HUMAN RESOURCE INFORMATION SYSTEMS

Objectives:

After reading this, you should be able to understand

� The meaning and definition of HRIS� The importance of HRIS� Data and information needs for HR manager� Efficiency and Effectiveness of HRIS� Advantages of HRIS� Basic system requirements� HRIS in Action� How to select HRIS?� System Integration� Establishing HRIS in a company� HRIS implementation pitfalls

Introduction:

Many well-known examples of the use of information technology for competitive advantage involve systems that link an organization to suppliers, distribution channels, or customers. In general, these systems use information or processing capabilities in one organization to improve the performance of another or to improve relationships among organizations. Declining costs of capturing and using information have joined with increasing competitive pressures to spur numerous innovations in use of information to create value. The ideas do not constitute a procedure leading inexorably to competitive advantage. However, they have been of value when combined with an appreciation of the competitive dynamics of specific industries and a grasp of the power of information.

Results from "The Gap Between IT and Strategic HR in the UK",(June 2006) a study by talent management solutions company Taleo, show asignificant disconnect between HR's strategic functions, including talent acquisition and workforce planning, and IT ability to support these business initiatives.

The survey of 100 senior HR managers, all in organizations employingmore than a thousand people, found that only a quarter thought that strategic functions such as workforce planning, leadership development and performance management were well supported by their IT

systems. Only a third felt confident in systems support for recruitment and employee progression. Other findings included:

�Current technology systems were out-of-date. Over half the respondents (55%) felt that more sophisticated technology systems and processes were needed to support recruitment and development.

�IT focused on lower-level, administrative functions. Respondents said that payroll and employee administration (68%) and evaluation and management reporting (53%) were adequately supported by IT. However, more strategic HR initiatives such as performancemanagement (28%), leadership development and planning (25%) and strategic workforce planning (25%) were not well supported.

�Inadequate data and technology systems obstructed workforce management. Just 29% of respondents felt that they had sufficient systems in place to gain a clear picture of existing employee skills.

�The HR function was striving to become more strategic. 63% of respondents cited talent management (including recruitment) as a significant priority in the year ahead.

Taleo Research Vice President, Alice Snell said:

"The gap between the support of administrative functions and strategic HR responsibilities needs to be addressed in order for HR directors to deliver results to the Board. When HR directors can assess the workforce changes needed by the business, acquire and develop the talent needed to optimize the workforce, and then measure the results, their true value can be realized." "Findings of this study clearly show that HR is evolving to play a morestrategic role in supporting fundamental business objectives, but the systems being used by HR functions are not keeping up," added Neil Hudspith, Senior Vice President, International Operations, Taleo. "It's clear that talent management and other strategic initiatives are being recognized as essential functions by ambitious companies that want to retain and recruit the best people, but organisations need to arm their HR directors with the tools and technology needed to support this strategy. The right HR technology is a critical element ofany HR strategy moving forward."

Meaning and Definition of HRIS:

Human Resources Information System, is a system that lets you keep track of all your employees and information about them. It is usually done in a database or, more often, in a series of inter-related databases. These systems include the employee name and contact information and all or some of the following:department,

job title,grade,salary,salary history,position history,supervisor,

training completed,special qualifications,ethnicity,date of birth,disabilities,veterans status,visa status,benefits selected,and more.

Any HRIS include reporting capabilities. Some systems track applicants before they become employees and some are interfaced to payroll or other financial systems. An HRIS is a management system designed specifically to provide managers with information to make HR decisions

�You notice that this is not an HR system...it is a management system and is used specifically to support management decision making .

�The need for this kind of information has increased in the last few years, especially in large and/or diverse companies, where decision making has been moved to lower levels

�And large companies generally have the advantage when it comes to HRIS’s...the cost to develop an HRIS for 200 people is usually close to that for 2000 people...so it is a better investment for large companies...larger companies tend to have systems that have a fair degree of customization

Therefore, HRIS can be defined in simple words as given below.Human Resource Management Systems (HRMS, EHRMS), Human Resource Information Systems (HRIS), HR Technology or also called HR modules, shape an intersection in between human resource management (HRM) and information technology. It merges HRM as a discipline and in particular its basic HR activities and processes with the information technology field, whereas the planning and programming of data processing systems evolved into standardised routines and packages of enterprise resource planning (ERP) software. On the whole, these ERP systems have their origin on software that integrates information from different applications into one universal database. The linkage of its financial and

human resource modules through one database is the most important distinction to the individually and proprietary developed predecessors, which makes this software application both rigid and flexible.Most HRIS Contain:

�Personal history - name, date of birth, sex�Work history - salary, first day worked, employment status, positions in the organization, appraisal data and hopefully, pre-organizational information�Training and development completed, both internally and externally�Career plans including mobility�Skills inventory - skills, education, competencies...look for transferableskills

The pressure is on for proactive HR innovations that contribute directly to the bottom-line or improve employee morale and efficiency. Ajuwon (2002) points out that the typical HR professional gets involved with one step in many different flows of work. Very often the involvement of HR has no purpose except to validate the process in some way and acts as an interruption to the flow of work. In other words, the HR function is a 'gatekeeper for informationthat’s been deemed too highly classified for the data owner.' So HR is not actually making a measurable contribution - in fact, the opposite. HR involvement creates a queue or delay in the process. We should ask if the HR involvement is really necessary. Once upon a time the HRdatabase had an 'all-or-nothing' quality - probably because it was paper-based.

