CHAPTER 26

The Human Resource Information System (HRIS)

CHAPTER OBJECTIVES

After reading this chapter, you should be able to:

1. Understand the objectives of a human resource information system (HRIS)
2. List the types and components of an HRIS
3. Enumerate the steps in the implementation of an HRIS
4. Discuss the applications of an HRIS in human resource management
5. Explain the benefits of an HRIS
6. List the conditions essential for an effective HRIS

Rallis India Limited is a leading agro-chemical company in India. The company is one of the subsidiaries of Tata Enterprises. It has nearly 150 years of experience in the rural markets of India. The HR philosophy of this company is “attract the good, retain the better and advance the best”. The approach of this company towards human resources can best be summed up through a single term PRAGATI—People Related Actions for Growth and Achievement through Transformation and Involvement. Rallis has a well-planned and comprehensive induction programme for its new employees. Besides, the company focuses on raising the skills and knowledge of the employees constantly.

Rallis India has chosen an on-demand performance management system, EmpXtrack, to manage the performance of its employees effectively. This web-based software of Saigun Technologies supports the HR department’s efforts to align its strategies with the organizational strategy. The performance management system is an element of the HRIS that enables employees to have complete control over their performance and goals. In fact, the primary reason for Rallis India’s automation initiative is to further reinforce its performance-driven culture. The efforts of Rallis India to enhance the efficiency of performance management through an HRIS clearly explain the importance of this new and emerging concept. We shall now discuss the importance of the various aspects of HRIS in this chapter.

Introduction

The human resource information system (HRIS) is basically a database system developed to assist HR in decision making and reporting. It is normally one of the elements of the overall management information system (MIS) of an organization. It is indeed an IT-enabled HR service available to the HR managers for data analysis and decision making. HRIS helps the HR managers in making a quality decision by ensuring them an adequate and timely availability of all relevant information. The scope of HRIS is so wide that it can provide information about every aspect of an employee, beginning with his recruitment and ending with his retirement.¹ As such, HRIS facilitates the use of computer technology to streamline HR operations, cut costs and eventually enhance the effectiveness of human resource management. However, the utility and the elements of HRIS may not be identical for all organizations. Typically, the HRIS as a system has three elements, namely, input, process and output. The access to any HRIS can be available to the users through the intranet, extranet and portals. When HR services are made available online through Web pages, it is called e-HR.²

The scope of HRIS includes all the HR functions of the organization, namely, recruitment and selection, training and development, wages and salary administration, incentives and benefits, grievance resolution, human resource planning and succession planning. The different systems dealing with the HR functions are the job evaluation system, the job analysis system, the HR planning system, the applicant tracking system, the employee benefit system, the attendance control system, the performance management system, the employee career planning system and the grievance management system. The goal of bringing these HR functions into the ambit of HRIS is to enhance the efficiency of these functions. However, any HRIS would be effective only when the information available for decision making is timely, accurate, concise, relevant and complete.³

Systematizing and streamlining the HR operations and enhancing the efficacy of the HR department are the focus of the definitions of HRIS. Box 26.1 lists some of these important definitions.

We may define an HRIS as an automated system for gathering, storing, retrieving, analysing and disseminating HR-related data for facilitating operational, managerial and strategic decision making that impacts human resources.

Objectives of an HRIS

The primary purpose of an HRIS is the application of technology for enhancing the efficiency of human resource management. Initially, the purpose of an HRIS was just to transform the manual information-keeping system into a computerized form. As the years progressed, the applications and utility of an HRIS increased manifold, and now, there is a broad-based and self-contained HRIS available with numerous rich features. The present-day advanced HRIS can do several more functions with the features and options available in it.⁸ We shall now see the objectives of an HRIS.

• To enhance the ability of the human resource management to leverage and absorb new and emerging opportunities and challenges in the business horizons.
• To ensure efficient collection, storage and distribution of HR-related information in a paperless work environment.
• To create an HR information hub for the whole organization which facilitates effective people-to-people and people-to-information contacts.
• To establish an integrated system for achieving an efficient and purposeful integration of various human resource functions and effective deployment of strategic human resources.
• To facilitate faster processing of information and more effective decision making to make the optimum use of the available human resources.
• To enable the HR managers to devote more time to strategic issues by relieving them from routine operations through the employee self-service system (ESS). The ESS in the HRIS lets the employees have direct access to select information without disturbing the HR manager.
• To facilitate employees’ direct and online access to information on training, payroll and other relevant matters.
• To maximize the accuracy, reliability and validity of workforce records and eliminate the cost and wastages associated with the manual maintenance of HR records.

Components of an HRIS

A human resource information system performs three inter-related activities as a database. These are (i) receiving inputs in the form of data from different sources; (ii) storing and processing data with the purpose of transforming them into meaningful information; and (iii) generating output in different forms, as required by the users. The working of an HRIS is diagrammatically explained in Figure 26.1.

Input

Input refers to all employee-related data, HR policies, procedures, corporate goals and information about the statutory provisions entered into the HRIS for conversion into the desired form of output. At present, even the scanned images of documents and signatures can be entered as input.

