Steps in Designing of HRIS, HRIS Subsystems, Mechanisms of HRIS

Steps in Designing of HRIS

(1) Study the Present System:

In defining requirements or assessing the existing information system, three questions need to be answered; what is the present flow of information? How is the information used? How valuable is the information to decision making?

(2) Develop a Priority of Information that Managers Need:

Once the current system is understood well it is used to develop priorities. A manager must have certain information in order to make proper decisions. Other information is nice to have but is not essential to the manager’s decision-making. The HRIS must ensure provision of high priority information. Lower priority data should be generated only if the benefits exceed the costs of producing it.

One approach would be to have individual managers develop their own priority lists and then integrate them into a list for the entire organization. Certain departments will find that the information they identify as top priority would be far down the list for the organization as a whole. Here the needs of the entire organization might be the controlling factor.

(3) Develop the New Information System:

The organization wide priority list should govern the design of the HRIS. Information not worth the cost is excluded. A system of required reports should be developed and diagrammed. The entire organization is treated as a unit to eliminate duplicity of information.

(4) Choose a Computer:

Today, it is reasonable to assume that HRIS of most organizations will be computerized. Because of the increasing reliance on computers, the HR managers should be computer literate. The presence of computers is far too pervasive and their usefulness far too great for human resource managers to ignore their capabilities. Human resource software for personal computers is almost always the responsibility of the HR department.

The modern day complexities involved in managing a global labour force makes developing an effective global HRIS a necessity. Information concerning many factors affecting human resource must be shared. This information must be relevant and timely to assure that the best HR decisions are made.

HRIS Subsystems

Presently, HRIS is an integration of ‘HRM’ and the ‘Information System’. With the development of various concepts and sub-systems of the HR function, the top management’s perspective of HR has undergone a tremendous change prompting extensive use of computers that have the capability of pro­cessing, storing, and retrieving massive information of complex and diverse nature.

It helps managers to perform the HR function in a more effective, efficient, and systematic manner. It can be a potent weapon for lowering administrative costs, increasing productivity, speeding up response times, and improv­ing decision-making and customer service.

HRIS is now taken as an integration of activities of the HRM function and the information system in relation to basic HR activities, and covers people, poli­cies, procedures, and data required to manage the HR function. The most potent output of HRIS is the generation of various predesigned reports and graphical formats that help in the analysis of HR activi­ties for sound decision-making.

Top managements are increasingly making use of HRIS in various HR activities like HR planning and analysis, compensation and benefits, staffing, development of employees, performance evaluation, health, safety, and security, collective bargaining etc. Top managements are noted to have become more efficient by way of reduction in time spent on administrative work by 20 to 25 per cent and redeployment of time saved to higher tasks such as decision-making and employee development, eliminating paper and process inefficiencies.

Top managements’ horizon seems to have widened in realizing the transition of HR from an administrative department to a strategic department. Unlike in the past, the modern-day managements think of sharing data among all the functional areas to achieve organizational goals.

With that end in view, depending upon the financial constraints, choice of separate software for HR functions, and similar other considerations, an organization may choose either an integrated information technology solution like the ‘ERP System’ or a software like People Soft, SAP-HR, Abra Suite, Vantage, or Oracle-HRMS which are specifically developed for HR activities of an organization.

Mechanisms of HRIS

1. Organizational Management Module:

It is mainly used to perform numerous business and HR processes. This module is installed before any of the aforesaid modules is introduced. The information entered in this module is regarding the jobs, tasks, positions and their relationship in the organization, job description, employees working in dif­ferent positions along with their qualifications, profiles, and tasks performed by them, and the different departments in the organization.

(1) The module creates an organizational plan which depicts the functional structure of an enterprise. By relating jobs, tasks, and positions with relationship a network that mirrors the organizational reporting structure can be created and depicted via easy-to-use graphical tools. In addition to this, relationship to objects from other components like cost centres, employee, or user can be created.

(2) When an organization changes the core business process which in turn necessitates staffing adjustments, HR people can dynamically adjust the organizational model to reflect the new situa­tion. Regular evaluation of personnel situation can help avoid qualification deficit in the future.