But now technology allows controlled access to various portions of the database. So an employee can safely amend his or her own address or bank account details, while the ability to change certain appraisal details might be confined to the line manager. In either case, there is no reason for HR to be involved. HR should move on from the role of intermediary.

Not surprisingly, the use of employee self-service systems for records, information, payroll and other functions is becoming increasingly common. Libraries of forms can be kept online to be downloaded as and when required. Systems can be enhanced to include streaming video and other new software providing wide access to corporate videos, training, etc. Obviously, e-mail announcements and newsletters can also be used to alert employees to newdevelopments or urgent requests.

Ajuwon (2002) argues that HR should be proactive in the process and highlights three different perspectives for action:

* The process perspective - getting the fundamental building blocks (people processes) right and ensuring their relevance at all times. This demands close and detailed knowledge of HR processes and a commitment to improvement and efficiency. HR professionals need to understand their own objectives and the relationship with business strategy.

* The event perspective - a focus on providing a framework for knowledge management. In other words, capturing the experience and information available in that harnesses the organisation and making it available to individuals.

* The cultural perspective - acknowledging that HR has a 'pivotal role in the proactive engagement of the entire organisation in a changing climate.

During the 1990s the business process re-engineering approach resulted in many organizations taking a 'root and branch' look at HR and other processes.Subsequentreorganizations may have produced fresh, streamlined processes but often they became inappropriate or inefficient as circumstances changed. It is not enough to design a corporate human resource strategy or acquire a piece of technology. There has to be some way of ensuring effective operational delivery. A more fluid, constantly changing methodology is required. Ajuwon contends that we have the means:

"It’s more than innovating and/or streamlining your HR processes; or building an HR portal or introducing a culture change programme.

"It’s about weaving together all three in a way that sustains change, engages the entire organization and deploys the organization’s knowledge assets to gain competitive advantage and deliver profitability, even in times of economic downturn."

Human resource systems can differ widely. They may be:* Intranets using web-type methods but operating purely within one organization or location.* Extranets - encompassing two or more organizations.* Portals - offering links to internal information and services but also accessing the worldwide web.

Advantages:

In today's corporate world human resources has come to play a very critical role in a business. Whether it concerns the hiring and firing of employees or whether it concerns employee motivation, the Human Resources department of any organization now enjoys a very central role in not only formulating company policies, but also in streamlining the business process.

To make a human resource department more effective and efficient new technologies are now being introduced on a regular basis so make things much simpler and more modernized. One of the latest human resource technologies is the introduction of a Human Resources Information System (HRIS); this integrated system is designed to help provide information used in HR decision making such as administration, payroll, recruiting, training, and performance analysis.

Human Resource Information System (HRIS) merges human resource management with information technology to not only simplify the decision making process, but also aid in complex negotiations that fall under the human resource umbrella. The basic advantage of a Human Resource Information System (HRIS) is to not only computerize employee records and databases but to maintain an up to date account of the decisions that have been made or that need to be made as part of a human resource management plan.

The four principal areas of HR that are affected by the Human Resource Information System (HRIS) include; payroll, time and labor management, employee benefits and HR management. These four basic HR functionalities are not only made less problematic, but they are ensured a smooth running, without any hitch. A Human Resources Information System (HRIS) thus permits a user to see online a chronological history of an employee from his /her position data, to personal details, payroll records, and benefits information.

The advantage of a Human Resource Information System (HRIS) in payroll is that it automates the entire payroll process by gathering and updating employee payroll data on a regular basis. It also gathers information such as employee attendance, calculating various deductions and taxes on salaries, generating automatic periodic paychecks and handling employee tax reports. With updated information this system makes the job of the human resource department very easy and simple as everything is available on a 24x7 basis, and all the information is just a click away.

In time and labor management a Human Resource Information System (HRIS) is advantageous because it lets human resource personnel apply new technologies to effectively gather and appraise employee time and work information. It lets an employee's information be easily tracked so that it can be assessed on a more scientific level whether an employee is performing to their full potential or not, and if there are any improvements that can be made to make an employee feel more secure.

Employee benefits are very crucial because they help to motivate an employee to work harder. By using a Human Resource Information System (HRIS) in employee benefits, the human resource department is able to keep better track of which benefits are being availed by which employee and how each employee is profiting from the benefits provided.

