INSTITUTE FOR OPEN

LEARNING

STUDY MANUAL

INFORMATION SYSTEMS FOR

STRATEGIC HR POLICIES II
CODE: BIS - 3118

COPYRIGHT
Published by the International University of Management
Windhoek, Namibia
International University of Management 2009
No part of this publication may be reproduced, stored in retrieval system or
transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without prior permission of the publishers.

International University of Management

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BIS-3118 Information Systems for Strategic HR Policies II: NQF Level 8 Credits 20
3rd year Human Resource Management

TABLE OF CONTENTS:

pg.

The Information age in which we live 2

Electronic commerce.. 10
Protecting people and information. 19
HRMS Planning.. 22
Employment Equity and Affirmative Action..34
Benefits35
Training and development36
Payroll. .40
Emerging trends and the future of HRMS..41
Module questions 42
References and bibliography44

UNIT 1: MANAGEMENT OF INFORMATION SYSTEMS

MODULE OUTCOME: To understand how Management Information System can
facilitate decision making.

The Information Age in which we live

We live in the information age where Information and Communication Technology (ICT)
is the dominant factor. Information and Communication Technology (ICT) is a term used
to describe a range of technologies for gathering, storing, retrieving, processing,
analyzing and transmitting information. Advances in ICT have progressively reduced the
costs of managing information, enabling individuals and organizations to undertake
information- related tasks much more efficiently, and to introduce innovations in
products, processes and organizational structures. ICT is the fusion of computers and
telecommunications. Computers enable people to work creatively; but they are limited by
what they can access. Adding a communications channel, such as the internet or other
information services, significantly extends the capability of the computer. It allows it to
be not only an inexpensive communication device, it can also become a means of
obtaining education, information, and working creatively with others irrespective of
geographical barriers.
ICT is used in nearly all sectors of any national economy. Communications and
Information Technology (ICT) has revolutionalised business and commerce, transforming
traditional business processes and creating new ones. The following are the major
information and communications technology developments that have changed the way
businesses operate and are managed:

The silicon microprocessor, transistors and the development of personal

computers(PC) because these elements contributed to reducing the capital costs of
computerization and made electronic processing of data more cost effective and
more widely available.

Networking technologies and protocols have enabled computer systems to

communicate with each other globally and provided secure employee access to
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corporate information from any authorized workstation physically connected to

the communications grid, irrespective of geographic location. The establishment
of the internet would not have been possible without the development of wide
area networking capabilities.

Wireless communications and the development of the digital mobile phone

network and other hand- held communication and data processing devices.

Wireless technology has extended the capabilities of

traditional network

technology and facilitated dynamic access to information from anywhere

irrespective of the physical connection.

The World Wide Web has provided a standard framework for the presentation of
digital information over the internet and has created a new dimension in the
management and operation of commerce. The world wide web created an
environment in which new virtual companies can operate

Digital recording and image processing technologies have transformed

information management from being purely text- based to being content rich and
media- inclusive. As a result of digital imaging and recording technologies it has
become possible to store, manage and process all kinds of documents and other
recorded material irrespective of the original format. Audio and visual records can
be processed in the way that text records were previously managed. This has
extended the capacities of some businesses and created new business
opportunities in the entertainment industry.

Strategic and Competitive opportunities

Strategic systems are information systems that are developed in response to corporate
business initiative. They are intended to give competitive advantage to the organization.
They may deliver a product or service that is at a lower cost, that is differentiated, that
focuses on a particular market segment, or is innovative.

Strategic information systems are those computer systems that implement business
strategies; They are those systems where information services resources are applied to
strategic business opportunities in such a way that the computer systems have an impact
on the organizations products and business operations. Strategic information systems are
always systems that are developed in response to corporate business initiative. The ideas
in several well-known cases came from information Services people, but they were
directed at specific corporate business thrusts. In other cases, the ideas came from
business operational people, and Information Services supplied the technological
capabilities to realize profitable results.
Most information systems are looked on as support activities to the business. They
mechanize operations for better efficiency, control, and effectiveness, but they do not, in
themselves, increase corporate profitability. They are simply used to provide management
with sufficient dependable information to keep the business running smoothly, and they
are used for analysis to plan new directions. Strategic information systems, on the other
hand, become an integral and necessary part of the business, and directly influence
market share, earnings, and all other aspects of marketplace profitability. They may even
bring in new products, new markets, and new ways of doing business. They directly
affect the competitive stance of the organization, giving it an advantage against the
competitors.
Some of the more common ways of thinking about gaining competitive advantage are:
1. Deliver a product or a service at a lower cost. This does not necessarily mean the
lowest cost, but simply a cost related to the quality of the product or service that
will be both attractive in the marketplace and will yield sufficient return on
investment. The cost considered is not simply the data processing cost, but is the
overall cost of all corporate activities for the delivery of that product or service.
There are many operational computer systems that have given internal cost saving
and other internal advantages, but they cannot be thought of as strategic until
those savings can be translated to a better competitive position in the market.

2. Deliver a product or service that us differentiated. Differentiation means the

addition of unique features to a product or service that are competitive attractive
in the market. Generally such features will cost something to produce, and so they
will be the setting point, rather than the cost itself. Seldom does a lowest cost
product also have the best differentiation. A strategic system helps customers to
perceive that they are getting some extras for witch they will willingly pat.
3. Focus on a specific market segment. The idea is to identify and create market
niches that have not been adequately filled. Information technology is frequently
able to provide the capabilities of defining, expanding, and filling a particular
niche or segment. The application would be quite specific to the industry.
4. Innovation. Develop products or services through the use of computers that are
new and appreciably from other available offerings. Examples of this are
automatic credit card handing at service stations, and automatic teller machines at
banks. Such innovative approaches not only give new opportunities to attract
customers, but also open up entirely new fields of business so that their use has
very elastic demand.

Database
A database is a structured collection of records or data that is stored in a computer
system. The structure is achieved by organizing the data according to a database model.
The model in most common use today is the relational model. Other models such as the
hierarchical model and the network model use a more explicit representation of
relationships.

