Impact of Technology on Human Resource Information System and Achieving Business Intelligence in Organizations

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Introduction

Effective human resource management (HRM) requires all types of advanced technology of the present era. A human resource information system (HRIS) is not new, but it is planned, implemented, and evaluated in the field of human resources (HR) to cope with the changing work culture and technological environment of an organization. With a HRIS it is easy to plan, collect, analyze, and retrieve data as needed by the human resource department. It helps in all types of human resource processes such as human resource planning, recruitment and selection, and training and development. It can be used for performance management and compensation management for recordkeeping of all the facts and figures, i.e., leaves, accidents, superannuation, various employee benefits, etc. The technological environment of the business organization makes it more advanced if it will copes with the external environment. Many researchers describe that integration of the human resource processes with technology is becoming a competitive advantage of the respective industry or organization as compared to others. Having a HRIS is an administrative and strategic advantage to the respective organizations. This chapter is a modest attempt to give a comprehensive analysis to understand the advantages of HRIS in the organization, w'hich may be strategic, competitive, or administrative.

Objective of the Study

  • 1. To study the concept of the HRIS with its historical evolution.
  • 2. To study the advantages of the HRIS.
  • 3. To study human resource information technology as a competitive strategy and administrative advantage.
  • 4. To study major issues and challenges in the implementation of HRIS.

Research Methodology

An extensive literature survey is done by collecting data from various journals, published articles, online articles, related books, and company websites.

Literature Review

Firms invest to get leverage or competitive advantages in the form of operational excellence, new product development, customer satisfaction, and improvement in decision-making processes. To achieve this, all management levels concentrate on proper data collection and analysis by using technology in each step of the business process. HRIS is an important part of the whole business process as it helps in each level (Nath, 2015). Even if previously adoption and acceptance of a HRIS was challenging earlier, now it is implemented in most successful industries (Figure 8.1).

HRM is being redefined for better operational performance as it emerges into a new area using new workforce analytics professionals, robot trainers, virtual culture architects, AI integrators, and cyber ecosystem designers. Organizations are using data analytics in HR for prediction.

HRIS functions associated with different levels of HR. (Source

FIGURE 8.1 HRIS functions associated with different levels of HR. (Source: Nath and Naidu. 2015.)

Evolution of HRIS and the Changing Concept of HR Integration with IT

Before 1945 (Pre World War II)

HRM was earlier known as personnel management. It had some isolated functions like record keeping, employee relations practices, and child labor issues, which were mainly dealt with by the government. Employee names and addresses were scribbled on 3x5 note cards (Bhuyan, 2014).

-1960 (Post World War II)

Certain concepts like employee morale, labor utilization and mobilization, job descriptions, extensive reporting to government agencies, and motivation as a social and psychological factor were introduced in the area of HR. Computer technology was used as a facilitator in the HR department (Bhuyan, 2014).

–1980 (Legislative Era and Emerging HRM)

The personnel department is known as the HR department and computer technology is widely used in various processes. Government and regulatory agencies increase reporting requirements in different areas like occupational health and safety, retirement benefits, tax regulation, and legislative compliance, which requires data collection, analysis, reporting, etc. (Bhuyan, 2014). Enterprise resource planning (ERP) was introduced, which associated with all types of HR functions.

–1990 (Low-Cost Era and Integration of HR with IT)

The HR department used technology for effective and efficient in-service delivery, through cost reduction and value-added services. HRIS evolves from simple record keeping to different HR functions like recruitment and selection, benefits to management, time management, compensation management, expense reporting, and reimbursement. Some of the definitions of HRIS are as follows:

HRIS is a systematic procedure for collecting, storing, maintaining, retrieving and validating data needed by an organization about its HR, personnel activities and organization unit characteristics (DeSanctis, 1986).

HRIS is a technology-based system used to acquire, store, manipulate, analyze, retrieve and distribute pertinent information regarding an organization's HR consistently.

The human resource department used technology for effectiveness and efficiency in- service delivery, through cost reduction and value-added services. Traditionally it was used only for payroll, and moved from mainframe systems to client-server technology.

–2000 (Technology Era and the Emergence of Strategic Human Resource Management)

The addition of technology to the organization’s product/services and human capital is considered as a competitive advantage and an important part of strategic HRM (Figure 8.2).

