October 24, 2012

MU0012 [Employee Relations Management] Set1 Q6

Q.6.Write a note on common applications of Human Resource Information System (HRIS)?


Human Resource Information Systems is a software application that caters to the human resource information needs of the organisation like monitoring employee attendance, payroll and benefits administration, career development, employee information, performance management, and training. HRIS is a collection of components which work together to gather, process and store information that the HR department can use to make decisions, to coordinate and to plan its activities. HRIS facilitates easy access and management of employee related information. 

For example, Terasen Pipelines, a Canadian company was using a manual system to maintain its records. But when its workforce increased, it began to use an HRIS to maintain accurate employee records.

Initially, mainframe computers were used by organisations to manage human resource management functions. A large amount of capital was needed to operate these systems. The advent of client-server architectures and Software as a Service (SaaS) models has lowered the maintenance costs of HRIS.

Common Applications of Human Resource Information Systems
An HRIS is an integrated approach to acquiring, storing, analysing and controlling the flow of information throughout an organisation. A well-developed HRIS is useful in many HR applications and can enhance the efficiency and time-of-response of many HR activities.

Some of the common applications of HRIS are as follows:
1) Planning: The HR activities implemented by this application are personnel and succession planning, labour relation planning, target analysis and organisational charting.
2) Staffing and Employment: This application handles recruitment activities. It ensures compliance with employment equity.
3) Training and Career Development: This application deals with analysing training needs, training administration, and career planning.
4) Performance Management: This application deals with performance appraisals, and monitoring time and attendance of employees.
5) Compensation and Benefits: This application deals with employee compensation and benefits administration.

Details of the above applications are as follows:
1) Planning: Planning is a very important activity of HR management. Planning identifies and implements the activities that ensure that the organisation is moving in the right direction. Planning is concerned with implementing the business strategy of the organisation. The components of planning are as follows:
• Environmental Scanning: It identifies the business opportunities and threats after reviewing the external factors that affect an organisation.
• Business Plan Analysis: It reviews the business plans and strategies.
• Manpower Planning: It reconciles any imbalance between HR supply and demand.
• Program and Policy Review: It ensures that the HR policies and programmes are aligned with the organisational needs.

The components of HRIS which assists in planning are:
• Work Force Profile Review: It assesses the demand and supply of workforce by analysis of employee data elements like age, wage, performance rating, position and organisational data elements like employee turnover.
• Work Force Dynamic Analysis: It examines the employee movement in the organisation by analysing historical data like service, promotions, performance ratings, and salary. Various reports which provide information on lateral transfers, promotions, new recruits and turnover are generated.
• Succession Planning: It identifies potential successors for critical positions. Employees are scored and assessed for suitability of pre-defined job profiles. The staff details (job history, competencies, assessments) is analysed to find which position the individual can fit into. Employee databases are searched to retrieve profiles of employees who fit certain criteria. Reports are generated of individual competencies. 
• Strategic HR Planning: It analyses HR data and compares it with performance benchmarks. It is used to evaluate policy compliance and impact of new programmes.

2) Staffing and Employment
Staffing refers to the process of attracting candidates, interviewing them, and negotiating a compensation package with them. The process of staffing is very important as organisations have to recruit the right candidates who will help in realising the organisational goals.
The components of HRIS which assists in staffing and employment are:
• Applicant Tracking: This helps in identifying competent candidates quickly and effectively. It organises information about applicants and their availability and helps in automating the recruitment process. Resumes are imported from job portals. Candidates are short-listed by pre-screening their profiles. It helps to match applicant capabilities with job openings. It compares candidates applying for the same job and helps in scheduling and tracking interviews. The tracking component also generates employment letters. For example, Bell Helicopter Company uses its HRIS to recruit technical staff. MCI Telecommunications uses a resume tracking system called SmartSearchTM to spot eligible candidates.
• Employment Equity Compliance: Employment Equity is a process which helps organisations to identify and eliminate barriers in their employment policies and procedures in order to have representation of women, people with disabilities, and minorities at all levels. Employee personal data (gender, sex, and group) and reports of employees hired and employees promoted are used to make decisions to ensure fair employment practices.