Database management systems

A computer database relies on software to organize the storage of data. This software is
known as a database management system (DBMS). Database management systems are
categorized according to the database model that they support. The model tends to
determine the query languages that are available to access the database. A great deal of
8

the internal engineering of a DBMS, however, is independent of the data model, and is
concerned with managing factors such as performance, concurrency, integrity, and
recovery from hardware failures. In these areas there are large differences between
products.
A Relational Database Management System (RDBMS) implements the features of the
relational model outlined above. In this context, Dates "Information Principle" states:
"the entire information content of the database is represented in one and only one way.
Namely as explicit values in column positions (attributes) and rows in relations (tuples).
Therefore, there are no explicit pointers between related tables."

Security
Database security denotes the system, processes, and procedures that protect a database
from unintended activity.
Security is usually enforced through access control, auditing, and encryption.

Access control ensures and restricts who can connect and what can be done to the
database.

Auditing logs what action or change has been performed, when and by whom.

Encryption: Since security has become a major issue in recent years, many
commercial database vendors provide built-in encryption mechanisms. Data is
encoded natively into the tables and deciphered "on the fly" when a query comes
in. Connections can also be secured and encrypted if required using DSA, MD5,
SSL or legacy encryption standard.

Enforcing security is one of the major tasks of the DBA.

In the United Kingdom, legislation protecting the public from unauthorized disclosure of
personal information held on databases falls under the Office of the Information
Commissioner. United Kingdom based organizations holding personal data in electronic
format (databases for example) are required to register with the Data Commissioner.
9

Data warehouse
Data warehouse is a repository of an organization's electronically stored data. Data
warehouses are designed to facilitate reporting and analysis.
This definition of the data warehouse focuses on data storage. However, the means to
retrieve and analyze data, to extract, transform and load data, and to manage the data
dictionary are also considered essential components of a data warehousing system. Many
references to data warehousing use this broader context. Thus, an expanded definition for
data warehousing includes business intelligence tools, tools to extract, transform, and
load data into the repository, and tools to manage and retrieve metadata.

Data warehouse architecture

Architecture, in the context of an organization's data warehousing efforts, is a
conceptualization of how the data warehouse is built. There is no right or wrong
architecture. The worthiness of the architecture can be judged in how the
conceptualization aids in the building, maintenance, and usage of the data warehouse.
One possible simple conceptualization of a data warehouse architecture consists of the
following interconnected layers:
Operational database layer
The source data for the data warehouse - An organization's Enterprise Resource
Planning systems fall into this layer.
Data access layer
The interface between the operational and informational access layer - Tools to
extract, transform, load data into the warehouse fall into this layer.
Metadata layer
The data directory - This is usually more detailed than an operational system data
directory. There are dictionaries for the entire warehouse and sometimes
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dictionaries for the data that can be accessed by a particular reporting and analysis
tool.
Informational access layer
The data accessed for reporting and analyzing and the tools for reporting and
analyzing data Business intelligence tools fall into this layer.

Decision Support
The importance of relevant information systems in decision support can be viewed
from:
Decision Support System ( DSS)- Which is a computer program application that analyses
business data and presents it, so that users can make business decisions more easily. It is
an informational application to distinguish it from an operation application that collects
the data in the course of normal business operation. Typical information that decision
support applications might gather and present would be:

Comparative sales figures between one week and the next

Projected revenue figures based on new product sales assumptions

The consequences of different decision alternatives given past experience in a

context that is described. A DSS may present information graphically and may
include an expert system or artificial intelligence (AI).

Artificial Intelligence (AI)

Artificial Intelligence (AI) is the intelligence of machines and the branch of computer
which aims to create it. Major AI textbooks define the field as "the study and design of

11

intelligent agents," where an intelligent agent is a system that perceives its environment
and takes actions which maximize its chances of success.
Artificial intelligence has been the subject of breathtaking optimism, has suffered
stunning setbacks and, today, has become an essential part of the technology industry,
providing the heavy lifting for many of the most difficult problems in computer science.
AI research is highly technical and specialized, so much so that some critics decry the
"fragmentation" of the field. Subfields of AI are organized around particular problems,
the application of particular tools and around longstanding theoretical differences of
opinion. The central problems of AI include such traits as reasoning, knowledge,
planning, learning, communication, perception and the ability to move and manipulate
objects. A
Artificial intelligence, by claiming to be able to recreate the capabilities of the human
mind, is both a challenge and an inspiration for philosophy. Are there limits to how
intelligent machines can be? Is there an essential difference between human intelligence
and artificial intelligence? Can a machine have a mind and consciousness? A few of the
most influential answers to these questions are given below.
Turings polite convention
If a machine acts as intelligently as a human being, then it is as intelligent as a
human being. Alan Turing theorized that, ultimately, we can only judge the
intelligence of machine based on its behavior. This theory forms the basis of the
Turing test.

Evaluating artificial intelligence

How can one determine if an agent is intelligent? In 1950, Alan Turing proposed a
general procedure to test the intelligence of an agent now known as the Turing test. This
procedure allows almost all the major problems of artificial intelligence to be tested.
However, it is a very difficult challenge and at present all agents fail.

12

Artificial intelligence can also be evaluated on specific problems such as small problems
in chemistry, hand-writing recognition and game-playing. Such tests have been termed
subject matter expert Turing tests. Smaller problems provide more achievable goals and
there are an ever-increasing number of positive results.
The broad classes of outcome for an AI test are:

optimal: it is not possible to perform better

strong super-human: performs better than all humans

super-human: performs better than most humans

sub-human: performs worse than most humans

Applications of artificial intelligence

Artificial intelligence has successfully been used in a wide range of fields

including:

medical diagnosis,

stock trading

robot control

law

scientific discovery

video games and toys

Electronic commerce

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Electronic commerce, commonly known as (electronic marketing) e-commerce or

eCommerce, consists of the buying and selling of products or services over electronic
systems such as the Internet and other computer networks. The amount of trade
conducted electronically has grown extraordinarily with wide-spread Internet usage. A
wide variety of commerce is conducted in this way, spurring and drawing on innovations
in electronic funds transfer, supply chain management, Internet marketing, online
transaction processing, electronic data interchange (EDI), inventory management
systems, and automated data collection systems. Modern electronic commerce typically
uses the World Wide Web at least at some point in the transaction's lifecycle, although it
can encompass a wider range of technologies such as e-mail as well.
A large percentage of electronic commerce is conducted entirely electronically for virtual
items such as access to premium content on a website, but most electronic commerce
involves the transportation of physical items in some way. Online retailers are sometimes
known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers
have electronic commerce presence on the World Wide Web
Electronic commerce that is conducted between businesses is referred to as business-tobusiness or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or
limited to specific, pre-qualified participants (private electronic market). Electronic
commerce that is conducted between businesses and consumers, on the other hand, is
referred to as business-to-consumer or B2C. This is the type of electronic commerce
conducted by companies such as Amazon.com.
Electronic commerce is generally considered to be the sales aspect of e- business. It also
consists of the exchange of data to facilitate the financing and payment aspects of the
business transactions.

