Human resource information systems (HRIS) are means of acquiring, storing, manipulating, analyzing, retrieving, and distributing pertinent information regarding an organization’s human resources. They may be as simple as a box of index cards or a file cabinet full of manila folders or as complex as an interactive, Web-based computer application with role-based portals (an integrated and personalized interface to information, applications, and collaborative services). Regardless of whether one thumbs through a box of index cards or uses a computer to search data stored on a server, the purpose of an HRIS is to make information about the human resources in an organization available to organizational decision makers.
With the introduction of information technology, computers, and the Internet, today’s HRIS really is a sociotechnical system. A sociotechnical system is a combination of technology and people with inputs, transformations, and outputs. An HRIS sociotechnical system based on computers and information technology consists of hardware (mainframes, workstations, peripherals, and connecting networks); software (operating systems, utilities, application programs, and specialized codes); physical surroundings (building structures and working environments); people (individuals, groups, roles); procedures (management models, reporting relationships, documentation requirements, data flow, rules, and norms); laws and regulations (equal employment opportunity, privacy, etc.); and data and data structures (how data are collected and archived and to whom they are made available). Consequently, to be effective, an HRIS must blend the technical expertise of information technology professionals with the people-management expertise of human resource professionals. A technologically sophisticated HRIS will not yield desired benefits if it is used incorrectly or if it is ignored when it could make a difference. Likewise, sophisticated employees and managers will not be able to make their maximum contributions to organizational performance if the HRIS does not have the capabilities to provide them with the information they need in a timely fashion.
Three major types of information are contained in an HRIS:
- organizational information,
- job information
- employee information.
Organizational information may include policies, procedures, and processes. Job information may include position title, number of current vacancies, qualifications needed, place in career ladder, salary range, replacement candidates, and turnover rate. Employee information may include biographical data, equal employment opportunity classification, education, date of hire, position held with company, salary history, performance ratings, training, prior work experience, developmental needs, career interests/objectives, specialized skills, honors and awards, benefits, licenses and certifications, payroll information, attendance data, tax deduction information, pension contributions, and turnover. One issue of concern regarding employee information is how long to keep it. State laws and practices vary, but record retention periods can range from 1 year for hiring records not related to hired employees to 30 years for some medical records.
Information about human resources is collected when individuals apply for jobs (e.g., completing an application form) and then added to or modified throughout an employee’s tenure with an organization (e.g., updating an employee’s education qualifications in a personnel file). In the past, changes in employee information were made manually on paper entirely by administrative staff in the human resource (HR) department. Today, much information can be collected and input—by those outside of the HR department—online through Web sites, workstations, interactive voice response (telephonic), or freestanding kiosks. In addition, many organizations make it possible for employees to “own” their information and maintain it themselves online. Thus, when something changes in their lives, such as the birth of a child, employees can update their own HR information directly.
Information about jobs, work processes, and other organizational issues is collected from managers and subject-matter experts for input into the HRIS. Organizational information is also modified and updated to reflect changes, for example, in job descriptions or business strategies.
Within the present business environment, even the smallest organizations are likely to keep human resource records in some type of computer file. Commonly available software programs, such as Microsoft’s Access and Excel, can be used to create a rudimentary HRIS. Larger organizations are more likely to use specialized applications, such as ABRA, that provide greater data integration and HR functionality. Larger organizations also are more likely to use enterprise resource planning (ERP) systems, such as SAP, which integrate HR information with financial, operational, and strategic information.
An HRIS relies on relational database technology for storing and retrieving information. Rather than duplicating information (e.g., name, age, address, job title, and pay rate) in each of several separate files (e.g., payroll file, benefits file, employee records file), a relational database shows information only once in an appropriate table (e.g., a table of demographics, a table of benefits, a table of employee skills). The relational database software can then link the tables together and locate and combine information from many tables for analysis or report generation. Consequently, both inputting and processing times can be reduced greatly.
