Issues and Implementation Considerations Related to Human Resource Information Systems - Research Paper Example

Issues and Implementation Considerations Related to Human Resource Information Systems Abstract As technology keeps on advancing and its consequences are reflected in every aspect of society and business, investors and planners have to understand when it is time to embrace a trend that is technologically enabled to improve their business operations. Information technology grows fast in computing speed and capacity. These new technologies are aimed for the improvement of the pace of work, enhancement of electronic communication richness, and automation of even more business processes. The pace of information delivery is ever changing therefore there are emerging trends that facilitate accuracy and consistency of data. This paper seeks to explain the significance of having to adapt to the dynamism in information management and provides a road map that will guide the stakeholders in the sector to manage the human resource operations using information management systems called Human Resource Information System (HRIS) with the aim of achieving effectiveness and efficiency. The research design of this paper involves a sample of various companies selected randomly who use such information management systems for improving business operations and human resource practices in their company. This paper will be useful for enhancement of development practices in the domain of information management and will help companies in implementing information management systems in their organizations. It also discusses the issues related to information management systems, as well as various strategies that are adopted while introducing such systems in the company. 1. Introduction Information management systems are useful in managing information easily and efficiently; it is due to this reason that various information management systems are being developed for companies in the prevailing times. One of these automated systems that is specially designed for human resource management is HRIS. According to Vries, Settle and McQuide (2009), HRIS provides effective storage and collection of data that facilitates the managers and leaders to focus their attention and time on the achievement of different business goals, rather than being occupied with the data management tasks. Phenix Management International (2008) stated that human resource information systems have transformed with the passage of time with an incremental approach, for example, a basic HRIS was first introduced at General Electric in the 1950s. Later, HRIS transformed from a basic system of converting manual information into computerized systems. According to Phenix Management International (2008), the result was the third generation of the computerized HRIS, a feature-rich, broad-based and self-contained HRIS. Moreover, the third generation took systems far beyond being mere data repositories and created tools with which human resource professionals could do much more. The paper is structured to highlight the link of the information management system with the human resource management practices in any organization, alongside the issues, development and implementation factors that might become apparent with their adoption. Section 2 includes the importance of information management systems, alongside the key points of HRIS. Section 3 discusses the needs that motivate an organization to acquire HRIS for the management of their human resource operations. Section 4 includes the development considerations that are generic for mainly all types of information systems, including HRIS. Section 5 highlights the practical implementation of HRIS by different companies; some of them reflect successful experiences while others reflect limitations and constraints that lead to the failure of the respective implementations. Section 6 discusses the strategies that can be helpful to measure the effectiveness of HRIS. Section 7 includes the implementation issues that might become apparent during the adoption of the system while Section 8 describes the best approaches that facilitate a smooth transition. 2. Importance of Information Management Systems and HRIS Living in the information age, advances in information technology and electronic business coupled with the ever growing competitions in business have created the need for systems that can not only automate the work but also make it faster and more accurate. The conventional modes of performing human resources tasks have been paper-based or automated till the extent of excel sheets. Some of the many applications of HRIS are: clerical applications, applicant search expenditures, risk management, training management, training experiences, financial planning, turnover analysis, succession planning, flexible-benefits administration, compliance with government regulations, attendance reporting and analysis, human resource planning, accident reporting and prevention and strategic planning. Cristofari, Hodges, Huang and Porcher (2010) stated that roles and responsibilities of employees, hierarchies and departmental classification can be managed in a structured manner with the aid of HRIS. ERP systems maintain a single database consisting of data from various departments and allow every department to retrieve and add information in real time. ERP comes with configurable modules of different types. HRIS can be considered an important module of ERP. citeHR, (n.d.) also agreed with this notion and stated that HRIS is considered to be a portion of ERP systems. Stylus Solutions (2009) explained that management information Systems (MIS) tend to provide greater accuracy and efficiency in the performance of business operations. HRIS also bear such benefits. This is also agreed by Sadri and Chatterjee (2003, p.84) who stated that it is easier to store, classify, update and analyze data with HRIS. Therefore, decisions can be made faster on training and development needs and administration of employees. In the view of these benefits, it can be stated that HRIS can give a competitive edge to the organisation. 