3) Training and Career Development
Employee training and career development is very essential for motivating employees. HRIS is a very important training and career management tool.
• Training: Organisations need to measure costs of training and their effectiveness. HRIS helps in scheduling and monitoring training programmes. Employees use the self-service module to apply for training. Employee data like skills, goals and performance rating are used to evaluate training needs of an employee. Based on this analysis, the HR personnel or managers grant training approval. Training budgets are fixed using HRIS tools. 
• Career Development: HRIS can be used to monitor employee career trajectories. Many organisations seek to fill vacancies from within the organisation. HRIS informs employees about the current vacancies and the requirements of those positions. HR personnel are also able to identify employees who fit the requirements for vacant job positions by using employee data. For example, the company ‘3M’ has implemented a ‘job information system’ which lists the jobs available companywide. All employees can view this listing and apply for the desired position.

4) Performance Management
Employee performance management is essential to ensure that employee performance is monitored. This makes the organisations more productive and profitable.
• Performance Appraisals: Performance appraisal results are used to make administrative decisions like promotions, salary increments and so on. Feedback of performance appraisals improves employee performance. Performance management of HRIS uses data like position, supervisor, date of appraisal, performance rating, appraiser comments, history of performance, and date of next appraisal. Performance appraisals help in identifying the strengths and weaknesses of employees and their training needs.
• Time and Attendance: Information on attendance and time worked is very important as absenteeism results in considerable loss to the organisation. Time and attendance module analyses information like time spent on a job, start date, end date, total time taken and reason, and leave details. Overtime calculations are also performed. Some HRIS also manage attendance details of multiple shifts. Time sheets are created for different categories of employees. Time sheets can also be configured for each project. Off-time information is also captured. Time sheets can be approved. After approval, time worked and leave details are exported to payroll module. Department-wise reports of absenteeism with reasons are generated.

5) Compensation and Benefits
Attractive compensation packages and good benefits programme help motivate employees and retain skilled employees. The University of Michigan uses HRIS to manage pay, benefits and pensions of its current and retired faculty members.
• Compensation Management: All organisations have to offer a competitive compensation package, maintain payroll costs and comply with government laws. Employee compensation is determined by examining jobs and determining their relative worth to the organisation. Compensation Management function of HRIS uses data like salary basis (hourly, commission and so on), bonusses, hours worked, types of increment (annual, biannual, promotion) and interfaces with the payroll system. It interfaces with the performance management system to ensure correct pay based on performance ratings.
• Benefits Administration: Employees use the HRIS to enroll in various benefit programmes. For example, the employees of Apple Computers enroll in benefit plans using the HRIS of the company. Employees can also change their enrollment plans. HRIS determines benefits by using employee data like date of enrollment, type of insurance plan opted (Health, Life), memberships availed (health clubs), loans and beneficiary details. HRIS automates the computation of flexible benefits. Employees are also educated about the various benefit plans they are eligible for through HRIS.

HRIS comprises of the following modules:
Payroll: This module of HRIS keeps track of the pay grades and positions of the employees. Pay raise details are also recorded. This module gathers information on employee time and attendance. It calculates the deductions and taxes and generates pay slips and tax reports. Cheques get automatically deposited in the employee bank accounts. Inputs for this module are obtained from HR and time keeping modules. This module integrates with the current financial systems of the organisation.

Benefits Administration: This module tracks and administers employee benefits programmes. The benefits programmes include insurance, reimbursements, profit sharing and pension programmes.

HR Management: This module covers many HR aspects which range from employee recruitment to retirement. It records employee details like addresses, training programmes undergone, skills, position and so on. The functions addressed by this module are recruitment, placement, evaluation and career development of the employees. Job sites on the Internet are increasingly being used for recruitment. This module tracks job applications. Interviews and selection details are also maintained.

