BMS - HRM set 3 - HRIS & HRP

Human Resource Information System (HRIS) is a systematic way of storing data

and information for each individual employee to aid planning, decision making, and for

submitting of returns and reports to the external agencies. Human Resource Department

requires large amount of detailed information. The quality of personnel management

departments, contribution largely depends upon the quality of information held by it. The

information required may be

i. Duties and responsibilities of every job in the organization.

ii. Skills possessed by every employee.

iii. Organization’s future human resource needs.

iv. Current productivity of human resources and

v. Identification of training needs.

Acquisition, storage and retrieval of information present a significant challenge to

the management. However, once the database is created, maintenance becomes easier.

HRIS is basically used for the following purposes:

a) Storing information and data for each individual employee for future

reference.

b) Providing a basis for planning, organizing, decision making, controlling

and a host of other human resource functions.

c) Meeting daily transactional requirements such as marking present,

absent or granting leave.

d) Supplying data and submitting returns to government and other statutory

agencies.
Formerly HR departments of various companies used to share hardware and files
with other departments. Later, companies began to develop information systems devoted
exclusively to human resource applications. These systems came to be known as HRIS.
STORING
Same of the applications which could be computerized and the nature and type of
information that can be recorded and stored are described below.
PERSONNEL ADMINISTRATION
It will contain information about each employee, such as name, address, date of
birth, date of joining the organization, and information about next of kin and family. The
facility should allow the user to maintain a number of address records such as permanent
home address, local postal address, and the address of next of kin.
SALARY PARTICULARS
Salary review procedures are an important function of the human resources
department. Details of present salary, last increase and the proposed increase will all be
compiled and stored.
LEAVE / ABSENCE RECORDING
An important requirement of HRIS is providing comprehensive and accurate
method of controlling leave and absences. A complete leave history for each employee,
days of absence, delay in reporting are all stored. Eligibility of leave, medical, maternity
leave under credit, leave encashment, eligibility are all stored.
SKILL INVENTORY
HRIS is used to record acquired skills and monitor a skill database at both
employee and organizational level. This will give the necessary information to identify
employees with necessary skills for certain positions or job function.
MEDICAL HISTORY
The HRIS may be used to record occupational health data needed for industrial
safety purposes, accident monitoring, exposure to potentially hazardous materials, and so
on. For example, hearing loss, nervous debility in certain work areas may be monitored
and results recorded on HRIS. The records of periodical medical examinations may also
be maintained.
ACCIDENT MONITORING
The system should record the details of the accidents for the injured employees.
This could highlight accident prone areas or accident prone times within the organization.
PERFORMANCE APPRAISAL
The system should record individual employee’s performance appraisal data such
as the due data of the appraisal, scores for each performance criteria, potential for
promotion, and other information to form a comprehensive overview of each employee.
Training and Development
The system should record the details of training imparted, training evaluation
development opportunities given and availed. The type of training needed may be
identified and stored.
HRP
The HRP plan, extensions, plan executed, to be executed strength and weaknesses
of the plan, plan evaluation etc, may be recorded.
RECRUITMENT
Recruitment pool, screening, preliminary selection etc, may be stored for HRIS.
CAREER PLANNING
Placement, training, selected candidates for career planning, supervisors view can
be stored.
COLLECTIVE BARGAINING
Wage, salary administration, bonus, negotiations, trade Unions views, most
welcome and least resistant measures may also be recorded.
STEPS IN IMPLEMENTING HRIS
Following are the steps in implementing HRIS.
INCEPTION OF IDEA
Idea should originate somewhere. The originator should make a preliminary report
justifying the need for HRIS and illustrate how it could assist management in making
certain decisions.
FEASIBILITY STUDY
The cost-benefit analysis of HRIS in terms of labour and material as also intangible
savings, such as increased accuracy and fewer errors should be highlighted.
SELECTION OF PROJECT TEAM
Once the feasibility study has been accepted and the resources accepted, a project
team should be selected. The project team should consist of a human resource
representative, who is knowledgeable about the organization’s human resource functions
and activities, and the organization itself, and also a representative from management
information system. As the project advances, additional clerical people from the human
resource department will have to be added.
DEFINING THE REQUIREMENTS
A statement of requirements specifies in detail exactly what the system needs to
do. A larger part of the statement of requirements normally deals with the details of the
reports that will be produced. The objective is to make sure that the mission of an HRIS
truly matches with the management’s needs of an HRIS.
VENDOR ANALYSIS
The purpose of this step is to determine what hardware and software are available
that will best meet the organization’s needs at the least price. This is a difficult task. This
involves discussions with various vendors on how their HRIS will meet the organization’s
needs.
CONTRACT NEGOTIATIONS
The contract stipulating the price, delivery, vendor’s responsibilities with regards
to installation, service maintenance, training to organization’s employees etc, may be
negotiated.
TRAINING
Project team members may first be trained to use the system and then they could
train all users from other departments.
TAILORING THE SYSTEM
It involves making changes to the system to best fit to the organizational needs.
DATA COLLECTION
Data is collected and fed into the system.
TESTING THE SYSTEM
The object of verifying is to test the output of HRIS and make sure that it is doing
what it supposed to do. All reports to be critically analysed.
STARTING UP
Even after testing, some additional errors may crop up. These errors surface during
start up. These are to be sorted out.
PARALLEL RUNNING
Just for the security, the new system is to be run in parallel with the old till the new
system stabilizes and people gain confidence in its operation.
Maintenance
Proper maintenance of the system and maintenance of secrecy of records are to be
guarded. It normally takes several months for HR people to get acquainted with HRIS.
AUDIT
After a year or so, the project team should audit the performance of HRIS and if
required, corrective actions should be taken.
Large organizations generally install computerized HRIS system because it enables
them to collect, process and use large amount of data. It links the various subsystems of
HRM.