Systems development

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System development, or sometimes referred to as system analysis and design is

basically the process of creating and maintaining information systems. Developing an
information system involves all the five components: hardware, software, data,
procedures and people. Due to this fact, system development requires more than just
programming or technical expertise. Establishing the systems goals, setting up the
project, and determining requirements require business knowledge and management skill.
Tasks like building computer networks and writing computer programs require technical
skills, but developing the other components requires non-technical, human relations
skills. Creating data models requires the ability to interview users and understand their
view of the business activities. Designing procedures, especially those involving group
action, requires business knowledge and an understanding of group dynamics.
Developing job descriptions, staffing, and training all require human resource and related
expertise.
Simply, do not suppose that systems development is exclusively a technical task
undertaken by programmers and hardware specialists. Rather, it requires coordinated
teamwork of both specialists and non-specialists with business knowledge.

hh
Hardware

Software

Data

Procedures

People

Software and data part constitutes computer programming which deals with programs.
All the other five deals with systems development.

15

SYSTEM DESIGN METHODS

TRADITIONAL SYSTEM LIFE CYCLE(System Development Life Cycle,
(SDLC))The System Development Life Cycle (SDLC) is the classical process used to
develop information
systems.
Ff

Feasibility study
Requirements Specifications

Systems Design
Detailed design
Programming

testing

16

maintenance

Systems analysis and design tasks

(a) Systems Development Life Cycle (SDLC) major stages and tasks are:
(i) Project Initiation Selection;
Selection from a portfolio of possible projects by senior managers, user;.
Wide view of benefits, risks and problems for each of the projects considered.
(ii) Feasibility Study;
Economic, technical and social feasibility carried out on project selected in (i); gathering
data about the existing system (if one exists) in terms of problems to be solved, volumes
present and future to be considered, technical advances available, outline of user
requirements.
(iii) System Analysis;
Thorough analysis of the feasibility data; building models such as DFDs, ERMs, ELHs,
cross-checking them with the users; development of a logical model and an outline new
physical model for use in the design stage.
(iv) Systems Design;
Detailed design based on the logical model and creation of a new outline physical model
probably using CASE tools; selection of the H/W and database to meet the specification.
(v) Implementation;
Whole process of creating new formatted data for use in the database; construction of
physical location of H/W, electrical and network cabling; initial trials and checks to
ensure system is working to specification; changeover by whatever technique has been
decided; users check against system specification and accept/do not accept.
(vi) Evaluation and Maintenance.
Once system has settled down, final acceptance by user; routine and updating
maintenance carried out.
STRUCTURED SYSTEM ANALYSIS AND DESIGN METHOD (SSADM)
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Strictly SSADM does not cover any of the project initiation, fact finding, planning and
implementation aspects involved in the SDLC. These tasks are undertaken in a parallel
and linked approach. Its purpose is to provide the analyst and designer with the tools and
procedures to enable the production of computer systems which provide what people
want, and which are robust and capable of amendments to cope with further changes.
SSADM consists of six stages:

Investigation of current system

Specification of required system
Selection of technical system
Data design
Process design
Detailed physical design

Each stage is broken down into steps- which are named and have unique numeric
identifiers- and steps are further subdivided into tasks, which are identified by numbers
within the appropriate step.
Characteristics of Structured methods:(a) Decomposition:- Business systems are complex so breaking the system down into
more understandable subsystems for analysis and design is essential. (Context level DFD,
Level 1 and Level 2 DFDs)
(b) Limited elements:- Restricting the number of elements under consideration at any
time allows humans to focus their attention more clearly. It is suggested that a maximum
of seven variables at any one time is best for human consideration.
(c) Boundaries:- As, by their nature, business systems are complex, interactive,
interrelated and interdependent, clear boundaries must be established at the
commencement of any project otherwise misunderstandings will lead to aggravation and
mistrust between all parties involved with the project. (Terms of Reference (TORS)
(d) Analysis of process and data:- Data is the bedrock of an organizations IS and must be
carefully analyzed to ensure a successful project. Combined with the processing required,
both aspects require careful attention.

18

(e) Graphical documentation:- Pictures are suggested as being equivalent to a thousand

words, so the use of a diagrammatic approach for a complex subject is more likely to be
an effective means of communication. (Data
Flow Diagrams, Entity Relationship Diagram and Entity Life Histories)
(f) Ability to cross-check:- The ability to cross-check by the analyst/designer gives great
confidence that the final design is reasonably correct. The relationship of the three views
of Process, Data and Behavior is very important.
(i) The data contained in the entities of the Entity Relationship Diagram
(ERD) are contained in the Data Stores in the Data Flow Diagrams
(DFD):- DFD/ERD relationship.
(ii) The data from external entities shown in the DFDs are events in the
Entity Life Histories (ELH) and thus affect the data:- DFD/ELH relationship.
(iii) The entities from the ERD are the entities whose life histories are shown in the
various ELHs:- ERD/ELH relationship.
What SSADM Will Not Do
SSADM undoubtedly provides a sound procedural framework for systems development.
Within this framework lies the application of some very useful techniques. What the
method does not do, is replace the skills and expertise of the systems analyst and
designer. Given these skills, the use of SSADM will almost certainly produce better
systems- those which meet the current need and are able to cope with future needs. It is,
therefore, a mistake to view the method, as some organizations have done, as a substitute
for trained and experienced staff. To do so is to invite disaster in the form of projects
which grossly overrun their planned time-scale and, in some cases, are never ending i.e.
abandoned.
SSADM is a method of analyst and design. The final output, essentially, is a physical data
design, program specifications and a plan for the programming and implementation
phases. It does not produce coding nor does it cover the use of program design methods.
It is not intended to! It also does not cover a whole range of activities associated with

