HUMAN RESOURCE SYSTEMS

HUMAN RESOURCE INFORMATION SYSTEM

NON-OPTIMUM HRIS SITUATION

Payroll Applicant Tracking

DATA

Benefits Admin.
DATA

DATA

Training Mgmt.
DATA

Competency Modeling

DATA DATA

Job Evaluation

OPTIMUM SITUATION

Payroll

Benefits Admin.

Applicant Tracking

HR DATA
Competency Competency Modeling Modeling Job Evaluation

Training Mgmt.

Integrated HR Systems and Data

Need & Importance of HRIS

There are several advantages to firms in using HRIS, therefore the need arises due to the following reasons; 1. Comprehensive HR Database Management

2. Increasing competitiveness by improving HR operations

3. Collection of appropriate data and converting these into info. for decision making 4. Generating variety of accurate and real-time HR/MIS reports 5. Shifting the focus of HR from TPS to Strategic HRM 6. Re-engineering HR processes and functions 7. Improving employee satisfaction by delivering quick and accurate services to them

Definition of HRIS
A system used to acquire, store, manipulate, analyze, retrieve, and distribute information regarding an organization's human resources. Although an HRIS includes hardware and software, it also includes people, forms, policies & procedures, and data. Kavangh, 1990

DEFINITION OF HRIS elaborated

The HRIS should be designed to provide information that is:
TIMELY: A manager must have access to up-to-date information : A manager must be able to rely on the accuracy of the information provided A manager can absorb only so much information at any one time A manager should receive only the information needed in a particular situation A manager should receive complete, not partial, information

ACCURATE

CONCISE

RELEVANT

COMPLETE

HRIS The Big Picture - Reasons for Change

Savings

Complexity

Duplication

World-class HR

Inconsistencies

Poor accessibility

Inefficient paper-driven process

HRIS: Benefits

Faster information process, Greater information accuracy, Improved planning and program development, and Enhanced employee communications (Overman, 1992).

HRIS: Challenges

Lack of management commitment No or poorly done needs analysis Failure to include key people Failure to keep project team intact Politics / hidden agendas Failure to involve / consult significant groups Lack of communication Bad timing (time of year and duration)

HRIS Outsourcing
HRIS outsourcing is the practice of contracting with vendors to provide HR services by customizing the requirements of the organization through various HRIS modules on behalf of the company usually from their own premises. e.g., Payroll as a separate function/module of an HRIS.

WHY HRIS OUTSOURCING???

Cost cutting Complexity in HRIS Huge interference of IT in HRIS Lack of experienced and desired skills in the HRIS work-team Focus on the main business Inability of the organization to afford internal HRIS
Examples: Companies like HSBC, Stanchart, Idea, Thomson Digital etc. have outsourced the HRIS to vendors like, Ma-foi, 3i Infotech etc.

GROUP DISCUSSION

Should HRIS be outsourced or be developed and managed internally?

HR AUDIT

Definition:

HR Audit refers to Examination & Evaluation of Polices, Practices & Procedures to detect Effectiveness & Efficiency of HRM and Verify if Mission, Objectives, Polices, Procedures, Programs are chased and expected results achieved. HR Audit also suggest future improvements based on past activities measurement.

Need for HR Audit:

Though, to audit HR- Policies & Practices no legal obligation exists, some Modern Organizations chase to:

1. Increase size of Organization & Personnel

2. Change Philosophy of Management towards HR

3. Increase Strength & Influence of Unions

Scope of Audit: HR Audit has vide scope, involves much more than Management.
Policies HR Philosophy Special area Programmes & Practices

supervision
leadership styles delegation Motivation & commitment Organizing negotiation Staffing & Development Scope of HR Audit

Personnel Results Research & Innovation Planning Forecasting

Scheduling

Benefits of HR Audit:
1. Identifies contribution of HR Department.

