Chapter 4: Human Resource Information System

The Concept of Human Resource Information System and Related Concepts

Human resource information system consists of all information related to business’s human resources and it can include various data elements such as head count, fluctuation, age distributions, composition of talent pools, use and effectiveness of training and development initiatives, or data sources such as the employee surveys, performance management, succession planning. Kavanagh et al. (2012, p.17) defined the concept in their book titled Human Resource Information Systems as a “system used to acquire, store, manipulate, analyze, retrieve, and distribute information regarding an business’s human resources.

Two important related concepts with human resource information system is electronic human resource management and talent management.

Electronic human resource (e-HR) is a term that identifies a form of technology that enables HR professionals to integrate the business’s HR strategies and processes in order to improve overall HR service delivery. HRIS is the underlying cause of e-HRM effectiveness. HRIS integrates internal and external operations such as health and retirement benefits and applicant recruitment and tracking.

The management of talent is one of the most critical asset to keep organizational performance. There is a strength correlation between the approach to manage talent and the approach to use HRIS. HRIS gives opportunities to managers to make the most potential of their employees to succeed. Combining human resource functions with human resource information technology is deemed a prerequisite for organizational development and success.

The Need of Human Resource Information System in Business

Potential benefits can be summarized as in the following:

• Providing a comprehensive information picture as a single, comprehensive database enables to build a structural connectivity across units and practices in businesses
• Increasing competitiveness by improving HR operations and administrative functions, such as talent management or workforce analyzing.
• Collecting appropriate data and converting them to information and knowledge enhance the quality of decision making and decrease the cost of time.
• Producing a greater number and variety of accurate and real-time HR-related reports.
• Shifting the focus of HR from the processing of transactions to strategic HRM.
• Increase effectiveness through reengineering HR processes and functions.
• Improving users’ satisfaction and motivation by delivering HR services more quickly and accurately.

Potential Risks of Human Resource Information System

• Financial Risks
• Technological Risks
• Political Risks
• Compliance Risks:
• Adoption Risks

Subsystems of Human Resource Information System

• Employee Administration
• Recruitment
• Time and Attendance
• Training and Development
• Compensation and Benefits Administration
• Payroll
• Health and Safety
• Labour Relations

Modules of Human Resource Information System

Human Resource Planning and Human Resource Information System Human resource planning, as “the process for ensuring that the human resource requirements of an business are identified and plans are made for satisfying those requirements” is the fundemantal function of human resource management.

Human resource planning consists of three clear steps :

1. Forecasting future people needs (demand forecasting)
2. Forecasting the future availability of people (supply forecasting)
3. Drawing up plans to match supply to demand.

To successfully forecast human resources demand and supply, HRIS enables to gather some important information to develop skill inventory and HR audit. A skill inventory is a computerized or manual system designed to take stock of information about current employees’ experiences, education, compensation history or abilities (see Figure 4). HR audit is a systematic examination of an organizational workforce in an effort to create an understanding of the current staffing situation. The HR audit compares the past with the present labour specifications to identify trends and patterns in multiple aspects, including turnover, training, absence, and diversity.

The useful information that has to be gathered and analyzed by HRIS to compose skill inventory and HR audit can be summarized as in the following:

• Budget information
• Compensation/Benefits information
• Demographic data
• Experience of employee
• Health/Safety issues
• Identification of bargaining and unionization
• Job analysis information
• Labour market analyses
• Performance data and evaluations
• Recruiting sources
• Retention data
• Retirement plans
• Training development information
• Turnover data

Staffing and Human Resource Information System

Business use two types of recruitment sources: internal recruitment and external recruitment. Internal recruitment includes the employees working in the business to fill the vacant position. On the other hand external recruitment is the evaluation of new applicants outside the business to fill the vacant position.

The optimal use of internal recruitment requires possessing an updated and accurate information of employees. HRIS helps to compose human resource inventory. A human resource inventory consists of a database that keeps the largest possible amount of detailed information about the employees. This kind of inventory includes personnel details, recruitment details, prior positions held, promotions or performance reviews.