Benefits of HRIS
Following are the benefits:
 Higher speed of retrieval and processing of data.
 Reduction in duplication of efforts leading to reduced cost.
 Better analysis and decision making.
 Higher accuracy of information and reports generated.
 Fast response to answer queries.
 Improved quality of reports.
 Better work culture.
 Streamlined and systematic procedures.
 More transparency in the system.
Limitations
Following are the limitations of HRIS.
 Expensive interms of finance and manpower requirement.
 Inconvenient to those who are not comfortable with computers, particularly top
bosses.
Data storage and processing
1. Maintain systematic information about the individual
employee : history characteristics, performance, record,
potential record, promotions, remarkable achievements,
salaries etc.,
2. Supply files to departments whenever solicited for
counseling, career planning, training purposes.
3. Design data card for computer.
4. Monitor feeding in and out of the data.
5. Process data for research on trends, etc.,
Manpower planning
Selection and placement
Reinforcement
and
Advancement
Performance appraisal
Industrial Relations
 Computers cannot substitute human being, individual decision making and
intuition.
 System needs updating, in many a situation, stale information is as good as no
information.

HRP

features of HRP can be identified.

i. HRP is a process which includes various aspects through which an

organization tries to ensure that right people, at right place and at right

time are available.

ii. It involves determination of future needs of manpower in the light of

organizational planning and structure. Determination of manpower

needs in advance, facilitates managements to take up necessary actions.

iii. It does take into account the manpower availability at a future point in

the organization. Therefore, it indicates what actions can be taken to

make existing manpower suitable for future managerial positions and the

how gap between needed and available manpower can be fulfilled.

Significance of HRP

HRP is of primary nature and it precedes all other HRM functions. Without HRP

no other function can be undertaken in any meaningful way. HRP contributes in the

following ways in managing resources in an organization.

Planning defines future personnel need and this becomes basis of recruiting and

developing personnel. In its absence there is likelihood of mismatch between personnel

needed and personnel available.

2. Coping with changes

In the Indian and international business arena fast changes are taking place.

Liberalization of economy has brought vast changes in India. At the international level

there is growing global competition. Every organization is trying to compete on the basis

of technology and managerial talents. In this war only those companies will survive which

adopt a formal, meticulous HRP. Change in technology has attached more premium to

knowledge and skills resulting into surplus manpower in some areas and shortage in other

areas. HRP helps in creating a balance in such a situation because manpower needs and

availability could be identified much in advance.

3. Providing base for developing talents

Jobs are becoming more and more knowledge oriented. This has resulted into

changed profile of manpower. Therefore an organization must be ready to face such as

eventuality by taking proper HRP.

