Special Topic 2

INFORMATION TECHNOLOGY IN HUMAN RESOURCES

Objectives

  • To briefly understand a Human Resource Management System.
  • To review various HRIS modules.
  • To understand the HRIS implementation.
A2.1 INTRODUCTION

Chapter 1 outlined the myriad ways in which technology has altered the drivers of the marketplace. It is, therefore, not surprising that ‘technology’ featured in the 50th year anniversary issue of HR Magazine as ‘one of the top 10 changes that have impacted human resources over the past half century’ (Moss 2005). The way people were managed and serviced by an organization has changed totally. Personal interactions have been replaced by e-mails, automated alerts and clicks. There was a time when only big organizations could afford automated workflow; however, now SAP, Oracle HRMS (People Soft) and others, i.e., HR software providers, have made it possible for small and medium enterprises to leverage technology to cut costs and provide better service too.

The need to plan more systematically for the people required to staff and manage organizations now, and into the future is critical (Cascio and Thacker 1994; Dyer and Holder 1988; Ulrich 1986; Wagel 1990). Such planning cannot be done effectively in organizations any size beyond a few hundred employees without the support of an HRMS (Horsfield 1991).

A2.2 HR TRANSFORMATION IN THE DIGITAL AGE

In the 1980s and 1990s, the role of the personnel department continued to transform. Most of them by mid-1990s had re-branded themselves as ‘human resources’ in an effort to align to the changing drivers at the workplace. Till then the HR department was viewed as an expense. It started feeling the pressure from executives across the business to provide accurate and faster turnaround times where data or core information was concerned. The running joke amongst most CEOs was that if they asked for a headcount report from three different HR managers, they would get different headcount numbers. Apart from the data management, a large part of the HR function consists of tracking existing employee data which traditionally includes personal histories, skills, capabilities, accomplishments and salary. To reduce the manual workload of these administrative activities and also increase their efficiency and effectiveness, organizations began to electronically automate many of these processes by introducing specialized human resource management systems. Soon many players developed standardized HRIS (human resources information systems) to take care of routine functions of the HR department.

Thus, HRMS (human resource management system) and HRIS (human resources information system), (either of these terms would be used in the chapter) were the first phase of the advent of information technology for Human Resource Management and resulted in automation of HR services. It was largely used by the HR department and in a skeletal way by employees to manage their affairs. As business turned more and more people driven, managers went beyond the HR department and found people management to be a large part of their job. HRM started getting closer to the line manager. Consider an operations manager in a BPO or a project manager of a software firm, all their work revolves around analysis, improving and working on improving the competence of their people. Consequently, a large chunk of Human Resource Management would be a part of their day-to-day management of affairs. Now the requirement for the empowerment of managers with information brought in the next wave of technology to introduce web-based services which could be used by the managers to manage human resources. This wave brought in what is now known as eHRM.

As the terms suggests ‘eHRM’ is human resource management leveraging electronic technology. While HRMS has more of a service perspective to it, eHRM is more strategic in nature. It definitely does result in the satisfaction levels of service going up by enhancing the service quality by improving process efficiencies, but it is not just about that. eHRM is a means to leverage technology to drive the HR strategy of the organization. It is the use of the entire ecosystem of computer systems, interactive electronic media, telecommunication networks web-based technologies to design and implement interventions to achieve the final objective.

A2.3 GOALS OF IMPLEMENTING AN HRIS

Based upon a scan of professionally oriented and academic journals, we can draw three types of goals for the adoption and implementation of HRIS. They are:

  • Cost reduction/efficiency gains: The use of paperless forms for the collection of data and information about an employee, automated alerts for filling in forms etc. not only saves time, money and resources but also improves the response time of the HR department and actually help it in becoming more proactive.
  • Client service improvement/facilitating management and employees: The availability of data to the employee on their leave status and their tax returns helps them manage their own affairs better. The availability of the same data to the manager helps them take an informed decision about an employee's leave request.
  • Improving the strategic orientation of HRM: The use of an employee opinion poll on the organizational intranet to collect feedback about a change in any company policy—which would impact the employees—helps the organization prove to the employees the importance of their participation in the governance of the company.
A2.4 TYPES OF HRMS

Broadly speaking, HRMS appears to be of three types:

  1. Operational: These include systems that are used for basic HR activities in the administrative area, such as payroll and personnel data administration (personal data of employee, leave records, nominations for PF, gratuity etc.).
  2. Relational: These include slightly advanced HRM activities, those that involve interaction between a professional source, an HRIS application and employees/management. For example, recruitment and selection systems, performance management systems etc. These would include questionnaires to assess the skills of an employee through feedback from their manager and their colleagues etc.
  3. Transformational: These are the ones for HR activities with a strategic character. For example, the development of a knowledge management portal to maintain a repository of knowledge in the organization, encourage learning through discussions on discussion boards and Weblogs.
A2.5 CHOOSING THE RIGHT HRMS SOLUTION

Much has been said about the usefulness of having an HRMS for an organization and this cannot be denied. However, very often you will find HR managers or end users complaining about the HRMS not being up to their expectation. The market is flooded with many kinds of solutions each harping on something special that it can do for the organization's effectiveness. HRMS solutions are also not a cheap buy as they consume considerable amount of money and people resources to install, implement and maintain. The HR managers are under a big onus to choose the most optimum solution for their organizations. Hence, a proper due diligence needs to be done prior to any commitment.