Data Processing

Data processing refers to the storing and processing of data by a computer with the help of the software that issues instructions for processing. This stage involves the methodical performance of operations like handling, merging, sorting and computing of data. The end result of data processing would be data conversion. The success of data transformation depends critically on the validity, reliability and utility of input data.

Output

Output refers to the generation of reports in the form desired by the users. This is the final stage of an HRIS process. The quality of the report indicates the efficiency of the HRIS performance. In order to make the output valuable to the user, the HRIS must process the output and format its presentation in a way that is easily understandable to all the users of the report.⁹

Types of HRIS

Since the latest versions of HRIS software have wide applications in organizations, it is up to the management of an organization to decide the purpose for which and the level at which it intends to use the HRIS. For instance, some organizations may use HRIS only for data storage and report generation, while some others may use it for decision alternatives’ generation, decision making, and even for simulation. Generally, the HRIS supports management at three levels of an organization. These are: (i) the electronic data processing (EDP) level, (ii) the management information system (MIS) level and (iii) the decision support system (DSS) level.¹⁰ We shall now discuss these three methods in detail.

The Electronic Data Processing (EDP) Level

The purpose of an HRIS at the EDP level is collecting, storing, manipulating, analyzing, retrieving and distributing relevant information regarding the human resources of an organization. This is primarily used at the operational levels of the organization. The users of EDP are normally the basic-level operators. The goal of EDP in an HRIS is to computerize the routine HR activities of the organization like attendance, payroll and basic employee information, skill inventory, applicant tracking, employee training data, career profile, employee insurance, income tax details and other routine reports. In its early stages of development, the HRIS was primarily used only for the EDP-level operations.

The Management Information System (MIS) Level

The next level of HRIS is called the management information system, in which the HRIS has much wider and advanced applications. An MIS is basically a system that provides information to managers, who use it for decision making. In an MIS, the relevant data are converted from storage to knowledge and this ultimately helps the manager in directing and controlling human resources effectively.¹¹ The reports produced by an efficient MIS are (1) informative, (2) relevant, (3) sensitive, (4) unbiased, (5) comprehensive, (6) timely, (7) action-oriented, (8) uniform, (9) performance-targeted, and (10) cost-effective.¹² The MIS is primarily used by the middle-level managers for information retrieval, data analysis and report generation. The MIS is used for a few specific data analyses like recruitment analysis, selection analysis, position analysis, manpower analysis, training needs analysis, post-training effect analysis, promotion analysis, performance evaluation analysis, attitude survey, productivity analysis, personnel cost analysis and compensation analysis.

The Decision Support System (DSS) Level

The last level of an HRIS is called the decision support system (DSS). The primary users of a DSS are top managers and executives. The DSS is basically an interactive software-based model that helps the users in simulating situations and making decisions. It works on the basis of the “what if” analysis and simulation of the future scenario. This model is capable of generating several decision alternatives for the users in the decision-making process. DSS is useful in staffing simulation, succession management simulation, career management simulation, training administration and evaluation simulation, performance management simulation, and compensation management simulation.

Implementation of an HRIS

Many organizations have realized the need to apply technology to human resource management in order to develop human resources as strategic tools to survive and grow in an intensely competitive market. In fact, there is a general expectation that the future success of human resource management depends on how effectively it is integrated with technology.¹³ HRIS is known to play a major role in planning, administration, decision making and control activities of the human resources management. Thus, organizations, both big and small, show a keen interest in installing an HRIS. Since the installation of HRIS is generally an irreversible and expensive process, organizations need to be careful in deciding about its installation. Each organization can have its own approach towards the process to be adopted for implementing HRIS. As mentioned in Figure 26.2, the installation of a typical HRIS may involve the following stages: (i) determination of the need for HRIS; (ii) constitution of a project team; (iii) development of the project plan; (iv) designing and developing system specification; (v) identification and training of user groups; (vi) implementation and maintenance; and (vii) evaluation of effectiveness.¹⁴ We shall now see these steps in detail.

Determination of the need for HRIS

Before implementing an HRIS, the management must clearly decide about the need for an HRIS in the organization and in the HR department in particular. In this context, it should first assess the present HR operations that require system-enabled support and then the extent to which these operations require such support. Factors like the size of the organization, the strength of the workforce, the corporate and HR philosophies, the present level of HR efficiency, and the existing bottlenecks in the HR operations should be considered carefully before any decision is taken regarding the HRIS implementation. The existing HR practices, the degree of centralization, the present mode of report generation and the future HR information requirement can also influence the HRIS installation decisions. As part of assessing the HRIS needs, the views of the managers and the employees can be ascertained through interviews with the HR and other connected staff and through observations and document reviews. When the management is convinced that the HRIS can make a substantial difference to the organization in terms of efficiency and productivity, it may go ahead with its implementation in the organization.

Constitution of a Project Team

Once the management decides about the implementation of the HRIS, the next step is to choose a specialized team for this specific purpose. The main task of this team is to supervise the entire operation from the planning to the execution of the project, including post-installation monitoring. Since the project is associated closely with HR operations, the HR professionals must be involved in the task force in substantial numbers along with technical people.

