Human Resource Information Systems - Article Example

Assessment #1 Human Resource Information Systems (HRIS) Executive Summary HRIS has great advantages for both employees and management. This software can personalized the information for the particular employee based on their personnel record and employees can easily access current benefits information. It can greatly help reduce mistakes in filling-up forms as they have on-line forms for claims or request with built-in error checking routines. Furthermore, routine HR transactions such as processing of benefits claims or payroll can be performed very quickly at a lower cost. Since the data are available in databases, performance appraisal, recruiting, or salary planning can be done much more efficiently. Today, a considerable number of large organizations are already in the process of implementing their HRIS systems in their Local Area Networks and Intranets to enable fast and easy information dissemination and data gathering. The web-based ‘self-service’ approach of HRIS systems eliminate the needs to fax hard copies of forms thus reducing costs and generating cleaner data for the organization. Managers can now therefore clearly oversee the recruiting cycle and research salary information. Utilization of this technology is on the rise and many organizations have reported huge savings and improved decision-making in terms of quality and speed. Table of Contents i. Introduction - 4 ii. Human Resource Information Systems - 4 iii. State of Organizational Readiness - 8 iv. Organizational User’s Needs - 9 v. Suitability of Commercial and In-House Packages - 10 a. Capabilities and Functionalities - 11 b. Advantages and Disadvantages - 12 c. Installation, Maintenance, System Cost and Benefits - 14 vi. References - 16 i. Introduction The administrative and functional human resource management services of an organization are undoubtedly realigning increasingly toward being a commodity or product that can be delivered in a number of different ways. Historically, they have been delivered by an in-house HR function in a labour-intensive, inadequately integrated, and costly manner. There is little doubt that this labour-intensive approach is obsolete and needs to be replaced by a new model. The apparent technology to replace it is an IT-based HR system that provides self-service. This research will evaluate HR information management and HRIS functionality and benefits. ii. Human Resource Information System A significant group of software pertinent to knowledge management in the workplace is Human Resource Information/Management Systems. They are systems that are normally developed and implemented by vendors that provide computerized solutions to an extensive variety of human resource functions as well as recruiting and job posting, benefits enrolment and processing, career planning and personnel development, performance appraisal and tracking, and aspects of payroll. Traditionally, HR information and transactions have been paper-based, concerning extensive numbers of memos, policy and procedure handbooks, and forms. In the past decade, fax and telephone answering systems have sped up the processing of HR information, but it has remained a paper-based system. However, once the information came to be stored in computer databases and most employees obtained access to computers, it was a natural progression of HR transaction to become gradually more computer-based. With the introduction of LANs and Intranets, this progression toward on-line distribution and processing of HR information has improved drastically to the point where roughly all HR functions in organizations are done by electronic means. This progression towards HRIS has enormous advantages for both employees and management. Employees can effortlessly access up-to-date benefits information and, in numerous situations, the software can customize the information for the certain worker based on their personnel record. On-line forms for claims or request can include helps and error-checking routines that diminish inaccuracy and inappropriately accomplished submissions thus saving time for every one. Information regarding job posting, fresh business opportunities, amendment to benefits, etc. can be disseminated rapidly and consistently to all employees via e-mail or bulletin postings. Regular HR transactions such as processing of benefits claims or payroll can be performed exceptionally fast and at lesser cost. Further intricate tasks, such as performance appraisal, recruiting, or salary planning, can be done much more competently because the pertinent data are accessible in databases for assessment and manipulation via spreadsheets and specialized analysis tools. A good number of large organizations are in the process of moving their HRIS systems to their LANs and intranets to make information distribution and data gathering straightforwardly accessible to all employees. For instance, in an industry white paper prepared by NetDynamics Inc. they explained how a number of their clients are doing this, using the PeopleSoft HRIS and their web server software. Two companies at the forefront in HRIS technology for knowledge management are AT&T and Boeing. With a diverse computing environment, AT& T’s strategy is to deliver functionality from several incongruent systems through a common web-based user interface, while combining existing custom applications such as recruitment into PeopleSoft. AT&T started its intranet efforts with four self-service applications. First is a recruitment application for posting job requisition, updating resumes, and viewing internal job postings. Second is a personal data maintenance application in which employees can maintain information such as address, e-mail ID, and military status. Third, a manager reporting application for retrieving employee demographic data such