  1. Know what you need: It is very important that the organization clearly identifies what it specifically needs (not wants). Choosing a fancy HRMS complete with all the functionalities might be a drain on the company coffers for no added value.
  2. Determine and prioritize requirements: Requirements can be of three types:
    1. Functional requirements: These encompass what requirement one has from the system in view of the kind of an organization that one has. This would mean the kind of monitoring one would want, the kind of reports which could be generated, the kind of user-friendliness that is required by the people in the organization.
    2. Technical requirements: These encompass what are the technical requirements of the system. It would depend on the kind of IT infrastructure that the organization has. Based on that there are three options to be chosen from:
      1. Application service provider (ASP): The vendor hosts the software and organization rents the service.
      2. Client server based: The organization purchases the HRMS license and the software is hosted on the company server.
      3. Web-based: Similar to the client server option, the application is deployed and accessed completely through a browser.
    3. Support requirements: This would mean defining the kind of support that the vendor is capable of giving the organization in implementation, maintenance as well as troubleshooting of the system.
  3. Check readiness for the future: An HRMS should be acquired with an eye on the future. If an organization is to grow in size in the future, it would be prudent to invest in a system which would be able to support the increased numbers. If the organization is intending to go global, then the HRMS should be such that it supports local languages, has offices in geographies where the company intends expanding.

Some of the reputed HRIS vendors in India are SAP—Human Capital Management, Oracle HRMS, Adrenalin eSystems (Polaris), Ramco Marshall—Human Capital Management, JD Edwards, Lawson HR suite etc.

Oracle HRMS: A Brief Write-up

The Oracle HRMS is a composite suite offered by Oracle to take care of Human Resources Management. The product (as per the company) claims to contribute to HRM in four different ways:

  1. Comply: Managing core HR data and processes, payroll, benefits and legislative/regulatory compliance.

  2. Automate: Saving cost and time with comprehensive, workflow-driven employee and manager self-service.

  3. Align: Offering flexible programmes designed to increase workforce value through a broad range of development, performance management and learning applications.

  4. Measure: Providing metrics and analytical tools to stakeholders to deliver information and determine the value of HR programme investments.

It achieves the above four objectives through different modules. These are:

  • Human resources: This module builds a centralized data repository for all people management activities. The module captures all essential details of employees (personal details, reporting authority, competencies) as it may be required for tracking, monitoring and for the preparation of various kinds of reports. It also has statutory compliances built into it so that they may be monitored, tracked and also reported to regulatory authorities where required.
  • iRecruitment: Oracle iRecruitment is a full-cycle recruiting solution that gives managers, recruiters and candidates the ability to manage every phase of finding, recruiting, hiring and tracking new employees.
  • Payroll: This automates the entire payroll process with data being picked up from within the software for running the payroll. This means that the system will pick up details of the compensation, attendance, benefits chosen from within the system and run the payroll as per rules set by the system. This lowers the administrative set-up costs, decreases the incidence of errors and improves responsiveness.
  • Advanced benefits: This flexible, rule-based benefits administration application enables improved benefits support and analysis while reducing overall costs through easy set-up and process automation.
  • Incentive compensation: This variable compensation application automates the design, administration and analysis of transactional pay-for-performance incentive programmes to align sales behaviour to corporate goals.
  • Time and labour: Oracle time and labour automates the entire time and attendance record-keeping process and provides a web-based interface for time entry and approval. It offers a simplified way to submit, review, track and approve timecards.
  • Learning management: This Enterprise Learning Management System (LMS) lets organizations manage, deliver and track training participation in online or classroom-based environments. It helps to implement competency management, manage learning content, support online learning and assessments, build a unified learning catalogue, schedule and manage resources, tie training to organizational goals and also extend learning to customers and partners.
  • Tutor: This provides organizations with powerful tools to develop, deploy and maintain end-user business process documentation. All these system-generated documents are used for compliance to quality process or statutory compliances. This reduces the effort to be put by people thus increasing efficiency and reducing costs.
  • Workflow: This delivers a complete workflow management system that supports business process–based integration. Its technology enables modelling, automation and continuous improvement of business processes, routing information of any type according to user-defined business rules.
  • Self-service human resources: Oracle self-service human resources allows the employees to update and use information using a portal view that is personalized to their role, experience, work content, language and information needs. It allows managers and workers to access and manage information and transactions in a paperless environment. If an employee has got married instead of sending a request to HR for changing their nomination on a form, all they have to do is update their marital status and change nominations where they are required to and send the necessary supportings to HR.
  • Human resources intelligence: This enables the user to access reports which might be needed on a regular basis on subjects such as turnover, sales target achievement, for analysing and taking decisions on various management aspects of the workforce.