A Human Resource Information System (HRIS) also has advantages in HR management because it curtails time and cost consuming activities leading to a more efficient HR department. This system reduces the long HR paper trail that is often found in most HR divisions of companies and leads to more productive and conducive department on the whole.

- Familiarity (looking like web pages)- Attractiveness (colourful, clearly laid out, graphics)- Integration (linking different HR systems such as basic personnel records, employee handbooks, terms and conditions, contracts, various entitlements and payroll)- Allowing employees and managers to enter, check and amend controlled ranges of personal and other information.- Eliminating printing, enveloping and mailing of personnel and other employee information- Reducing need for telephone handling of routine enquiries by HR staff.

Basic system requirements:

1. Desktop PCs for accessing and inputting information locally. Standard browsers are used to access information (e.g. Netscape or Internet Explorer).2. Organization-wide server. In a small company this need be nothing more than a PC as well. The server must have an intranet server software package installed (Microsoft Internet Information Server, or Netscape Communications Server are examples.)3. Server-side software such as HTML, Java, Javascript, Perl.4. Intranet communications protocol running on both PCs and the server.5. Relational database/Information processing software for records, payroll, etc. If data is to be accessed then the procedure is made slightly more complicated with the need for CGI scripts and database server software on the server.6. Basic documents such as policy manuals typically loaded in HTML – but formats such as Adobe Acrobat PDF are also an alternative.

Cost-benefit analysis

Difficult to quantify because the greatest return is in improved morale. Robert Musacchio, CIO with the American Medical Association in Chicago is quoted as having installed between 50-60 intranet applications for 1400 employees at $10,000 to $20,000 per application."Musacchio says a self-service employee-benefits site, which provides information on benefits and lets employees pick health-care, day-care, and retirement investment options, was built for "almost six figures." Musacchio figures it provided a 40% return on investment, based on the time saved by human resource managers who don't have to answer employees' questions aboutthese topics because they're answered by the application".('Intranet ROI: Leap Of Faith',( Information Week Online, May 24 1999.)

Fletcher argues that businesses have to adopt a 'Human Capital Management' approach to make the most of any organization's greatest asset: the skills, knowledge and experience of its staff. She describes how, in the 1990s, most large businesses introduced 'Human Resources Information Systems' (HRIS) and that, in combination with re-engineering (the buzzword of the time), this enabled them to "replace antiquated, time-consuming personnel processes with automation."

Walker (Walker, A.J. 'Best Practices in HR Technology' in Web-Based Human Resources, McGraw Hill, 2001) states that if HR technology is to be considered successful, it must achieve the following objectives: It must provide the user with relevant information and data, answer questions, and inspire new insights and learning.

Efficiency and effectiveness

HRIS must be capable of changing the work performed by the Human Resources personnel by dramatically improving their level of service, allowing more time for work of higher value, and reducing their costs. But, despite extensive implementation of Enterprise Resource Planning (ERP) projects, Human Resource Information Systems (HRIS), and HR service centres costing millions of dollars, Walker concludes that few organizations have been entirely happy with the results. Why is this? Many systems have been implemented by cutting HR staff, outsourcing and imposing technology on what was left. Arguably this approach should, at least, have cut costs. But Walker argues that survey results demonstrate that overall HR departments have actually increased their staffing levels over the past decade to do the same work. Moreover he considers that: "Most of the work that the HR staff does on a day-to-day basis, such as staffing, employee relations, compensation, training, employee development,and benefits, unfortunately, remains relatively untouched and unimproved from a delivery standpoint."

Fletcher explores the issue of effectiveness in a very telling in which she states that: "Executives struggle with what to measure and how to clearly tie employee metrics to business performance." Not only are they pressured by the vast costs of Human Capital Management (payroll, etc.) but they also have to report to analysts "whose valuations consist partly ofmeasuring such intangible assets as the corporate leadership's team to execute on strategy or the ability of the business to attract and retain skilled talent."

She concludes that:

�Executives are not sure about the kind of data that would prove to analysts that their employees are delivering better and creating more value than their competitors.

�Analysts are struggling to make sense of intangibles, often falling back on a 'revenue per employee' metric which does not tell the whole story.

18 STEPS TO SELECTING “HUMAN RESOURCE INFORMATION SYSTEM”

Technology has dramatically altered the lives of human resource professionals over the past 15 years. Today, much of what used to be time-consuming manual processes are performed by computers, freeing us to work on higher value activities. And the demand for technological solutions to human resource issues increases each year. What happens when you are the person responsible for selecting a new human resource information system? How do you approach this type of project? What is the process and what are the pitfalls?