3. Needs Analysis of HRIS Needs analysis bears great relevance since the system can prove to benefit the organization only if the system is in accordance with their aims and vision. Toshi and Jackson (2003) also agreed that the organizational systems need to be aligned with the main aims and direction of the organization Dess, Lumpkin and Eisner (2010) stressed on the relevance of human capital and stated that human resources bear as much importance as any other asset of the company. In the midst of intense competition in the markets, companies try to create unique value and core competency with the aid of knowledgeable and experienced employees. A company can retain human capital only if they possess effective processes and systems to manage their employees. Therefore, one of the needs for human resources information system should be to manage the detailed information of the employees in an organized and structured form to facilitate greater security of data and faster access. The size or organization is a critical factor for needs analysis of HRIS. Kissel (2009) stated that small organizations do not usually opt to implement information systems, like HRIS; this might happen due to several reasons, such as lack of resources, lack of awareness about the relevance of such systems, lesser degree of complexity of work processes and lesser number of resources. Namani (2009) did not advocate the prevailing trend of small organizations not implementing systems, like HRIS. He stated that the lack of adoption of such systems will threaten their survival. Usually, as an organization grows its business needs grow and complexity of work processes increases. The human resource department also tends to experience the increment of the workload in terms of the increasing administrative and human resource management practices. Excess burden and inefficiency to complete the allocated tasks can lead to dissatisfaction of employees, alongside loss of market share and brand shifts by customers. Bingham (2009) stated that human capital and consumer are important assets of an organization therefore effective HRIS are needed to ensure retention of employees and sustained market shares. The next factor is generic in nature since it applies to the adoption and implementation processes of all information systems; analyze the current status of the company. The management needs to evaluate the growth of the company if it is increasing, decreasing or stagnant in the market. Such analysis can be done through scenario analysis, prototyping and conducting surveys with the end-users of the system. Existing systems must be evaluated according to their features and limitations; if the limitations and constraints are numerous then a newer system might be a good step for the company. 4. Development of HRIS The company should perform the following stages before implementing any information management systems. According to Whitten and Bentley (2005), the major stages are as follows: Preliminary investigation: This phase calculates the need of the project and concludes whether new HRIS project is really required or not. It also defines the scope of the project, preliminary requirements, schedule and constraints. Problem analysis: It involves investigation of existing systems (both manual and computerized) that are currently used for the business process. ERD (Entity Relationship Diagrams) and DFD (Data Flow Diagram) are used in the analysis phase. It also checks what problems can be faced during the implementation of the new system. Requirements analysis: This phase investigates requirements for the system, such as data, process and interface requirements. Design: The design phase is the point at which technological solutions are developed for business problems based on inputs from users, vendors and IT specialists. Construction: In this phase, system is built and tested according to the business requirements and design specifications. Implementation: In this phase, the new system will come into action and execute in the real world. Operation and support: It includes technical support for users and maintenance of the system to address errors, missions and new requirements that arise. Strandberg (2009) stated that employees prefer to work for companies that are possessed with effective HR policies and practices. The return on investment of HRIS can be received in the form of lesser turnover rate for the company. Campbell (2002) explained the estimate that is proposed by The American Management Association to calculate the expense to replace employees; 30% of the annual salary of the employee. This estimate can result in thousands of dollars if effective human resource management practices are not applied in an organization. Another intangible return on investment is the reduction of man-hours in which tasks are completed. 5. Case Studies Regarding HRIS Implementations There are many examples of organizations that have been able to successfully incorporate HRIS in their policies and procedures. The results have been remarkable and rewarding in terms of their efficiency, data storage management, accuracy and information security. Some of the successful case studies have been discussed below: One such company is IBM. IBM has a paperless online enrollment plan for all of its employees. Not only has the online enrollment saved the company $1.2 million per year on printing and mailing costs, the employees enjoy working with the online plan. Heuring (2003) included the views of one of IBM’s communications specialist who highlighted the benefit of their online enrollment; he stated that employees had been waiting to avail the facility (since many years) of logging in from anywhere they desired, rather than depending on the company’s intranet. By utilizing the benefits of the HRIS application, IBM has been able to cut costs and give employees the freedom to discover their benefits on their own time and pace. However, along with the freedom of accessibility from any place comes the responsibility of the management to ensure secure channels of communication and provision of uninterrupted services; no information of such nature could be possessed from the respective source. Koven (2002) discussed another company that has taken advantage of HRIS applications- Shaw’s Supermarkets. With the aim of improving Shaw’s workforce management, the company decided it was time to centralize the HR operations. After looking at different options, Shaw’s decided to implement an Employee Self Service (ESS) system. Moreover, the use of self-service applications created a positive situation for HR. ESS gave HR more time to focus on strategic issues, such as workforce management, succession planning, and compensation management, while at the same time improving service provision to employees and managers. ESS also provided greater level of accuracy in the data. With this solution, employees had online access to forms, training materials, benefits information and other payroll related information. Understanding the different applications of HRIS, companies have the benefit of increasing employee efficiency, reducing costs and increasing security of the data. It can be seen from the preceding case studies that organizations have benefitted in many respects. However, there are still some companies that are not able to integrate the systems in a successful manner; therefore, tend to suffer in different ways. Some of the losses that have been suffered by an organization due to the lack of presence of effective HRIS implementation are presented below: Government of Lesotho decided to improve their work flow and data management by the introduction of HRIS. International Records Management Trust (2006) stated that they aimed to get rid of the paper-based systems and procedures and facilitate the availability of a platform on the basis of which effective decisions could be made. After careful analysis, UNIQUE was launched in 2001 that served to address the human resource management operations in the government agency. The system was able to improve the pace of the workflow by making information accessible to people at any time and improving the accuracy of data. However, the system was discontinued after some time of its implementation; some of the major issues are as follows: Increasing needs for the maintenance of the system Lack of operability of the system by the HR department when the Treasury department would decide to generate payroll (that lasted for 10 days sometimes) The system proved to be difficult to operate by the employees since it was not very user friendly and proper training was not given. After analyzing few practical examples of the implementation of HRIS, it can be stated that HRIS can prove to benefit the organization in improving the work flow, pace of operations, accuracy of data and information security if it is coupled with effective training plans and user friendly operations. Web enabled access of the solution is highly appreciated and utilized by employees. Training needs shall be discussed in further detail in the chapters ahead. 