications: Enterprise Resource Planning, People Soft and SAP-HR
Until recently, most organizations had un-integrated information systems that supported only the activities of individual functional areas of business. Thus, an organization would have a separate marketing information system, production information system, accounting and so on, each with its own hardware, software and methods of processing data and information. Such un-integrated systems might work well within individual functional areas, but to achieve the overall goals, an organization must share data among all the functional areas.
Application # 1. Enterprise Resource Planning:
One such most integrated information technology solution is the ‘ERP system’ that integrates business processes and includes manufacturing, distribution, accounting, finance, HRM, project management, service and maintenance, and transportation. It provides accessibility, visibility, and consistency across the enterprise.
ERP is defined as a computer-based system designed to process an organization’s transactions and facilitates integrated and real-time planning, production, and customer response. The ERP system has a centralized common database system which holds a very large amount of data. The technology to hold such data in an organized fashion and to retrieve data easily is known as the Data Base Management System.
It has distinct business modular designs such as finance management, accounting management, manufacturing management, HRM, etc. The integration of modules provides seamless flow of data among the modules and creates operational transparency through standard interfaces.
Utility of ERP:
The ERP enables an organization to integrate the data used throughout the organization. It streamlines organizational data flow and provides the top management with direct access to a wealth of real-time operating system. Looking at the HR function, this system provides information on various HR activities including employee database, job description and evaluation, applicant tracking, performance review, career and succession planning, and creating an alternate organization structure apart from taking care of the training needs of employees on a continuous basis.
As an alternative to the enterprise-wide information technology solution such as ERP, there are a few other software specifically developed for various HR activities of an organization, namely, People Soft, SAP-HR, Abra Suite, Vantage, Oracle-HRMS, and the like. Hence, depending upon the financial constraints, choice of different software for HR functions, and similar other considerations, an organization can choose from some of the few available HR software.
Application # 2. People Soft:
One such major HR software of HRIS is People Soft which can run on almost all modern computer operating systems. It was acquired by Oracle Corporation in January 2005. It focuses on the complete HRM product line. It has three versions, namely, Enterprise Program, Enterprise One, and People Soft World.
The Enterprise Program is designed with the internet in mind.
It allows employers to:
(1) Plan the workforce required to achieve the goals of the organization.
(2) Select the right person at the right time.
(3) Track and monitor the performance of employees
(4) Provide the tools required to make the employees more productive.
(5) Help the management to assess the skills of the workforce so that learning and performance programmes can be designed to develop people in alignment with their career paths and goals of the organization; and
(6) Plan the compensation and reward structure that aligns the workforce with the corporate goals. This includes linking the employees with the right kind of compensation and reward so that there is increase in efficiency and performance and reduction in costs.
Enterprise which works in integration with the Enterprise Program also allows the employer to:
(1) Maintain a database regarding the skills and competencies of employees.
(2) Help in tracking the position and the head counts with respect to the organization and the department, and in tracking the recruitment data.
(3) Simplify the employee evaluation process by automating work flow, and
(4) Help managers to understand discrepancies between employees’ expected and actual performance.
People Soft World was developed to help small businessmen to cope with changing hardware. It is built to work with the IBM iSeries.
(1) This system offers self-service capabilities. The web browser-based access enables customers, suppliers, and employees to get the required information easily and quickly.
(2) It is a low-maintenance solution for small businesses.
(3) It supports multi-currency, multi-language, and multi-company requirements and integration with other key people-software technologies.
(4) This system offers affordable pricing. Pre-integrated applications optimized on an IBM iSeries means lower implementation costs and ongoing IT needs.
(5) Its architecture is flexible, enabling the users to tailor menus, security, and reporting to the specific needs of their business without costly modifications.
The People Soft Software is a web-based platform enabling ‘portal’ technology. For the ‘Enterprise Program’ and ‘Enterprise One’, portals are available to connect with employees over the web. People Soft is a leading vendor of product solutions in all categories except time attendance and knowledge-based applications.