as salary band groupings. Lastly, an address updates application for updating mail stops and processing employee’s work address changes. The web-based self-service applications reduced the necessity to fax hard copy forms and process written change requests, decreasing costs and producing fresh data for the organization. AT& T employees are now able to review and update their personal information at their desks with virtually no training or software installation. Managers can better supervise the recruiting cycle and research salary information, and the company has in place and enhance integrated system for managing costly HR information flow process. HRIS with Boeing Corporation is through the development of “My Information” web site for employees on the company’s intranet. The application starts from a central Boeing People Service pager. After logging on, the employee enters a custom-made general service page, categorized into personal information, career information, and financial information. The employee may view or change records including W-4 form, skill inventory, home address, work phone, mail stop, emergency contact, education, monitored training, and pay check information. Some updates to information take place immediately or in some situations are indicated as ‘pending’ until the suitable batch system processes the request (Marquardt and Kearsley 1999, p.174-175). In general, the use of information technology of all types is altering the different roles of HR management. Over the past decade, organizations have developed and put into service information systems to abridge use of huge quantities of HR data. Better use of technology has led to organizational use of a human resources management system, which is an integrated system providing information used by HR management in decision making. The HRMS/HRIS terms stresses that making HR decisions and not just building databases, is the most important reason for gathering data in an information system. The use of HR technology has developed hastily in the past decade as ‘workforce technologies’ are used to alter the way HR delivers its activities. An HRIS/HRMS serves two main objectives in organizations. One is link to administrative and functioning efficiency, the other to effectiveness. The first of an HRIS/HRMS is to enhance the efficiency with which data on employees and HR activities are compiled. Many HR activities can be done more economically and more rapidly and with less paperwork if computerized. One survey about 200 companies found a 60% decline in HR administrative work when employees were given self-service access to HR through Web-based systems (Mathis and Jackson 2006, p.19). The second purpose of an HRIS/HRMS is strategic and is linked to HR planning. Having accessible data enables HR planning and managerial decision making to be based to a greater degree on information rather than depending on managerial insight and instinct. One study found that 47% of the surveyed firms use HR technology to help with strategic HR planning and predominantly with attracting and preserving human resource talent. The final phase of implementing HRIS/HRMS is HR ‘work flow’. In this phase, not only can the users access information and input changes, the system will now direct the users through all the steps of the transaction. An rising number of organizations have HRIS/HRMS that allow employees access to Web-based 401(k) information, and employees and managers are able to make changes to their own data without the aid of an HR professional (Mathis and Jackson 2006, p.19). iii. State of Organizational Readiness In Stambaugh (2000) analysis, part of the reason for the perception of non-delivery and non-responsiveness of HR commercial systems has to stem from the “sheer diversity of the population that software vendors are trying to serve” (p.2). Therefore, vendors have no choice but to support all of them. Developing a plan with some kind of structure, a steady framework around which they can hang the diverse and growing elements of their own businesses. In view of the multifaceted and wide-ranging challenges they will be addressing, it is extremely improbable that they will all be contented with the similar framework and structure (p.2). Part of the reason of discomfort with the ‘one plan’ approach is the multiplicity of systems out there that no one structure will be right for everyone predominantly in this world of change. For instance, some corporate strategies and their accompanying HRIS support programmes will prefer a careful, deliberate, and incremental path for change while others will jump in with both feet at this instant (p.3). iv. Organizational User’s Needs An HRIS has scores of uses in an organization. The most essential is the computerization of payroll and benefits activities. Another widespread use of HRMS is tracking the EEO/ affirmative action activities. Beyond those basic applications, the use of Web-based information systems has allowed the HR unit in organizations to become administratively competent and to deal with more strategic and longer-term HR planning issues. Web-base systems include Bulletin Boards containing information on personnel polices, job postings, and training material that can be accessed by employees worldwide. Data Access that are linked to databases in an extranet or an intranet to allow employees to access benefits information such as sick leave usage or 401(k) balances. This frees up time for HR staff members who beforehand spent significant time answering and routing employee inquiries. Employee self-service on the other hand enable employees to access and update their individual personnel records, modify or enrol in employee benefits plans, and respond to employment opportunities in other locations. Apparently, preserving security is vital when the employee self-service is option