4. High cost of investment in HR

The cost of acquiring, developing and retaining personnel is increasing much faster

than the average rate of inflation. This increasing cost may be taken care of by proper

HRP which provides the way for effective utilization of such talents. In fact, such a high

cost has forced many companies to have a relook at their HRM functions and particularly

HRP and to align these with new situations.

5. Creating involvement of top management in HRM

Systematic HRP forces top management of an organization to participate actively

in total HRM functions, an area that has been neglected by most of the companies until

recently.
HUMAN RESOURCE PLANNING PROCESS
This consists of series of activities as follows:
1. Forecasting
Forecasting of future manpower is an important step. It could be done in terms of
mathematical projection of trends in the economy and developments in the industry, or of
jundgement estimates based upon specific future plans of the company.
2. Inventory
Inventory of the present manpower resources and the degree to which these
resources are employed optimally should be assessed.
3. Anticipating problems
Anticipating manpower problems by projecting present resources into the future
and comparing them with the forecast of the requirements, adequacy both quantitatively
and qualitatively should be estimated.
4. Planning
Planning for recruitment, selection, training, deployment, utilization, transfer,
promotion, development, motivation and compensation to be undertaken for manpower
requirement.

Guiding Principles of effective HRP
 The plan should be as detailed as expenditure constraints allow.
 Should not extend too far into the future. Accurate prediction of the distant
future is simply impossible.
 An alternative course of action should be considered.
 Side effects and implications of the actions envisaged should be.
 Instructed to individuals and departments must be incorporated into the
plan.
 Plans should be concise and easy to understand.
HRP is not a static one-shot plan that will be useful over a period of time for the
organization; the data has to be continually updated and the various factors adjusted to
reflect the changes that constantly take place.

A Voluntary Retirement Scheme (VRS) is viewed as a universal cure for all organisational ailments. According to a survey by the Society of Human Resource Management, 50% of the organisations, which used this method, reported a decline in productivity or no change at all.

A right context has to be set for the programme first, especially for an organisation that is implementing it for the first time. Care should be taken not to project it as a downsizing exercise.

Guidelines

1.     It cannot be implemented in isolation. VRS needs to be networked with the management's long-term objectives.

2.     It is not a one-stroke exercise. VRS has to be implemented in a carefully planned time frame and phased manner to avoid complications.

3.     It is applicable across all functions. During the first round, VRS should be applicable to all employees across the organisation. This is critical lest anybody should feel victimised. Subsequently, it could be targeted at specific groups within the company.

4.     It is one of the many options. Managements need to explore a plethora of choices before zeroing in on VRS. A detailed examination of the existing systems and processes is essential.

Communication

The risks of VRS can be minimised through open communication and rewards for star performers. An effective communications strategy sends the right signals about the management's intentions in implementing VRS.

Open forum

The CEO addresses the forum every quarter on the company's prospects. Key questions as to the past, present and future direction of the company are addressed. This is followed by presentations by other executive committee members on costs, margins, profitability and competitiveness of the product.

Apex Forum

This forum is targeted at a smaller audience like union leaders and officers associations and at a greater frequency. Transparency is the key word in these meetings where various aspects of business needs are shared.

It is essential to convey the message that VRS is not a handout from the management. To this extent, suggestions from the rank and file need to be welcomed. Only then would VRS really be voluntary

Downsizing or Rightsizing

In today's competitive market, many companies found that staying in business requires downsizing. This is a decision that impacts the organisation’s performance tremendously and its impact is seen in ever sphere and felt by all employees. It is important to remember that this event affects not only the "downsized," but even those who remain.

Why Is this Important?

Downsizing has become a common occurrence in today's business world. Because of this, and many other factors, many employers and employees no longer believe in the concept of lifetime employment. As a result, employers often under estimate the need to provide support to employees, who are being released and also to the 'survivors.' Many employers feel that the only support they can provide is expensive outplacement services.

The decision to downsize is made for strategic and financial reasons. The expectation is that cost reduction will lead to a positive impact on the bottom line and will ultimately reflect in improved profitability and productivity. However, many organisations neglect the psychological impact of downsizing on those who remain. In fact, if downsizing is handled improperly, the problems it was designed to correct may intensify due to the impact on the loyalty and attitude of the survivors.