This paper is designed to give human resource professionals a blueprint to follow for any type of human resource software selection, from stand alone applicant tracking systems to fully integrated HRIS and Payroll solutions. The process that follows has 18 discrete steps. Software selection is invariably a more complex process than we originally estimate and one With long-term consequences for an organization. It requires a careful and thoughtful approach to fully address the issues and impacts related to your decisions. Some steps may be combined or performed concurrently, but the authors strongly believe that human resource professionals will optimize their selections by following the process as presented

Step1-Team work:

Congratulations. You've been selected to head up the project to select a new software package for your human resources department. Where do you begin? Most organizations start by forming a team to manage the software selection process and we strongly recommend that you form a 3 to 7 person team to oversee your selection. There are a myriad of issues to consider and software selection is definitely one area where the quality of the decision is improved by having several people involved in the evaluation and decision making process. Who do you include on the team? Look at who the key users and stakeholders will be for the new application. Include a knowledgeable member of your Information Technology staff from the very beginning and make sure that you have appropriate management representation so that as costs are developed, you will not find yourself in a situation of delivering "surprising" news at the end of the evaluation process. Larger organizations may also have a "Steering Committee" separate from the project team. Steering committees typically consist of the decisions makers - management who will sign off on the costs, participate in contract negotiations, support the project team and provide visible toplevelsupport.

Step2-Goals:At your initial team meeting(s) begin by identifying and agreeing on the goals for the

project. Without a set of fully developed goals at the beginning of your search, you will either waste significant time evaluating the wrong products, or, even worse, select the wrong software. Ask the team to fully answer the following questions:

Once your goals are developed, take a step back and ask how they fit into the bigger picture of your overall human resource information system. If you are looking for a specialized application such as applicant tracking or COBRA management, make sure that you consider how it will need to integrate with other applications such as your main HRIS. Are you trying to solve only one problem when you have other software issues to address that should be considered at this time? If you're selecting a new HRIS, does it cover all of specialized needs you have such as COBRA and HIPAA compliance or training records management? How does this application fit with your HR IT strategy?

Step3-BigPicture

Once your goals are developed, take a step back and ask how they fit into the bigger picture of your overall human resource information system. If you are looking for a specialized application such as applicant tracking or COBRA management, make sure that you consider how it will need to integrate with other applications such as your main HRIS. Are you trying to solve only one problem when you have other software issues to address that should be considered at this time? If you're selecting a new HRIS, does it cover all of specialized needs you have such as COBRA and HIPAA compliance or training records management? How does this application fit with your HR IT strategy?

Step4-FutureNeeds

Ask what your information system needs will be in the next few years. What other applications will be needed? When will you need them? Will they share the same information needs as this application, i.e. employee id, ssn, dateof birth, name, address, etc? If so, how will you prevent having to enter the same data into different applications in future years? Are you planning to move to web based applications and if so, is this the time to begin moving in that direction? Are any major business processes going to change either as a result of this selection or in the near future? Where do issues like employee self service and manager self service fit into your overall strategy?

Step5-TechnicalEnvironment

It is absolutely critical that you define the base technical environment for the new application before you begin to look at any specific products. This is an area where your Information Technology representative plays a key role. The questions that need to be answered include: what type of application are you looking for, stand alone PC, networked client/server, or mainframe. What operating system does it need to run on -- Windows NT,Unix, etc.? If it's a database application, what database does your company support, SQL, Oracle, DB2? How will it connect to remote offices? Does it need to be web deployable? Does it make a difference what language the application is programmed in such as C++ or Visual Basic? Is your IT department planning a major change in technology platforms in the next year?

Step6-Budget

Budgets can be hard to define before you speak with any vendors but you need to at least define some ballpark estimate of what your organization is willing to pay before you start talking to vendors. A key item to keep in mind during budget definition is to separate your costs into three areas: Software, hardware and implementation. Software includes the actual software licensing fee and other software costs for items such as database licenses and annual maintenance costs. Hardware is what you will need to spend for servers, PCs, and network upgrades. Finally, implementation costs encompass the money you will spend for configuring the software, training, and data conversion including the possible need to hire consulting services from the vendor or third party consulting firm to help in implementation.

Step7-Specs

Now that you've completed the first 6 steps, you're ready to develop a written specification document for your new software package. The specification should begin with your overall HR IT strategy, list your project goal, define the base system functionality that you require, specify how it needs to integrate with other systems, and list the technical requirements developed in step 5. This is a key deliverable for the overall project. If your specification is clear, specific and well defined; your selection process will be relatively painless. However, if you remain unclear on goals, functionality or the technical environment, then you're not ready to move forward.

Step8-Buildvs.Buy

At some point during the process, most organizations address the issue of whether they want to develop the application internally or purchase commercially available software. This issue may be considered as early as step 2 or 3 and as late as step 15 or 16. We don't think it should come any later than step 8 because it is typically both an emotional and confusing debate and one that can sidetrack your process indefinitely. Many organizations have successfully developed their own human resource software. Many more have been less than successful in such efforts. When the issue arises in your process, ask the following questions: . Are the necessary IT resources available internally for this project? . Does the human resource staff have the time and expertise to develop detailed system specifications, screen designs, system edits and reporting requirements? . What priority will it be given by IT management compared to other business systems? . What is so specialized about your needs that you can't get 80% of your requirements with commercially available software?