Deciding the Project Plan

Normally, the first assignment of the task force is to evolve a comprehensive plan regarding how and when the team should begin its task, how it should proceed with the task, and so on. The preparation of an exhaustive plan can help the team in foreseeing the likely challenges in the process clearly and in developing strategies for surmounting these challenges. In any case, the plan developed by the task force must be practicable and well focused. As part of the project plan, the team members may also develop guidelines for order placement and evaluation.

Designing and Developing System Specifications

In this stage, the task force should develop a precise system design and specifications for the proposed HRIS after examining and defining the users’ data requirements. Certainly, identification of data needs and applications is critical for developing the design and programming specifications. For this, the task force members must have adequate knowledge of the concepts, methods and techniques of computer system design and specification preparation. They must also be aware of the techniques for flow chart preparation, program coding, compilation and testing. Since the HRIS software would be controlling the processing part of the HRIS, it is essential to consider the input data characteristics and the desired quality of output information.

Identification and Training of User Groups

This is the most sensitive stage in the entire HRIS planning process because employees would now be involved in the HRIS implementation. At this stage, the probable users of the HRIS are identified and imparted the necessary training for handling an HRIS. The task force must anticipate vocal or subdued resistance from the existing employees for two reasons. One, they may oppose automation due to the fear of job losses in the organization and the compulsion to forgo their skills and abilities learnt from the existing practice. Two, they may fear and doubt their own ability to learn and master the new technology and techniques. The task force, along with the management, must act judiciously in dispelling the fears of the employees and in imparting training to make them fit for working in an HRIS work environment. A timely acquisition of information system capabilities by the HR staff is essential for a seamless introduction of HRIS in the organization.

Implementation and Maintenance of an HRIS

Once the HRIS software is procured from the vendor, it should be properly installed under the careful supervision of the task force as per its plan and guidelines. The team must conduct performance testing to ensure that the HRIS fulfils all the system specifications and user requirements. It is important for the team members to analyse the real-time functioning of the system and decide the critical system performance to ensure that the system performance meets user needs. In this regard, the team must have adequate knowledge of the tools and techniques used for testing the software. In fact, they must develop the test data for checking the efficacy of the entire system.

Once the testing phase is over, the task force must make the HRIS available to the actual users in the HR department. The performance of the users in the HRIS environment must be observed closely. The task force must also ensure the availability of the user operational and program manuals. When any complaint and trouble is reported about the HRIS, it must be ready for troubleshooting. Similarly, it must ascertain the views and suggestions of the users for improvements in the system functions. The HRIS must be properly maintained to ensure that it produces optimum results throughout its life. If the task force is permanently responsible for maintaining the HRIS throughout its lifetime, it must keep a watch on its performance and maintenance constantly.

Evaluation of Effectiveness

The organization must undertake periodic evaluation of the performance of the HRIS to ensure that it is fit and adequate to meet the present and future information requirements of the users. When the HRIS is found to be inadequate in its present form, the management may update it with new features. In contrast, if the present form of the HRIS has become obsolete due to technological and other changes in the environment, the organization should begin its search for a new HRIS by replicating the whole HRIS implementation process.

Applications of an HRIS in Human Resource Management

Due to a manifold increase in the number of employees and the HR functions performed by the HR department, it became imperative for many organizations to bring almost all HR activities under the HRIS environment. Incidentally, the contemporary HRIS software programs are capable of handling nearly all kinds of HR functions like applicant searching, training management, succession planning, flexible benefits administration, risk management, financial planning, turnover analysis, compliance with statutory regulations, attendance reporting and analysis, human resource planning, accident reporting, performance evaluation, promotion, wage management and separation. Yet, the importance of and urgency for an HRIS might differ from one organization to another, depending upon the size, nature of operation, affordability and managerial philosophy of the organization. With a wide variety of applications available through an HRIS, the management must be careful in prioritizing the HR activities for HRIS applications. Figure 26.3 depicts the different applications of an HRIS. We shall now see these applications in detail.

Applicant Tracking System (ATS)

Many big and small organizations are now gradually automating their recruitment process by installing an applicant tracking system software. The purpose of the applicant tracking system is to streamline the complete recruitment process and offer a unique support for all forms of candidate applications. The applicant tracking system normally assists the organization in screening applicant capabilities. It facilitates the accomplishment of the hiring goals of the organization in a fast and cost-effective manner. The applicant tracking system compares the job requirements of a vacant position with the applicants’ resumes posted by the prospective candidates to decide the suitability of the candidates. When the employee resume matches with the job requirements, the information about the candidate is forwarded to the recruiting officer or HR manager for further processing. Normally, the applicant tracking system seeks information about name, age, qualification, previous experience, technical competence and even names for reference checks. Some organizations may outsource the applicant tracking by employing external manpower consultants or Web sites. Box 26.2 outlines the utilities of applicant tracking systems in a recruitment process.

Training and Development System

The purpose of a training and development system is to help the employees gain new knowledge in a time-bound manner and prepare them for future assignments. The training system or module helps the user to track the qualifications and competency levels of the employees constantly. Then the training module uses the job codes to link job requirements with employee competencies to determine the training needs through a process called competency matching. Based on its assessment of the training needs, the training system schedules and registers the employees for training courses. Once the training programme is over, it automatically updates the employee profile by recording the result of the training programme in their profiles. Moreover, the training module can provide information about the availability of the training and development programmes both within and outside the organization and also about the time, duration and cost of these programmes. The employees, by accessing the training module, can choose the training packages suitable in terms of timings, duration and cost.