Application # 3. SAP-HR:
The HR function consists of tracking existing employee data which traditionally includes personal history, skills, capabilities, accomplishments, and salary. To reduce the manual workload of these administrative activities, organizations have begun to electronically automate many of these processes by introducing specialized software called SAP. SAP-HR is an integrated model developed by SAP AG that enables medium- and large-sized organizations to maintain a common HR database in a scientific manner.
This software helps organizations to efficiently manage a wide spectrum of HR functions and includes:
I. Organizational management module,
II. Recruitment module,
III. Personnel administration module,
IV. Payroll and time management module, and
V. Personnel development module.
SAP-HR offers plenty of in-built HR reporting functionality. The reporting function with SAP-HR is one of the main reasons why organizations are choosing this software. Each component with HR management includes standard reports that can be accessed using the SAP EASY ACCESS menu.
These reports are listed in the form of a report tree and comprise all major reports that the HR manager would like to execute within a certain area. For example, absence reports in time management; existing jobs, position, and tasks in the organizational management module, list of applicants, vacancies, and advertisements in the recruitment module; etc. All these standard reports can be displayed, filtered and soiled according to the needs of the organization.
I. Organizational Management Module:
It is mainly used to perform numerous business and HR processes. This module is installed before any of the aforesaid modules is introduced. The information entered in this module is regarding the jobs, tasks, positions and their relationship in the organization, job description, employees working in different positions along with their qualifications, profiles, and tasks performed by them, and the different departments in the organization.
(1) The module creates an organizational plan which depicts the functional structure of an enterprise. By relating jobs, tasks, and positions with relationship a network that mirrors the organizational reporting structure can be created and depicted via easy-to-use graphical tools. In addition to this, relationship to objects from other components like cost centres, employee, or user can be created.
(2) When an organization changes the core business process which in turn necessitates staffing adjustments, HR people can dynamically adjust the organizational model to reflect the new situation. Regular evaluation of personnel situation can help avoid qualification deficit in the future.
(3) This component can be used to match employees’ qualification profiles with job requirement profiles on a regular basis in order to pinpoint training needs and take the measures necessary to offset it.
(4) It also gives instant access to information on number of vacant positions, their associated job descriptions, activity and requirement profiles of the position, and when the vacancies must be filled. With organizational development and the organizational structure model in place an enterprise can swiftly and efficiently determine current and future staffing requirements.
(5) This module gives reliable information on the staffing position in the organization along with the reports on staff assignments, existing jobs, positions, and tasks in the organization.
II. Recruitment Module:
It is a powerful tool which optimizes the recruitment procedure and reduces administrative overheads, time, and money spent on handling job applications. By automating routine tasks and delegating them to the system, it relieves the strain of the HR department. Information regarding the advertisement of job vacancies, basic data of the applicants, minimum requirements of the job, and standard text for letter of receipt, letter of rejection, and contract of employment are entered in this module.
(1) Using the SAP-HR recruitment model the organization can advertise a job vacancy on the internet.
(2) When applicant data are entered, it also checks to see if any of the applicants are former employees or are currently employed in the company. This module automatically provides the existing master records of these applicants. It also passes the electronic documents submitted by these applicants to the HR administrator.
(3) The status of the application can be found by the applicant by using the applicant number and password.
(4) The applicants are given a confirmation that the application has been received. When an applicant’s data are entered, this module automatically generates a confirmation of receipt of the applicant. The applicants can receive a letter of rejection generated automatically by the system.
(5) The application documents are scanned into the system and archived. This means that the application documents can be called upon directly from the system.
(6) This module reports the applicants transferred to the applicant pool who do not fulfill requirements of the position advertised but have a qualification profile. It also reports the list of unsolicited applicants and the applicants put on hold.
(7) When a candidate is selected, a contract of employment is offered to the selected candidate. The HR manager completes the selection procedure by entering the data of hiring and information by transferring them to the personnel administration module and the HR master data.
(8) The system can create statistical reports or lists on applications received, vacancies, and advertisement. It finds the cost of recruitment and replacement. It studies the sources from which employees were drawn and correlates this with success on the job to see if some sources should be dropped or added. The skill database is maintained, allowing retrieval of a potential candidate for a specified job.
(9) This module is integrated with personnel development and training and enables the management to determine whether the applicant requires further training in certain areas.