19

computer systems design and implementation, such as equipment procurement, site

preparation, etc., which must take place in parallel to the SSADM tasks.
RAPID APPLICATION DEVELOPMENT (RAD)
The basic idea of rapid application development (RAD) is to break up the design and
implementation phases of the SDLC into smaller chunks and to design and implement
those chunks using as much computer assistance as possible.
Like SDLC, RAD has a requirements phase, but it interweaves the design and
implementation phases. That is, developers design, implement, and fix a piece of the new
system until users are satisfied with that piece. Then, developers move on to design ,
implement, and fix another section of the system. Then, developers move on to design,
implement, and fix another section of the system, and so forth, until the entire system has
been developed in pieces. This process, sometimes called incremental development,
reduces development challenges by using a divide- and conquer strategy.
The RAD requirements analysis can be less detailed and less complete than with SDLC,
because the users are actively involved during design and implementation. In effect,
during the design /implement/fix process, the users provide detailed requirements in
context.
RAD CHARACTERISTICS
The main RAD Characteristics are as follows:
1. The design/implement/fix development process (as just discussed)
2. Continuous user involvement throughout
3. Extensive use of prototypes
4. Joint application design
5. Use of CASE tools
With RAD, users are actively involved throughout the development process and become
key members of the development team. Having users as part of the team not only
increases the accuracy and completeness of the requirements, it also promotes a better
environment for conversion. The new system will be installed not by strangers, but rather

20

with the active participation of involved users. The final three characteristics are
discussed in detail in the following sections.

IT Infrastructure

Infrastructure can be defined as the basic physical and organizational structures needed
for the operation of a society or enterprise, or the services and facilities necessary for an
economy to function. The term typically refers to the technical structures that support a
society, such as roads, water supply, sewers, power grids, telecommunications, and so
forth. Viewed functionally, infrastructure facilitates the production of goods and services;
for example, roads enable the transport of raw materials to a factory, and also for the
distribution of finished products to markets. In some contexts, the term may also include
basic social services such as schools and hospitals. In military parlance, the term refers to
the buildings and permanent installations necessary for the support, redeployment, and
operation of military forces.
In this article, infrastructure will be used in the sense of technical structures or physical
networks that support society, unless specified otherwise.
In information technology and on the Internet, infrastructure is the physical hardware
used to interconnect computers and users. Infrastructure includes the transmission media,
including telephone lines, cable television lines, and satellites and antennas, and also the
routers, repeaters, and other devices that control transmission paths. Infrastructure also
includes the software used to send, receive, and manage the signals that are transmitted.
21

In some usages, infrastructure refers to interconnecting hardware and software and not to
computers and other devices that are interconnected. However, to some information
technology users, infrastructure is viewed as everything that supports the flow and
processing of information.
Infrastructure companies play a significant part in evolving the Internet, both in terms of
where the interconnections are placed and made accessible and in terms of how much
information can be carried how quickly.
Protecting people and Information
The core features of data protection could most easily be derived from the eight guiding
principles of data protection, i.e. data held on personnel should be:
Obtained lawfully
Processed for specific purposes
Relevant and not excessive
Accurate and up to date
Kept only as long as needed
Available to subject
kept secure
Not to be transferred to countries where data protection is not adequate
Organizations that adopt effective data protection policies and procedures will gain
the following benefits:
Protection from legal action
Increased trust and openness in the workplace
Employees will be encouraged to respect the personal data of customers
Better housekeeping through the updating and accuracy of records
Compliance with global business practice
Key points determining how managers act concerning protection of employees privacy
should be derived from the eight guiding principles of data protection, i.e. data held on
personnel should be:
22

 Obtained lawfully
Processed for specific purposes
Relevant and not excessive
Accurate and up to date
Kept only as long as needed
Available to subject
Kept secure
Transferred only to countries that provide an adequate level of data protection.
The design of information systems must take account of these guiding principles/key
points. It should feature the following points:
Security of access to data held on individuals
Facility for individuals to view data held about them, resulting in increased trust and
openness in the work place
Accuracy checks and ability of individuals to update personal details
Data must be held as input to specific information processes.
Top tips for protecting your personal information

Check out the privacy settings of websites

Read the privacy policies and user agreements regularly

Keep passwords secret and change them often

Remember what you tell people online can affect your safety offline

Reality check would you want parents, teachers or employers to see your
profile?

Emerging trends and technologies

Trade and economic globalization are taking deep roots in many countries these
days. The holistic paradigm shift to a single global company has opened up new
economic opportunities. A look at the trends by which people are managed in this
dynamic industry reflects that Attracting, Managing, Nurturing talent and
23

Retaining people has emerged to be the single most critical issue in lieu of the
enormous opportunities spun off by the market. The new economy has given rise
to a culture of working in teams. Today no job in the knowledge industry can be
performed in isolation. Companies are now designing compensation structures,
which rewards team performance in addition to individual performance. In this
regard, advances too in technology have been realized with ICT being a major
achievement.