HRIS also facilitates workplace e-learning by the employees as part of their training programme. In e-learning, necessary learning and other supportive resources are made available to the users through computer network. In fact, e-learning enables the employees to gain new skills and knowledge in their spare time or at a time most convenient to them without disturbing their regular work schedule. In e-learning, contents are usually delivered to the users through the electronic media, which may include, among others, the Internet, intranet, extranet, interactive TV and satellite broadcasting.

Electronic Performance Support System (EPSS) As an alternative to the formal training system, an increasing number of organizations have of late introduced the Electronic Performance Support System (EPSS) to increase the employees’ skills and productivity. In fact, an EPSS is a computer-based system that improves worker productivity by providing on-the-job access to integrated information, advice, and learning experiences.¹⁵ It provides employees with direct, immediate and individualized online access to the full range of job-related information necessary for effective job performance. Thus, it enables the employees to learn and perform the job almost independently. As such, it supports employees in several ways like providing information about the processes and procedures involved in performing a job, making available a huge job-related database, helping in locating the required information and providing information through multimedia for faster and effective learning.

Compensation Management System

The compensation management system aims at computing employee payments through an integrated payroll system. It makes a flexible module available for the processing of pay and all related financial transactions. This compensation system normally considers employee working hours, attendance and productivity for computing the salary of the employees. The structure of the pay slip can be altered to include any number of “income” and “deduction” heads in the compensation module. Some compensation systems even have automatic cheque-writing facility for the payment of compensation. Similarly, a few compensation management modules can send relevant notifications to the employees, seeking pay-related information like tax savings, preferred tax deduction, etc. The other facilities generally available with the compensation management modules are bonus and incentive computation, earned leave computation, stock option computation and other pay-related computation.

Performance Management System

The main goal of the performance management system is to track employee performance reviews and the due dates for next reviews. It aims to develop, motivate and retain a high- performance workforce all year round. It permits the management to streamline the entire performance planning and review process by centralizing workflows and increasing the visibility levels of performance management. The latest versions of the online performance management system permit the organization to automate the review process. The performance management system also allows the managers to have instant access to current and correct employee information while writing performance reviews. It provides a performance evaluation report “on demand” to the higher authorities while deciding the career and succession plans for the employees. Besides, the performance management module protects the confidentiality of the performance reviews by restricting their accessibility. Obviously, it facilitates the HR department in securing complete control of the employee performance data. The critical requirements for effective implementation of the performance management system are effective communication, clear accountability from top to bottom, necessary training, suitable alignment, and accurate measurement.¹⁶

Manpower Planning System

The primary purpose of a manpower planning system is to ensure that an organization has the right number of employees working in it at any point of time to complete the organizational goals. The manpower planning module automates the manpower requests based on the long- and short-term goals of different departments. For instance, the system will first check for the available manpower in a department and then finalize the required manpower as per the goals and activities mentioned by the user, and finally, the manpower request for that department is generated automatically. The manpower planning system manages employee skill inventory and supports several other HR activities. For instance, it maintains a real-time inventory of the number of job positions vacant in different sections, units and departments of the organization. This module compares the manpower available with the manpower required to determine the variances. Similarly, it computes the labour turnover for the current year and, based on the past turnover rates, makes projections for the future. Manpower planning can also make retirement projection, which would help the firm in planning its recruitment and training activities in advance.

Succession Planning System

The succession planning system facilitates the identification of key positions in the organization and their requirements in terms of skills, competencies, qualifications and experience profiles. In the next stage, it identifies the employees who meet the requirements for these key positions. Finally, the succession planning module brings the identified and selected employees into the succession channel. Generally, this system works in close coordination with other systems like training system, compensation system, and performance management system. As part of the succession planning process, this module acquires the necessary employee performance data from the performance management system, and the compensation data from the compensation management system. Similarly, the training profile of the employees is obtained from the training and development system for determining the suitability of the employees. Besides, the information about the time and nature of the training programmes available are also gathered through the training and development system. This helps in planning the training programmes for the employees identified as the successors. The succession planning module, in essence, simplifies and streamlines the complex succession planning process and makes it possible for the organization to keep the succession pipeline open for each one of its employees.

A few succession planning modules assist the management in developing several succession channels for each key managerial position. For instance, each succession plan may indicate the short-, medium- and long-term successors for a key position in the organization. Further, a succession planning module usually monitors, records and reports any change in the career profile of these successors like the additional qualification acquired, transfers sought and sanctioned, and also their exit. Major changes in the career profile of the successors, like a resignation, may warrant a complete revision of the succession planning.

Position Control and Budgeting System

The purpose of position control is to manage the position structure of an organization. This system maintains all information about each position in a separate database. This database maintains information about position descriptions, education and skill requirements, requisitions, incumbent history, reporting relationships, and budgeting information for each job in the organization. This positional control and budget system is also integrated with other databases. A position control module helps the firm in tracking the amount of time spent by the employees in each position when they have to hold more than one position at a time. It provides businesses with a framework for staff planning, human resource development, and budgetary controls. Understandably, it is capable of enhancing the effectiveness of the manpower planning and budgeting process. The position control and budgeting system also helps in labour cost planning and management, evolving meticulous staffing plans and budgets, keeping a historical data for different position levels, and creating critical staffing decision reports.