is available. Comprehensive linkage allows the incorporation of an HRIS/HRMS to the databases of vendors of HR services and an employer to be linked so that data can be exchanged electronically. In addition, employees can correspond openly from all over the world to submit and retrieve personnel details, take on-line training courses, and provide inclusive career planning data. The greater of use HRMS technologies is shaping how HR activities are done in countless ways. For instance, Coca-Cola has Web-based employee self-service programs for its worldwide staff in over 200 countries. Employees can go on-line to access and change their personal data, enrol in or change benefits programs, and organize performance reviews (Mathis and Jackson 2006, p.20-21). v. Suitability of Commercial and In-House Packages HR information systems are much more than automating the payroll or skill inventory in organization. It is an incorporated approach meant to accelerate the decision-making process concerning HR and enhancement of collaborative communication. Software packages such as HRMS ORACLE, People soft-HR, and SAP-HR are accessible which are appropriate for building an HRIS. The system is used in the field of recruitment principally pre-employment application process, training requirements analysis, HR planning mainly in forecast techniques, payroll, skill inventory, career and succession planning, employee benefit administration and services, collaborative communication in organization, HR personal data, job evaluation, compensation management, and employee surveys. Areas of utilization of this practice are mounting during the current decade. Numerous organizations have stated enormous savings and enhanced decision-making in terms of quality and speed. For instance, Chevron estimated that it saved to the tune of $2000 per employee resulting from the integration of employee information through HRIS. Philips Petroleum reported saving over $100 million ensuring accessibility of essential information directly to managers (Kandula 2004, p.69). SAP HR is an integrated software module developed by SAP AG that enables medium and large size organizations to maintain a common HR database in a systematic manner. This software helps organizations in efficiently managing a wide range of HR functions that include the organizational management as it offers an assortment of organization models like matrix, project organization, flat structures etc. We can build and preserve entire organizational structure, including organization units, positions, jobs, tasks, and the reporting structure with ease and efficiency with its graphical planning tool. It allows modelling the organizational structure and altering it as required to reflect its dynamic development and resolve the current staffing condition, future needs, unoccupied positions, and qualification shortage. Its Personnel Administration features make it possible for management to realize a streamlined, broad, and completely integrated HR data structure. It allows storing all data with effective dates, implement validity checks, and maintaining accurate log of data entered. Data entry can be streamlined and hasten with the help of swift data entry functions for mass data input, standardized default values to facilitate data maintenance, customizable menus that are user specific. Further, this system empowers employees to view, create, and maintain their own data at any time, from their workstation, anywhere in the globe (Kandula 2004, p.69). a. Capabilities and Functionalities The SAP human resources (HR) area contains business processes for personnel administration such as applicant screening, payroll accounting, travel expenses, etc. and personnel development including workforce planning, seminar management etc. The business processes coupled with the HR modules are exceedingly country specific to adhere to national laws relating to employment, tax, benefits, and so forth. Since these laws are subject to change frequently, many enterprises deploy a dedicated HR system detach from the other systems to limit the downtime required when applying legal patches to the HR department. Its other functions include cross-application modules that provide general-purpose functionality independent of specific modules. Applications include business workflow automation, EDI support, document management systems (DMS) with an archive link and product data management (PDM) including CAD integration. However, the most essential functionality is Application Link Enabling (ALE) that automates the data exchange between independent systems (R/3, R/2, or external). ALE provides the ability to synchronize the databases of distributed SAP systems. Reflecting the customer business needs, the scenarios reach from systems distributed around the globe to physical consolidation in one or a few data centres. ALE is the technological basis for the combination of mySAP.com components and it can be used for reproducing a system to another location. ALE has an impact on the CPU and memory utilization, so it must be accounted for on the server(s) that is sending documents. (Missbach and Hoffman 2000, p.9) b. Advantages and Disadvantages A basic principle of HR competence is to make sure that HR procedures transpire more efficiently, better, faster, and cheaper. An effectual HR practices mean that the organization has the ability to do better HR work at lesser cost. HR effectiveness is being increased in many organizations through proper deployment of technology like SAP HR, building shared service departments, and increasing investments in training and development of HR professionals. This is essential since unless HR departments master the quality, speed, and costs of the delivery, they will not gain reverence and integrity required to deliver more strategic value (Schuler and Jackson 