HUMAN RESOURCE INFORMATION SYSTEMS

Objectives:

After reading this, you should be able to understand

 The meaning and definition of HRIS

 The importance of HRIS

 Data and information needs for HR manager

 Efficiency and Effectiveness of HRIS

 Advantages of HRIS

 Basic system requirements

 HRIS in Action

 How to select HRIS?

 System Integration

 Establishing HRIS in a company

 HRIS implementation pitfalls

Introduction:

Many well-known examples of the use of information technology for competitive

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

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

The survey of 100 senior HR managers, all in organizations employingmore than a

thousand people, found that only a quarter thought that strategic functions such as workforce
planning, leadership development and performance management were well supported by their IT
systems. Only a third felt confident in systems support for recruitment and employee
progression. Other findings included:

Current technology systems were out-of-date.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

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

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

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

Taleo Research Vice President, Alice Snell said:

"The gap between the support of administrative functions and strategic HR

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

Meaning and Definition of HRIS:

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

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

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

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

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

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

Therefore, HRIS can be defined in simple words as given below.Human Resource

Management Systems (HRMS, EHRMS), Human Resource Information Systems (HRIS),
HR Technology or also called HR modules, shape an intersection in between human
resource management (HRM) and information technology. It merges HRM as a discipline
and in particular its basic HR activities and processes with the information technology
field, whereas the planning and programming of data processing systems evolved into
standardised routines and packages of enterprise resource planning (ERP) software. On
the whole, these ERP systems have their origin on software that integrates information
from different applications into one universal database. The linkage of its financial and
human resource modules through one database is the most important distinction to the
individually and proprietary developed predecessors, which makes this software
application both rigid and flexible.
Most HRIS Contain:

Personal history - name, date of birth, sex

Work history - salary, first day worked, employment status, positions in the
organization, appraisal data and hopefully, pre-organizational information

Training and development completed, both internally and externally

Career plans including mobility

Skills inventory - skills, education, competencies...look for transferable
skills

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

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

Not surprisingly, the use of employee self-service systems for records, information,
payroll and other functions is becoming increasingly common. Libraries of forms can be kept
online to be downloaded as and when required. Systems can be enhanced to include streaming
video and other new software providing wide access to corporate videos, training, etc.
Obviously, e-mail announcements and newsletters can also be used to alert employees to new
developments or urgent requests.
 Ajuwon (2002) argues that HR should be proactive in the process and highlights three
different perspectives for action:

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

* The event perspective - a focus on providing a framework for knowledge management. In

other words, capturing the experience and information available in that harnesses the
organisation and making it available to individuals.

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

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

"It’s more than innovating and/or streamlining your HR processes; or building an HR

portal or introducing a culture change programme.

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

Human resource systems can differ widely. They may be:

* Intranets using web-type methods but operating purely within one organization or location.
* Extranets - encompassing two or more organizations.
* Portals - offering links to internal information and services but also accessing the worldwide
web.
Advantages:

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

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

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

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

The advantage of a Human Resource Information System (HRIS) in payroll is that it

automates the entire payroll process by gathering and updating employee payroll data on a
regular basis. It also gathers information such as employee attendance, calculating various
deductions and taxes on salaries, generating automatic periodic paychecks and handling
employee tax reports. With updated information this system makes the job of the human resource
department very easy and simple as everything is available on a 24x7 basis, and all the
information is just a click away.
 In time and labor management a Human Resource Information System (HRIS) is
advantageous because it lets human resource personnel apply new technologies to effectively
gather and appraise employee time and work information. It lets an employee's information be
easily tracked so that it can be assessed on a more scientific level whether an employee is
performing to their full potential or not, and if there are any improvements that can be made to
make an employee feel more secure.

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

A Human Resource Information System (HRIS) also has advantages in HR management

because it curtails time and cost consuming activities leading to a more efficient HR department.
This system reduces the long HR paper trail that is often found in most HR divisions of
companies and leads to more productive and conducive department on the whole.

- Familiarity (looking like web pages)

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

Basic system requirements:

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

Difficult to quantify because the greatest return is in improved morale. Robert

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

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

Walker (Walker, A.J. 'Best Practices in HR Technology' in Web-Based Human

Resources, McGraw Hill, 2001) states that if HR technology is to be considered successful, it
must achieve the following objectives: It must provide the user with relevant information and
data, answer questions, and inspire new insights and learning.