2. Improves HR Departments Professional Image.

3. Fosters greater Responsibility & Professionalism amongst HR Staff. 4. Classifies HR Departments Responsibilities & Duties. 5. Stimulates Uniformity of Personnel Policies & Practices. 6. Identifies Critical personnel problems. 7. Ensures Timely Legal Compliance Requirements. 8. Reduces HR Costs

Pitfalls of HR Audit:
1. Full audit may be time consuming 2. May not be as objective and impartial as desired 3.Impact of certain actions may not be clear

Auditors Role:
For each activity in the HR Audit functions Auditors must:

1 determine objective of activity.

2 Identify who is responsible for its performance. 3 Review the performance. 4 Develop action plan to correct deviation, between Results & Goal. 5 Follow up action plan. HR Evaluation must justify existence of department & its expenses. Department has no reason to function if it fails to contribute to Companys bottom-line, Prune expenses to make department viable.

FIVE Approaches to HR Audit:

Auditors may choose any of the five approaches for the purpose of Evaluation. 1. Comparative Approach.

2. Outside Authority Approach.

3. Statistical Approach.

4. Compliance Approach.
5. MBO Approach

Comparative Approach
Auditors Identify another Company as a MODEL. Result of the

Organization compared with those of Model Company.

Outside Authority Approach

Often, Auditors use standard set by Outside Consultant as BENCHMARK for comparison of own Results.

Statistical ApproachStatistical Measures of Performance are developed (Absenteeism,

Equal Time Off {ETO} rates) Based on companys existing information. These Data help auditors evaluate/assess performance.

Compliance Approach
Auditors review Past Actions to determine if those activities comply with legal

requirements and Company Policies & Procedures.

Management By Objectives Approach

Creates Specific Goals against which performance can be measured. Then the Audit Team Researches ACTUAL PEERFORMANCE and COMPARES

WITH THE OBJECTIVES.

PERIOD OF AUDIT

Naturally any audit will be done annually. Though it is preferred to conduct Human Resource Audit annually, but it is advisable to conduct audit once in three years or five years, keeping in view the fact that the realization of the Organizational goals may not be identified within a year.

Audit Report
The Program comes to end with preparation of Report. Report may be Clean or Qualified. It is Qualified if HR Performance contains Gaps for which remedies are suggested. Report is Clean where Performance is fairly Satisfactory

HR ACCOUNTING

HUMAN RESOURCE ACCOUNTING

Definition:The American Accounting Associations Committee on Human Resource Accounting (1973) has defined Human Resource Accounting as The process of identifying and measuring data about human resources and communicating this information to interested parties.

Provide cost value information about acquiring, development ,allocating and maintain HR

Enable management to effectively monitor the use of HR Find whether human asset is appreciating or depreciating over a period of time

Assist in the development of effective management practices To motivate individual persons in the organization to increase their worth by training

Foresee the changes

The adoption of the system of HRA discloses the value of human resources. This helps in proper interpretation of Return on Capital Employed
The maintenance of detailed record relating to internal human resources(i.e. employees) improves managerial decision-making specially institutions like direct recruitment versus promotions; transfer versus retention Throws light on the strength and weaknesses of the existing workforce Identification of human resources as a valuable asset will help in prevention of misuse and under use due to thoughtless or rather reckless transfers, demotions, layoffs

Cost approach

Economic value approach

HISTORICAL COST

OPPORTUNITY COST

REPLACEMENT COST

The historical cost of human resources is the sacrifice that was made to acquire and develop the resource a calculation of what would have been the returns if the money spent on HR was spent on something else the cost that would have to be incurred if present employees are to be replaced.

PRESENT VALUE OF FUTURE EARNINGS

value of an individual is the present worth of the services that he is likely to render to the organization in future an internal market for labor is developed and the value of the employees is determined by the managers. Managers bid against each other for human resources already available within the organization. The highest bidder wins the resource.

COMPETITIVE BIDDING MODEL

Not easy to value human asset Results in dehumanizing human resource Hr is full of measurement problem Employees and unions may not like the ideas Unrealistic