2006, p.129). Apart from the apparent, bottom-line impacts, the growing business requirement to press on more people-management activities out the line managers from the HR functions. In order to do this, SAP HR provides management and employee self-service tools. The integrated training administration system for self-registration has the capability to measure training costs more methodically, analyze, and track training needs. E-HR or employee self-service came on board with the SAP system. It provides the chance for employees to have ownership of their personal data, and control of altering it, anywhere in the world. E-HR can lessen irritation; augment employee satisfaction, and consequence in a considerable improvement in data precision. This leads to administrative time saved in answering questions, pursuing and trying to change erroneous data and making certain the data is only changed in one place. The decrease in duplicate activities is particularly priceless in organizations with a number of outsourced relationships and where downstream systems support an assortment of functional processes like flexible benefits, payroll, pensions etc.. The precise information can enhance internal customer satisfaction that in turn influence external customer satisfaction and enables the analytical and administrative departments to be focused on more advantageous activities (Schuler and Jackson 2006, p.451). Technology companies like Dell, Cisco, Hewlett-Packard, and Microsoft have very inspiring custom HR self-service systems. However, it is extremely improbable that most companies will still develop similar kind of custom systems since doing so is just too costly and time consuming. Organizations can only either take on other alternatives such as purchasing web-based systems from ERP vendors like SAP or they can obtain HR IT applications designed to do compensation administration, staffing, training, and other HR activities from software vendors. However, there is a considerable drawback associated with choosing a set of “best-of-breed” software systems since HR data frequently involves using them in compound processes thus software integration is predestined. This can be expensive and time consuming (Lawler et.al. 2006, p.113) and regardless of the benefits ERP systems like SAP, it remains the most intricate and expensive computer-based systems. Analysis of ERP implementation practices reveals that it is a multifaceted and rather inflexible system requiring a company to redesign its business processes. In addition, ERP systems require practically a life-changing experience for each person involved and employees have to trounce traditional conservatism in operating a previously strange computer systems which has new input forms, output report, functionality, etc. (Bidgoli 2004, p.713) c. Installation, Maintenance, System Cost, and Benefits The selection and implementation of an ERP system consists of several major steps that prepare a framework for successful implementation. Once the software is identified, definition of the performance measure for the new system should be done and create an initial detailed implementation project plan. Educate the project team and assess the integrity of the existing database. Install new or upgrade existing hardware and install the software. Next is educating the ERP users, and characterize and improve procedures for the new system. Maintain data accuracy and integrity and enhance the system persistently (Bidgoli 2004, p.715). Implementation time software cost depends on the company’s size, number of implemented applications, and level of planning and preparation of the implementation process. However, implementation is only one part of the total cost of ownership (TCO) of ERP systems. In general, TCO includes software license fees, hardware cost, installation and implementation fees, cost of maintenance, and customer support. The average TCO of an ERP could run up to $85 million but for a number of large organizations, it could reach $400 million (Bidgoli 2004, p.713). However, with these enhancements, more efficient and effective management of resources lead to major cost savings and increased return on investments (ROI). In 2002, according to Bidgoli (2004), CIO Magazine suggests that the median annual savings from newly implemented ERP systems are around $1.6 million. In addition, apart from what we have discussed earlier (Chevron and Philips Petroleum), 70% of companies with ERP felt that their systems have been successful because of swift information response time, lesser inventory levels, better cash management, reduced direct operating cost, and improved interaction across the enterprise. vi. References Bidgoli Hossein, 2004, The Internet Encyclopedia, Published 2004 John Wiley and Sons, ISBN 0471222011 Kandula Srinivas, 2004, Human Resource Management in Practice: With 300 Models, Techniques and Tools, Published 2004 Prentice Hall of India, ISBN 8120324277 Lawler Edward, Boudreau John, and Mohrman Susan, 2006, Achieving Strategic Excellence: An Assessment of Human Resource Organizations, Published 2006 Stanford University Press, ISBN 0804753318 Marquardt Michael and Kearsley Greg, 1999, Technology-Based Learning: Maximizing Human Performance and Corporate, Published 1999 CRC Press, ISBN 1574442147 Mathis Robert and Jackson John Harold, 2006, Human Resource Management, Published 2006 Thomson South-Western, ISBN 0324289588 Missbach Michael and Hoffmann Uwe, 2000, Sap Hardware Solutions: Servers, Storage, and Networks for Mysap.Com, Published 2000 Prentice Hall PTR, ISBN 0130280844 Schuler Randall and Jackson Susan, 2006, Strategic Human Resource Management, Published 2006 Blackwell Publishing, ISBN 1405149590 Stambaugh Robert H, 2000, 21 Tomorrows: HR Systems in the Emerging Workplace of the 21st Century, Published 2000 Rector-Duncan, ISBN 0967923905 Read More