Finally, if your Information Technology staff develops any preliminary budgets or schedules for doing the job internally, experience says that you should double both and you will have a more realistic estimate to compare against the commercial products.

Step9-Research

Now you're ready to start identifying vendors and products that could meet your needs. How do you locate information on vendors and products? The obvious starting point is to talk to your colleagues in other companies for recommendations on products they have used that fit your general needs. Another source is the internet. Here are four websites that have extensive vendor/product lists: www.shrm.org/buyers/hris.htm, www.ihrim.org/market/onlineguide/ www.workindex.com, and www.benefitslink.com/software.shtml. IHRIM also produces a reference booklet for their members "IT_Matrix, Integrated HR Applications". It can be purchased from HRMS Directions at 1-905-843-0330 or www.hrmsdirections.com. The annual SHRM and IHRIM conferences and most state HR conferences also include vendor exhibits where you can talk with a variety of software vendors.

Step10-Literature

Hopefully your research has generated a good list of potential vendors. The next step is to contact each and get some product literature. Vendors supply different levels of information in their brochures, some are very high level without much detail, and other pieces are more informative. Make sure that you specifically ask for literature containing the level of detail you need. This is a key step in the process and should not be skipped because it should reduce your potential vendor list to a manageable number. Some vendors will drop out when you call for literature and you find out their product isn't available to fit your technical platform, or it really doesn't meet your needs. You will eliminate some after reviewing their Literature and determining that the product is not as close a match with your technical specifications as others. One note of caution about this step, many vendors will want to schedule meetings when you contact them for literature. Don't meet with vendors yet, you're not ready. Limit them to sending you as much information as they can, and let them know that you'll contact them if you have further interest.

Step11-RFP Now you're ready to develop and send a request for proposal (RFP) to your smaller list of target vendors. RFP's can be one page in length or ten or more. You will need to decide how much detail you want prior to seeing product demonstrations. Smaller companies may want to use a simplified 1 or 2 page requests for information (RFI) that requests less information and has more flexible response guidelines in order to expedite this stage. Larger companies and those in the public sector most typically will use a formal RFP process. The most common elements in an HRIS request for proposal include: . An overview that describes your company, . A description of your software need and the employee population it will support,

. Desired system functionality,

. Required technical environment/specifications,

. A request for pricing (licensing fees, maintenance charges, training and implementation support, annual maintenance fees and telephone hotline support), . A request for customer references, . Details on customer service/support available from the vendor, . A request for sample contract terms

Once you have assembled your RFP, send it to your vendor contacts and give them a reasonable period of time to respond, typically 3 to 6 weeks. Some vendors will supply you with a "sample" RFP if you request one, which you can then modify for your specific system needs. The RFP needs to contain guidelines for the vendor response such as:

. Are each of the required features currently in their system?

. Are certain features proposed in a future version of the system?

. Will any of your required features require system customizations and if so what are the costs and problems associated with the customizations?Always be aware of your "special needs" and the extra money and effort it will cost for implementation and future support. Work hard to modify your internal processes to match the software before embarking on customization.

Step12-Evaluate

As the RFP's are returned, you will want to have a common basis for evaluating all of the proposals. A typical approach is to create a spreadsheet with all of the items in the RFP as your column headings and the vendors listed on the rows. Then you would assign a value to each RFP item (yes/no, a dollar value, or a numerical ranking of some type) for each vendor. Once you have received all of the proposals and entered the data on your spreadsheet, then the team can meet, review the evaluations and select the vendors they want to schedule for product demonstrations.

Step13-Demos

Software product demonstrations, by their very nature, are designed to showcase the best attributes of the product and downplay the limitations. You can and should control product demonstrations to try and get as accurate and unbiased information as you can from what is clearly a major sales event for the vendor. How do you control the product demonstration? You control the demonstration by modifying the vendor's agenda. All software vendors have standard product demonstrations -- don't accept the standard demonstration. By this point in the process,

you should have a strong grasp of your needs and issues. Create a list of specific questions/trends for the demonstration that focus on your issues and concerns and provide it to the vendor in advance of the meeting. In this way the vendor can include your issues as part of their overall demonstration and you should get a more unbiased look at the product. All of your team members should be involved in the demonstration and the team should agree in advance on specific issues that each member will ensure are addressed during the demonstration.

Step14-EvaluateAgain

After you have completed your initial product demonstrations, it's time for the team to meet and evaluate the products based on all of the information you have at that point. Have each team member list the likes, dislikes, concerns, and unresolved questions that they have concerning each product. You may need to have one or more vendors provide some additional information before you move forward. You also need to be concerned about pricing differences at this point in the process. However, do not assume that you have the "final" price from each vendor. As the vendors learn more about your specific needs, they may be in a position to refine the pricing submitted with their RFP. Finally, narrow your vendor list to 2 or no more than 3 vendors. Invite those remaining vendors back for a second product demonstration.