Benefits Administration System

This system manages all the current and historical employee benefit information for the entire organization. A few examples of employee benefits are retirement plans, medical and life insurance plans, vacation pay, holiday pay, maternity leave, and employee stock ownership plans. The benefits administration system keeps information about the beneficiaries and the details of the benefits. It specifies the eligibility criteria, waiting periods, cost, billing cut-off and other relevant information for all benefit plans. It may also provide information about the enrolment rules and regulations for new entrants and for the dependents of the employees. It can also generate statements about the benefit particulars of the employees and forward these to them for information and approval. Finally, it would also maintain necessary forms for admission, discontinuation from any plan, and for making claims.

Personnel Information and Identification System

A basic personnel information system is usually the foundation of any HRIS. This may also be called a central staff database. The purpose of a personnel information system is to manage, report and analyse employee information. This system provides almost all information about the employees. It contains general staff data like name, address, family details, identity number, date of appointment, job position and location in the organizational structure, job classification, job specifications and descriptions, and disciplinary action taken. It can also automate reporting, notification, and forms generation relating to human resources operations. It is usually linked with all other systems in the HR department and functions in an integrated manner. For instance, it feeds general employees information to the other systems and also gets back specific information about the employees from the other systems for updating employee records. Apparently, the compensation management, succession planning and management, training and development, and performance management systems depend critically on basic personnel information system for inputs and share their output with it.

Grievance Management System

An effective grievance identification and redressal is an important prerequisite in improving employee satisfaction and labour–management relations. The grievance management module can effectively track and analyse the grievances of the employees. Since the management is normally required to complete the redressal within a specified timeframe, an automated grievance management system enables it to gather all relevant information about the grievances quickly and in a cost-effective manner. A grievance management system often deals with questions like “who, why, what, where” and also strengthens the position of the management through a systematic recording of information just in case the grievance becomes a dispute and is referred for arbitration.¹⁷ Finally, the grievance management system assists the management in pre-empting employee grievance by analysing the nature, sources and frequency of earlier grievances and by acting on the sources of those grievances.

Benefits of an HRIS

An HRIS, which is an interaction between human resource and information technology, is an important tool for developing competitive advantage out of human resources. These two major elements of an HRIS are capable of producing synergy effect in organizations.¹⁸ In fact, an HRIS has emerged as an effective tool to manage the routine employee activities through an impersonal and automated approach. It has relieved the work pressure on the HR managers considerably. Through an HRIS, the management also gets real-time information on the HR activities performed by the HR department. Consequently, an HRIS keeps the organization healthy by monitoring and optimizing the human resources available in the organization constantly. We shall now see the important benefits of HRIS.

Effective Use of Human Resources

The chief benefit of an HRIS is the optimum and strategic use of human resources in an organization. Since there is a complete visibility in all the activities performed by the employees, it prevents duplication in the employee efforts by tracking people as they move through the system. It also ensures that all their activities are aligned to the enterprise objectives properly. Finally, an HRIS standardizes the processes for key HR functions which ensure that there is uniformity in the performance of the HR activities in the entire organization.

Ability to Manage Voluminous Data

The inherent ability of an HRIS is its capacity to store, manipulate, retrieve and distribute large volumes of data within the shortest possible time. It is certainly unmatched in analysing complex, voluminous and heterogeneous data and in guiding their interpretation and reporting. In fact, an HRIS is variedly described as a transaction processor, editor and record-keeper. An HRIS can handle large data. This requires reconciliation with high speed and great accuracy, which is very difficult to accomplish in any manual operation.

Reduction in Labour Cost

An HRIS has the ability to reduce the labour requirement in the HR department significantly. When there is a decrease in the labour requirement, the labour cost, which is a recurring cost to the organization, is kept down. For instance, automating the HR processes, like hiring through the applicant tracking system, lowers the time-to-hire and cost-per-hire considerably.

Faster and Effective HR Decisions

Since the decision support system of an HRIS is capable of generating as many alternative decisions as possible for solving a problem, the managers can make the best decisions quickly and precisely. Certainly, a timely decision enables the organization to capitalize quickly on the opportunities rising in the business environment.

Better Supervision and Control over Human Resources

The effectiveness of supervision and control exercised by the managers over the employees is certainly superior in an HRIS environment as compared to that in a manual environment. This is because all the activities of the employees are monitored round the clock on a real-time basis through HRIS. Besides, the managers are also spared of any physical supervision of the employees. Since supervisory requirements are less, the organization can also save on the cost of supervision.

Optimum Security and Confidentiality

Preserving the security and confidentiality of the employee data is a major problem for many organizations. They can keep their employees’ records safer through an HRIS by limiting access to such information. They can use password and other authorization requirements to prevent any unauthorized access to valuable and sensitive information about the employees.