Increasingly, HR departments are relying on networking applications that enable centralized data storage with decentralized access to information. A client-server system has a server that provides the centralized storage of information, while the client allows end users access to the portions of the data they need. Client software makes it possible to tailor data access depending on different organizational roles (e.g., managers have access to different information than do employees).
The Internet has increased the flexibility of developing client-server systems. Organizations can maintain their own servers or “lease” servers from other providers for centralized data storage. Then, through browser-capable device access, such as personal computers, personal data assistants, cellular telephones, and computer kiosks, clients can obtain needed information from the server.
Analysis of information in an HRIS can range from the tailored and self-generated processes needed by the small-business owner using office software applications to the workforce analytics and real-time “management dashboards” that provide users of sophisticated HRIS software with an array of automatically generated assessments. These analyses can be used to create reports for internal and external stakeholders, who may then use them for making decisions or determining compliance.
An HRIS is composed of several subsystems: a transaction-processing system, a workflow system, a reporting system, a decision support system, and an executive support system. The transaction-processing system contains records of employee activities, such as tracking time and attendance or enrollment in various benefits. This record-keeping repository feeds into other subsystems, such as the workflow subsystem and the reporting subsystem. The workflow subsystem facilitates the routing and transfer of forms or other work process information from person to person or department to department. Work processes, such as recruiting, selecting, and orienting new employees, are captured in this subsystem. The reporting subsystem generates two types of reports: (1) predetermined, regularly generated reports, such as payroll and equal employment/affirmative action, and (2) ad hoc inquiries, such as the number of employees with specific skills, the number of employees who chose a particular benefit option, and so on. The decision support subsystem uses transaction data but makes it possible to go beyond simple report generation. These subsystems typically incorporate rules, formulae, or specialized displays designed to help end users make specific decisions, such as how to allocate merit increases. The executive support subsystem provides support for firm-level or strategic decision making. This subsystem draws on multiple sources of data for decisions, such as choosing a site for a new plant. The number of subsystems in any particular HRIS will vary depending on the size of the organization, the hardware and software used, and the needs of the end users.
Organizations that want computerized human resource information systems have several alternatives available to them. They can create their own HRISs in-house, or they can buy the software from a vendor. The HRIS software may be a stand-alone system with only HR functionality, or it may be part of an integrated ERP system. The HRIS can be installed on in-house computer systems or reside on servers owned by the software vendor. Today, many systems that once were available and affordable only to large organizations are also available and affordable to smaller organizations.
Early uses of the HRIS focused on supporting transaction processing; however, today, these systems increasingly are being used for process improvement and strategic purposes. Process-based uses focus on solving a specific problem, usually with a tangible cost impact inside the organization. For example, costs are reduced and accuracy is improved when employees are allowed to enter and monitor their own administrative data using self-service HR applications. A strategic focus goes beyond transactions and processes and seeks to connect HR activities with improvements in revenue generation. For example, one large retailer used data from its HRIS to demonstrate that a 5-unit increase in employee attitude led to a 1.3-unit increase in customer impression, which, in turn, led to a 0.5 percent increase in revenue growth.
A human resource information system can be used for assessing past performance or for future planning. Through the calculation of workforce analytics or key performance indicators, progress toward achieving goals can be examined from multiple levels: individual, group, department, and organization. In addition, variables can be examined to determine cause-and-effect relationships. For example, turnover data aggregated at the department level may indicate a human resource problem that can be investigated further by looking at variables that may be related, such as pay satisfaction. In addition, the internal data can be benchmarked against external standards for still further analysis. Through modeling alternative business strategies, organizations with an HRIS can, for example, predict relevant costs of hiring new employees, retrain existing team members, or obtain new skills through a company acquisition. This human capital management perspective focuses on acquiring, retaining, and leveraging an organization’s employee asset base.