UNIT 2: ROLE OF INFORMATION SYSTEMS IN HR

MANAGEMENT.
MODULE OUTCOME: To evaluate the role of information systems in the
management of human resources.
Human Resource Management System (HRMS) Planning
A Human Resource Management System (HRMS ), Human Resource Information
System (HRIS), HR Technology or also called HR modules, refers to the systems and
processes at the intersection 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 programming
of data processing systems evolved into standardized 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.
Purpose

24

The function of Human Resources departments is generally administrative and common

to all organizations. Organizations may have formalized selection, evaluation, and payroll
processes. Efficient and effective management of "Human Capital" has progressed to an
increasingly imperative and complex process. The HR function consists of tracking
existing employee data which traditionally includes personal histories, skills, capabilities,
accomplishments and salary. To reduce the manual workload of these administrative
activities, organizations began to electronically automate many of these processes by
introducing specialized Human Resource Management Systems. Due HR executives rely
on internal or external IT professionals to develop and maintain an integrated HRMS.
Before the "client - server" architecture evolved in the late 1980s, many HR automation
processes were relegated to mainframe computers that could handle large amounts of data
transactions. In consequence of the high capital investment necessary to purchase or
program proprietary software, these internally-developed HRMS were limited to
organizations that possessed a large amount of capital. The advent of client - server,
Application Service Provider, and Software as a Service or (SaaS) Human Resource
Management Systems enabled take increasingly higher administrative control of such
systems. Currently Human Resource Management Systems encompass:
1. Payrolls
2. Work Time
3. Benefits Administration
4. HR management Information system
5. Recruiting
6. Training/ Learning Management System
7. Performance Record
The Payroll module automates the pay process by gathering data on employee time and
attendance, calculating various deductions and taxes, and generating periodic pay
cheques and employee tax reports. Data is generally fed from the human resources and
time keeping modules to calculate automatic deposit and manual cheque writing
capabilities. This module can encompass all employee-related transactions as well as
integrate with existing financial management systems.
25

The Work Time gathers standardized time and work related efforts. The most advanced
modules provide broad flexibility in data collection methods, labour distribution
capabilities and data analysis features. Cost analysis and efficiency metrics are the
primary functions.
The Benefits Administration module provides a system for organizations to administer
and track employee participation in benefits programs. These typically encompass,
insurance, compensation, profit sharing and retirement.
The HR management module is a component covering many other HR aspects from
application to retirement. The system records basic demographic and address data,
selection, training and development, capabilities and skills management, compensation
planning records and other related activities. Leading edge systems provide the ability to
"read" applications and enter relevant data to applicable database fields, notify employers
and provide position management and position control. Human resource management
function involves the recruitment, placement, evaluation, compensation and development
of the employees of an organisation. Initially, businesses used computer based
information system to:

produce pay checks and payroll reports;

maintain personnel records;

pursue Talent Management.

Online Recruiting has become one of the primary methods employed by HR departments
to garner potential candidates for available positions within an organization. Talent
Management systems typically encompass:

analyzing personnel usage within an organization;

identifying potential applicants;

recruiting through company-facing listings;

recruiting through online recruiting sites or publications that market to both

recruiters and applicants.

26

The significant cost incurred in maintaining an organized recruitment effort, crossposting within and across general or industry-specific job boards and maintaining a
competitive exposure of availabilities has given rise to the development of a dedicated
Application Tracking System, or 'ATS', module.
The 'Training Module' provides a system for organizations to administer and track
employee training and development efforts. The system, normally called a Learning
Management System if a stand alone product, allows HR to track education,
qualifications and skills of the employees, as well as outlining what training courses,
books, CDs, web based learning or materials are available to develop which skills.
Courses can then be offered in date specific sessions, with delegates and training
resources being mapped and managed within the same system. Sophisticated LMS allow
managers to approve training, budgets and calendars alongside performance management
and appraisal metrics.
Many organizations have gone beyond the traditional functions and developed human
resource management information systems, which support recruitment, selection, hiring,
job placement, performance appraisals, employee benefit analysis, health, safety and
security, while others integrate an outsourced Applicant Tracking System that
encompasses a subset of the above. Examples of popular HRMS are PeopleSoft HRMS,
SAP-HR Human resource management (HRM) is the strategic and coherent approach
to the management of an organisation's most valued assets - the people working there
who individually and collectively contribute to the achievement of the objectives of the
business. The terms "human resource management" and "human resources" (HR) have
largely replaced the term "personnel management" as a description of the processes
involved in managing people in organizations. In simple sense, Human Resource
Management(HRM) means employing people, developing their resources, utilizing
maintaining and compensating their services in tune with the job and organizational
requirement.
Features

27

Its features include:

Organizational management

Personnel administration

Personnel management

Manpower management

Industrial management

But these traditional expressions are becoming less common for the theoretical discipline.
Sometimes even industrial relations and employee relations are confusingly listed as
synonyms, although these normally refer to the relationship between management and
workers and the behavior of workers in companies.
The theoretical discipline is based primarily on the assumption that employees are
individuals with varying goals and needs, and as such should not be thought of as basic
business resources, such as trucks and filing cabinets. The field takes a positive view of
workers, assuming that virtually all wish to contribute to the enterprise productively, and
that the main obstacles to their endeavors are lack of knowledge, insufficient training, and
failures of process.
HRM is seen by practitioners in the field as a more innovative view of workplace
management than the traditional approach. Its techniques force the managers of an
enterprise to express their goals with specificity so that they can be understood and
undertaken by the workforce, and to provide the resources needed for them to
successfully accomplish their assignments. As such, HRM techniques, when properly
practiced, are expressive of the goals and operating practices of the enterprise overall.
HRM is also seen by many to have a key role in risk reduction within organizations.
The goal of human resource management is to help an organization to meet strategic
goals by attracting, and maintaining employees and also to manage them effectively. The
key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the
management of an organization's employees, and the overall strategic direction of the
company .
28

The basic premise of the academic theory of HRM is that humans are not machines,
therefore we need to have an interdisciplinary examination of people in the workplace.
Fields such as psychology, industrial engineering, industrial, Legal/Paralegal Studies and
organizational psychology, industrial relations, sociology, and critical theories:
postmodernism, post-structuralism play a major role. Many colleges and universities
offer bachelor and master degrees in Human Resources Management.
One widely used scheme to describe the role of HRM, , defines 4 fields for the HRM
function:

Strategic business partner

Change management

Employee champion

Administration

However, many HR functions these days struggle to get beyond the roles of
administration and employee champion, and are seen rather as reactive than strategically
proactive partners for the top management. In addition, HR organizations also have the
difficulty in proving how their activities and processes add value to the company. Only in
the recent years HR scholars and HR professionals are focusing to develop models that
can measure if HR adds value.
Business practice
Human resources management comprises several processes. Together they are supposed
to achieve the above mentioned goal. These processes can be performed in an HR
department, but some tasks can also be outsourced or performed by line-managers or
other departments. When effectively integrated they provide significant economic benefit
to the company.