Training: This module administers and tracks employee training and development programmes. Records of employee education, qualification, and skills are maintained. It also outlines the training courses and training materials (CDs, books, web based learning programmes) which help employees develop their skills. Courses can be planned and scheduled using the data stored. Managers can approve training and budgets.

Performance Appraisal: This module evaluates the job performance of employees in terms of quality, time and cost. This helps in analysis of employee strengths and weaknesses and suitability for promotions. It gives feedback to employees on performances and identifies employee training needs. It also documents criteria which can be used for organisational rewards.

Work Time: This module helps to track the work done by the employees. This module merges the functions of work management and time management across a wide range of activities that include project, tasks, requests and deployment. This module maintains attendance and leave details of employees which are exported in various formats for further processing.

Employee Self-Service: This module permits employees to update their personal details, query HR databases and perform HR transactions. Employees are allowed to apply for leave, raise purchase requests, file expenses, view their salary details and keep track of their project related activities. Employees use this to update their tax savings details and bank related information. Table 5.1 outlines some of the applications that are used in HRIS.

Table : HRIS Applications

In table we have outlined some of the applications that are used in HRIS. Now let us examine the guidelines which help in the selection of an HRIS.

Examples of Human Resource Information Systems 
There are many HRIS software available in the market today. Some of them are listed below:
Sage Abra HRIS
Oracle HRMS
iVantage HRIS

Importance of Human Resource Information Systems
Figure is a diagrammatic representation of the activities and data of a HRIS.

Figure : HRIS

You know that human resources play a very important role in all organisations. The Human Resource department is involved in formulating the company policies and streamlining the business processes. Efficient and new applications like HRIS make the human resource department more effective. HRIS assists the human resource department in decision making, employee recruitment, benefits administration, payroll, and employee training and performance analysis. HRIS simplifies the HR processes. It organises company and employee data in a better way. By using HRIS, confidential information can be protected. HRIS integrates the financial and the human resource aspects of a business.

The four main functions of a HR department are payroll, time and labour management, employee benefits and HR management. The advantages of implementing HRIS in these functions are as follows:
Payroll: HRIS automates the entire payroll process by collecting and maintaining payroll data. It collects information such as employee attendance, computes the deductions and taxes and generates pay-cheques automatically and periodically.
Time and Labour Management: HR personnel can collect and assess employee time and work information. HRIS helps in analyses of employee performance. It helps employees to perform better through efficient career planning.
Employee Benefits: Employee benefits are very important because they help in motivating employees. Employees log in to the system and find the benefits they can avail. Organisations use HRIS to keep track of the benefits employees avail and inform employees of the advantages of various benefit programs. The HR personnel use relevant data and statistics to compute benefits and compensations of the employees or their dependants. Employee performances are tracked and incentives are computed. Employees can view the details of the incentives. It helps in planning and monitoring employee training. Costs of training are computed. For example, IBM uses a web-based employee benefits enrolment system which enables employees to access the system and view their benefits at any time and any place.
HR Management: HRIS reduces the manual and paper work of the HR personnel in performing their routine tasks. The HR personnel can thus focus on more important duties. HRIS provides data support to HR decisions. HRIS helps in succession planning. It helps to integrate employee performance, development and payroll modules and thus retain key employees who can ensure organisational success. HRIS helps in career management and talent management by identifying the skills of the employees. It helps in monitoring the productivity of employees. HRIS helps in assessing why employees leave organisations.

Features of Human Resource Information Systems
You have seen that HRIS helps an organisation to keep track of employee related information. Let us now examine the features of a good HRIS. The important features of an HRIS are as follows:
Job and Pay History
Ability to Import and Export Data
Ad-Hoc Report Writing
Automated Reminders and Alerts
User-Defined Fields:.
Attendance and Leave Tracking
Employee Self-Service
Benefits Administration: 
Performance Management 
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