III. Personnel Administration Module:
It creates and processes employee data precisely and efficiently. This module deals with employee-related personnel activities which are called ‘personnel actions’. The basic personnel activities such as hiring, organizational assignment or leaving are handled in the Master Data Administration in this system.
The personal data of each of the employees is entered—his name, date of birth, marital status, family members, blood group, email address, emergency contact phone numbers, permanent and temporary address, etc. Besides this, date of hiring, official assignments, dates of promotion, change of pay, date of leaving, etc. are also entered in this module.
(1) It tracks the chronology of data of all times and forms the basis for sound HR decisions at all levels.
(2) Through this system every type of employee information can be saved using HR info types. Info types are data entry screens. They contain separate items of information entered into fields.
(3) The system automatically adjusts all relevant employee data to actual entry data of the employee. If the employee moves to another cost centre of the company the organizational assignment of employee also changes.
(4) This software ensures consistent data at all times. This module allows automatic monitoring of data for HR processes that require follow-up activities. For example, when hiring an employee, the HR manager can specifically be reminded when the probation period ends so that necessary follow-up activities can be done.
(5) Optical archiving allows scanning original documents such as work contracts, performance appraisal, or employee photo and archive them in the system.
(6) The top management can evaluate lists like employees’ directory, family members, bank details, anniversaries of years of service, and statistical information like staffing levels, nationality, age, wage, and seniority. SAP Business Graphics enables to the editing of evaluation results in a graphical form.
(7) It gives the ‘personnel action’ list of employees regarding his hiring, organizational assignment, reassignment to another cost centre, change of pay, termination, and re-entry.
IV. Payroll and Time Management Module:
It is an automatic planning table that is in-built in the system, and provides an overview of HRs available at a given moment. It helps in planning shifts, absenteeism management, recording working times, and compliance of labour laws. The country-wise versions are available to handle the payroll function. This can take care of multiple factors such as valuation of time data, partial payment calculation, reduction of company loans, etc.
Payroll is integrated with personnel administration, time management, and accounting. Standardized data retention enables to use most of the data and payroll data from the personnel administration module. Time data entered via time management are automatically included in the payroll and valued during the payroll run.
The master file is composed of discrete pieces of information called data elements. Data are keyed into the system, updating the data elements. The elements on the master file are combined in different ways to make up reports of interest to the management and government agencies and pay cheques sent to employees.
(1) It calculates pay and includes tax tables in accordance with compensation regulations.
(2) The information on expenses and payables from the payroll is posted for accounting directly in financial accounting and it becomes easier to assign the costs to the appropriate cost centres.
(3) The system calculates gross and net pay which comprises individual payments and deductions that are calculated during the payroll period and received by an employee.
(4) The payroll system keeps track of money paid to the employee.
(5) The system generates pay cheques or direct deposits which are electronic transfers of compensation funds from the company’s bank account to those of the employees.
(6) It determines the optimal health and retirement plans for each employee based on factors such as marital status, age, and other data.
V. Personnel Development Module:
It ensures that employees develop in line with the company’s goals, and at the same time enables to take individual preference of the employees into account. Personnel development has two important objectives. One is to ensure that there are enough qualified employees and managers in the organization; the other is to show all employees the career opportunities that are open to them, and to promote their work-related and social skills.
The career and succession planning components of the personnel development module provide powerful planning tools that help to achieve these aims. The data regarding career planning, succession planning, and performance appraisal are entered into this module. This module uses career planning to show employees what career opportunities are available if they perform well and prove suitable.
Pre-defined careers provide employees and applicants with the information on how they can progress within the organization. It can portray vertical and horizontal movements within the organizational structure and thus create all kinds of career paths for the employees.
Succession planning identifies candidates who are qualified in all respects to occupy a post at the present moment or in the future. In succession planning, the system enters information about qualifications, career preferences of employees, estimated potential of employees, dislikes, and a pre-defined career.
(1) The system helps in obtaining the suitability of the potential successor and also gives concrete proposals for the training measures that need to be taken for individual candidates.
(2) The module reports the employees’ current suitability and personal preferences and forecasts what they are likely to be in the future. This system provides a powerful reporting and evaluation system.