Workforce planning

Recruitment (sometimes separated into attraction and selection)

Induction and Orientation

29

Skills management

Training and development

Personnel administration

Compensation in wage or salary

Time management

Travel management (sometimes assigned to accounting rather than HRM)

Payroll (sometimes assigned to accounting rather than HRM)

Employee benefits administration

Personnel cost planning

Performance appraisal

Human Resource Management Systems (HRMS)

Definition: Human Resource Management Systems (HRMS) provide a
link between human resource management and information technology.
HRMS allow enterprises to automate many aspects of human resource management, with
the dual benefits of reducing the workload of the HR department as well as increasing the
efficiency of the department by standardizing HR processes.
The field of human resources is one that is often overlooked in enterprise management.
This situation is aided by the fact that an efficient Human Resources department should
function without fanfare. For example, when a project team successfully launches a
product on time and within budget it is hailed as a great success. When the HR
department manages the administration of the enterprise successfully it can go virtually
unnoticed after all, the Human Resources department is simply expected to work, only
attracting attention when there are problems.

30

Workforce Planning System

The reality, however, is very different. The HR department plays a vital role in ensuring
the smooth running of an enterprise most importantly by tracking and analysing the
time-keeping and work patterns of the workforce, allowing management better
information on which to form strategies.
The importance of human resources has not gone unnoticed by the software industry.
There is now a wide range of applications available to aid the HR department in their
tasks, making possible the automation of certain tasks and aiding in the organisation of
many others.

HRM software systems (from vendors such as Oracle and Ascentis) are broadly defined
by the four basic responsibilities of the HR department, and as such typically contain
standalone

modules

to

address

the

needs

of

each

responsibility:

Payroll Module:
The payroll module greatly reduces the workload of the HR department by automating
the payroll process, allowing HR to ensure that payroll functions are completed on time
and without errors.

31

At its most basic level the payroll module is supported by the manual entry of
timekeeping and attendance data from paper-based timesheets submitted by the
workforce. More advanced systems track employee timekeeping through automatic
systems, connected to either a clocking in system or a tracker connected to the desktop
computers of the employees.
Once attendance data is fed into the system, the payroll module automatically calculates
payment amounts and various deductions such as income tax before generating
paychecks and employee tax reports.

Time and Labour Management Module:

The time and labour management module is designed to collate and analyse employee
timekeeping information for the purposes of organisational cost accounting.
By sourcing data directly from the timekeeping devices and methods used to calculate
payroll this module can provide management with valuable data regarding the use of
labour resources within the organization.
Benefit Administration Module:
The benefit administration module provides HR personnel with the capacity to monitor
and manage employee participation in a range of benefit programs. These programs can
range from programs related to the wellbeing of the workforce (such as health insurance
and pension schemes) to profit making programs (such as stock option plans and profit
sharing).
HR Management Module:

32

The HR management module provides a range of HR solutions ranging from analyses of

application

data

through

to

the

basic

demographic

data

of

employees.

The management module allows HR personnel to effectively manage the Human Capital
Pool (HCP) available within the enterprise, in that it keeps track of the training and
development of the workforce and the skills and qualifications of each employee.
Advanced HR management modules can also automate the process of application for
positions by capturing application data and entering it to a relevant database.
Benefits of HRMS
While these modules each provide benefits to the HR department itself, the applications
also aid the enterprise as a whole.
HRM systems convert human resources information into a digital format, allowing that
information to be added to the knowledge management systems of the enterprise. The
result of this is that HR data can be integrated into the larger Enterprise Resource
Planning (ERP) systems of the enterprise.
In analysing enterprise wide resource usage this data can prove invaluable. Data related
to the time usage of the workforce can enhance the decision making abilities of
management, allowing the HR department to form an integral aspect of strategy
formation for the enterprise as a whole.
Applicant and employment management
People are the key resource of any business and the recruitment and the selection
procedure is central to ensuring that an organization has the right people for the job.

33

The Recruitment process.

Recruitment comprises a number of stages, each of which needs to be completed for the
process to be a success.

1. Determine the vacancy

2. Complete the job analysis

3. Write the job description

4. Draft the personnel specification

5. Advertise in suitable sources of recruitment
6. Receive applications and pre-select candidates
7. Hold interviews (and/or other selection method)
8. Make a job offer
9. Implement an induction programme

34

UNIT 3: HUMAN RESOURCE CONCEPTS

MODULE OUTCOME: To understand some of the basic concepts of human resource
management.
Employment equity and affirmative action
Affirmative action as a term refers to policies that take race, gender, or ethnicity into
account in an attempt to promote equal opportunity. The focus of such policies ranges
from employment and education to public contracting. The impetus towards affirmative
action is twofold: 1.
1. To maximize diversity in all levels of society, along with its presumed benefits, and
2. To redress perceived disadvantages due to overt, institutional, or involuntary
discrimination.
Supporters of Affirmative action cite the perceived present and past institutionalized
limitations on the participants of the program. Those who argue against it say that
affirmative action devalues the accomplishments of people who are chosen because of the
social group to which they belong rather than their qualifications. Opponents also
contend that affirmative action devalues the accomplishments of all those who belong to
groups it is intended to help .
Some opponents further claim that affirmative action has undesirable side-effects in
addition to failing to achieve its goals. They argue that it hinders reconciliation, replaces
old wrongs with new wrongs, undermines the achievements of minorities, and
encourages groups to identify themselves as disadvantaged, even if they are not. It may

35

increase racial tension and benefit the more privileged people within minority groups at
the expense of the least fortunate within majority groups

Compensation
Compensation has several definitions;
Total benefits of employment: the total value of an employee's salary, benefits, and
other payments
Definition: 1.
Money in payment for loss: an amount of money or something else given to pay for
loss, damage or work done.
Definition 2.
Giving of compensation: the act of giving money or something else to pay for loss,
damage or work done.
Benefits
Employee benefits and benefits in kind (also called fringe benefits, perquisites, perqs
or perks) are various non-wage compensations provided to employees in addition to their
normal wages or salaries. Where an employee exchanges (cash) wages for some other
form of benefit, this is generally referred to as a 'salary sacrifice' arrangement. In most
countries, most kinds of employee benefits are taxable to at least some degree.
Some of these benefits are: housing (employer-provided or employer-paid), group
insurance (health, dental, life etc.), disability income protection, retirement benefits,
daycare, tuition reimbursement, sick leave, vacation (paid and non-paid), social security,
profit sharing, funding of education, and other specialized benefits.
The purpose of the benefits is to increase the economic security of employees.