Effects on Work Effort

In an attempt to determine the impact of downsizing, the effects of job insecurity and economic need to work on the employee, Brockner and his colleagues examined employee attitudes. In this study, Brockner decided to use work effort as a measure for job attitudes. The study found that high job insecurity coupled with a higher need to work, resulted in increased work effort that usually followed a layoff. This indicates that when there are high levels of job insecurity, as would be expected during downsizing, employees with a greater need to work will increase their work effort, while the others will remain unchanged.

Brockner found that the remaining employees' perception of the fairness of the lay-off process and their attachment to the lay-off victims coloured their views about downsizing. This issue of fairness is related to a number of other work-related variables and has its roots in theories of organisational justice.

The Justice Theory

Layoff survivors are expected to exhibit the most negative reactions when they identify themselves with the layoff victims and feel that the victims have not been well compensated.

When survivors perceived that those laid off had been dismissed with little or no compensation, they reacted more negaitively, even to the extent that they felt some prior sense of psychological kinship with the laid-off parties".

Brockner's study would indicate that employees are not only affected by the layoff but also with the way they were managed. Brockner found that negative attitudinal changes were reflected in survivors' reduced work performance and lowered commitment to the organisation. Conversely, the study showed that employee commitment could actually increase during a layoff process when the company shows some commitment towards the displaced workers.

Brockner's study indicates that the organisations can proactively affect the surviving employees' attitudes during the downsizing.

Strategies for Maintaining Positive Employee Attitudes

According to the survey results of the study on employee loyalty conducted by Industry Week 2000, there were eight factors affecting employee loyalty in a downsizing situation. They are, in descending order: equity, security, good management, integrity, empowerment, good communication, benefits and personal support.

Communicate

During downsizing, the losses due to decreased employee loyalty, morale and productivity compound the complexity of the layoff process. For example, the rumour mill that develops, or intensifies, during the preliminary planning stages results in employees spending significant amounts of time gossiping and worrying about what might happen. Unfortunately, many managers in the position of being "in the know" are guided by a policy in which they should avoid talking about rumours with employees. While this policy may seem appropriate, the costs associated, in terms of lost productivity and employee loyalty may be significant. Communication helps curb worry and re-direct employee energies to the job at hand.

The most preferred method of communication is personal appearances from top management. However, any form of communication will be helpful.

Ensure that the communication covers the following topics:

• Talk about the fact that changes are going to take place.; This will increase the employee’s trust in you.
• Explain the purpose of the downsizing;
• Explain the need for growth and profitability
• If possible, explain future plans including detailed plans of restructuring, upgrading technology, or some processes to increase efficiency;
• Communicate, whenever possible, that though employee downsizing is necessary, each employee who is let go off will receive appropriate severance pay and job placement assistance;
• Emphasise that laid-off employees will be treated with respect and dignity; this is important for managing and maintaining the morale and commitment of the remaining employees.

Most importantly, listen carefully to employee concerns and address each concern adequately. This must be done with sincerity and no sense of condescension, such as "calming the mob."

In addition, justification of the layoffs is extremely important, especially if times are good and the downsizing is a part of strategic growth and profitability. Employees need to understand that you sincerely need to make these cuts and it is not a whim .

Make Valuable Employees a Part of the Progressive Organisation

To stay or not to, is the question asked by most remaining employees as an aftermath of their company's downsizing process--particularly those who have other employment opportunities outside the company. When these employees see some top managers leave voluntarily, they may question the long-term prospects of the company and will consider an immediate job change. This is something to watch out for, as people who leave under these circumstances are generally those with valuable skills and training.

Rebuild Loyalty

Long after downsizing, continue communicating with employees to re-build security and trust. Do not allow management to assume remaining employees are merely grateful to still have their jobs. Employees need to feel they are valued, that they have a place in the company, and that the management believes that they are an important part of the success of the organisation. To emphasise this point, talk about where the company is headed, and describe any plans for growth and prosperity.

A Valuable Tool: an Employee Satisfaction Survey

An employee survey can help an organisation gauge employee satisfaction. As redevelopment programs are implemented, the initial survey will provide a benchmark for comparative measures. Such a survey also conveys to employees that the company is concerned about their satisfaction and the need to build a stable work environment.

Companies striving to be leaner and more profitable must consider the cost of employee discontent and must strive to manage any downsizing practices to keep up the goodwill of remaining employees.

1. Defining Future Personnel need