Source: Adapted from http://www.oracle.com/ru/products/applications/018835.pdf, accessed on 25 July 2011.

A2.6 COMPONENTS OF AN HRMS

An HRMS has three major functional components: input function, data processing function and output function.

  • Input function: This requires the capability to get the human resources data into the HRIS. Once it is clear how the data will be collected, it needs to be entered into the system after one codes it. This is a very important stage, as the data entry must go under several checks, if by mistake the data is entered incorrectly, the output would get affected too. The validation process is of utmost importance here, as this helps in ensuring the data accuracy.
  • Data maintenance function: This function helps in updating the data that is stored. Changes need to be updated accordingly.
  • Output function: The output function culminates to data and reports produced by the system. This is the end result of the input function. The HR team should know how to slice and dice the data as per the requirement.
A2.7 HRIS MODULES

HRIS is an integrated software that provides a suite of modules that range from hiring to separation and all other HR functions. Every HR function is developed into a module—it could cover a range from employee master, reporting relationships, appraisals, increments, promotions, transfers, training, confirmations, disciplinary records etc. It gives tremendous flexibility for HR to set rules as per requirements.

Let us review some of the HRIS modules; most HR software have some or even more of the modules listed below (Figure A2.1):

  1. Human resource planning
  2. Recruitment and selection
  3. Time/attendance and leave
  4. Payroll and benefit administration
  5. Performance appraisal
  6. Learning and development
  7. Career and succession planning
  8. E-learning
  9. Employee self-service and manager self-service

Figure A2.1 HRIS modules

Figure A2.1 HRIS modules

A2.7.1 Human Resource Planning Module

Due to business exigencies and the dynamic environment one operates in, where organizations develop, grow and downsize, it is necessary to constantly analyse and match the demand for human resources with internal and external labour market supply. The integration of all this functional planning with other human resources plans and with overall corporate strategic planning can be accomplished by using an HRP module.

The HRP module brings an open window into current manpower situation, as a basis for future predictions; when interlinked with the recruitment module, it becomes very helpful in defining vacancies and thus ensuring timely acquisition of necessary manpower. An HRP system carries out the following tasks: It helps in defining the scope of plans and the required criteria. One can have multiple versions too. It also aids in inputs of existing positions and setting up of a planning framework and budgetary constraints. One can raise manpower requisitions specifying various criteria such as qualification details, skill sets, responsibility details, experience, gender and age group requirements among other requirements. It enables analysis of job skills, self-assessment, career aspirations and current job utilization in the company. It is a helpful tool for setting up a manpower planning structure, creating plans, working with them and using them to adequately counter emerging manpower needs. It is sufficiently flexible to accommodate a variety of planning needs and manpower movements.

A2.7.2 Recruitment and Selection Module

Recruitment Module

Technology has changed the way recruitment is done. The early 1990s saw this change coming in. Companies started using their Web sites to attract applicants and advertise their job and career opportunities (Figure A2.2). E-recruitment modules came into the market and companies automated part of their recruitment process. This resulted in the recruitment cycle time coming down. Providers of web-based services to aid recruitment started flooding the market. Jobsites, virtual career fairs and video conferencing interviews became the order of the day. Companies developed their intranet to drive internal recruitment and initiated employee referral schemes.

E-recruitment can be understood as recruitment carried out by the use of various electronic means. Online, Internet, or web-based recruiting can be defined as the use of the Internet to identify and attract potential employees, for example, advertising a vacant position and attracting a pool of applicants through corporate Web sites and Internet job boards. An e-recruitment system works as a back-office system for administrating the recruitment process, and is normally designed to allow applicants to submit their data electronically. E-recruitment can thus be perceived as an umbrella term covering recruitment activities performed using various electronic means and the Internet, including online recruitment and e-recruitment systems.

Online recruitment may not always increase the quality of candidates; however, it is likely to increase the number of candidates who apply for jobs. The applicants who use e-recruiting systems are likely to have higher achievement and persistent levels, but, may also have less favourable backgrounds or switch jobs more often than those recruited from traditional sources. An e-recruitment system can carry out the following tasks: storage, retrieval, creating a match between the CVs for the purpose of shortlisting. Documentation—interview invitation letters, acceptance, rejection letters, offer and appointment letters and MIS reports (could be a part of the selection module too). Computerized recruitment systems automate the recruitment communication and enable the HR team to track applicants at various stages, match profiles and employees against job positions.

