Human resources information systems and global management practices

Human Resources Management Practices in the Global Environment & Human Resources Information Systems (HRIS)

The objective of this study is the examine Human Resources Information Systems (HRIS) as it relates to Human Resources Management practices in the Global Environment. Toward this end, this work in writing will examine the literature in this area of study.

Globalization, in the work of Husain (2010), is reported as symbolizing "the structural making of the world characterized by the free flow of technology and human resources across national boundaries presenting an ever-changing and competitive business environment." (p.1) Husain defines globalization as "the ongoing economic, technological, social, and political integration of the world that begin after the Second World War." (2010, p.1) Husain argues that a large base of evidence indicates that "changes taking place in the global business environment are often not accompanied by complimentary changes in human resources management practices whereby the failure of some firms is due to the mismanagement of people rather than to problems with technical systems; (2) This is because organizations have achieved relatively low levels of effectiveness in implementing Strategic Human Resource Management practices; and (3) In order to manage employees for competitive edge in a period of globalization, human resource personnel must possess competencies relevant for effective implementation of such strategic HRM policies and training. (Husain, 2010, p.1) - HRIS Project Implementation is stated to be based on three principles: (1) consideration for the organization's busy timelines and resource limitations; (2) emphasis on building partnerships with organizations; and (3) flexibility in the implementation process to cater to specific organization requirements. (Community Care Information Management, nd)

The work of Pirakatheeswari (2010) states that innovative HRM is characterized by the following:

Crafting creative business strategies

Organizational restructuring

Creating social networks

Invoking new challenges

Shifting approach

Enabling companies to go global

Leading to superior performance

Creating knowledge workforce (Pirakatheeswari, 2010)

Stated as benefits of HRIS are the following:

Simplified data entry

Less paperwork

Fast and accurate

Better use of feedback

Increased efficiency

Improved tools for data analysis (Pirakatheeswari, 2010)

The various aspects of HRM are stated to include:

Human Resource Planning

Recruitment

Selection

Placement

Inductions

Transfer & Planning

Job Analysis

Performance Appraisal

HR Audit

Total Quality Management

Quality of Working Environment

Quality Cycle (Pirakatheeswari, 2010)

It is noted by Pirakatheeswari, (2010) that information system has "become a tool for more HR professionals, and often, these systems are provided through the Internet."

Dresser Associates states that the system requirements, features and capabilities of the HRIS that must be addressed include: (1) the recommended hardware to operate the system; (2) the anticipated cost of the hardware; (3) local area networks that are compatible with the system; (4) maximum number of employee records the system can handle effectively; (5) is the system commercially available or written in programming language; and (6) the estimated time to process and generate a standard 10-field employee roster listing that includes age, annual salary and years of service for 500 employee records. (Dresser Associates, nd)

It is necessary that the real needs of the system be clearly articulated and that questions including those as follows be addressed: (1) what major tasks are to be accomplished and what results are expected; (2) what tasks and results are to be realized over the next two years; and (3) what results will be produced by the system for the organization's operational management over the next three years. (Dresser Associates, nd)

II. Analysis of the Issues

The work of Kontakos (2003) entitled "Global HR Information Systems" reports that HR Information Systems make the provision of the opportunity "to become more efficient and strategic function by standardizing the majority of the organization's HR processes, improving the quality and speed of available information and improving services to employees." (p.17) Planning for HRIS requires that the organization develop its "overall business strategy, system goals and objectives, critical success factors and the type of data it aims to have. This plan serves to shape the HRIS. The real driver of HRIS is stated by Kontakos to be "strategic thinking -- not technology" and it is emphasized that the plan "incorporates a degree of flexibility to allow for new developments in the organization, business environment, technology, or management thinking." (Kontakos, 2003, p.17) The HRIS system that is designed correctly has the capacity to manage data on employees in the same manner as the organization is managed which highlights the need for a multinational organization to implement a global Human Resources Information System. (Kontakos, 2003, paraphrased)

Kontakos states that the global HRIS has the capacity to strategically use vast amounts of employee data and the global database should be of the nature that has automatic updates by the local databases which should serve to ensure that the data in correctly input and that it only needs to be input one time. This allows for the information to be used for conducting in-depth analyses and in assisting HR and the organization to make decisions that are better informed. (Kontakos, 2003, paraphrased) The global HRIS, through application of "a consistent process for capturing and maintaining employee specific data…can be used to identify, plan and budget for employee training, succession planning, and expatriate assignments." (Kontakos, 2003, p.17)