Efficiency and effectiveness

HRIS must be capable of changing the work performed by the Human Resources
personnel by dramatically improving their level of service, allowing more time for work of
higher value, and reducing their costs. But, despite extensive implementation of Enterprise
Resource Planning (ERP) projects, Human Resource Information Systems (HRIS), and HR
service centres costing millions of dollars, Walker concludes that few organizations have been
entirely happy with the results. Why is this? Many systems have been implemented by cutting
HR staff, outsourcing and imposing technology on what was left. Arguably this approach should,
at least, have cut costs. But Walker argues that survey results demonstrate that overall HR
departments have actually increased their staffing levels over the past decade to do the same
work. Moreover he considers that: "Most of the work that the HR staff does on a day-to-day
basis, such as staffing, employee relations, compensation, training, employee development,
and benefits, unfortunately, remains relatively untouched and unimproved from a delivery
standpoint."
 Fletcher explores the issue of effectiveness in a very telling in which she states that:
"Executives struggle with what to measure and how to clearly tie employee metrics to business
performance." Not only are they pressured by the vast costs of Human Capital Management
(payroll, etc.) but they also have to report to analysts "whose valuations consist partly of
measuring such intangible assets as the corporate leadership's team to execute on strategy or the
ability of the business to attract and retain skilled talent."

She concludes that:

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

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

18 STEPS TO SELECTING “HUMAN RESOURCE INFORMATION SYSTEM”

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

This paper is designed to give human resource professionals a blueprint to follow for any type of
human resource software selection, from stand alone applicant tracking systems to fully
integrated HRIS and Payroll solutions. The process that follows has 18 discrete steps. Software
selection is invariably a more complex process than we originally estimate and one
With long-term consequences for an organization. It requires a careful and thoughtful approach
to fully address the issues and impacts related to your decisions. Some steps may be combined or
performed concurrently, but the authors strongly believe that human resource professionals will
optimize their selections by following the process as presented
Step1-Team work:

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

Step2-Goals:
At your initial team meeting(s) begin by identifying and agreeing on the goals for the
project. Without a set of fully developed goals at the beginning of your search, you will either
waste significant time evaluating the wrong products, or, even worse, select the wrong software.
Ask the team to fully answer the following questions:
Once your goals are developed, take a step back and ask how they fit into the bigger
picture of your overall human resource information system. If you are looking for a specialized
application such as applicant tracking or COBRA management, make sure that you consider
how it will need to integrate with other applications such as your main HRIS. Are you trying to
solve only one problem when you have other software issues to address that should be
considered at this time? If you're selecting a new HRIS, does it cover all of specialized needs you
have such as COBRA and HIPAA compliance or training records management? How does this
application fit with your HR IT strategy?

Step3-BigPicture

Once your goals are developed, take a step back and ask how they fit into the bigger
picture of your overall human resource information system. If you are looking for a
specialized application such as applicant tracking or COBRA management, make sure that
you consider how it will need to integrate with other applications such as your main HRIS.
Are you trying to solve only one problem when you have other software issues to address
that should be considered at this time? If you're selecting a new HRIS, does it cover all of
specialized needs you have such as COBRA and HIPAA compliance or training records
management? How does this application fit with your HR IT strategy?
Step4-FutureNeeds

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

Step5-TechnicalEnvironment

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

Step6-Budget

Budgets can be hard to define before you speak with any vendors but you need to at least
define some ballpark estimate of what your organization is willing to pay before you start talking
to vendors. A key item to keep in mind during budget definition is to separate your costs into
three areas: Software, hardware and implementation. Software includes the actual software
licensing fee and other software costs for items such as database licenses and annual
maintenance costs. Hardware is what you will need to spend for servers, PCs, and network
upgrades. Finally, implementation costs encompass the money you will spend for configuring the
software, training, and data conversion including the possible need to hire consulting services
from the vendor or third party consulting firm to help in implementation.
Step7-Specs

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

Step8-Buildvs.Buy

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

Finally, if your Information Technology staff develops any preliminary budgets or

schedules for doing the job internally, experience says that you should double both and you will
have a more realistic estimate to compare against the commercial products.
Step9-Research