For example, Maruti Udyog Ltd realized that using disparate systems to manage human resources was definitely inadequate. Maruti's workforce continued to expand to 5,000+ employees across India. They were in dire need of a single, integrated system to manage their strong workforce. They implemented Oracle HRMS, the company reported a stronger and better control over the whole host of HR functions such as recruitment, leave management, payroll, compensation, competency assessment and employee development. All the relevant inputs for each employee are stored into a single database, wherein the HR team can access the work and personal history of the employees. For the filling up of new positions, they can search candidates and run reports to figure out the apt candidate for a particular position. One could also run various reports to determine the skill level of employees and they ensured that proper training was in place to advance their knowledge. This could help them attract and retain high-quality people, a major asset for any organization.

 

Figure A2.2 Traditional paper–based recruitment process vs the (new) recruitment process with e-recruitment

Figure A2.2 Traditional paper–based recruitment process vs the (new) recruitment process with e-recruitment

 

Source: Adapted from Holm (1999).

Selection Module

Keeping an eye on costs and monitoring effectiveness of this module is the prime responsibility of the recruitment team. Hence, they need to opt for cost-effective solutions in all the stages of the selection process, i.e., interview process, selection tests etc. This module covers all stages of selection too. Online ability tests and personality assessments maybe less reliable and valid than traditional systems, as applicants complete the tests without being monitored (Chapman and Webster 2003). Computer adaptive testing varies the test items and length of the test based on the applicant's response (Jones and Dages 2003). Organizations must ensure that whichever system they finally choose, it should produce reliable and valid results before using them to select applicants. All stakeholders need to be party to the finalization of this module, i.e., recruiter, test administrator, IT manager and Human Resources team. It should also be designed keeping the candidate in mind. Proper security checks should be in place, automated workflows should be built in and must be carefully structured too. Access should be restricted for test results. Propriety and sensitive information should be protected.

Many HR systems would link together the recruitment and selection module. Empowered with the recruitment module, managers would be able to carry out the recruitment process from vacancy definition through candidate gathering and the selection process up to the final hiring level. Information gathered at every stage is being updated in the database and could be useful at a later date. The e-selection process includes a set of test scores, shortlisting and different levels of interviews, interview ratings, background check results and any other evaluations of the skills, experiences, abilities or other attributes that the candidate could bring to the organization. It also includes system-generated letters, recruitment and selection costs.

For example, HDFC Standard Life Insurance had opted for the Adrenalin basic HRMS Recruitment Selection. This helped them to have a decentralized offer making process for the regional offices—Offer generation TAT (i.e., turnaround time) was considerably reduced from five days to three minutes. They also had consistency, control during the offer process, online employee creation, generation of online appointment letter and extensive reports too.

A2.7.3 Time/Attendance and Leave Module

Leave and time attendance module is one of the areas that HR can save time and use it to concentrate on other value-added assignments. Moreover, as there is no human intervention, it is accurate. A classic example is the process of taking a ‘leave’. In a traditional, paper-based process, it involves the employee filling out a form, getting the line manager's approval and sending the form to HR for someone to update the employee record. This module enables the employee to select the appropriate template and submit the request electronically. The request is then authorized (or refused) and records automatically updated.

It reduces the cost of administration and automatically records changes too. The module helps in systematically monitoring the employees’ attendance and leave management. It also helps in shift/roster planning and is especially useful at call centres/BPOs. It handles all types of leaves such as earned/ privilege, sick, casual leave and is accessible through the Internet or intranet. It also has linkages to the payroll and benefit module.

A2.7.4 Payroll and Benefits Administration Module

It enables managers to effectively design, administer and communicate compensation programmes. It also helps to gather, store, manipulate, analyse, utilize and distribute compensation and information. These systems are web enabled that allow related data entry and data processing to be performed remotely by managers, employees and other stakeholders through the net browser. For example, a manager can review the list of proposed compensation increase of their direct reportees.

The vast array of components range from base pay, stock options, paid time off, sabbaticals, insurance, retirement plans, tax plans, car and petrol, uniforms etc.