–2010 (Emergence of High Technology and Introduction of Diversified Technological Tools)

According to Scott and Snell (2002), HRM can meet the challenges. Several applications of the HRM system are done. HRMS integrates with human resource planning, preventive and strategic planning, financial planning and risk management, training management and experiences, recruitment and selection process, turnover analysis, attendance reporting and different clerical applications, career and succession planning, compliance with government regulations and analysis, etc. (Hani et al., 2004) HRIS adoption helps to achieve the following objectives (Ruel et al., 2004):

  • 1. It helps in cost reduction and enhances the innovative characteristics of the employees.
  • 2. It improves the strategic orientation of HRM and facilitates the relationship between management and employees.
  • 3. It helps in client-server improvement and smoothing the functions of HRM.
  • 4. It helps in better compensation management.
Traditional strategic human resource management is converted to sustainable competitive advantage. (Source

FIGURE 8.2 Traditional strategic human resource management is converted to sustainable competitive advantage. (Source: Bhuyan. 2014.)

In 2007, the term e-HRM was used to designate the action of designing, adopting, and implementing data technology.

Onwards (Recent Trends of HRIS)

HRIS facilitates human resource forecasting and planning, provides easy, secure access to data, and helps in effective HR decision-making (Khera, 2012). HRIS is implemented in several business organizations. Currently, enhanced technology is considered a sustainable competitive advantage as a socio-technical system whose purpose is to gather, store, and analyze information regarding an organization’s HR department. HRIS comprises computer hardware and applications as well as the people, policies, procedures, and data required to manage the HR function. HRIS integrates with all the processes of HR and leads to error-free results. For example, recruitment is driven by social media and cognitive assessment. Applicant screening systems that use artificial intelligence reduces the man-hours required for recruitment (). Future leaders will require agile thinking, digital skills, global operating skills, interpersonal and proper communication skills, and it will be best if he or she is technologically oriented.

Many noteworthy technologies evolved in this era, such as:

  • 1. Robotics and nanotechnology
  • 2. Network communication technology (broadband and wireless)
  • 3. Convergence technologies(cell phones and PDAs, Internet TVs)
  • 4. Collaborative tools (Web2.0 and portals)
  • 5. Service-oriented architecture (SOA)(e.g., Oracle Fusion and SAP Net Weavers)
  • 6. Business intelligent system
  • 7. Software as a service (SAAS)
  • 8. Infrastructure as a service (IAAS)

There are certain modules that can be included in the HRM system like employee information, recruitment, training, leave, performance management, employee survey, payroll management and attendance, and whether they are implemented depends upon: (Jahan, 2014)

  • • Effective organizational need analysis and inclusion of proper professionals
  • • Top management consultation and commitment
  • • A proper management team
  • • Effective communication and training

Technology as a Competitive Strategy

HR can meet the issues and challenges and become more strategic, flexible, cost-efficient, and customer-oriented by leveraging information technology (Scott and Snell. 2002). HRIS facilitates talent management, business process transformation, social networking, time management. HR metrics, workforce planning, ethics, sustainability, safety issues, strategic management, performance management, skill inventory management, legal rules and regulations, and leads to cost awareness, globalization of the workforce, stress management, employee safety, management of workforce diversity, and employee engagement. Firms get competitive advantages in two ways: by accessing special resources or by using common resources efficiently and effectively. Modeling and decision-making depends upon the data collection, transformation, and proper dissemination which will lead the firm to a good strategic position and bring profit (Laudon and Laudon, 2010). There is a great deal of research done on managerial perception toward the effectiveness of human resource information technology on performing administrative and strategic functions of human resource which will work as a competitive advantage for the company. One survey took the feedback of 31 HR managers from private organizations in Bangladesh and suggested that it can be a great competitive advantage to adopt technology in HR department by lowering the cost involved in recruitment and selection, training, and development. By using the HRIS, there is a maximum level of coordination among the various departments and improvement in communication (Islam and Shuvro, 2014). HRIS is a competitive advantage to the organization in public sector organizations as related to the education department (Srivastava, 2018) (Figure 8.3 and Table 8.1).

Many researchers state that the inclusion of information technology or any type of new technique in the product or services will lead to great profitability and create a strategic position in the current market. There are four steps described by Jesuthasen, MD of Wilis Tower Watson, to be follow'ed to implement technology or to do w'ork effectively with an optimal human-machine combination. They are deconstruct, optimize, automate, and reconfigure. Due to the integration of technology with

Analysis of Michael Porter’s competitive forces model. (Source

FIGURE 8.3 Analysis of Michael Porter’s competitive forces model. (Source: Laudon and Laudon. 2010.)

business processes like HR, marketing, or operations, globalization of work is possible in this dynamic era.