According to Kontakos the multinational organization with a global HRIS when seeking the best individual to fill a position "can very quickly and easily discover the right person…" which effectively creates a competitive advantage for the organization. (Kontakos, 2003, p.17) The system should be designed so that employees who desire to work in overseas assignments are easily identified and this, according to Kontakos "will make the expensive and time-consuming expatriate process quicker and easier." (2003, p.17)

The HRIS may be utilized in thinking on a local basis and for global compensation in that "…compensation can be applied fairly across the globe while still being aware of and understanding differences in compensation for similar jobs in various countries." (Kontakos, 2003, p. 18) It is possible to review plans in local and other currencies and languages with such an HRIS system and as well the global HRIS can make provision of guidelines for compensation and assist the documentation both online and offline toward assisting employees in gaining an understanding of their specific compensation package and in assisting the manager in making decisions for compensation awards and in determining compensation policy matters. (Kontakos, 2003, paraphrased)

Quantitatively, the organization may through use of the HRIS "quickly assess costs when planning for a new department or project regardless of the employees or countries involved." (Kontakos, 2003, p.18) The global HRIS assist in the identification of various currencies and exchange rates and makes the provision of a final cost figure in any currency. For example, it is reported that Professional Marketplace, a global database of IBM's talent is of the nature that assists IBM in ensuring that an employee who is overqualified is not sent to a job that could be handled by an employee who costs the company less which is important when considering that IBM has approximately 60,000 consultants, all who bill by the hour. Qualitatively, IBM is able to make a quick assessment of which employees are available and the qualifications of the employees resulting in more accurate and transparent decisions in overall business planning. (Kontakos, 2003, paraphrased)

The benefits of a global HRIS include that the system "create an element of cultural cohesion and closeness for employees -- especially those within the expatriate community. Employees across the organization, regardless of location, will feel more connected to each other and will have a single point of contact." (Kontakos, 2003, p.18) It is important to understand that there must be a balance between global, standardized HR processes and local customization and while "80% of HR processes are the same around the world the 20% can paralyze the global HRISZ and the organization." (Kontakos, 2003, p.19)

Kontakos states that global organizations "often make the mistake of becoming too corporate-centric believing it knows best. In order to find the right mix of corporate and local culture when implementing a global HRIS, the organization must identify best HR practices and standardize those processes -- some of which may be local. And while the local culture may not match the corporate culture, it should be complimentary. regardless of location, will feel more connected to each other and will have a single point of contact." (2003, p.19) HR Information Systems are becoming more sophisticated with an increase in the volume and detail of employee data. Kontakos writes:

"In some of the areas in which it operates, the organization may face specific laws restricting the way it stores, handles and transfers employee data. Most notable of these laws is the EU Directive 95/46/EC -- on the protection of individuals with regard to the processing of personal data and on the free movement of such data. In terms of a global HRIS and the EU Directive, the organization must ensure that the employee data is limited to specific purposes, retained only as long as necessary, accurate and up-to date, protected by adequate security measures and does not cross borders." (2003, p.21)

Furthermore, there is a requirement that the employee "be notified of and have access to the data." The data may be transferred only to third world countries or those outside the EU "if the country provides an adequate level of protection for the data." (Kontakos, 2003, p. 21) The existing options for making guarantees of data protection are inclusive but not limited to the following: (1) drafting individual contracts between the European business unit(s) and the U.S. Headquarters, certifying to the Safe Harbor Arrangement and ensuring the organization is providing "adequate" privacy protection as defined by the Directive and establishing binding corporate rules (BCR) or internal codes of conduct. BCRs are a comprehensive way of meeting privacy requirements globally (Harris, 2006) and have many advantages." (Kontakos, 2003, p.21) BCR advantages include: (1) making the provision of a legal basis for transferring EU data from any EU member state to any part of the global organization; (2) able to yield a single global standard for employee data transfer, handling, and storing so that all employees are provided with equal protection of privacy as well as addressing specific country compliance needs; (3) eliminates legal regulatory overhead of other options that are not necessary; and (5) are flexible and adaptable to creation of user-friendly guidance for employees and agents. The primary drawback is that an excessive amount of time is needed for BCR approval and this is particularly true by each EU member state. (Kontakos, 2003, p.22)

Data security for employee information is best handled at the local level and should necessary involve the involvement of employees. In addition, there is a need for global organizations to provide employees with a self-service tool in the local language so that they can view and update their personal information which his stored both nationally and internationally. Kontakos relates that the "golden age of transactional HRIS and software -- payroll and benefits and hello to the new age strategic HRIS and software -- performance management, succession planning, competency-based compensation and workforce analytics . (p. 23)