36

The term perks or perks is often used colloquially to refer to those benefits of a more
discretionary nature. Often, perks are given to employees who are doing notably well
and/or have seniority. Common perks are company cars, hotel stays, free refreshments,
leisure activities on work time (golf, etc.), stationery, allowances for lunch, andwhen
multiple choices existfirst choice of such things as job assignments and vacation
scheduling. They may also be given first chance at job promotions when vacancies exist.

Employee and Industrial relations

The field of industrial relations (also called labour relations) looks at the relationship
between management and workers, particularly groups of workers represented by a
union.
Labor relations can take place on many levels, such as the "shop-floor", the regional
level, and the national level. The distribution of power amongst these levels can greatly
shape the way an economy functions.
Another key question when considering systems of labor relations is their ability to adapt
to change. This change can be technological (e.g., "What do we do when an industry
employing half the population becomes obsolete?"), economic (e.g., "How do we respond
to globalization?"), or political (e.g., "How dependent is the system on a certain party or
coalition holding power?").
Governments set the framework for labor relations through legislation and regulation.

Training and development

Training and development can be initiated for a variety of reasons for an employee or
group of employees, e.g.,:

When a performance appraisal indicates performance improvement is needed

37

To "benchmark" the status of improvement so far in a performance improvement

effort

As part of an overall professional development program

As part of succession planning to help an employee be eligible for a planned

change in role in the organization

To "pilot", or test, the operation of a new performance management system

To train about a specific topic (see below)

Typical Topics of Employee Training

1. Communications: The increasing diversity of today's workforce brings a wide

variety of languages and customs.
2. Computer skills: Computer skills are becoming a necessity for conducting
administrative and office tasks.
3. Customer service: Increased competition in today's global marketplace makes it
critical that employees understand and meet the needs of customers.
4. Diversity: Diversity training usually includes explanation about how people have
different perspectives and views, and includes techniques to value diversity
5. Ethics: Today's society has increasing expectations about corporate social
responsibility. Also, today's diverse workforce brings a wide variety of values and
morals to the workplace.
6. Human relations: The increased stresses of today's workplace can include
misunderstandings and conflict. Training can people to get along in the
workplace.
7. Quality initiatives: Initiatives such as Total Quality Management, Quality
Circles, benchmarking, etc., require basic training about quality concepts,
guidelines and standards for quality, etc.
8. Safety: Safety training is critical where working with heavy equipment ,
hazardous chemicals, repetitive activities, etc., but can also be useful with
practical advice for avoiding assaults, etc.

38

9. Sexual harassment: Sexual harassment training usually includes careful

description of the organization's policies about sexual harassment, especially
about what are inappropriate behaviors.
Benefits from Employee Training and Development
These are some of the benefits derived from employee training and development:
Increased job satisfaction and morale among employees

Increased employee motivation

Increased efficiencies in processes, resulting in financial gain

Increased capacity to adopt new technologies and methods

Increased innovation in strategies and products

Reduced employee turnover

Enhanced company image, e.g., conducting ethics training (not a good reason for
ethics training!)

Risk management, e.g., training about sexual harassment, diversity training

Human Resource Planning

Human resource planning is the term used to describe how companies ensure that their
staff are the right staff to do the jobs. Sub topics include planning for staff retention,
planning for candidate search, training and skills analysis and much more.

Occupational safety and health

This is a cross-disciplinary area concerned with protecting the safety, health and welfare
of people engaged in work or employment. As a secondary effect, it may also protect coworkers, family members, employers, customers, suppliers, nearby communities, and
other members of the public who are impacted by the workplace environment.
Hazards, risks, outcomes
39

The terminology used in OSH varies between countries or states, but generally speaking:

A hazard is something that can cause harm if not controlled.

The outcome is the harm that results from an uncontrolled hazard.

A risk is a combination of the probability that a particular outcome will occur and
the severity of the harm involved.

Hazard, risk, and outcome are used in other fields to describe e.g. environmental
damage, or damage to equipment. However, in the context of OSH, harm generally
describes the direct or indirect degradation, temporary or permanent, of the physical,
mental, or social well-being of workers. For example, repetitively carrying out manual
handling of heavy objects is a hazard.
Risk assessment
Modern occupational safety and health legislation usually demands that a risk assessment
be carried out prior to making an intervention. It should be kept in mind that risk
management requires risk to be managed to a level which is as low as is reasonably
practical.
This assessment should:

Identify the hazards

Identify all affected by the hazard and how

Evaluate the risk

Identify and prioritize the required actions

The calculation of risk is based on the likelihood or probability of the harm being realised
and the severity of the consequences.
The assessment should be recorded and reviewed periodically and whenever there is a
significant change to work practices. The assessment should include practical
recommendations to control the risk. Once recommended controls are implemented, the
risk should be re-calculated to determine of it has been lowered to an acceptable level.
40

Generally speaking, newly introduced controls should lower risk by one level, i.e, from
high to medium or from medium to low
Workplace hazards are often grouped into environmental hazards, physical hazards,
chemical agents, biological hazards and psychological issues.

Payroll taxes
Federal/national, state/provincial, and/or local agencies require employers to perform
various payroll functions, such as withholding amounts from employees' compensation to
cover income tax, social security, and Medicare.
Payroll taxes are levied by government agencies on employees' wages, tips, and other
compensation. The amounts withheld by employers from employees' pay for federal
income, social security, and Medicare taxes are considered to be trust-fund taxes, because
the money is held in a special trust fund for the government. Amounts withheld for state
and local income taxes are held in trust for the state and local governments.

