This article will focus on human resource information systems (HRIS) and the ways in which HRIS are used by business organizations to optimize their human capital. The article will provide an overview of the place of HRIS in human resources departments, HRIS processes, HRIS history, and HRIS benefits. This overview will serve as the foundation for discussion of the design and implementation of HRIS. In addition, the issues associated with global HRIS, HRIS privacy, and HRIS management will be addressed.
Keywords Global HRIS; Human Capital; Human Resource Information Systems (HRIS); Human Resources; Management
Management: Human Resource Information Systems
Business, governments, and non-profit organizations around the world rely on human resource information systems (HRIS) to facilitate information sharing as well as facilitate downsizing and reengineering efforts. The human resource information system, also called the human resources management system (HRMS), refers to a systematic procedure for collecting, storing, maintaining, retrieving, and validating data needed by an organization about its human resources, personnel activities, and organization unit characteristics. Human resource information systems help human resource professionals achieve human resource objectives. For example, human resource information systems provide businesses with rapid data access, information exchange, and strategic advantage. Public and private sector organizations, such as Federal Express, IBM, Levi-Strauss, the Central Intelligence Agency, the Department of Defense, Hewlett-Packard, Stanford University, and Johns Hopkins, have developed and implemented HRIS to optimize their human capital performance. HRIS, along with the Internet and related communication technologies, are transforming the human resource management arena and life within organizations.
Human resource information systems, while increasingly complex and computerized, can be simple or complex, computerized or non-computerized. Examples of informal human resource management systems include small business payroll records and time cards. Examples of complex human resource information system include the computerized human resource databases of major corporations, banks, and national governments. There are countless HRIS computer applications available from consulting firms, software firms, and in-house developers. Oracle HR and People Soft are two popular versions of computerized human resource information systems (Kovach & Cathcart, 1999).
The following sections provide an overview of the role of HRIS in human resources departments, HRIS processes, HRIS history, and HRIS benefits. This overview will serve as the foundation for later discussion of the design and implementation of HRIS. In addition, the issues associated with global HRIS, HRIS privacy, and HRIS management will be addressed.
The Human Resources Department
The human resources department is responsible for employee recruiting, training, promoting, terminating, record keeping, and meeting legal and governmental standards and regulations. An effective human resources department is considered to be one of the main factors in developing sustainable competitive advantage in the marketplace (Targowski & Deshpande, 2001).
Human resource stakeholders and human resource managers use and rely on the information provided by human resource information systems. Human resource systems tend to be comprehensive and integrated with the planning, staffing, and development goals and objectives of their organization. Examples of information maintained on and available from a human resource information system includes (Kovach & Cathcart, 1999):
- Information for labor force planning, and supply and demand forecasts
- Information needed to satisfy stakeholder need or regulation
- Information on equal employment, separations, and applicant qualifications
- Information on training program costs and trainee work performance
- Information on pay increases, salary forecasts, and pay budgets
- Information on contract negotiations and employee assistance needs
HRIS became a ubiquitous part of business practices and corporate culture when HRIS proved that they could improve the management of an organization's human capital. HRIS provides an administrative advantage to organizations which often translates to a competitive advantage. HRIS in contemporary business organizations are increasingly characterized as employee self-service (ESS) systems. ESS systems allow employees to have access to and update their records without the assistance of human resources personnel. HRIS have moved from client server architecture to a web-based environment. Many firms have added interactive voice response (IVR) to their HRIS to enable employees to easily update their human resource information. Examples of information that can be updated on web-based or interactive voice response HRIS are address information, retirement information, health plan information, life-events reporting, life insurance information, and 401(K) information.
HRIS can often be accessed from multiple locations within an organization including employee offices, factory floor portals, and email kiosks. HRIS portals and kiosks located in public and centrally located spots throughout the organization, a growing trend in business organizations, enable all employees to complete human resources transactions regardless of their work hours, work location, and profession (Kovach, Hughes, & Fagan, 2002).
There are three main functional components in any HRIS: Input, data maintenance, and output (Kovach & Cathcart, 1999).
- Input: The input function enters personnel information into the HRIS. Input features may include automated scanning of documents.
- Data maintenance: The data maintenance function updates and adds the new data to the database. Electronic data storage is becoming the norm in large organizations.
- Output: The output function processes the input, makes the necessary calculations, and then formats the results in an accessible form for the users.
These three HRIS functions, supported by the Internet and related communication technologies, are increasingly interactive.
The origins or antecedents of contemporary HRIS began in the years preceding World War II. During the early twentieth-century, personnel staff performed basic employee record keeping on such limited topics as employee names and addresses. This service had little impact on the efficiency or strategic advantage of the firm. Organizations, between 1945 and 1960, began to recognize the connection between employees and firm performance. As a result of this emerging organizational insight about human capital issues, organizations began to develop formal processes for employee selection and development. Organizations, from 1960-1980, restructured with human resources increasingly integrated into the overall strategy of business organizations. HRI, during this period, transitioned from paper to computer record-keeping. Organizations, from 1980 to today, have come to rely on their HRIS to generate management solutions that optimize the contribution and potential of a firm's human capital (Hendrickson, 2003). In 1998, 60 percent of Fortune 500 companies use the HRIS to support daily human resource management (HRM) operations. The growing popularity of HRIS in connected to its usefulness and applicability to administrative, strategic, and business decision-making arenas (Ngai & Wat, 2006).
HRIS, which requires capital and technical resources to design and implement, is believed to create a competitive advantage for organizations through improved accuracy, the provision of timely and quick access to information, the cost savings, quality/customer satisfaction, and innovation (Ngai & Wat, 2006). HRIS impact the time allocation and work-flow of human resource staff. For example, HRIS, which eliminates work duplication and streamlines processes, allow human resources staff to spend less time on administrative tasks and more time on strategic decision making and planning. This reallocation of time for human resources staff creates increased efficiency and departmental response time. HRIS improve business organization's knowledge management and, in turn, increases competitive advantage in the marketplace and stakeholder satisfaction (Targowski & Deshpande, 2001). Ultimately, HRIS data have provided a new tool for managerial decision-making in the human resources arena and organizations-at-large. The management uses this strategic data to make a wide range of decisions from work-related decisions regarding an individual employee to large scale decisions about corporate strategy (Kovach, Hughes, & Fagan, 2002).
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