THE ROLE OF Human Resource Information System (HRIS) IN ACHIEVING EFFECTIVE PERFORMANCE APPRAISAL - Dissertation Example

?Literature Review THE ROLE OF Human Resource Information System (HRIS) IN ACHIEVING EFFECTIVE PERFORMANCE APPRAISAL 2.0 Introduction Several researchers and human resource experts have been concerned about the need to finding interventions and remedies that will bring about effectiveness in the entire human management process within the organization. But as this goal cannot be achieved by generalizing a single solution to all the different facets of human resource management duties at work, there have always been the need for specific aspects and departments of human resource management to be looked at. It is not for nothing therefore that much attention will be given to the area of performance appraisal in seeking ways of making it more and more effective. This literature review is therefore focused on finding major existing literature that is related to the problem of making performance appraisal effective. The review shall be conducted by taking opinions and cater opinions on major themes of the research work that have been outlined in the specific objectives of the study, as well as those posed in the research questions. This way, the literature review is going to become an effective data collection tool for addressing the research problem. Generally, researchers hold a common opinion that when information system is made an integral part of human resource management it leads to a more effective human resource management goal achievement. But as to how the concept of information system should be applied is where differences come in opinions. 2.1 Human Resource Information System As the search for best ways to use information technology in human resource management continues, the argument is further reduced to best ways in using information technology in performance appraisal. This is because performance appraisal remains a central part of human resource that is focused on finding the effective compliance level of employees to roles and tasks assigned to them (BNET, 2010a). On the use of information technology in performance appraisal, McLeod and Schell (2008) holds a school of thought that it is not enough to merely have computers and computers accessories in place and think that performance appraisal will become effective. Rather, it is opined that information technology should be transformed into an information system, which is further integrated into the role of performance appraisal. This means that information system will be integrated into performance appraisal in a manner that ensures that all areas and aspects of the performance appraisal process are linked to a centralised information system that determines how procedures should be followed. In support of the opinion, Alvarez-Suescun (2007) stressed that once information technology is moved a step into information system and applied in any aspect of human resource management, the concept of human resource information system (HRIS) is said to be developed. Such HRIS has been said to be better off than the ordinary application of information technology in performance appraisal. In the opinion of Noe and Gerhard (2007), the major difference that exists between HRIS and the application of information technology in performance appraisal is that all forms of application of information technology constitute HRIS but HRIS goes beyond the ordinary application of information technology. As technology takes a central part in organisational management, it is very common to see that each and every modern day organisation has series of computers and their accessories that are used in the day to day processing of information at the workplace. However, this is not the same as information system because information system goes more into a technical composition of information technology (Deloitte, 2006). In information system, the work is not made to control the information technology but information technology is made to control the work. In effect, human resource managers using HRIS in performance appraisal would have the information system dictating to them and the larger organisation what should be done by way of appraising employees. But when HRIS is not in place but the mere application of information technology, the human resource manager determines what he wants to do and finds information technology to get this task executed (Al-Khayyat, 2008). In most modern models, users of HRIS performance appraisal create a centralised system that automatically generates variables of assessment and evaluation, based on which decisions are taken on the performance of employees (Morley et al, 2006). 2.2 Gaps in existing literature works From the overview and discussions given on the subject of human resource information system, a major gap that can be identified in existing literature is a failure by various researchers to critically define a model that can be used to achieve the role of a well coordinated HRIS that does not merely associate the use of computers in the roles of human resource management as HRIS. Currently, there seem not be a generally accepted model that seeks to outline how the task of HRIS can be undertaken in a well coherent manner within any given organisation. One other major gap has to do with ways in which the traditional system of undertaking human resource management can be fused with the new paradigm that allows for the incorporation of computer systems. This study therefore seeks to put the pieces together in gathering sets of literature that addressing various components of the issue of human resource management and use of information systems at the workplace and put them all together in identifying how best a model for HRIS can be devised for a modern organisation. Later in the review also, the place of traditional human resource management in relation to the new HRIS shall be stressed. 2.3 IS/IT and corporate strategy The inculcation of information system and information technology in modern organizational management has been said to be highly beneficial to organizations because unlike some forms of technologies that are stagnant and cannot be used across several areas and aspects of the organization, information system and information technology fits almost every part of the organization (Worcester Polytechnic Institute, 2013). Because of this, it is possible to integrate the use of information system and information technology in the main process running of organizations, creating and corporate strategy that is based on information system and information technology. According to McLeod and Schell (2008), organizational leaders can best use information system and information technology as part of their corporate strategy by instituting an information management portfolio in their outline. It is in line with this that Glaveli and Kufidu (2005) recommends three major levels in creating information management at the work place. The first level is the strategic level, which looks into the planning and decision making process on the IT/IS by the senior management members, of which the human resource manager who wants to implement HRIS must be part (Hagood and Friedman, 2002). The second level is the tactical level, which features the level of information where there is a connection between current performance, utilization of resources and short-term forecasts to determine how the implementation of the plans on information will be executed (Hagood and Friedman, 2002). The final level is the operational level, which sets the IS/IT to use by identifying specific tasks within the organization such as the appraisal of employees with which the information system and information technology shall be used to undertake. 