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

Step10-Literature

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

Step11-RFP

Now you're ready to develop and send a request for proposal (RFP) to your smaller list of
target vendors. RFP's can be one page in length or ten or more. You will need to decide how
much detail you want prior to seeing product demonstrations. Smaller companies may want to
use a simplified 1 or 2 page requests for information (RFI) that requests less information and has
more flexible response guidelines in order to expedite this stage. Larger companies and those in
the public sector most typically will use a formal RFP process. The most common elements in an
HRIS request for proposal include:
. An overview that describes your company,
. A description of your software need and the employee population it will support,
. Desired system functionality,
. Required technical environment/specifications,
. A request for pricing (licensing fees, maintenance charges, training and implementation
support, annual maintenance fees and telephone hotline support),
. A request for customer references,
. Details on customer service/support available from the vendor,
. A request for sample contract terms

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

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

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

Step12-Evaluate

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

Step13-Demos

Software product demonstrations, by their very nature, are designed to showcase the best
attributes of the product and downplay the limitations. You can and should control product
demonstrations to try and get as accurate and unbiased information as you can from what is
clearly a major sales event for the vendor. How do you control the product demonstration? You
control the demonstration by modifying the vendor's agenda. All software vendors have standard
product demonstrations -- don't accept the standard demonstration. By this point in the process,
you should have a strong grasp of your needs and issues. Create a list of specific questions/trends
for the demonstration that focus on your issues and concerns and provide it to the vendor in
advance of the meeting. In this way the vendor can include your issues as part of their overall
demonstration and you should get a more unbiased look at the product. All of your team
members should be involved in the demonstration and the team should agree in advance on
specific issues that each member will ensure are addressed during the demonstration.

Step14-EvaluateAgain

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

Step 15 - Decision Points

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

Step16-CheckReferences

Now it's time to start checking references on your finalists. Your team should develop a
list of questions that they would like answered by each reference. Questions should cover any
areas of concern that you have with the product, product functionality, implementation, problems
the reference has encountered and ongoing support. Make sure that you understand the technical
environment of each reference, i.e. Windows NT, Unix, AS/400, etc so that you can identify
issues that may or may not apply to your situation. Listen carefully to what is said and not said
by the reference. If you can get references in the same geographic area in which you work, try
and visit the reference's business to see the product in action and talk to the actual users. It is best
to check all of the references before the second demonstration so that issues that come up during
this process can be addressed at the time of the next demonstration.

Step17-DemoAgain

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

Step18-EvaluateAgain&Select

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

Improved Reporting Capability:

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

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

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

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

But the company’s hiring process may be the most futuristic aspect of all. Applications
sent via the World Wide Web or fax are automatically deposited into a database; those submitted
on paper scanned into the computer and plugged into the same database. Once a hiring manager
has elected an applicant for an interview, the system phones that person and asks him or her to
select an interview time by punching buttons on a touchtone phone. At the end of the call, the
client /server database notifies the interviewers of the appointment, and even offers a reminder
the day of the interview. It’s all handled without human interaction. And an orientation program
for new hires works much the same way.
 HRIS Application: Because of such capabilities even many midsize firms are installing
HR information systems toady. For example, Grand Casinos Inc installed an HRIS called the
Human Resource Manager a package from PDS, Inc to help with the hiring of several thousand
new casino employees. This system consolidates the human resources operations of Grand
Casinos nine separate properties and lets these operations share resumes and other applicant
information. State Capital Credit Union in Madison, Wisconsin with 105 employees, installed a
desktop version of an HRIS called Spectrum HR / 1200. This system tracks applicant history and
status salary ad staffing changes across departments, benefits plan participation, pension plan
contribution employee training and turnover. It maintains compliance statistics. and wage and
hour information. State capital’s system also performs other HR tasks including internal job
postings, benefits billing payroll reconciliation and personalized letters and labels for applicant
and employee correspondence. For larger installations major IT firms including IB provide the
required HR systems integration. For example, IBM provides software under its ‘On Demand
Workplace Program’. Under this Program IBM offers integrated HR software from several
developers, including work brain (for instance, labor scheduling, and time and attendance) and
Store Perform (for work load optimization in retail stores). Similarly, when Chiron Corp. A large
pharmaceutical and biotechnology company, found it needed to integrate its existing computer
base HR system component solutions, it turned to the large information systems firm SAP. For
example, SAP was able to integrate its own proprietary human resources information system
with an online recruiting tool from hire.com that Chiron had been using wanted to continue to
use.