(3) This component can be used to match employees’ qualification profiles with job requirement pro­files on a regular basis in order to pinpoint training needs and take the measures necessary to offset it.

(4) It also gives instant access to information on number of vacant positions, their associated job descriptions, activity and requirement profiles of the position, and when the vacancies must be filled. With organizational development and the organizational structure model in place an enterprise can swiftly and efficiently determine current and future staffing requirements.

(5) This module gives reliable information on the staffing position in the organization along with the reports on staff assignments, existing jobs, positions, and tasks in the organization.

2. Recruitment Module:

It is a powerful tool which optimizes the recruitment procedure and reduces administrative overheads, time, and money spent on handling job applications. By automating routine tasks and delegating them to the system, it relieves the strain of the HR department. Information regarding the advertisement of job vacancies, basic data of the applicants, minimum requirements of the job, and standard text for letter of receipt, letter of rejection, and contract of employment are entered in this module.

(1) Using the SAP-HR recruitment model the organization can advertise a job vacancy on the internet.

(2) When applicant data are entered, it also checks to see if any of the applicants are former employ­ees or are currently employed in the company. This module automatically provides the existing master records of these applicants. It also passes the electronic documents submitted by these applicants to the HR administrator.

(3) The status of the application can be found by the applicant by using the applicant number and password.

(4) The applicants are given a confirmation that the application has been received. When an applicant’s data are entered, this module automatically generates a confirmation of receipt of the applicant. The applicants can receive a letter of rejection generated automatically by the system.

(5) The application documents are scanned into the system and archived. This means that the applica­tion documents can be called upon directly from the system.

(6) This module reports the applicants transferred to the applicant pool who do not fulfill require­ments of the position advertised but have a qualification profile. It also reports the list of unsolic­ited applicants and the applicants put on hold.

(7) When a candidate is selected, a contract of employment is offered to the selected candidate. The HR manager completes the selection procedure by entering the data of hiring and information by transferring them to the personnel administration module and the HR master data.

(8) The system can create statistical reports or lists on applications received, vacancies, and adver­tisement. It finds the cost of recruitment and replacement. It studies the sources from which employees were drawn and correlates this with success on the job to see if some sources should be dropped or added. The skill database is maintained, allowing retrieval of a potential candidate for a specified job.

(9) This module is integrated with personnel development and training and enables the management to determine whether the applicant requires further training in certain areas.

3. Personnel Administration Module:

It creates and processes employee data precisely and efficiently. This module deals with employee-related personnel activities which are called ‘personnel actions’. The basic personnel activities such as hiring, organizational assignment or leaving are handled in the Master Data Administration in this system.

The personal data of each of the employees is entered—his name, date of birth, marital status, family mem­bers, blood group, email address, emergency contact phone numbers, permanent and temporary address, etc. Besides this, date of hiring, official assignments, dates of promotion, change of pay, date of leaving, etc. are also entered in this module.

(1) It tracks the chronology of data of all times and forms the basis for sound HR decisions at all levels.

(2) Through this system every type of employee information can be saved using HR info types. Info types are data entry screens. They contain separate items of information entered into fields.

(3) The system automatically adjusts all relevant employee data to actual entry data of the employee. If the employee moves to another cost centre of the company the organizational assignment of employee also changes.

(4) This software ensures consistent data at all times. This module allows automatic monitoring of data for HR processes that require follow-up activities. For example, when hiring an employee, the HR manager can specifically be reminded when the probation period ends so that necessary follow-up activities can be done.

(5) Optical archiving allows scanning original documents such as work contracts, performance appraisal, or employee photo and archive them in the system.

(6) The top management can evaluate lists like employees’ directory, family members, bank details, anniversaries of years of service, and statistical information like staffing levels, nationality, age, wage, and seniority. SAP Business Graphics enables to the editing of evaluation results in a graph­ical form.

(7) It gives the ‘personnel action’ list of employees regarding his hiring, organizational assignment, reassignment to another cost centre, change of pay, termination, and re-entry.