2.4 HR Transformation and HRIS Deloitte (2006) identifies two major generations or eras with human resource transformation. In the first era, he sees a moment when human resource transformation focused mainly on the need to make human resource operations more efficient and effective by use of process standardization and technology. This was indeed those times that the presence of computers and its inputs were acknowledged as an important tool in making the processes of human resource achieved at an easier and faster rate (Hagood and Friedman, 2002). During this first era, human resource managers appreciated the place of technology in human resource management but would not centralize the processes involved in human resource management on technology. In the second era human resource transformation, which happens to be the new era however, Deloitte (2006) notes that there is a new dimension to human resource management where human resource is tightly connected to corporate strategy in creating business value through human resource services. This is indeed a more complicated version of the transformation because once human resource is linked with corporate strategy, the implication is that human resource management must not be ran in isolation from other facets of organizational management. It is against this background that McLeod and Anctis, 2005) notes that human resource managers who want to be part of the new transformation will make use of HRIS as HRIS is integrative in nature and focuses on change. HRIS also seeks to address a company’s most pressing strategic challenges such as performance appraisal, which is directly linked to organizational growth. 2.5 HRIS Performance Appraisal Usage Performance appraisal has been explained as the review and discussion of an employee’s performance of assigned duties and responsibilities (Worcester Polytechnic Institute, 2013). Performance appraisal can therefore be seen as an important component of the human resource management task. This is because human resource management is directly related to the management of the human resource base of the organization, of which the employee and the need for the employee to execute duties and responsibilities as assigned, is key (Saunders, Lewis and Thornhill, 2003). Sekaran (2003) has however noted that the task of performance appraisal is multi-facet, involving several independent tasks and roles that must be executed at different levels on the appraisal train. What is more, O‘Brien and Marakas (2008) also identify performance appraisal as a systematic and periodic process, meaning it ought to be carried out following specific set of principles and as often and regularly as possible. In a very modern paradigm drawn between the need of a typical modern day performance appraisal and the functioning of HRIS, Martin and Reddington (2009) noted that the two phenomena are so interrelated that the best way any human resource manager may want to make the best out of the his duties of human resource management is to approach the process from the view point of HRIS. Once this integration is undertaken, we say a HRIS performance appraisal has been created (May, Korczynski and Frenkel, 2002). In a typical outlining of HRIS performance appraisal usage, Pattanayak (2009) outlined three major processes that are followed. The first of these is the fusion information system into the core human resource management process of the organization. In effect, HRIS performance appraisal starts with instituting the HRIS. May, Korczynski and Frenkel (2002) observes that HRIS is instituted from a more technical and professional viewpoint by having a team of experts who will create a centralized system within the human resource department of the organization. Whiles creating HRIS, it is not only a part but all aspects of human resource management that are fused into the information system (Glaveli and Kufidu, 2005). One typical way to do this is to ensure that there is a network of all computerized services within the department linked to the server system that is controlled by the human resource manager (Glaveli and Kufidu, 2005). The second phase is the identification of portioned component of the HRIS to focus purposely on performance appraisal. This can be done easily by using software that makes a list of all variables of appraisal of employees in relation to their roles at work, their input to work, and the output of work they produce (Hayleys, 2008). The software will also be responsible for determining the period within which appraisal should take place. The final component of HRIS performance appraisal usage has to do with a combined task of critical reasoning and decision making. This is because at this stage, the human resource manager uses the outcome of the system to effect changes within the human resource set up of the organization. 2.6 HRIS Performance Appraisal benefits Dessler (2005) has stressed on the importance of having an accurate performance appraisal program as the outcome of performance appraisal several areas of decision making within the organization. For example, based on the results of the performance appraisal, a human resource manager may fire, promote or demote an employee. These are however very sensitive decisions that influence the organizational climate and can even affect the way employees react towards employees, colleague workers and management (Babey, 2006). For this reason, the outcomes of performance appraisal must be guaranteed for its accuracy and authenticity. In line with this, inculcating HRIS in performance appraisal eliminates all forms of manual computations and mechanisms that may be characterized with human errors (DeSanctis, 2006). Because the HRIS performance appraisal is founded on the principles of computerization of the system of undertaking performance appraisal, it becomes very easy to inculcate into the system, an internal checking and control mechanism that regulates the entire system against all forms of errors in reporting (Ball, 2001). Because of this, the outcome of HRIS performance appraisal when used in decision making becomes very guaranteed on accuracy and authenticity. What is more, HRIS performance appraisal in realizing the old transformational goals of efficiency and effectiveness that have been mentioned earlier. It would be noted that performance appraisal has a characteristic that makes it systematic and periodic (DeSanctis, 2006). Due to the burden of task involved however, there is too often a time that the implementation of the program has been made to be haphazard and lengthy (Collis and Hussey, 2009). In a recent study, Collier and Dixon (1995) found that the average time that most organizations that operate an isolated performance appraisal engage in appraisal is bi-annually. This means that twice every year, there is a performance appraisal that takes place. On the part of those using a more enhanced HRIS performance appraisal, their average time is monthly, which means that HRIS performance appraisal enhances a more periodic appraisal process. In a related research, Zhang and Hong (2006) outlined the need for performance appraisal to take place as periodic as possible, stressing that the earlier employee performance patterns are identified, the earlier it is that necessary interventions are put in place to correct aspects that needs to be corrected. Often times, appraisals that are not forthcoming are characterized with declining organizational performance because non-productive employees are not identified earlier. 