Anytime, Anywhere Access

HRIS enables its users to have anytime, anywhere access with multiple channels for task performance and reporting. It removes the need for the users to be within the premises to have access to the information available in the HRIS. Email, Web, Windows forms, SMS and Voice are some of the forms used prominently for accessing an HRIS in normal circumstances.

Better Focus on Strategic Activities by Managers

The automation of HR managers’ routine administrative activities like attendance tracking, work scheduling, etc., allows them to devote more time to strategic planning tasks. HRIS enables the HR manager to perform from the top levels of the management by involving themselves in strategic decision making processes. In fact, the HRIS has drastically changed the job characteristics and job expectations of the managers with a growing strategic role pressure.¹⁹

Better Statutory Compliance

Since all statutory provisions are usually incorporated in an HRIS, it ensures that these provisions are strictly adhered to. When employees overlook any of the regulatory provisions even unintentionally while performing HR activities, it may invite legal troubles for the organization. This can be completely avoided when employees perform through the HRIS. For instance, if there are statutory provisions regulating the recruitment, these provisions must be included as in-built features in the applicant tracking system. The system would automatically seek this information and consider it while determining the suitability of the applicant for the job. As a result, costly and time-consuming litigations can be avoided by the organization.

Meeting the Future Challenges and Changes of HRM

The historical role of HR managers has undergone drastic changes in the recent past with the changes in the labour market characteristics. With the increasing presence of knowledge workers in organizations, the role of HR managers has undergone tremendous changes and so have the management’s expectations from the HR department. Besides, the mergers and acquisitions along with globalization have simply internationalized the HR operations, bringing in a sharply diversified workforce. Certainly, the role of HR managers receives an increased status in organizations when compared to earlier years.²⁰ Thus, the HR managers should be prepared to perform more complex administrative operations in future for which they should inevitably depend on the sophisticated HRIS. In fact, these systems increase administrative efficiency and produce reports capable of improving decision making.²¹

In addition to these advantages obtaining from the HRIS, A. M. Beckers and B. Z. Bsat²² have identified a few reasons for justifying its introduction in organizations. According to them, an HRIS (i) has the ability to increase the number and variety of HR operations; (ii) facilitates competitive advantage through improved HR practices; (iii) ensures that HR is moved from transaction processing to strategic planning; (iv) greatly integrates the employees with the system; and (v) revamps and reengineers almost all HR functions of a business organization. Box 26.3 lists a few benefits and beneficiaries of HRIS.

Conditions Essential for an Effective HRIS

There is a growing realization among the HR managers and the business organizations that an HRIS is no longer optional for them but a basic necessity. This is because an effective HRIS is now capable of supporting all HR functions such as recruitment, selection, attendance, payroll, benefits, and performance management in a cost effective way. However, it is to be noted here that an effective HRIS alone can produce the desired output. We shall now see the factors that contribute to the effectiveness of an HRIS.

Developing the HRIS Leadership

The success of an HRIS depends primarily on the expertise of the leadership assigned with the tasks of planning, executing and maintaining the HRIS in the organization. The HRIS leadership must be technically sound and have good negotiation and persuasion skills. It should be capable of providing strategic supervision and impetus for all HRIS-fortifying activities of the organization.

Ensuring Clarity of the HRIS Goals

The next important prerequisite for the success of an HRIS is the presence of unambiguous goals for the HRIS programmes. In the absence of clear goals, the organization may end up wasting its time in the process or buying inappropriate software for automating its HR operations.

Strengthening the Infrastructure and other Supporting Systems

An HRIS can function fruitfully only when it gets proper infrastructure support in the organization. The usual infrastructure requirements of an HRIS are hardware, software, adequate connectivity, networking, training and support.

Sustained Enhancement of the HRIS Capabilities

With a continuous increase in the volume and sophistication of HR data, there is a need for constant capacity building in an HRIS. When the system capability is increased, it obviously requires proportionate changes in the supporting infrastructure facilities. Thus, a continuous capacity building is essential for the effectiveness of the HRIS.

Ensuring Top-management Support

Top-management support is a key prerequisite for the success of the HRIS implementation process. This is because top managers alone supply critical resources like funds, technologies, staff, and user training programmes. Their role and support is critical for change management and vision sharing. The HRIS leadership must work in close coordination with the top management.

Securing Absolute Control of the HRIS

The major responsibility of an HRIS team is to ensure the security of the information stored in the system. It must put in place a foolproof security to avoid the risk of unauthorized intrusion, data theft and other potential dangers to the valuable and sensitive information.

Providing Adequate Training and Exposure to the Users

Organizations must ensure that there is an ongoing training support available for the HRIS users so that there is the optimum use of HRIS resources. Each HRIS user must be required to complete necessary training to understand the different features of HRIS like HRIS Setup and Navigation, HRIS Drill Around, HRIS Broadcast Report, etc. These trainings may be provided either online or offline to the connected staff.

Ensuring Wider Participation and Better Cooperation

It is the responsibility of the HRIS leadership to ensure that there is a wider consultation within the organization at different levels before the implementation of the HRIS proposal. The senior managers must also be actively consulted to ensure their active participation and support for the HRIS plans. In a unionized organization, there must be adequate information sharing with the union leaders to allay their fears about the HRIS, especially in respect of its impact on the existing staff. Thus, the cooperation and support of employees across the board is essential for the success of the HRIS.