Step 15 - Decision Points

You've seen all the products once and have the preliminary pricing proposals. It's time for the team to start discussing the items that will drive your final decision. In most software selections price is one of, but not the only, selection criteria. Other obvious decision points may include differences in functionality and compatibility with existing systems. For many companies, implementation costs and timeframes are critical decision points. One word of caution is certain that your management team representative is heavily involved during this discussion as the team needs to be very sensitive to the items that will influence the eventual Approval or disapproval of their recommendation.

Step16-CheckReferences

Now it's time to start checking references on your finalists. Your team should develop a list of questions that they would like answered by each reference. Questions should cover any areas of concern that you have with the product, product functionality, implementation, problems the reference has encountered and ongoing support. Make sure that you understand the technical environment of each reference, i.e. Windows NT, Unix, AS/400, etc so that you can identify issues that may or may not apply to your situation. Listen carefully to what is said and not said by the reference. If you can get references in the same geographic area in which you work, try

and visit the reference's business to see the product in action and talk to the actual users. It is best to check all of the references before the second demonstration so that issues that come up during this process can be addressed at the time of the next demonstration.

Step17-DemoAgain

As with the first demonstration, set the agenda. The team will have specific items that they want to see again or need to have clarified. These items should form the basis of your second demonstration. Make sure that your management team representative is present at this demo. Your IT representative should ensure that all technical issues are resolved at this time. Review core functionality, reporting, processing time, implementation schedule and costs, customer support, issues raised in the reference checking process and any specific concerns of the team. You should also review each item in the pricing of the product with the vendor's sales representative. If you have any concerns about the pricing portion of vendor's proposal, now is the time to express them so that the vendor has a chance to clarify this critical issue before you make your decision. If you do not get everything resolved to your satisfaction during the second round of demonstrations, do not be afraid to bring one or more of the vendors back for a third demonstration.

Step18-EvaluateAgain&Select

The demonstrations are finished; all the questions have been answered, it's time to make a selection. Before everyone decides to vote, take a step back and evaluate the information you learned in the second round of product demonstrations. Compare what you've learned to your initial goals and product specifications. Create a matrix of how each product evaluates against your decision points. If you've done a thorough job of learning the strengths and weaknesses of each product, established clear goals and product specifications and you've been aligned as team from goal setting through final demonstrations, then you should have an easy time reaching consensus on a product recommendation. In some situations, you will have two systems that meet your needs. In that situation, begin contract negotiations with both companies and work on negotiating the best package for your company - software price, training credits, implementation assistance, etc. Remember that making the right selection is only phase one of your project. A successful implementation that achieves your goals is the real challenge.

SYSTEM INTEGRATION:

Improved Reporting Capability:

Because the HRIS is comprehensive with respect to the number of HRs it handles, the installation of such a system significantly improves HR’s reporting capabilities.

For most of these systems, the number and variety of reports possible is limited only by the manager’s imagination. For a start, reports might be available (company wide and by department) for: health care cost per employee, pay and benefits as percent of operating expense, cost per hire, report on training, volunteer turnover rates, turnover costs, time to fill jobs, and return on human capital invested (in terms of training and educations fees, for instance). Similarly you might want to calculate and review: human resource cost information by business unit: personal and performance information on candidates for global assignments; demographics pf the candidate pool to meet diversity reporting requirements; benefits plan funding requirements and controls; union membership information; information required for HR if a merger, acquisition or divestitu9re is expected and data on your global executive level population for development promotion and transfer purposes.

Because its software components (record keeping payroll appraisal and so forth) are integrated, a true HRIS enables an employer to dramatically reengineer its entire HR function by having the information system itself take over and integrate many of the tasks formerly carried out by HR employees.

The system installed at PeopleSoft (now part of Oracle Corporation) provides a good example of the Sophisticated workflow technology routes promotions, salary increases, transfers, and other forms through the organizations to the proper managers for approval. As one person signs off, it’s routed to the next. If any one forgets to process a document, a smart agent issues reminders until the task is completed. Training materials including video are almost entirely online, and a; payroll checks are distributed electronically.

But the company’s hiring process may be the most futuristic aspect of all. Applications sent via the World Wide Web or fax are automatically deposited into a database; those submitted on paper scanned into the computer and plugged into the same database. Once a hiring manager has elected an applicant for an interview, the system phones that person and asks him or her to select an interview time by punching buttons on a touchtone phone. At the end of the call, the client /server database notifies the interviewers of the appointment, and even offers a reminder the day of the interview. It’s all handled without human interaction. And an orientation program for new hires works much the same way.