(3) By performing various targets/actual comparisons the module helps in obtaining a realistic overview of the company’s staffing structure.
(4) It helps in comparing employees’ profiles and displays the results in various formats so that analysis becomes easier.
(5) It can search through the entire company for persons with a particular qualification. This module is flexible and can be tailored to meet the company’s specific needs and personnel development strategy.
(6) It helps in identifying succession planning gaps in an organizational unit.
The organization can use this module for performance appraisal of employees. The appraisals are conducted using standardized criteria, thus ensuring maximum objectivity when results are calculated. It standardizes the process of employee evaluation by providing step-by-step guidelines to writing performance reviews, a check list of performance areas to be included in the evaluation and compute subtotals of each category and weighted grade which can then be electronically stored as part of employees’ records.
(1) The system reports whether an employee was appraised in a given time period or not.
(2) It helps in determining which of the employees in an organizational unit have been appraised and by whom. It gives a list of the appraisals which have not been completed.
(3) It identifies persons who are over-qualified or under-qualified.
(4) It also identifies suitable applicants for a vacancy. As a personnel development instrument, an employee’s appraisal provides clear and reliable information to plan and monitor personnel development measures.
The additional modules in SAP-HR are travel management, training and event management, intranet employee self-service, and business workflow. SAP-HR is an integrated tool which is highly useful in multi-unit organizations whose operations are spread geographically.
Many of the HR decisions are data-based and fool proof maintenance of the same is imperative. Thus, integration of data helps an organization to save on duplication efforts, man hours, and consequential financial cost. Circulation of data, transparency, and on-line employee communication are in-built benefits with this system.
Human Resource Information System (HRIS) – Evaluation
Human Resource Information System (HRIS) is a computerized system that provides current and accurate data for purposes of control and decision-making. It is a system used to acquire, store, manipulate, analyse, retrieve and distribute HR information.
Large quantities of employee data, including training records, skills, compensation rates, benefits, cost etc. can be used easily. The database is kept in a central and accessible location. However, there is certain confidential information which is not accessed by all.
(i) As HR affects the entire workforce the impact of HRIS can be dramatic.
(ii) HRIS can be used to lower administrative costs, increase productivity, speed up response times and improve decision making and customer service.
(iii) Most common HRIS applications are payroll, benefits, enrolment /administration, recruiting (tracking of applicant), personnel administration, training and development, employee self-service and manager self-service.
As many options are available under HRIS, the first step in choosing an HRIS is for HR personnel to evaluate the biggest ‘headaches’ they experience or most time-consuming tasks and then choose the applications that can have the strongest impact on the organization’s financial measures. The next step is to calculate the costs based on average salaries or HR hours that could be saved by using an HRIS along with hours of increased productivity.
In addition, the following items need evaluation:
(i) Fit of the application to the firm’s employee base.
(ii) Ability to upgrade and customize the software.
(iii) Compatibility with current systems.
(iv) User friendliness.
(v) Availability of technical support.
(vi) Time required in implementing and training staff members.
(vii) Initial costs and annual maintenance costs.
The biggest advantage of using HRIS is that the HR personnel can concentrate more effectively on the firm’s strategic decision instead on the routine tasks. Initially HRIS was related to cutting HR costs. But now it is used to share information with line managers to enable them go in for better production practices and cost control solutions.
Human Resource Information System (HRIS) – Benefits and Barriers
Benefits of Human Resource Information System:
In 1992, a survey by Overman (1992) concluded that the potential advantages of HRIS are:
i. Faster information processing,
ii. Greater information accuracy,
iii. Improved planning and programme development, and
iv. Enhanced employee communications.
Some authors have proposed that the use of a HRIS reduces HR costs by automating information and reducing the need for large numbers of HR employees; by helping employees to control their own personal information; and by allowing managers to access relevant information and data, conduct analysis, make decisions, and communicate with others without consulting an HR professional. Ideally, with an appropriate use of HRIS, less people should be needed to perform administrative tasks such as record keeping and more time would be made available for HR managers to assist the Management by providing data on a strategic level.