2.7 HRIS Performance Appraisal obstacles There have been two major obstacles associated with HRIS performance appraisal implementation and usage. Writing on the subject, Turban and Wetherbe (2007) pointed to role conflict as one of such major obstacles that human resource managers seeking to implement HRIS performance appraisal face. This role conflict has been identified to come in two major formats, the first of which has to do with an internal conflict with other aspects and components of the human resource management department (DeSanctis, 2006). For example the level of attention that should go to performance appraisal as against the remuneration of employees can easily create a role conflict for the human resource manager (Babey, 2006). The reason this could easily be is because in most cases, the HRIS used for the purpose of performance appraisal is the same system used in the other human resource roles. The second form of role conflict arises as a result of external conflict with other departments within the organization if the HRIS is connected to the larger information system in place at the organization (Beadles, Lowery and Johns, 2005). Another major obstacle with HRIS performance appraisal has been found to be human capital input, which refers to the level of training needed by the human resource personnel within the organization to effectively and efficiently manage the system (Collier and Dixon, 1995). It would be noted that despite the fact that the system functions in a more computerized format, it takes certain basic inputs from personnel within the organization to make this computerized and automated functioning possible. It has been warned therefore that were there is inadequate training and development programs for the human resource base of the organization, the temptation will be that the system will be functioning from a faulty default, which could lead to a situation where wrong data is recorded by the system (Bohlander and Snell, 2007). Such a situation may only be avoided if the organization commits much resource into the training of its personnel who will be responsible for handling the HRIS and its output of work. With those who will implement the results and outcome of the system also, it is important that they receive enough training on ways of applying critical reasoning and decision making in its most effective means to the system. 2.8 Traditional HR role and HRIS sourcing decision Having discussed the role of HRIS in performance appraisal and for that matter human resource management as a whole, there is the temptation that one may think the traditional human resource role is no longer relevant because everything has now been automated into a computerised system, giving the human resource manager a new line of contemporary role to play. Turban and Wetherbe (2007) however argues against this notion, stating that traditional human resource roles still remain as important in an ear of human resource information system as it was decades back. In line with this, two central traditional roles are identified namely internal devolution and external devolution. In the first instance, there is the devolvement of personnel or human resource responsibilities to line management, which means that the human resource manager delegates or transfers responsibilities to other members within the management, while ensuring that the manager remains with the management as a facilitator of roles (Pattanayak, 2009). Using this principal approach would therefore give the human resource manager much room to attend to other tasks that has to do with the new system rather than staying put to the traditional roles exclusively. In the second principle approach where external devolution is used, the human resource manager is expected to undertake an outsourcing of human resource activities to an external contractor (BNET, 2010b). This approach is often recommended and used in very large multinational companies where the implementation of HRIS takes a highly sophisticated technical tone. In such instance, an external contractor who is more into information systems engineering rather than human resource management may be brought on board. This however does not mean that the human resource will have no roles to play in the HRIS management (Collis and Hussey, 2009). The human resource manager will be responsible for the decisions that results in the selection of a contractor for the HRIS. What is more, the human resource manager will be made to work hand in hand with the technical experts so that there can be an internal training program alongside the external devolution so that a time will come when the organisation can independently take charge of its own system. The advantage with this external devolution is that the human resource manager is offered much opportunity to concentrate on traditional roles other than the use of the human resource information system (Beulen, 2009). 2.9 Summary of the Review The literature review has seen the researcher critically analyse secondary data that are of relevance to the research problem currently under study. Particularly, it has been established that human resource information system (HRIS) is far different from the mere use of information technology in a given organisation. Human resource information system embraces a more integrated approach to undertaking the roles of human resource management within the organisation. But whiles using HRIS to undertake human resource functionalities, there is the advantage to focus attention on specific scopes of human resource management such as performance appraisal. When the organisation wants to focus its HRIS on performance appraisal, we say there is a HRIS performance appraisal in use (Collis and Hussey, 2009). The study actually drew the understanding that using HRIS performance appraisal comes with several advantages for the organisation to derive. Specifically, the organisation gets the opportunity to have a more accurate performance appraisal in place because human errors that come about as a result of the manual operation of performance appraisal are done away with. What is more, the organisation is offered the opportunity of doing more within a very little time frame. This notwithstanding, there are other challenges that can be encountered while using HRIS performance appraisal. This includes role conflict that takes place within the organisation. 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