An HRIS can be used in all functional areas of HR. Equal employment opportunity and affirmative action monitoring and reporting are enhanced with an HRIS that is able to track the dynamic employee flows (hires, promotions, demotions, transfers, voluntary and involuntary exits, etc.) in an organization. The recruiting function can use an HRIS for applicant tracking and correspondence, internal job posting and job-bidding processes, and the identification of internal candidates when no job posting is used. Collecting and assessing information about job applicants can be linked directly to the HRIS, and the HRIS, in turn, can be used to match applicants with available jobs. Performance appraisal results (e.g., 360-degree appraisals) can be input directly into the HRIS, enabling rapid feedback and decision making. In addition, performance-rating distributions can be monitored within and between departments to maintain consistency of standards. Compensation and benefits can be managed more effectively with an HRIS. The HRIS can be used to maintain compliance with the Fair Labor Standards Act, track executive compensation, conduct job evaluation studies, build wage structures, link internal data to market wage surveys, and determine bonus and incentive pay (e.g., from gain-sharing plans). Health and safety uses of an HRIS include tracking occupational diseases and injuries, providing reports for the Occupational Safety and Health Administration, monitoring employee safety training completion, and preparing reports for workers’ compensation claims. Labor relations uses of an HRIS include tracking disciplinary actions and grievances, identifying trends in union activity and membership across locations and job types, and assessing alternative contract proposals.
An HRIS is particularly useful for human resource development and career planning for the benefit of both the employees and the organization. The quantity, utility, and accessibility of training and development information made available through an HRIS can allow employees to pinpoint and accurately assess their own interests, strengths, and weaknesses and tailor development plans to enhance their own human capital and value to the organization. Moreover, much training and development coursework can be delivered effectively and cost-efficiently when integrated with an HRIS. From an organization’s perspective, an HRIS enables it to determine essential competencies needed to implement a chosen strategy, identify the distribution of those competencies currently available, and then assess competency gaps. Furthermore, once the competency gaps have been identified, an HRIS can enable decision makers to assess alternative means for closing the gaps, such as hiring employees from outside, retraining current employees, or acquiring another organization with the needed competencies.
An HRIS can increase both the efficiency and effectiveness of the HR function. Efficiency is enhanced because a greater number of HR transactions can be processed with fewer fixed resources, and many processes can be simplified. Effectiveness is enhanced through increased timeliness due to processing power and increased accuracy, precision, and completeness of data used for decision making. As a consequence, HR functions in organizations can shift their emphasis from administrative to more strategic concerns.
The HRIS is changing the roles of HR professionals. With fewer needs for administrative personnel in the HR function, those HR professionals remaining can be deployed more productively as consultants aiding managers and employees in solving problems and improving organizational processes. Helping managers and employees interpret and use the information available in an HRIS plays a more dominant role in the HR professional’s activities. At the executive level, the role of the HR professional is that of strategic partner, weighing in on organizational decisions such as mergers and acquisitions, changes in business strategy, and so on. With a sound HRIS and the ability to identify and analyze relevant information, HR professionals can play a vital role in ensuring that the “people side” of the equation is seriously considered in major organizational decisions.
The HRIS is also changing the roles of employees and managers. For example, a Web-based HRIS with role-based portal access places more HR services under direct control of end users. Managers can view their departmental HR data, conduct “what if” scenario analyses, consult decision “wizards” that guide them through decision-making processes, and implement actions that previously would have taken place over longer periods of time (as paper forms passed through many hands) and involved training and back-and-forth consultation with representatives from the HR department to ensure compliance with organizational rules and policies. Likewise, employees can view their own HR data, make changes in their personal information, conduct “what if” scenario analyses on, for example, different retirement options, assess their own career plans, enroll in training online, and do all of this without ever physically going to the HR department.
The potential for HR information systems to improve and facilitate career planning and development as well as other HR functions is only now beginning to be realized. Future advances will likely make it possible for both employees and organizations to jointly achieve their separate goals. However, as human resource information systems become more widely accessible and more advanced technologically, organizations will confront many challenges.
- Computer-based career support systems
- Human resource planning
- Human resource support systems
- Strategic human resource management
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