Reports and presentations can be in the form of colourful graphs and charts, thus with a carefully crafted compensation content and targeted distribution, web-based software can facilitate the dissemination of critical information and manage the way employees perceive the compensation and benefits package. It also facilitates multi-currency transactions, loans and reimbursements. It reduces time-consuming administrative tasks and takes care of payroll details; it also helps in reducing managerial costs and increases the efficiency of the HR department. The module carries out the following tasks: It links to the time and attendance database, does the payroll processing, handles all monetary transactions, takes care of reimbursements. Benefits include medical, hospital and life insurances, pension projections, provident fund and other statutory obligation links housing and car/scooter schemes. It aids in cafeteria style benefits and healthcare packages. It also links to other HRIS modules and supports regulatory and analytical reports, satisfying all kinds of management and third-party requirements.

For example, Zenta Technologies implemented the Adrenalin HRMS to suit their HR processes at the company for payroll. The system helped them to reduce their operational time and increased accuracy in the computation of salary. Their earlier dependence on the IT team also reduced drastically. They had a better track of employees and efficient shift management. Quicker decisions happened due to workflow, which resulted in time and cost savings.

Globally, Microsoft reported that it has a savings of more than $1 million per year using such an automated payroll system. Most of the savings are from not printing and mailing earnings systems.

A2.7.5 Performance Management Module

An automated performance management system facilitates measuring an employee's performance, it also aids in the process of writing reviews or generating performance feedback, it could also include coaching which provides information to evaluators about coaching employees they evaluate. Such online evaluation software systems can make the appraisal process less onerous for evaluators; ease of administration may lead to frequent, accurate and ongoing feedback. In this way, performance management becomes more of a real-time continuous process and less of an annual event. A performance management system can reduce the unnecessary paper work and time spent in the transfer of papers. It makes the process more interactive, confidential and responsible. It can track core competencies and provides the manager and HR with tips for employee improvement areas and coaching. It can also alert the supervisor on trends within the function that may indicate a need for training or management attention. Managers/human resources may carry out the performance appraisal processes tailored to their needs and query the information in a variety of different forms and reports. A Performance System carries out the following tasks: Online forms get created, it helps in adjusting the grading criteria. It aids in reviews, analysis and reporting on the result of performance reviews and tracks employee progress over the years. It creates the normal distribution curve, of the performance of all employees. It enables analysis of job skills, self-assessment, career aspirations and current job utilization with the company. It also helps in defining a budget for rewards. Various summary reports and function wise sheets can be churned out. This system is also linked to the compensation module and the learning and development module.

For example, at CEAT Limited, the Human Resources team of the company has developed a road map to leverage technology that also includes 840 senior managers and directors spread across 33 geographies and six zones in India. Among the first initiatives towards the goal is the Performance Management System (PMS). Based on the system of a Balanced Scorecard, the self-appraisal system drives the appraisal process PAN India. The system is completely automated, all appraisal processes of CEAT employees are now online. It has also reduced the cycle time to compile reports and conduct audits. The error rates have reduced drastically and the computation and audit timeframes have reduced. Cycle time is reduced to 10–15 days from the earlier two to three months. The HR team was involved with the demos and screenshots. Everything that is computed is automatically archived. The team is happy that they have eliminated human bias. The PMS also has a career and development page, which contains information on the employee's long- and short-term career goals, their development actions, leadership and functional competencies that they need to develop.

A2.7.6 Learning and Development Module

An automated learning and development module becomes very easy with the Internet/intranet. It becomes cost-effective and a highly efficient way to distribute the training material to the employees all across. The administration of learning and development becomes easy and transparent, thus contributing to building a learning organization. The module permits one to define and administer training subjects and courses, recording training needs, budgets and an evaluation programme. The learning and development module carries out the following tasks: Posting of the various programmes for the year, the programmes can be booked and approved accordingly as this is applicable to both internal and external facilitations. Online courses can be viewed and skill development can be updated too. It helps in tracking training skills and competencies. As it aids the organization in an electronic inventory of its talent, one can track which function has a shortage of which skills.

A2.7.7 Career Planning and Succession Planning Module

Most HR software also have a career and succession planning module. The career planning module carries out the following tasks: It could include job-specific competency models to guide employees in developing and implementing personal learning plans. More often than not, each job role has associated tasks, responsibilities and performance criteria that link to specific competencies and learning opportunities—such as job shadowing and mentoring opportunities. This module can help in the implementation of career management practices which could include both career planning and management development. This module could also be a part of the performance management module.

For succession planning it carries out the following tasks: It identifies qualified replacements to fill managerial-level positions at various functions. It identifies gaps at the managerial positions, so that an appropriate intervention strategy could be designed and developed and successors and backup candidates could be designated for all key positions. It also identifies managers in line with business goals by utilizing data for potential candidates.