The work of Hendrickson (1996) entitled "Recasting HRIS as an Information Resource" states that traditional thinking in HRIS has as its focus "satisfying current and future information needs of functional areas. The weakness in the system is that information is considered only in relation to functional needs, which means that information as an independent resource is virtually ignored." (p. 1) Information generally collected by HR department includes such as absenteeism, employee demographics, workers' compensation, performance appraisal and payroll. Although most departments do an excellent job tracking this information, very few departments are able to exploit it for maximum value." (Hendrickson, 1996, p.1)

This work has examined the theoretical framework of implementation of HRIS in global organizations. As well this work has examined the use of HRIS for HRM and has found that use of HRIS effectively reduces costs that are associated with employee recruiting, training, planning, and tracking. In addition administrative fees are effectively reduced and elimination of work duplication is another benefit of HRIS. Furthermore, HRIS serves to improve the performance of activities and reduce time and cost required to complete an activity. Other benefits from HRIS include faster access to information and information that is more meaningful and usable. As well, reduction of HR administrative workload and better tools which result in a higher level of productivity. Communications between employees are also optimized with the use of HRIS. Decision-making has better outcomes and the organization realizes a competitive advantage from use of HRIS.

III. Recommended Course of Action & Conclusion

The recommended course of action for any organization in the globalized business environment is to integrate the use of HRIS with HRM. The benefits are clear and include the reduction of costs in many areas of HRM as well as performance improvement and time reduced in completing activities. Information is easier to access and is more usable even enabling ad hoc reporting. HRIS lightens the HR duties and outcomes include higher levels of productivity, better decision-making and a competitive advantage being realized by the organization making use of HRIS>

Annotated Bibliography

1. Mayfield, M.; Mayfield, J. And Lunce, S. (2003) Human Resource Information Systems: A Review and Model Development. Entrepreneur. 2003. Retrieved from: http://www.entrepreneur.com/tradejournals/article/110733614.html

Mayfield, Mayfield and Lunce (2003) present a HRIS model with the primary goal of providing a comprehensive framework that supports HRIS research.

2. Foss, N.J. And Mahoney, J.T. reports that knowledge governance "is characterized as a distinctive research subject, the understanding of which cuts across diverse fields in management." These authors state that knowledge governance "represents an intersection of knowledge management, strategic management and theories of the firm."

3. Kourik, J.L. And Maher, P.E. (2008) Does Practice Reflect Theory? An Exploratory Study of a Successful Knowledge Management System. International journal of Human and Social Sciences. Vol. 3, Issue 4. Retrieved from: http://www.waset.org/journals/ijhss/v3/v3-4-35.pdf -Kourik and Maher (2008) investigate the link between theory and practice and state that a Knowledge Management System (KMS) that is successfully implemented is one that had as its design the capacity to manage curricular knowledge in a distributed university environment. Findings stated "indicate substantial correspondence between the successful KMS and the theory-based framework providing provisional confirmation for the framework while suggesting factors that contributed to the system's success." (Kourik and Maher, 2008, p. 1)

4. Pirakatheeswari, P. (2010) Emerging Issues in HRM. Barackoli.com. 4 May 2010. Retrieved from: http://barackoli.com/emerging-issues-in-hrm / - This work reports that critical issues in HRM have emerged including "planning, acquisition and development of human resources, responding to the demands of the work place and, above all, evolving a strategy of dealing with industrial conflict. Also cited in this work are factors that are critical to innovative HRM.

5. Hendrickson, Anthony R. (1996) Recasting HRIS as an information resource. HR Magazine. 1 Feb 1996. Retrieved from: http://www.allbusiness.com/human-resources/545381-1.html - Hendrickson reviews the diverse uses of HRIS in the organization.

6. Human Resources Information System (HRIS) Project Implementation (nd) Community Care Information Management. Retrieved from: http://www.ocsa.on.ca/ccim/mis-hris/documents/Training_and_Implementation.pdf - HRIS Project Implementation is stated to be based on three principles: (1) consideration for the organization's busy timelines and resource limitations; (2) emphasis on building partnerships with organizations; and (3) flexibility in the implementation process to cater to specific organization requirements.

7. Kontakos, Anne-Marie (2003) Global HR Information Systems. Global HR Best Practices: Maximizing Innovation, Effectiveness and Efficiency in HR. A Collection of White Papers. Center for Advanced Human Resource Studies -- CAHRS. Research Conducted in Preparation for the CAHRS Fall Sponsor Meeting 23-24 Oct. Ithaca, New York. Retrieved from: http://www.ilr.cornell.edu/cahrs/research/pubs/SpecialTopics/upload/2006FALL-GlobalHRBestPractices.pdf - This work examines the use of HRIS in HRM and states the benefits and drawbacks of HRIS implementation in the global organization.