There are complementary social, managerial, and organizational assets required to optimize the return from information investments described as follows (Figure 8.4): When calculating investment in HR portals it is seen that the HRIS can be a competitive advantage to the organization (. Table 8.2 shows examples of the administrative advantages of technology.

TABLE 8.1

Five Types of Competitive Forces Are Seen in the Market

FORCES

Traditional

Competitors

New Market Entrants

Substitute

Products

Customers

Suppliers

Criteria

All firms share market space with others as competitors.

Organizations continuously using new technologies to produce new products or to provide services.

New market entrants act as competitors.

They hire young workers and implement new technologies in products and sendees

They lessen the pricing and profit margins.

Concentrate on recent trends of technology.

The profitable organization depends to the large measure on its ability to attract and retain customers.

There may be little product differentiation.

Suppliers may concentrate on the firm's profits, price, quality of material, delivery' schedules, etc.

Complementary social, managerial, and organizational assets. (Source

FIGURE 8.4 Complementary social, managerial, and organizational assets. (Source: Laudon and Laudon, 2010.)

TABLE 8.2

Technology as an Administrative Advantage

Serial. No.

Administrative Advantage

Functions

1

Employee Service (ESS)

  • 1. HR data collection
  • 2. Record keeping and access
  • 3. Access by converting client-based service architecture to web-based environment

2

Interactive voice response (IVR)

  • 1. Updating address information
  • 2. Planning for retirement
  • 3. Updating health plan information Reporting on life events like birth of child or life insurance

3

Use of HR portals

  • 1. Different clerical transactions
  • 2. Recruitment and selection

4

Communication

  • 1. Email
  • 2. Read company news and policies
  • 3. Link to job-related information
  • 4. Link of HR data to others

5

Cost reduction in HR functions by calculating different cost)

  • 1. Healthcare costs per employee
  • 2. Pay benefits as a percentage of operating expense
  • 3. Cost per hire
  • 4. Cost for training and development
  • 5. Turnover rates and costs
  • 6. Time required to fill certain jobs
  • 7. Return on human capital investment

When implementing technology in product development or in-service delivery, certain actions are done step by step. For example, there is a feasibility study done which includes all aspects of the current software like the scope of the software, future benefits of the software after implementation, the potential of the software, cost estimation, return on investment calculation, etc. (Jahan, 2014). Some issues and challenges during implementation of HRIS discovered in the literature are shown in Table 8.3.

TABLE 8.3

Issues and Challenges during Implementation of HRIS

Author(s)

Issues and Challenges

Kovach et al. (2002)

  • 1. Technology adaptation
  • 2. Operation and maintenance issues
  • 3. Lack of training, following proper process, and end-user involvement

Kumar and Parumasur (2013)

  • 1. Increase in competitiveness in collecting data
  • 2. Reengineering of business processes
  • 3. Difficulties in adapting
  • 4. Long implementation period
  • 5. Acceptance of new or upgraded HRIS
  • 6. Management of change processes
  • 7. Lack of understanding
  • 8. Insufficient management commitment
  • 9. Fear of change
  • 10. Result in jobless/altered leave entitlement/shift arrangement
  • 11. Up-to-date information

Sadiq et al. (2012)

1. Lack of cooperation

Weeks (2013)

  • 1. Lack of strategic/operational efficiency, user-friendly interface, and commitment
  • 2. Insufficiency in integration with other systems within the organization
  • 3. Complicated system
  • 4. Inflexibility
  • 5. Insufficient fund allocation

Jahan (2014)

  • 1. Expensive
  • 2. Lack of end-user participation
  • 3. Threatening and inconvenient
  • 4. Lack of change management

Nath (2015)

  • 1. Process improvement
  • 2. Employee acceptance
  • 3. Security issues
  • 4. Cost of operation
  • 5. Adaptation challenges
  • 6. Technical limitation
  • 7. Responsibility of HR department
  • 8. Resistance to change
  • 9. Software errors and bugs 10. Change in workflow

(Continued)

TABLE 8.3 (Continued)

Issues and Challenges during Implementation of HRIS

Author(s)

Issues and Challenges

Ali (2017)

  • 1. Lack of funds, expertise, cooperation, and professional staff
  • 2. Inadequate knowledge
  • 3. Network problems
  • 4. Technical problems
  • 5. Time consumption

All the issues and challenges can be overcome by proper training and development. effective training need analysis, top management commitment, effective communication, the inclusion of key people, a dedicated team or professional team (Jahan, 2014), and effective and accurate decision-making (Islam and Shuvro, 2014). Implementation of HRIS helps in cost reduction, competency management, knowledge management, the motivation of employees, effective communication, proper monitoring and feedback, and adaptability and flexibility (Nath, 2015). It also has other benefits like reducing chapter work, data improvement, quick response, easy access to information, service improvement, reducing errors, enhancing competitiveness, time-saving, etc. (Ali, 2017).