A2.7.8 E-learning

The American Society for Trainers and Development (ASTD) defines e-learning as ‘instructional content or learning experiences delivered or enabled by electronic technology’. To guarantee success in this environment, individuals and organizations must remain flexible, acquire new skills continuously and identify new ways of managing knowledge and information. Although technology is drives most of the change in business and work environments, it also serves as a key tool for keeping pace with rapid change. E-learning includes diverse learning strategies and technologies, from CD-ROMs and computer-based instruction to videoconferencing, satellite-delivered learning and virtual educational networks etc. E-learning is not limited to web-based instruction. Through e-learning, there are several ways in which individuals accumulate and transfer knowledge and information. According to a prediction by Fortune Magazine, training that typically would take six to nine months can be compressed to two to three weeks due to e-learning. Technology giant CISCO Systems reported that e-learning programmes produced a savings of $1 million in manufacturing costs in a single quarter, due to improved processes, as well as an 80 per cent increase in speed-to-competence.

A2.7.9 Employee Self-service (ESS) and Manager Self-service (MSS)

As of 2002, more than 70 per cent of large organizations had implemented some form of ESS. Likewise, MSS is growing rapidly, as almost 80 per cent of large organizations either have implemented MSS or plan to implement in the near future (Cedar 2002).

ESS could be used for a range of HR services such as personal information, input and edit of the data, viewing compensation details pay slip, benefits, performance linked incentives, stock options and tax-related information. One could also view training programmes that are to be scheduled and those that the employees have already attended, job postings, time and attendance details, leave records, review of performance appraisal records, employees could also participate in employee-related surveys, access to HR policies etc.

MSS could be used for many services too as it allows managers to access a range of information about the employees who report to them and electronically process the HR paperwork. For example, a request for sick leave can be approved by the manager for employees who report to them. It also offers a host of benefits to the organization, cost savings being the most obvious. It has the potential to increase consistency in HR practice by managers. It also includes tools to aid in budget reviews and reporting mundane tasks such as employee reimbursements and other related aspects.

Watson Wyatt's 2009 HR Technology Trends Survey

The survey found that 61 per cent of employers are taking steps to optimize their current service delivery models. Thirty-three per cent are reviewing and updating all vendor contracts and only 27 per cent are staying the course. Watson Wyatt's survey was conducted in February and March 2009 and includes responses from 181 large employers.

A2.8 IMPLEMENTATION OF AN HRMS

Poor design and mismanaged implementation of an HRMS prove to be very expensive for any organization. Some of the common pitfalls in HRMS Implementation are as follows:

  • Inappropriate need analysis: Often incorrect decisions are made and costly systems are bought that do not meet the needs of the organization. For example, an organization that works likely with contingent workers buys a system which does not facilitate detailed analysis of contingent workforce.
  • Lack of management commitment leading to inadequate resources and personnel: The management should be supportive in terms of sparing resources and people or the same. Implementation done with inadequate resources might lead to an ineffective system.
  • Political intrigue, conflict, hidden agendas: There are many involved in the process who have ulterior motive while deciding the workflow. For example, a control-oriented person from the finance department might want the workflow to include approvals from finance even where not required.
  • Failure to include key personnel on the project team: If the key stakeholders are not involved in the process, the system might not be designed in a holistic manner; secondly, a lack of buy-in will decelerate the adoption of the system.
  • Failure to assign a project team for the duration of the project: It is also imperative that the core project team members stay with the project from inception to implementation.

Robust HRMS implementations constitute of a detailed implementation planning and an efficient execution. HRMS implementations always begin with the appointment of an HRMS project manager who would handle the entire implementation. Usually this person is an HR manager who has a complete overview of the HR operations of the organization and a vision of how the software will help in driving the people strategy of the organization. In the HRMS Project Implementation team, there are two kinds of people involved:

  • Functional specialists: These are the functional (HR) experts, MIS experts and line managers who are going to be the users of the system. It is also important that the functional specialists be trained on the functionalities of the acquired HRMS, so that they could use all features that it has to offer to the advantage of the organization.
  • Technical specialists: These will be of two kinds—one internal to the organization and usually one from the vendor's side. The internal technical specialist shall bring in their knowledge of the IT infrastructure of the organization, the legacy systems used in the organization, the compatibility with existing software etc., whereas the consultant from the vendor's side will advise on the technical capability of the software purchased and how best to leverage it to serve the purpose of the organization.

This Project Implementation team reports in to a steering committee. The steering committee is a group of senior executives who have a clear vision of how technology can be leveraged to drive the organizational strategy in the long term. The steering committee is generally made up of a minimum of the following: (1) chairperson (corporate/executive sponsor) or other senior executives (this can be the CEO, too), (2) head of human resources, (3) head of information technology and (4) executive-level representative(s) from line management. Some organizations also include the head of finance, a representative from the board of directors or head of internal audit.