Summary

1. An HRIS is defined as an automated system for gathering, storing, retrieving, analysing and disseminating HR-related data for facilitating operational, managerial and strategic decision making that impacts human resources.
2. The three inter-related components of an HRIS are input, data storage and processing, and output.
3. The various levels of an HRIS are (i) the electronic data processing (EDP) level, (ii) the management information system (MIS) level, and (iii) the decision support system (DSS) level.
4. The steps in the implementation of an HRIS are: (i) determination of the need for an HRIS; (ii) constitution of a project team; (iii) development of the project plan; (iv) designing and developing system specifications; (v) identification and training of user groups; (vi) implementation and maintenance; and (vii) evaluation of effectiveness.
5. The applications of an HRIS in human resource management are in the applicant tracking system, the training and development management system, the compensation management system, the performance management system, the manpower planning system, the succession planning system, the position control and budgeting system, the benefits administration system, the personnel information and identification system and the grievance management system.
6. The benefits of an HRIS are: the effective use of human resources, the ability to manage voluminous data, reduction in labour cost, faster and effective HR decisions, better supervision and control over the human resources, optimum security and confidentiality, anytime and anywhere access to HRIS, better focus on strategic activities by managers, better statutory compliance, and meeting the future challenges and changes of HR management.
7. The conditions essential for an effective HRIS are: developing an HRIS leadership, ensuring clarity of the HRIS goals, strengthening infrastructure and other supporting systems, sustained enhancement of the HRIS capabilities, ensuring top-management support, securing absolute control of HRIS, providing adequate training and exposure to the users, and ensuring wider participation and better cooperation.

Review Questions

Essay-type questions

1. Evaluate critically the different types of HRIS using relevant examples.
2. Discuss the steps involved in an HRIS process using appropriate examples.
3. Examine critically the utilities of an HRIS for a business organization.
4. Enumerate the conditions essential for installing an effective HRIS.
5. “HRIS is not a luxury but a necessity for an organization.” Discuss.
6. State the future of an HRIS in Indian industrial organizations with real-life examples.
7. Evaluate critically the applications of HRIS in human resource management.
8. Describe the various components of an HRIS and the functions of each of them.

Skill-development Exercise

Objective – The objective of this exercise is to show you how to plan and execute the installation of an application tracking system as part of HRIS in an organization.

Procedure Note – The class is split up into groups. Each group has (1) an HR manager, (2) two HR team members, (3) two applicant tracking system software vendors, (4) two office-bearers of a trade union, and (5) two observers of the meetings. The role of the observer is to observe the various aspects of the role-playing sessions and report them.

Situation

Ashirvath Pharmaceuticals Limited is a medium-sized company engaged in the production of health-care products for the past 20 years. This company has been offering competitive compensation packages to its employees and has an excellent array of HR policies and practices. Yet, its track record in employee hiring has not been very impressive for some time since some of the new entrants’ performance was simply dismal.

The management was not impressed by the explanations provided by the HR department. So it appointed an external HR expert to look into the problems of the HR department. The external HR expert, who audited the HR policies, procedures and performance of the HR department, recommended the introduction of an HRIS in a phased manner. As a first response to the recommendation of the external HR auditor, the management decided to implement the applicant tracking system in the recruiting section of the HR department. It instructed the HR manager to plan and implement the system in a hassle-free way in close consultation with the trade union.

Steps in the exercise

There are four steps in the exercise:

Step 1: The HR manager meets the office-bearers of trade union to ascertain their views about HRIS in general and the applicant tracking system in particular. He also explains the features of the applicant tracking system to them in order to get their cooperation.

Step 2: He convenes a meeting of his HR team to determine the terms and conditions for the applicant tracking software and develops the system specifications.

Step 3: He meets the software vendors to brief them about the requirements of the company and to finalize the purchase.

Step 4: The observers analyse the performance of the members in the role-playing session and give their feedback.

Case Study

Good Health Products Limited is a diversified company engaged in the production of sugar, alcohol and biopesticides. This company is one of the major players in the sugar industry with a significant market share and a workforce of 8,200, with 4,800 unionized employees. It has full-fledged manufacturing information system and marketing information systems, which have ensured the complete automation of these departments’ operations. Its HR department is headed by the HR manager, Mr Atul, who is supported by 120 employees. Atul made a request to the management for installing an HRIS in order to enhance the efficacy of its operations but the request has been pending with the management.

Meanwhile, the HR department released the performance evaluation reports of the employees. As per the general practice of the company, the line managers conducted performance interviews with the employees to hand over the evaluation reports and these decide the employees’ future financial benefits, including promotion. Due to its importance, the performance evaluation process and the reports often get embroiled in controversies and invite criticisms from those employees whose performances are found to be insufficient for good rewards. The protest over the performance evaluation process and results became more vociferous this time and the management asked for the details of the performance evaluation process and an explanation from the HR department over the results of the performance evaluation.

