HRA and HRIS: Complementary Roles in HR Management

Introduction

Human resource management (HRM) is a term used to refer to the tasks and activities that are beneficial in maximizing the performance of employees in an organization. Over the past few years, HRM has been increasingly evolving and dynamic as organizational leaders constantly look to improve quality, productivity, and effectiveness. New models and ways to promote the value and effectiveness of HRM have been developed and are used by organizations. The evolution of HRM is fueled by rapid technological advancements and increased globalization.¹ Human Resource Information Systems (HRIS) are among the models that have emerged in HRM. HRM also entails the management of accounting information, which is used extensively in organizational strategic decision-making.

Background of the Study

Rapid technological advancements have contributed to the emergence of new models and ways of human resource management. Human resource professionals are increasingly seeking measures to enhance the effectiveness of their processes and activities. These efforts have contributed to the development of new HRM models, including Human Resources Accounting (HRA) and Human Resource Information Systems (HRIS). The development of these new models has been influenced by the fact that organizational leaders are increasingly cognizant of the various kinds of technology that could enhance their organization's effectiveness. HRA and HRIS have become critical components of modern HRM initiatives as they play a vital role in strategic decision-making processes.

HRIS is a term used to refer to integrated systems that collect, store, and analyze information about an organization's human resources.² The concept of HRIS was first introduced over five decades ago and has evolved beyond its initial purpose of converting paper records into computerized databases. Contemporary HRIS tools can be used by human resource professionals to carry out various activities on a daily basis. Through these tools, organizations implement more complex computerized systems to help ensure their records are accurate and up-to-date. HRIS tools are considered critical in today's HRM as they help enhance efficiency with regard to HR decision-making.

According to Al-Hattami and Kabra, human resource accounting is one of the sub-systems within the accounting information system used in HRM.³ Human resource accounting provides all financial and non-financial information regarding human resources. It achieves this by gathering data regarding the organization's human resources from a variety of sources and examining the data based on certain rules of accounting. The results of this process are then provided to all interested parties in order to promote the realization of desired goals and objectives. Therefore, human resource accounting plays a critical role in understanding the accounting aspect of strategies and activities adopted in human resource management.

Statement of the Problem

While HRIS and human resource accounting have become critical components of HRM, there is limited data on the link between these two concepts. There is limited data on the link between human resource accounting and HRIS despite the role they each play in HRM and strategic decision-making in an organization. In addition, there is an erroneous assumption that human resource accounting primarily focuses on accounting or financial information. This assumption negates the role non-financial information plays in human resource accounting processes and systems. The limited data on the two concepts has contributed to a lack of understanding of the role accounting information plays in human resource information systems and human resource management.

Purpose of the Study

The purpose of this study is to explore the complementary link between human resources accounting and human resource information systems. The study seeks to demonstrate how these two concepts are inter-related and play an important role in human resource management processes.

Research Question

What is the relationship between human resources accounting and human resources information systems?

Significance of the Study

This study is important in the field of human resources management as it provides insights into the link between financial and non-financial information in human resource practices. By exploring the relationship between human resources accounting and HRIS, the study demonstrates how both non-financial and financial information are critical in HRM. HRM practices should incorporate the collection, analysis, and use of financial and non-financial data in a complementary manner. The study also addresses the existing gap in literature regarding the complementary link between human resources accounting and HRIS, thereby addressing the need for human resource professionals to design accounting information systems as part of HRIS tools for better decision-making in HRM. The integration of accounting information into HRIS would also enhance an organization's strategic decision-making.

Study Objectives

By addressing the research question, this study seeks to achieve the following objectives:

1. To provide insights regarding human resource information systems.
2. To provide insights regarding human resources accounting.
3. To analyze the comparative relationship between human resources accounting and human resource information systems.
4. To clarify the significance of financial and accounting information in human resource information systems.