HRIS Application: Because of such capabilities even many midsize firms are installing HR information systems toady. For example, Grand Casinos Inc installed an HRIS called theHuman Resource Manager a package from PDS, Inc to help with the hiring of several thousand new casino employees. This system consolidates the human resources operations of Grand Casinos nine separate properties and lets these operations share resumes and other applicant information. State Capital Credit Union in Madison, Wisconsin with 105 employees, installed a desktop version of an HRIS called Spectrum HR / 1200. This system tracks applicant history and status salary ad staffing changes across departments, benefits plan participation, pension plan contribution employee training and turnover. It maintains compliance statistics. and wage and hour information. State capital’s system also performs other HR tasks including internal job postings, benefits billing payroll reconciliation and personalized letters and labels for applicant and employee correspondence. For larger installations major IT firms including IB provide the required HR systems integration. For example, IBM provides software under its ‘On Demand Workplace Program’. Under this Program IBM offers integrated HR software from several developers, including work brain (for instance, labor scheduling, and time and attendance) and Store Perform (for work load optimization in retail stores). Similarly, when Chiron Corp. A large pharmaceutical and biotechnology company, found it needed to integrate its existing computer base HR system component solutions, it turned to the large information systems firm SAP. For example, SAP was able to integrate its own proprietary human resources information system with an online recruiting tool from hire.com that Chiron had been using wanted to continue to use.

ESTABLISHING HUMAN RESOURCE INFORMATION SYSTEMS:

Larger companies typically integrate their separate HR systems into integrated human resource information systems (HRIS). HRIS may be defined as interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control analysis and visualization of an organization’s human resource management activities.

There are at least three reasons for installing such a system. First is competitiveness; and HRIS can significantly improve the efficiency of the HR operation and therefore company’s bottom line. For example, W H Brady Company, a Milwaukee-based manufacturer of identification products such as labels reportedly cut several hundred thousand dollars a year from its HR budget through the use of HRIS. Software producer People-soft reportedly has a ratio of one HR staffer to each 110 employees, a savings of millions of dollars a year when compared with the traditional ratio of one HR staffer per 50-100 employees, and it credits that to its HRIS. The company expects the HR to employee ratio to shrink to 1:500

The HRIS can also bump the firm up to a new plateau in terms of the number and variety of HR related reports it can produce. Citibank for instance (now part of Citigroup) has a global database of information on all employees including their compensation, a skills inventory bank of more than 10,000 of its managers, and a compensation and benefits practices database for each of the 98 countries in which the company has employees.

Finally, the HRIS can also help shift HR’s attention from transactions processing to strategic HR. As the HRIS takes over tasks such as updating employee information and electronically reviewing resumes the types of HR staff needed and their jobs tend to change. There is less need for entry-level HR data processors, for instance, and more for analysts capable of reviewing HR activities in relation to the company’s plans and engaging in activities such as management development.

Improved Transaction Processing: It has been said that the bread and butter of HRIS is still basic transaction processing. One study conducted at a pharmaceuticals company just before it implemented an HRIS found that 71% of HR employees time was devoted to transactional and administrative tasks In other words, an enormous amount of time was devoted to tasks like checking leave balances, maintaining address records and monitoring employee benefits distributions. HRIS packages are intended to be comprehensive They therefore generally provide relatively powerful computerized processing of a wider range of the firm’s HR transactions than would be possible if individual systems for each HR task had to be used.

Improved Reporting Capability: Because the HRIS is comprehensive with respect to the number of HR tasks it handles, installation of such a system significantly improves HR’s reporting capabilities.

For most of these systems, the number and variety of reports possible is limited only by the managerial imagination. For a start, reports might be available (companywide and by department) for health care cost per employee, pay and benefits as a percent of operating expenses, cost per hire, report on training, volunteer turnover rates, turnover costs, time to fill jobs, and return on human capital invested (in terms of training and education fees, for instance).

Similarly you might want to calculate and review: human resource cost information by business unit; personal and performance information on candidates for global assignments; demographic of the candidate pool to meet diversity reporting requirements; benefit plan funding requirements and controls; union membership information; information required for HR if a merger acquisition, or divestiture is expected; and data on your global executive level population for development, promotion and transfer purposes.

HR System Integration: Because its software components (record keeping, payroll, appraisal and so forth) are integrated, a true HRIS enables an employer to dramatically reengineer its entire HR function by having the information system itself take over and integrate many of the tasks formerly carried out by HR employees.

HRIS IN ACTIION:

The HRIS can also bump the firm up to a new plateau in terms of the number and variety of HR rated reports it can produce. Citibank for instance (part of Citigroup) has a global database of information on all employees including their compensation, a skills inventory bank of more than 10,000 of its managers, and a compensation and benefits practices database for each of the 98 countries in which the company has employees.

Finally, the HRIS can also help shift HR’s attention from transactions-processing to strategic HR. As the HRIS takes over tasks such as updating employee information and electronically reviewing resumes, the types of HR staff needed and their jobs tend to change. There is less need for entry level HR data processors, for instance, and more for analysts capable of reviewing HR activities in relation to the company’s plans an engaging in activities such as management development. Let’s look, more closely at how these advantages come about.