A significant problem with deciding whether HRIS benefits the organisation is that of measuring the effect of HR and more particularly HRIS on the bottom line. There are few clear cut ways to measure the value of HRIS. While there are measurements for administrative HRIS such as cost reductions in HR departments, it is difficult to measure precisely the return on investment and specific improvements in productivity within the HR departments.
Indeed, while the ideal assessment of HRIS success might include hard measures such as ROI, the control of extraneous variables makes this type of measurement of success difficult, if not impossible. This is why user satisfaction and perception of the system has often been used as a proxy measure for the effectiveness of the system.
To make a human resource department more effective and efficient new technologies are now being introduced on a regular basis so make things much simpler and more modernised. One of the latest human resource technologies is the introduction of a Human Resources Information System (HRIS); this integrated system is designed to help provide information used in HR decision making such as administration, payroll, recruiting, training, and performance analysis.
Human Resource Information System (HRIS) merges human resource management with information technology to not only simplify the decision making process, but also aid in complex negotiations that fall under the human resource umbrella. The basic advantage of a Human Resource Information System (HRIS) is to not only computerise employee records and databases but to maintain an up to date account of the decisions that have been made or that need to be made as part of a human resource management plan.
i. Lack of management commitment
ii. Satisfaction with the status quo
iii. No or poorly done needs analysis
iv. Failure to include key people
v. Failure to keep project team intact
vi. Politics/hidden agendas
vii. Failure to involve/consult significant groups
viii. Lack of communication.
For any organisation, it is required to assess its needs categorically before developing the Human Resource Information System (HRIS).
Human Resource Information System (HRIS) – Notes
With the changing management perspective of the HR function over the recent years coupled with advancements in information technology, the information system as applied to HRM has transformed from paper-based records to the one based on electronics like computer, projectors, internet, intranet, and the like.
Earlier, in the ‘personnel’ era, the top management s perspective towards information system was confined only to maintenance of statutory as well as historical records in respect of employees. HRIS is this period was mainly in the form of personnel forms and records maintained manually. Records management was considered as a crucial service for the efficient management of an organization but was not paid enough attention.
The information system emphasized more on production, sales, and financial activities and less on ‘personnel’, the latter as a function was not accorded the status it deserved. The system of personnel records was governed by factors like the size of the organization, category of employees, nature and content of information required, and the top management’s attitude towards personnel activities.
The activity was found to be mixed with other personnel activities as there was no separate section or group concerned with it. In some organizations, maintenance of personnel forms and records was noted to be the main activity of the personnel department.
Presently, HRIS is an integration of ‘HRM’ and the ‘Information System’. With the development of various concepts and sub-systems of the HR function, the top management’s perspective of HR has undergone a tremendous change prompting extensive use of computers that have the capability of processing, storing, and retrieving massive information of complex and diverse nature.
It helps managers to perform the HR function in a more effective, efficient, and systematic manner. It can be a potent weapon for lowering administrative costs, increasing productivity, speeding up response times, and improving decision-making and customer service.
HRIS is now taken as an integration of activities of the HRM function and the information system in relation to basic HR activities, and covers people, policies, procedures, and data required to manage the HR function. The most potent output of HRIS is the generation of various predesigned reports and graphical formats that help in the analysis of HR activities for sound decision-making.
Top managements are increasingly making use of HRIS in various HR activities like HR planning and analysis, compensation and benefits, staffing, development of employees, performance evaluation, health, safety, and security, collective bargaining etc. Top managements are noted to have become more efficient by way of reduction in time spent on administrative work by 20 to 25 per cent and redeployment of time saved to higher tasks such as decision-making and employee development, eliminating paper and process inefficiencies.
Top managements’ horizon seems to have widened in realizing the transition of HR from an administrative department to a strategic department. Unlike in the past, the modern day managements think of sharing data among all the functional areas to achieve organizational goals.
With that end in view, depending upon the financial constraints, choice of separate software for HR functions, and similar other considerations, an organization may choose either an integrated information technology solution like the ‘ERP System’ or a software like People Soft, SAP-HR, Abra Suite, Vantage, or Oracle-HRMS which are specifically developed for HR activities of an organization.