A2.8.1 Implementation Planning

When the HRMS vendor and application has been chosen, a great deal of time must be invested in planning the HRMS implementation. To start the planning process, a number of things must be known, including the scope and goals of the project. If the need analysis is thorough and the successful software vendor is quite clear about the capabilities of its product, this task will be simpler. An effective and realistic Project Plan should be drawn between Human Resource function and IT function. This should include project goals, timetables, responsibilities, resources and monitoring and reporting mechanisms. The plan should also outline priorities in terms of the technical environment; what equipment, technology must be purchased; priority of individual HR modules; whether to implement all at once or in a specific sequence; expectations of new users, such as moving to a decentralized system; availability of resources including whether human resources or information technology expertise will be provided by internal organizational resources, contract resources, or external consultants; availability of training for project team.

A2.8.2 Implementation

Once the priorities have been reviewed and a consensus reached, the HRMS project manager must work with the team leaders to schedule each task in the plan. This is a critical component of success and the only way to control costs and resources effectively. The implementation schedule must include the estimated completion dates as well as the elapsed time or duration of each task, and who will be responsible. The project manager's job is to lead the team to adhere to the implementation schedule. The entire implementation is under the eye of the steering committee. The steering committee's job is to monitor the implementation and keep giving the strategic direction.

A2.8.3 Training

The best HRMS in the world will only work if users know how to use it effectively. Human Resources can foster that knowledge by providing explicit training and ongoing support. An effective training plan should identify the actual kinds of users requiring training; the kind of training needed; estimate the number of individuals to be trained on each topic; develop the training programme and then implement it as per a planned training calendar. Generally, this training can be done in-house by members of the core project team, usually from Human Resources. Training addressed during these sessions relates to the way the new system works and any new procedures that may have evolved during the early phases of the implementation.

A2.9 HR PORTALS

HR portals provide a single site for HR-related services. These are sophisticated web sites that are designed to communicate a range of HR information. More than a third (36 per cent) of larger organizations participating in a survey indicated that they had a portal strategy (Cedar 2003). Another study by Towers Perrin found that 42 per cent of the organizations they surveyed had implemented a portal strategy by 2002.

Complex sites include information that is personal to each employee. More sophisticated portals permit the employees to customize the portal to the employees’ preferences. For example, one can have the list of employees’ birthdays and anniversary as a ticker or there could be a news ticker on the screen. The access to the level of information is normally ‘position’-driven, i.e., a regional credit manager (west zone) would be given access to information about employees who report to him, he, they obviously would not be able to access data of the regional credit manager (north zone).

HRIS at Ranbaxy

Ranbaxy has 1,200 plus scientists who are engaged in high end research. Hence, it is highly important for them to have a sound recruitment policy and system in place. To hire the right kind of talent, they have tied up with some of the biggest web-based consulting sites.

The entire performance management system is application based and conducted by using technology as an interface. Nevertheless, they do not lose out on the personal touch, hence they also have face-to-face meetings for the reviews.

They have successfully been able to measure the efficiency of using the technological tools and a lot of emphasis is place on well-developed systems to maximize internal communication. The only challenge they face is to educate employees for an effective transition.

Employee portals are also good for creating an employer brand. With a positive employer brand image, it can have a significant gain in attracting talented employees.

A2.10 CURRENT TRENDS: INFORMATION TECHNOLOGY IN HUMAN RESOURCES
  1. Podcasts: Podcasts broadcasters are finding creative ways to augment its features to impart knowledge which will educate as well as engage employees. Watson and Wyatt, 2009 HR Technology Trends Survey, reveal that companies are using the podcasting tool (19 per cent) to communicate with each other. Around 59 per cent are satisfied with their use of podcasts. Companies have found it beneficial in reinforcing messages such as informing and updating employees on their benefit plans and also for reducing costs. Recruiters are also using podcasts to attract and retain talent.

    24 × 7 learning delivers all its modules through podcast and mobiles. They believe that it is a collaborative and interactive tool for learning and suits the profiles of today's generation.

  2. Social networking sites: LinkedIn, Twitter, Facebook etc. are gaining popularity. On the one hand, some are finding these sites a great place to scout for candidates, but others are still not sure of its advantages.
  3. Recruitment process outsourcing (RPO): Recruiters take ownership of the end-to-end hiring process right from identifying the vacant positions in the organization to getting candidates on board. RPO consultants are a group of specialists dedicated to only recruitment. These consultants are normally posted at the client site. The RPO vendors also take full responsibility for the complete recruitment team. For example, Mindtree consulting uses RPOs for hiring of its workforce. Using this model its average processing time from receiving a CV to rolling out an offer has reduced to around 5–6 days, it includes all the sub-processes of recruitment—obtaining the CV, screening it, organizing three levels of interviews and then finally churning out the offer letter.

Some companies also use Weblogs, messenger services (Chat), Webinars, Netmeeting etc.