How exactly can an HRIS achieve these kinds of performance improvements? At some point the employer will outgrow the separate (manual or computerized) component approach to managing HR. Some estimate that firms with fewer than 150 employees can efficiently use computerized components systems, each separately handling talks such as attendance, and benefits and payroll management. However, beyond that point larger firms should turn to either off the shelf or customizable HRIS packages. The advantages of moving from component systems to integrated human resource information systems arise from the following.

Improved Transaction Processing: It’s been said that the bread and butter of HRIS is still basic transaction processing. One study – conducted in a pharmaceutical a company just before it implemented an HRIS – found that 71% of HR employees’ time was devoted to transactional and administrative tasks, for instance. In other words, an enormous amount of time was devoted to tasks like checking leave balances, maintaining address records, and monitoring employee benefits distributions. HRIS packages are intended to be comprehensive. They therefore generally provide relatively powerful computerized processing of a wider range of the firm’s HR transactions than would be possible, if individual systems HR task had to be used.

Online processing: Many HR information systems make it possible (or easier) to make the company’s employees themselves literally part of the HRIS. For example, Merck installed employee kiosks at which employees can verify and correct their home address and work location. Estimated savings reportedly approach $640,000 for the maintenance to those data alone, and many companies report similar savings. At Provident Bank an HR compensation system called Benelogic allows the bank’s employees to enroll in all their desired benefits programs over the Internet at a secure site. One shipping company estimates it will reduce transaction processing and related paperwork from $50 down to $30 or less per employee using direct access kiosks and integrative voice response (IVR) phone scripts. Increasingly, forms like Dell are creating intranet based HR sites. These allow managers and employees to process HRrelated information with little or no support required from the HR group itself. But using kiosks, or (increasingly) the intranet based systems should not only move the burden of the record keeping from HR to the employees themselves. It also should support employees’ quest for what information relating to, for example the impact on their take pay of various benefits options, insurance coverage retirement planning and more. Some experts refer to advanced Internet based HR service programs like these as electronic HR or (e-HR). It is the application of conventional, Web an voice technologies to improve HR administration transactions and process performance

HRIS IMPLEMENTATION PITFALLS:

Everyone knows by now, implementation a sophisticated information system is often more of a challenge than client expects, and several potential pitfalls account for this. Cost is one problem: for example, a representative from “All state Insurance Company” reported that the costs of moving to a new HRIS had increased 10% per year for five year and that additional investment would be required to make the transition. Other systems run into management resistance. At one pharmaceuticals firm, for instance, the new HRIS requires line managers to input dime information (such as on performance appraisals) into the HR system and some object to doing tasks previously performed by HR. Others trigger resistance by including in convenient or unworkable user interfaces for the employees to use; still others are installed without enough thought being given to, whether or not the new HRIS will be compatible with the firm’s existing HR information systems. Inadequate documentation or training can undermine the system’s utility and increase resistance to the system by exactly those employees and managers who are supposed to aid in its use.

Actually installing the HRIS therefore needs to be viewed as a whole but also as a process composed of separate projects, each of which must be planned and realistically scheduled. Given these sorts of hurdles a careful needs assessment obviously should be done prior to adopting an HRIS .Particularly for firms with less than 150 employees, consideration should be given to depending more of individual software packages for managing separate tasks such as attendance, benefits and payroll and OSHA compliance.

HRIS Vendors: Many firms today offer HRIS packages. At the Web site for the International Association for Human Resource Information Management (mentioned Earlier) for instance Automatic Data Processing Inc Business Information Technology, Inc., Human Resource Microsystems, Lawson Software, Oracle Corporation, PeopleSoft Inc., Restrac Web Hire, SAP America Inc., and about 25 other firms are listed as HRIOS vendors. As another

example, Business Computer Systems offers a line of ABRA software products for firms ranging in size from 20 to 10,000 employees. As one example, you can point and click to find a list of employees reporting to a particular supervisor and print over a hundred reports such as salary lists, employee profiles and EEO reports.

HR and Intranets: As note above, employers are creating internal intranet based HR information systems. For example LG &E energy Corporation uses its intranet for benefits communication. Employees can access the benefits homepage and (among other things) review the company’s 401 (k) plan investment options, get answers to frequently asked questions about the company’s medical and dental plans, and report changes in family status (such as marriage) that may impact the employee’s benefits.

A list of other HR related ways in which employers use the intranet include: create an electronic employee directory, automate job postings and applicant tracking, set up training registration: provide electronic pay stubs; publish an electronic employee handbook; offer more enticing employee communications and newsletters; let employees update their personal profiles and access their accounts, such as 401 (k); conduct open benefit enrollments; provide leave status information; conduct performance and peer reviews; manage succession planning (in part by locating employees with the right skills set to fill openings); and create discussion groups or forums.