HUMAN RESOURCE INFORMATION

Systems (HRIS)

Computers have simplified the task of analyzing vast amounts of data, and they

can be invaluable aids in HR management, from payroll processing to record retention.

With computer hardware, software, and databases, organizations can keep records and information better, as well as retrieve them with greater ease. A

human resource information system (HRIS) is an integrated system designed to provide information used in HR decision making. Although an HRIS does not have to be computerized, most are.

Purposes of an HRIS

An HRIS serves two major purposes in organizations. One relates to administrative and operational efficiency, the other to effectiveness. The first purpose of an HRIS is to improve the efficiency with which data on employees and HR activities is compiled. Many HR activities can be performed more efficiently and with less paperwork if automated. When on-line data input is used, fewer forms must be stored, and less manual record keeping is necessary. Much of the reengineering of HR activities has focused on identifying the flow of HR data and how the data can be retrieved more efficiently for authorized users. Workflow, automation of some HR activities, and automation of HR record keeping are key to improving HR operations by making workflow more efficient.

The second purpose of an HRIS is more strategic and related to HR planning.

Having accessible data enables HR planning and managerial decision making to be based to a greater degree on information rather than relying on managerial perception and intuition. For example, instead of manually doing a turnover analysis by department, length of service, and educational background, a specialist can quickly compile such a report by using an HRIS and various sorting and analysis functions.

HR management has grown in strategic value in many organizations; accordingly, there has been an increased emphasis on obtaining and using HRIS data for strategic planning and human resource forecasting, which focus on broader HR effectiveness over time.

Uses of an HRIS

An HRIS has many uses in an organization. The most basic is the automation of

payroll and benefit activities. With an HRIS, employees’ time records are entered into the system, and the appropriate deductions and other individual adjustments are reflected in the final paychecks. As a result of HRIS development and implementation in many organizations, several payroll functions are being transferred from accounting departments to HR departments. Another common use of HRIS is EEO/affirmative action tracking.

The explosion of information technology has changed the nature of HR information usage. Just a few years ago, most HR information had to be compiled and maintained on mainframe computers. Today, many different types of information technology are being integrated and used so that HR professionals can access HR-related data and communicate it to other managers and executives.

CHOOSING AN HRIS

It is crucial when establishing an HRIS that the system be able to support the HR strategies of the organization. This requires analyses of the uses of HR information, both in the HR unit and throughout the organization.

Too often, the decisions about an HRIS are made based primarily on cost factors, rather than on how well the HRIS supports HR decision making.

DESIGNING AND IMPLEMENTING AN HRIS

To design an effective HRIS, experts advise starting with questions about the data to be included:

-What information is available, and what information is needed about people in the organization?

-To what uses will the information be put?

-In what format should the output be presented to fit with other company records?

-Who needs the information?

-When and how often is it needed?

Answers to these questions help pinpoint the necessary hardware and software.

Experts recommend that a project team be established and extensive planning be done. This team often includes representatives from several departments in the organization, including the HR and management information/data processing areas. The team serves as a steering committee to review user needs, identify desired capabilities of the system, solicit and examine bids from software and hardware vendors, and identify the implementation process required to install the system. By involving a cross-section of managers and others, the organization attempts to ensure that the HRIS fulfills its potential, is accepted by users, and is implemented in an organized manner.

Many different types of software systems are available to provide human resource information. Some HRIS software systems use mainframe computers and represent significant costs for purchase and installation. Other HR software systems can be run on personal computers and through local area or wide area networks in organizations. Growing use is being made of the Internet as a base for HR information systems.

ACCESSING THE HRIS VIA INTRANETS AND EXTRANETS

The dramatic increase in the use of the Internet is raising possibilities and concerns for HR professionals, particularly when establishing intranets and extranets. An intranet is an organizational network that operates over the Internet. The growth in the use of HR intranets for obtaining and disseminating HR information is seen in a study of about 50 global firms, about 45% of whom are using global intranets, up from 27% in just one year.

An extranet is an Internet-linked network that allows employees access to information provided by external entities. For instance, with an extranet, employees can access benefit information maintained by a third-party benefits

administrator. In another situation employees can access their payroll information from a payroll service provider and submit their travel requests to an external travel-service provider. For both extranets and intranets, security is important to prevent unauthorized or inappropriate access and usage. Use of web-based information systems has allowed the firm’s HR unit to become more administratively efficient and to be able to deal with more strategic and longer-term HR planning issues. Firms have used these web-based HRIS options

in four primary ways:

-Bulletin boards: Information on personnel policies, job posting, and training

materials can be accessed by employees globally.

-Data access: Linked to databases, an extranet or intranet allows employees themselves to access benefit information such as sick leave usage, 401(k) balances, and so on, freeing up time for HR staff members who previously spent considerable time answering routine employee inquiries.

-Employee self-service: Many intranet uses incorporate employee self-service

options whereby employees can access and update their own personnel records, change or enroll in employee benefits plans, and respond to employment opportunities in other locations. Obviously, maintaining security is critical when the employee self-service option is available.

-Extended linkage: Integrating extranets and intranets allows the databases of vendors of HR services and an employer to be linked so that data can be exchanged electronically. Also, employees can communicate directly from throughout the world to submit and retrieve personnel details.

TRAINING

Training those who will be using an HRIS is critical to the successful

implementation of an HRIS. This training takes place at several levels. First, everyone in the organization concerned with data on employees has to be trained to use new recording forms compatible with the input requirements of the system.

In addition, HR staff members and HR executives must be trained on the system.

Support and instruction from hardware and software vendors also are important

in order for the organization to realize the full benefits of the system. One study of HRIS successes found that the presence of in-house training was linked with greater user satisfaction with an HRIS.

ENSURING SECURITY AND PRIVACY

Two other issues of concern are security and privacy. Controls must be built into the system to restrict indiscriminate access to HRIS data on employees. For instance, health insurance claims might identify someone who has undergone psychiatric counseling or treatment for alcoholism, and access to such information must be limited. Likewise, performance appraisal ratings on employees must be guarded.