The HR manager reminded the management about his long-pending request for the automation of the HR operations of the organization. He pleaded with the management to fulfil at least a part of his request by installing the performance management system (PMS) immediately, if not the complete HRIS. He strongly believed that the introduction of the information system in performance management would improve the visibility in the measurement, communication and accountability in the entire evaluation process. For the HR manager, the introduction of PMS appeared to be the best solution to solve the recurring performance evaluation-related problems in the organization.

However, the forceful arguments of the HR manager in favour of PMS were rejected by the management for four reasons. One, it was not cost-effective since the benefits are not tangible and substantial. Two, the labour reduction in the HR department on account of the introduction of the PMS is not possible due to strong unions. Three, it cannot be an immediate solution for the present problem. And four, the HR department has so far not chosen the most effective appraisal method for performance evaluation and this, according to the management, was the root cause of the problem. The HR manager is now contemplating his response to the observations of the management.

Questions for discussion

1. What is your assessment of the entire situation at Good Health Products Limited?
2. Do you agree with the stand and arguments of the HR manager regarding the introduction of an HRIS and a PMS?
3. What have you to say about the arguments of the management of Good Health Products against the introduction of a PMS?
4. If you were to be the HR manager of Good Health Products, what would you do now?

Notes

1. N. J. Beutell and A. J. Walker “HR Information Systems” in Randall S. Schuler (ed), Managing HR in the Information Age, 6, (Washington DC: Bureau of National Affairs, 1991), pp. 167–203.
2. A. Price, Human Resource Management in a Business Context, 2nd ed. (London: Thomson Learning, 2004), p. 69.
3. R. Wayne Mondy, Human Resource Management, (Upper Saddle River, NJ: Pearson Education, 2007), p. 113–114.
4. Anthony Hendrickson, “Human Resource Information System: Backbone Technology of Contemporary Human Resources,” Journal of Labour Research, 24, no. 3 (Summer 2003): 381–395.
5. Ben Swanepoel (ed), Barney Erasmus, Marius Van Wyk and Heinz Schenk, South African Human Resource Management: Theory & Practice, 3rd ed. (Cape Town: Juta and Company Limited, 2003), p. 785.
6. S. I. Tannenbaum, “HRIS Information: User Group Implications,” Journal of Systems Management, 41, no.1 (1990): 27–32, 36.
7. K. A. Kovach and C. E. Cathcart, Jr, “Human Resource Information Systems (HRIS): Providing Business with Rapid Data Access, Information Exchange and Strategic Advantage,” Public Personnel Management, 28, no. 2 (1999): 275–281.
8. Lloyd L. Byars, and Leslie W. Rue, Human Resource Management, 7th ed. (Boston: McGraw-Hill, 2004).
9. K. A. Kovach and C. E. Cathcart, Jr, “Human Resource Information Systems (HRIS): Providing Business with Rapid Data Access, Information Exchange and Strategic Advantage,” Public Personnel Management, 28, no. 2 (1999).
10. H. G. Gueutal, S. I. Tannenbaum, and M. J. Kavanagh, “Where to Go for an HRIS Education,” Computers in Personnel, 2, no. 3 (1988): 22–25.
11. Diane Huber, Leadership and Nursing Care Management (Toronto: Elsevier Health Sciences, 2006), p. 272.
12. C. Austin Information Systems for Hospital Administration (Ann Arbor, MI: Health Administration Press, 1979).
13. C. Richards-Carpenter, “How CPISs Alter Personnel’s Role,” Personnel Management, 23, no. 8, (1991): 18–19.
14. M. J. Kavanagh, H. G. Gueutal and S. I. Tannenbaum, Human Resource Information System: Development and Application (Boston, MA: PWS-Kent, 1990), p. 98, and Pieter Grobler, Surette Warnich et al., Human Resource Management in South Africa, 3rd ed. (London: Thomas Learning, 2006), pp. 58–60.
15. Barry Raybould, “Performance-Centered Design,” Training & Development, March 1996.
16. Patricia Davis and Robert W. Rogers, “Getting the MostfromYourPerformanceManagementSystem,” White Paper, Development Dimensions International, Inc.; available at http://www.ddiworld.com/pdf/ddi_gettingthemost_wp.pdf.
17. Al Doran and Glenn Rampton, “Making a Business Case for a New HRIS,” Phenix-Management-International; available at http://www.pmihrm.com/how_to_cost_justify_a_new_hrms.html.
18. M. L. Jenkins and G. Lloyd, “How Corporate Philosophy and Strategy Shape the Use of HR Information Systems,” Personnel, May 1985: 28–38.
19. K. Ball, “The Use of Human Resource Management Systems: A Survey,” Personnel Review, 30, no. 6 (2000): 677–693.
20. Zahid Hussain and Peter Prowse, “Human Resource Information Systems (HRIS) as the Means of Fulfilling Job Roles More Professionally for Human Resource (HR) Managers,” Working Paper No. 04/07; available at www.brad.ac.uk/acad/management/external/pdf/workingpapers/2004/Booklet_04-07.pdf.
21. Gerardine DeSanctis, “Human Resource Information Systems: A Current Assessment,” MIS Quarterly, 10, no. 1 (March 1986): 15–27.
22. A. M. Beckers and M.Z. Bsat, “A DSS Classification Model for Research in Human Resource Information Systems,” Information Systems Management, 19, no. 3 (2002): 41–50.