ESTABLISHING HUMAN RESOURCE INFORMATION SYSTEMS:

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

There are at least three reasons for installing such a system. First is competitiveness; and
HRIS can significantly improve the efficiency of the HR operation and therefore company’s
bottom line. For example, W H Brady Company, a Milwaukee-based manufacturer of
identification products such as labels reportedly cut several hundred thousand dollars a year from
its HR budget through the use of HRIS. Software producer People-soft reportedly has a ratio of
one HR staffer to each 110 employees, a savings of millions of dollars a year when compared
with the traditional ratio of one HR staffer per 50-100 employees, and it credits that to its HRIS.
The company expects the HR to employee ratio to shrink to 1:500
 The HRIS can also bump the firm up to a new plateau in terms of the number and variety
of HR related reports it can produce. Citibank for instance (now part of Citigroup) has a global
database of information on all employees including their compensation, a skills inventory bank
of more than 10,000 of its managers, and a compensation and benefits practices database for
each of the 98 countries in which the company has employees.

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

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

Improved Reporting Capability: Because the HRIS is comprehensive with respect to

the number of HR tasks it handles, installation of such a system significantly improves HR’s
reporting capabilities.

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

Similarly you might want to calculate and review: human resource cost information by
business unit; personal and performance information on candidates for global assignments;
demographic of the candidate pool to meet diversity reporting requirements; benefit plan funding
requirements and controls; union membership information; information required for HR if a
merger acquisition, or divestiture is expected; and data on your global executive level population
for development, promotion and transfer purposes.
 HR System Integration: Because its software components (record keeping, payroll,
appraisal and so forth) are integrated, a true HRIS enables an employer to dramatically
reengineer its entire HR function by having the information system itself take over and integrate
many of the tasks formerly carried out by HR employees.

HRIS IN ACTIION:

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

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

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

Improved Transaction Processing: It’s been said that the bread and butter of HRIS is still
basic transaction processing. One study – conducted in a pharmaceutical a company just before it
implemented an HRIS – found that 71% of HR employees’ time was devoted to transactional
and administrative tasks, for instance. In other words, an enormous amount of time was devoted
to tasks like checking leave balances, maintaining address records, and monitoring employee
benefits distributions. HRIS packages are intended to be comprehensive. They therefore
generally provide relatively powerful computerized processing of a wider range of the firm’s HR
transactions than would be possible, if individual systems HR task had to be used.
 Online processing: Many HR information systems make it possible (or easier) to make
the company’s employees themselves literally part of the HRIS. For example, Merck installed
employee kiosks at which employees can verify and correct their home address and work
location. Estimated savings reportedly approach $640,000 for the maintenance to those data
alone, and many companies report similar savings. At Provident Bank an HR compensation
system called Benelogic allows the bank’s employees to enroll in all their desired benefits
programs over the Internet at a secure site. One shipping company estimates it will reduce
transaction processing and related paperwork from $50 down to $30 or less per employee using
direct access kiosks and integrative voice response (IVR) phone scripts. Increasingly, forms like
Dell are creating intranet based HR sites. These allow managers and employees to process HR
related information with little or no support required from the HR group itself. But using kiosks,
or (increasingly) the intranet based systems should not only move the burden of the record
keeping from HR to the employees themselves. It also should support employees’ quest for what
information relating to, for example the impact on their take pay of various benefits options,
insurance coverage retirement planning and more. Some experts refer to advanced Internet based
HR service programs like these as electronic HR or (e-HR). It is the application of conventional,
Web an voice technologies to improve HR administration transactions and process performance

HRIS IMPLEMENTATION PITFALLS:

Everyone knows by now, implementation a sophisticated information system is often

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

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

HRIS Vendors: Many firms today offer HRIS packages. At the Web site for the
International Association for Human Resource Information Management (mentioned Earlier) for
instance Automatic Data Processing Inc Business Information Technology, Inc., Human
Resource Microsystems, Lawson Software, Oracle Corporation, PeopleSoft Inc., Restrac Web
Hire, SAP America Inc., and about 25 other firms are listed as HRIOS vendors. As another
example, Business Computer Systems offers a line of ABRA software products for firms ranging
in size from 20 to 10,000 employees. As one example, you can point and click to find a list of
employees reporting to a particular supervisor and print over a hundred reports such as salary
lists, employee profiles and EEO reports.

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

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