1. Payroll and Time Management Module:

It is an automatic planning table that is in-built in the system, and provides an overview of HRs available at a given moment. It helps in planning shifts, absenteeism management, recording working times, and compliance of labour laws. The country-wise versions are available to handle the payroll function. This can take care of multiple factors such as valuation of time data, partial payment calculation, reduction of company loans, etc.

Payroll is integrated with personnel administration, time management, and account­ing. Standardized data retention enables to use most of the data and payroll data from the personnel administration module. Time data entered via time management are automatically included in the pay­roll and valued during the payroll run.

The master file is composed of discrete pieces of information called data elements. Data are keyed into the system, updating the data elements. The elements on the master file are combined in different ways to make up reports of interest to the management and govern­ment agencies and pay cheques sent to employees.

(1) It calculates pay and includes tax tables in accordance with compensation regulations.

(2) The information on expenses and payables from the payroll is posted for accounting directly in financial accounting and it becomes easier to assign the costs to the appropriate cost centres.

(3) The system calculates gross and net pay which comprises individual payments and deductions that are calculated during the payroll period and received by an employee.

(4) The payroll system keeps track of money paid to the employee.

(5) The system generates pay cheques or direct deposits which are electronic transfers of compensa­tion funds from the company’s bank account to those of the employees.

(6) It determines the optimal health and retirement plans for each employee based on factors such as marital status, age, and other data.

2. Personnel Development Module:

It ensures that employees develop in line with the company’s goals, and at the same time enables to take individual preference of the employees into account. Personnel development has two important objec­tives. One is to ensure that there are enough qualified employees and managers in the organization; the other is to show all employees the career opportunities that are open to them, and to promote their work-related and social skills.

The career and succession planning components of the personnel develop­ment module provide powerful planning tools that help to achieve these aims. The data regarding career planning, succession planning, and performance appraisal are entered into this module. This module uses career planning to show employees what career opportunities are available if they perform well and prove suitable.

Pre-defined careers provide employees and applicants with the information on how they can progress within the organization. It can portray vertical and horizontal movements within the organizational structure and thus create all kinds of career paths for the employees.

Succession planning identifies candidates who are qualified in all respects to occupy a post at the present moment or in the future. In succession planning, the system enters information about qualifica­tions, career preferences of employees, estimated potential of employees, dislikes, and a pre-defined career.

(1) The system helps in obtaining the suitability of the potential successor and also gives concrete proposals for the training measures that need to be taken for individual candidates.

(2) The module reports the employees’ current suitability and personal preferences and forecasts what they are likely to be in the future. This system provides a powerful reporting and evaluation system.

(3) By performing various targets/actual comparisons the module helps in obtaining a realistic over­view of the company’s staffing structure.

(4) It helps in comparing employees’ profiles and displays the results in various formats so that analy­sis becomes easier.

(5) It can search through the entire company for persons with a particular qualification. This module is flexible and can be tailored to meet the company’s specific needs and personnel development strategy.

(6) It helps in identifying succession planning gaps in an organizational unit.

The organization can use this module for performance appraisal of employees. The appraisals are con­ducted using standardized criteria, thus ensuring maximum objectivity when results are calculated. It standardizes the process of employee evaluation by providing step-by-step guidelines to writing per­formance reviews, a check list of performance areas to be included in the evaluation and compute sub­totals of each category and weighted grade which can then be electronically stored as part of employees’ records.

(1) The system reports whether an employee was appraised in a given time period or not.

(2) It helps in determining which of the employees in an organizational unit have been appraised and by whom. It gives a list of the appraisals which have not been completed.

(3) It identifies persons who are over-qualified or under-qualified.

(4) It also identifies suitable applicants for a vacancy. As a personnel development instrument, an employee’s appraisal provides clear and reliable information to plan and monitor personnel development measures.

The additional modules in SAP-HR are travel management, training and event management, intranet employee self-service, and business workflow. SAP-HR is an integrated tool which is highly useful in multi-unit organizations whose operations are spread geographically.

Many of the HR decisions are data-based and fool proof maintenance of the same is imperative. Thus, integration of data helps an orga­nization to save on duplication efforts, man hours, and consequential financial cost. Circulation of data, transparency, and on-line employee communication are in-built benefits with this system.