Payroll warrants look like checks and clear through the banking system like
checks, but are not drawn against cleared funds in a deposit account. Instead they
are drawn against "available funds" that are not in a bank account, so the issuer
can collect interest on the float. In the US, warrants are issued by government
entities such as the military and state and county governments. Warrants are
issued for payroll to individuals and for accounts
Paycheck

A paycheck is traditionally a paper document issued by an employer to pay an employee

for services rendered. Recently the physical paycheck has been increasingly replaced by
electronic direct deposit to bank accounts.

41

Emerging trends in human resource management

Internationally, HRM places greater emphasis on a number of responsibilities and
functions such as relocation, orientation and translation services to help employees adapt
to a new and different environment outside their own country.

Selection of employees requires careful evaluation of the personal characteristics

of the candidate and his/her spouse.

Training and development extends beyond information and orientation training to

include sensitivity training and field experiences that will enable the manager to
understand cultural differences better. Managers need to be protected from career
development risks, re-entry problems and culture shock.

To balance the pros and cons of home country and host country evaluations,
performance evaluations should combine the two sources of appraisal
information.

Compensation systems should support the overall strategic intent of the

organization but should be customized for local conditions.

In many European countries - Germany for one, law establishes representation.

Organizations typically negotiate the agreement with the unions at a national
level. In Europe it is more likely for salaried employees and managers to be
unionized.

HR Managers should do the following things to ensure success

Use workforce skills and abilities in order to exploit environmental opportunities

and neutralize threats.

Employ innovative reward plans that recognize employee contributions and grant
enhancements.

Indulge in continuous quality improvement through TQM and HR contributions

like training, development, counseling, etc

42

Utilize people with distinctive capabilities to create unsurpassed competence in an

area.

Decentralize operations and rely on self-managed teams to deliver goods in

difficult times e.g. Motorola is famous for short product development cycles. It
has quickly commercialized ideas from its research labs.

Lay off workers in a smooth way explaining facts to unions, workers and other
affected groups HR Managers today are focusing attention on the following-

1. Policies- HR policies based on trust, openness, equity and consensus.

2. Motivation- Create conditions in which people are willing to work with zeal, initiative
and enthusiasm; make people feel like winners.
3. Relations- Fair treatment of people and prompt redress of grievances would pave the
way for healthy work-place relations.
4. Change agent- Prepare workers to accept technological changes by clarifying doubts.
5. Quality Consciousness- Commitment to quality in all aspects of personnel
administration will ensure success.
Due to the new trends in HR, the HR manager should treat people as resources, reward
them equitably, and integrate their aspirations with corporate goals through suitable HR
policies.

43

MODULE QUESTIONS
1. Effective human resource management is vital for the achievement of full
organizational objectives.
(a) Discuss the ways in which effective human resource management can contribute to
Organizational success and achieve competitive advantage.
(b) Explain, with the help of examples, how a personnel information system can support
the human resource management processes.
2. Handling data concerning staff in an organisational context requires at least ethical
practice, if not legal regulation.
(a) Explain the principles that should guide the human resource manager in handling data
on people in a personnel information system. Give reasons for your views.
(b) Show how the application of these principles can improve the operation of personnel
information systems and benefit the organization.
3. Information technology generally, and artificial intelligence specifically, can greatly
assist an organisations employees to develop themselves by acquiring new knowledge
and skills.
(a) Explain the concept of artificial intelligence.
(b) Show how expert systems can be used to assist in the settlement of an organisations
dispute.
(c) Explain other ways by which personnel information systems might assist the
spreading of knowledge in an organisation.
4. (a) Write briefly short notes on the following:
44

(i) Decision Support System

(ii) Artificial intelligence
(iii) IT Infrastructure
(iv) Electronic commerce
(b) Explain the term system development and describe the main benefits that might
result from a well-designed Personnel Information System (PIS).
5. Describe the role of decision support systems (DSS) in the analysis and evaluation of
personnel management projects, e.g. evaluation of different scenarios using what if
approach/sensitivity analysis.
6 Identify and review the operational decisions that are made both routinely and
exceptionally, e.g. in relation to absence, discipline, maternity/paternity, grades and pay,
employee skills, performance appraisal.

7. (a) Discuss the principles of planning and control as applied in personnel information
systems, e.g. generic budgetary planning and control systems; the potential for analysis,
planning and monitoring policies for employee salaries, incentive payments and fringe
benefits.
(b) Briefly describe the systems development life cycle (SDLC). Discuss its strengths
and weaknesses.
8. (a) Explain in outline the role of executive information systems (EIS) for the strategic
management of human resources, e.g. collection and analysis of labour market data for
forecasting of staffing requirements in support of corporate goals.
(b) Discuss and evaluate the competitive advantage gained through effective personnel
information management.

45

References and bibliography

Clarke S, (2007), Information Systems Strategic Management: An Integrated Approach ,
London: Rout ledge
Porter, Michael E., Techniques for Analyzing industries and competitors
ABE Syllabus and ISSM guidelines
Greavor, Maurice F., A Structured Approach to outsourcing Decisions and Initiatives
www.abeuk.com
Kroenke, (2007), Using MIS ,Washington: Prentice hall
OASIG (1996), Why do IT Projects so often fail? OR Newsletter 309: 12-16
Waisham, G. (1993). Interpreting Information Systems in Organizations. Chichester:
Wiley.
Baets, W. (1992). Aligning Information Systems with Business Strategy. Journal of
Strategic Information Systems 1(4): 205-213.
Desimone R.L ,Werner J.M.& Harris D.M.(2002), Human Resource Development,
Orlando FL: Harcourt College Publishers.
Davies, P.B.(2002), Information Systems, Bath, Great Britain, Bathpress publishers.
Wilson, D.A., Managing Information,(2nd edition), Butterworth Heinemann
Rosemary Harrison (2005). Learning and Development. CIPD Publishing. pp. 5.
ABE STUDY GUIDE, Managing the Information Resource

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Wikipedia-free online dictionary.

www.abeuk.com
http://websiteowner.info

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