Top Trends from SHRM's Technology and HR Management Special Expertise Panel

  1. Information and actions are increasingly portable via mobile applications.

  2. The use of cloud computing (web-based HR Systems) is increasing.

  3. Organizations are increasingly adopting recruiting and social media for employer brand messaging (e.g., Facebook, LinkedIn, Twitter, YouTube).

  4. Organizations are breaking larger projects into a series of smaller ones, globalization efforts are on hold, software implementation prices are lower.

  5. Talent management platforms are undergoing product consolidation, shifting away from siloed applications towards total solution suites that support a holistic view of talent management.

  6. Growth in the availability of HR management software aimed at and used by small businesses without HR staff.

  7. Loss of employee privacy as a result of technology (information available about people's present and past more easily obtainable).

  8. Business and consumer adoption of green technologies, employees will require training in the use of sustainability software.

  9. Increasing divide between technology-savvy employees and those unfamiliar with the latest technologies.

  10. Use of technology to eliminate geographical barriers in the workplace.

Source: Adapted from ‘Future Insights—Top Trends According to the SHRM Special Expertise’, available at http://www.shrm.org, accessed on 25 July 2011.

A2.10 HRIS AUDIT

As recommended by Robinson and others (1999), regular audit should be carried out to obtain responses to these questions.

  • Is the system being used efficiently and effectively?
  • Are the generated reports accurate and useful for decision-making purpose?
  • Are there any barriers to the effective use of the system?
  • Does technology enable managers?
  • Is the HR team complying with the policies?
  • Is the team complying with statutory obligations?

References

 

Aitchison, Margaret. 2006. ‘E-recruitment Best Practice in the Private Sector: A research Project Phase 1: Emerging Issues to Inform Best Practice Across the Public Sector’, available at http://www.bis.gov.uk/files/file35199.pdf

Bondarouk, T. V., Ruel, H. J. M. and Looise, J. C. 2011. Electronic HRM in Theory and Practice, Emerald Group Publishing.

Capelli, P. 2001. ‘Making the Most of Online Recruitment’, Harvard Business Review, 79: 139–46.

Cedar. 2002. ‘Cedar 2002 Human Resources Self Service/Portal Survey’, available at www.cedar.com

Cober, R. T., Brown, D. J., Blumental, A. J., Doverspike, D. and Levy, P. 2000. ‘The Quest for the Qualified Job Surfer: Its Time the Public Sector Catches the Wave’, Public Personnel Management, 29(4): 479–94.

Doran, Al and Rampton, Glenn. 1993. Making a Business Case for a New HRIS. Canada, available at http://www.comparehris.com/HRIS-New-Software-Justification/

Gueutal, Hal G. and Stone, Dianna L. 2006. The Brave New World of eHR: Human Resources Management in the Digital Age. US: Wiley.

Holm, Anna B. 1999. The Effect of E-recruitment on the Recruitment Process, Denmark: Aarhus University.

‘HR Drives Acceleration at CEAT’, available at http://www.cxotoday.com/story/hr-drives-acceleration-at-CEAT/

Lepak, D. P. and Snell, S. A. 1998. ‘Virtual HR: Strategic Human Resource Management in the 21st Century’, Human Resource Management Review, 8(3): 215–34.

Oracle Customer Case Study, June 2008.

Pantazis, Cynthia. 2002. ‘Maximizing E-learning to Train the 21st Century Workforce’, Public Personnel Management, 31(1): 21–26.

Rampton, Glenn M., Turnbull, Ian J. and Doran, J. Allen. 1999. Human Resources Management Systems: A Practical Approach, 2nd edition. Carswell Legal Publications.

Robert, Howell C. 2001. ‘How to Use Your HRIS to Produce Data that Managers Can Use IOMA's’, Human Resource Department Management Report, available at www.allbusiness.com

Stone, D. L. and Williams, K. J. 1997. ‘The Impact of ADA on the Selection Process: Applicant and Organizational Issues’, Human Resources Management Review, 7(2): 203–31.

Tong, D. Y. K. A Study of E-recruitment Technology Adoption in Malaysia, Multimedia University, Melaka, Malaysia.

Wright, P. M. and Dyer, L. 2000. ‘People in E-business: New Challenges, New Solutions’, working paper 00–11, Center for Advanced Human Resource Studies, Cornell University, Ithaca, New York.

Wyatt, Watson. 2009. ‘Strapped Companies Looking to Get More from HR Technology’, available at http://www.watsonwyatt.com/

Web sites

 

http://www.watsonwyatt.com/news/pdfs/WT_2009_11688.pdf

http://www.watsonwyatt.com/render.asp?catid=1&id=20976

www.isodynamic.com/web/pdf/IsoDynamic_elearning_white_paper.pdf

www.myadrenalincom

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