Adaptation of information technology in human resource staffing function has created new ways in external recruitment. E-recruitment, in other words Using Web 2.0 services like LinkedIn or online knowledge management systems automate the process of publishing positions and receiving CVs.

Compensation and Benefits And Human Resource Information System

The compensation module of HRIS is basically used to monitor compensation costs, policies, programs, as well as ensure legal compliance, develop salary structures, and support future compensation decisions. Furthermore, it enables the business to make comparisions among jobs and competitors. Thus, compensation module of HRIS can provide useful information for maintaining intenal and external pay equity. Data elements included in this module are salary, bonus, employee type, data of hours worked, deductions and tax status.

The benefit module is used to ensure compliance with legislative requirements, administer programs and traditional benefits. It covers mandatory benefits (such as social security or umemployment insurance), pension plans, insurance protection (such as health, disability, and accident insurance), paid time off (such as holiday time, vacation time, sick leave) and employee service (such as educational assistance or child care).

Performance Management and Human Resource Information System

Performance management systems emphasize the link between employee behavior and business strategies and goals by defining performance in the context of those goals. Performance management has three distinct components. The first component consists of the definition of performance, which includes organizational objectives and strategies. The second component is the actual measurement process itself. Performance measurement for performance appraisal aims to determine whether the employee is performing at the expected level. The third component is the communication between manager and employee about the extent to which employee behavior fits with business expectations (Landy and Conte, 2013, p.203-204).

HRIS provides a rating module to be used in the second component of performance management. The basic purpose of the module is to monitor or track employee performance. In addition, it can be designed to list forthcoming performance reviews and record key performance events.

In the last component stated as communication or feedback, performance management module of HRIS generates reports like performance contract and annual summary appraisal for each employee. These reports can highlight information about significant variations between original estimates and actual performance. Managers benefit greatly from using performance management module to give employees highly effective performance reviews on a highly regular basis, whether it’s on a dayby-day or goal-by-goal basis. With the assistance of feedback, employees exactly know what the manager want from his/her, what he/she has done right or wrong and what could be done to further improve quality of work and meet talent needs.

Training and Development And Human Resource Information System

HRIS enables HR professionals to carefully design and implement training and development intervention. HRIS facilitates Training Need Analysis to decide which programme might best meet the need of extant human capital of business. Competence module of HRIS allows to store data in system related to business strategic and critical goals. Personal development discussions in the system, managed by employees and managers, help to understand the requirements and expectations. Historical data from previous personal development discussions can be easily followed. The outcome of competence module of HRIS is to compose employee talent profile involving the present competence level and future goals and map showing the competence gap. Each profile is aggregated to an organizal talent profile indicating the competence requirements as a whole. Competence module of HRIS also contributes to the emergence of networks that employees with similar interest share their knowledge.

Implementation of Human Resource Information System

Typically, implementation of HRIS follows a three step process:

• Adoption phase
• Implementation phase
• Institutionalization phase

- Adoption Phase:

Whether performing a routine administrative task or making fairly high-level decisions governing the future directions of a business, the HRIS is designed in an integrated fashion to provide the HR professional with easy access to all the information needed to support decision making.

A need analysis helps the business decide on what the system should be capable of doing and what the technical specifications will be, and helps the business develop an information policy about how the information should be managed with respect to storage and access (Bulmash, 2006, p.60).

- Implementation Phase:

Four bacis steps are the main themes of implementation phase.

1. Process-Mapping: Process mapping helps to generate a dataflow model to identify data elements, processes and outputs of each step.
2. Implementing: Data migration and configuration/fit-gap processes must be managed.
3. Testing: After implementing, it is essential to monitor the performance of the system which is expected to meet the needs of business.
4. Privacy and Security: Information security and privacy must be managed and kept by HR managers.

- Institutionalization Phase

The last phase of HRIS implementation is training the users of the system. As with any change, employees hesitate wondering if they can transit to a new HRIS. HR may have difficulty with the change as well. Very recently, a popular extension of HRIS technology has been selfservice for employees and managers in order to automate workflow. With these technological developments, the typical activities that HR used to carry out are no longer required and, as a result, HR staff may feel disenfranchised.