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 Personal interactions have been replaced by e-mails, automated alerts and clicks.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).
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.
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:
Broadly speaking, HRMS appears to be of three types:
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.
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.
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:
Comply: Managing core HR data and processes, payroll, benefits and legislative/regulatory compliance.
Automate: Saving cost and time with comprehensive, workflow-driven employee and manager self-service.
Align: Offering flexible programmes designed to increase workforce value through a broad range of development, performance management and learning applications.
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:
Source: Adapted from http://www.oracle.com/ru/products/applications/018835.pdf, accessed on 25 July 2011.
An HRMS has three major functional components: input function, data processing function and output function.
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):
Figure A2.1 HRIS modules
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.
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
Source: Adapted from Holm (1999).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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:
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:
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.
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.
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.
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.
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).
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.
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.
Some companies also use Weblogs, messenger services (Chat), Webinars, Netmeeting etc.
Information and actions are increasingly portable via mobile applications.
The use of cloud computing (web-based HR Systems) is increasing.
Organizations are increasingly adopting recruiting and social media for employer brand messaging (e.g., Facebook, LinkedIn, Twitter, YouTube).
Organizations are breaking larger projects into a series of smaller ones, globalization efforts are on hold, software implementation prices are lower.
Talent management platforms are undergoing product consolidation, shifting away from siloed applications towards total solution suites that support a holistic view of talent management.
Growth in the availability of HR management software aimed at and used by small businesses without HR staff.
Loss of employee privacy as a result of technology (information available about people's present and past more easily obtainable).
Business and consumer adoption of green technologies, employees will require training in the use of sustainability software.
Increasing divide between technology-savvy employees and those unfamiliar with the latest technologies.
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.
As recommended by Robinson and others (1999), regular audit should be carried out to obtain responses to these questions.
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