6. Measuring the Effectiveness of HRIS Byars and Rue (2004) stated that the evaluation should determine whether or not the HRIS has performed up to its expectations and if the HRIS is being used to its full potential. The Internet is an increasingly popular way to recruit employees, research technologies and perform other essential functions in business. Friesen (2003) stated that delivering human resource services online (eHR) supports more efficient collection, storage, distribution, and exchange of data. An intranet is a type of network used by companies to share information with people within the organization. The effectiveness, pace and reliability of information can prove to measure the effectiveness of HRIS. TAMS put all employee benefits information online and created an open enrollment option when TAMS changed healthcare providers. Almost immediately upon rolling out the UltiPro portal (new HRIS technology), TAMS began seeing improvements with an estimated 70% increase in open enrollment efficiency. Moreover, by determining the efficiency of the new program, TAMS was able to realize the benefits of the new HRIS system. 7. Implementation Issues As stated earlier, Kissel (2009) explained that one of the major issues that a company faces are the insufficient funds or lack of financial support for HRIS implementation. According to Indeje and Zheng (2010), the introduction of any information system in an organization bears complications and issues; the most common issues that can be considered valid for the implementation of HRIS are as follows: The lack of required infrastructure. The lack of budget. Improper time management. Minimal availability of technically competent individuals in the organization. The lack of support from other departments. Project personnel may not have required knowledge of the technology or the business. In some cases, lack of management experience for such projects is also witnessed. Altarawneh and Al-Shqairat (2010) stated that internal change agents (managers) attempt to manage change but at the same time they might not have enough time, capital or information to undertake a formal strategic analysis of all possible alternatives. A key point was pointed out by Peszynski (2010) when he mentioned that many organizations face major difficulties in managing projects due to corporate politics. The new system might seem as a danger for their status and importance in the company. Existing employees may also resist the implementation of the HRIS since the new HRIS replaces the old manual system; they might not feel comfortable with the new system and new ways of working. There can also be lack of support from upper management. Altarawneh and Al-Shqairat (2010) also pointed out that any major change is impossible if the top management does not support the project. 8. Managing Challenges Proper training and regular support to employees can make things better. Important thing is to make employees believe in the importance of new system. This can prevent resistance from the employees. Razali and Vrontis (2010) conducted a survey that included a sample of 250 employees from different organizations, including individuals from all levels of hierarchy and both genders. The findings of the survey concluded that top management involvement was the biggest factor that influenced the employees to accept the change in the organization. The other factor that was witnessed to facilitate the transition phase was the organizational commitment to the introduction of the new system. Razali and Vrontis (2010) also stated that the employees should be designated the responsibility in making the change successful so that they take measures (on a personal level) to get acquainted with the changes and embrace them; this will give them the feeling of being empowered as a key contributor of bringing about the change. Kotter International (2010) agreed with the strategy of empowering the employees with the change management practices and stated that few employees should be convinced about the need of the change. These figures should be authoritative and possess leadership qualities such that they are usually able to solve grievances of their fellow employees. The workforce is likely to follow a guiding coalition amongst the employees, rather than the management. 9. Conclusion The paper concludes that the implementation of information management systems in a company can greatly reduce the workload and make the work faster and accurate. Specifically, HRIS can facilitate the smooth functioning of the HR department of any organization thereby providing a more structured and organized form of data for the employees and the management. Such automation and pace of operations can also give time to managers to make strategic decisions, instead of only working on everyday workload. However, implementing systems like HRIS is a challenge itself due to its huge cost and time involved in its implementation, coupled with the requirement of other resources, like skilled workforce etc. It might create a fear of job loss amongst employees as HRIS highly automates the work and removes the needs of manual work. Hence, any organization which is implementing a new project or new system can suffer resistance from employees or even from upper management. However, strategies like communicating the need of the new system, giving them proper trainings on how to work on HRIS and delegating responsibility for the transition phase are some of the things that can help make the implementation a success in the company. Companies can follow the guidelines mentioned in this paper to ensure a successful implementation of HRIS in their companies. Since this paper also discusses factors that are generic for all information management systems therefore guidance can also be acquired for the implementation of other types of information management systems. References Altarawneh, I. Al-Shqairat, Z. (2010), Human Resource Information Systems in Jordanian Universities, International Journal of Business and Management, 5 (10). Bingham, T. (2009), Making Sure that People Really are the Most Important Asset, American Society for Training & Development. Byars, L. L. & Rue, L. W. (2004). Human Resource Management, 7e. The McGraw-Hill Companies. Campbell, B. 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