Implications

This chapter highlights the strategic importance of HRIS implementation, issues, and challenges faced by organization when implementing HRIS in the organizational process. It also gives insight to many of the researchers, academicians, IT professionals, organizations, and others who are associated with the IT sectors as it includes some of the related facts regarding the HRIS.

Scope of the Study

Future studies can be done on the impact of HRIS on organizations or HR practices at all levels of employees or in all the sectors by investigating the public and private sectors differently. Alternatively, the study can be done by taking different areas like IT and non-IT sectors. Issues related to the implementation of HRIS or longitudinal research can be done to study the effectiveness of HRIS in a particular situation. There can be studies on the adaptation of technology in HR practices in a diversified workforce with consideration of internal and external factors.

Conclusion

Change management and an increase in employee morale may be the key factors to encourage organizations to adopt the technology with the organizational functions. Proper training will be helpful for the successful implementation of the HRIS.

The future workplace will need a huge usage of technology and analytical skills. That’s why organizations need proper analysis of training needs and feedback about technological adaptation. There is no doubt that if there will be a collective effort between the organization and employees to run the technology smoothly for all the processes, then all the apprehensions relating to the technology will decrease and a day will come when man and machine will complement each other and give efficient and effective results.

References

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Bhuyan, F. M. (2014). Historical evolution of human resource information system (HR1S): An interface between HR and computer. Human Resource Management Research, 4(4), 75-80.

DeSanctis. G. (1986). Human resource information systems: A current assessment. MIS Quarterly. 10, 15-27. http://dx.doi.org/10.2307/248875 Islam, M. F., and Shuvro. R. A. (2014, December). Administrative and strategic advantages of HRIS: An exploratory study in the private sector of Bangladesh. Stanford Journal of Business Studies, 6(1), 65-73.

Jahan, S. (2014, May). Human resources information system: A theoretical perspective.

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Khera, M. K. (2012. Oct). Human resource information system and its impact on human resource planning: A perceptual analysis of information technology companies. Journal of Business and Management, 3(6), 6-13.

Kovach, K. A.. Hughes, A. A., Fagan. P.. Maggitti. P. G. (2002). Administrative and strategic advantages of HRIS. Wiley Online Library, https:/ /doi.org /10.1002/ert. 10039 Kumar, N. A., and Parumasur, S. B. (2013). The impact of HRIS on organizational efficiency: Random or integrated or holistic. Corporate Ownership & Control, //(1), 567-575. http://dx.doi.org/10.22495/cocvl 1 i Ic6art4

Laudon. К. C„ and Laudon. J. P. (2010). Information System in Global Business Today (11th ed.). New York: Pearson.

Naidu. P. S. (2015). HRIS Efficiency and its impact on Organization. International research Journal of Management science and Technology (IRJMST), 6(7), 85-98.

Nath. P. S., and Naidu, J. G. (2015). HRIS efficiency and its impact on organization. International Research Journal of Management Science and Technology (IRJMST), 6(7). ISSN-2250-1959

Papia, S„ and Nath. D. G. (2015). HRIS efficiency and its impact on the organization.

International Research Journal of Management Science and Technology, 6(7), 85-98. Ruel. H. J. M., Bondarouk. T.. and Looise. J. C. (2004). E-HRM: Innovation or Irrigation. An explorative empirical study in five large companies in web based HRM. Management Revue, /5(3), 364-380.

Sadiq, U. (2012). The impact of the information system on the performance of HRD. Journal of Business Studies Quaterly, 3(4). 77-91.

Scott. A., and Snell, D. S. (2002). Virtual HR Departments: Getting out of the middle.

Working Paper series (1-8), Centre for Advanced Human Resource studies (CAHRS). Srivastava, P. (2018). Comparative analysis of effectiveness between E-HRM and traditional HRM. International Journal of Advance Research, Ideas and Innovations in Technology, 4(6), 1-5.

Weeks, K. O. (2013). An analysis of human resource information systems impact on employees. Journal of Management Policy and Practice, 14(3).

 
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