WEEK 8

ELECTRONIC HUMAN
RESOURCE
MANAGEMENT
(EHRM)

HRIS
Dr. Y. Johny Natu Prihanto
HR Administration and
HRIS
Objectives
• Understand the basic role of job analysis in human resources and explain the role of HRIS in
supporting job analysis
• Discuss the complexity of HR administration and the advantages of an HRIS over a “paper-and-
pencil” HR operation
• Discuss the advantages of having a service-oriented architecture (SOA) for the HRIS
• Differentiate among the four structural approaches to HR administration service delivery (i.e.,
self-service portals, shared-service centers, human resource outsourcing, and offshoring)
• Discuss the advantages and disadvantages of each of the four structural approaches to HR
administration
• Understand how legal compliance with government mandates is an important part of HRIS
functionality and how these mandates add to the complexity of an HRIS in both domestic and
multinational organizations
• Discuss the various privacy laws, particularly as they relate to an HRIS
• Discuss the elements important to successful measurement of the strategic alignment of the HR
balanced scorecard and how this alignment is related to the strategic alignment of an
organization
Technical Support for Job Analysis
• The organization must know not only what each job entails, but also
what knowledge, skills, and abilities (KSA) are necessary to perform
the job successfully.
• Job analysis provides both types of information. Specifically, job
analysis is the process of systematically obtaining information about
jobs by determining the duties, tasks, or activities of jobs, from which
KSA can be estimated.
• From this analysis, job descriptions can be developed.
Job descriptions
• Job descriptions define the working contract between the employee
and the organization.
• Job descriptions uses include:
1. evidence for any litigation involving unfair discrimination in hiring,
promoting, or terminating employees;
2. development of all the HRM programs, especially talent management in
organizations, and other important HRM programs including recruitment,
selection, training, and performance appraisal;
3. development of compensation structures;
4. employee disciplinary programs and union grievances.
• In fact, job descriptions are often termed the “heart” of the HRM
system.
Approaches and Techniques
Job analysis involves the following phases or considerations:
1. Identify the sources of information about the job. The best sources are usually
job incumbents and their supervisors; however, professional job analysts can
be used for newly created or complex jobs.
2. Identify the types of job information needed. This information can include
tasks, duties, responsibilities, the knowledge required, performance standards,
job context, and the equipment used.
3. Determine the appropriate methods of collecting the job data. Techniques
include interviews, questionnaires, observation, and focus groups.
4. Consider using one or more of the standardized techniques for conducting
job analysis to enhance the final job description, for example, functional job
analysis, the position analysis questionnaire (PAQ), task inventory analysis, or
the critical incident method.
Job Analysis Template
Date: Department:

Prepared By: Title:

Job Title: Reports To:

Education/Experience Required:

Goals/Objectives of Position:

Knowledge/Skills Required:

Physical Requirements:

Special Problems/Hazards:
HRIS Applications
• The utilization of technology, including Web-based job analysis tools, has
increased the availability of information supporting job analysis, reduced
costs of collecting information, and enhanced convenience of collecting
and analyzing information.
• Completing job analyses and deriving job descriptions can be accomplished
through online survey techniques.
• Job analysis questionnaires can be administered online to job incumbents
and supervisors, and the resulting job descriptions can be analyzed
statistically to finalize job descriptions.
• This online questionnaire capability can be part of an integrated HRIS
software package covering multiple programs (e.g., SAP, PeopleSoft) or
purchased as stand-alone software.
The HRIS Environment and Other Aspects of HR
Administration
• Information technology facilitates administration in multiple ways.
• First, an HRIS can help improve data accuracy by
• reducing the need for multiple inputs,
• eliminating redundancies in data,
• reducing the opportunity for human input errors and associated corrections.
• In addition, an HRIS, through relational databases, speeds the process of
building reports with simple query capabilities.
• Moreover, an HRIS, if properly designed for flexibility, can support differences in
reporting mandated by global governmental jurisdictions.
• Finally, a properly designed HRIS permits secure global distribution of data
while providing the desired privacy for employee data, facilitating consideration
of alternative methods of consolidating, and improving services to internal
customers
HRM Administration and Organizing
Approaches
• Modern HR professionals use technology to more effectively support
administrative activities and reduce organizational costs while
improving data accuracy, employee productivity, and customer
service.
• Global companies reported that, even with challenging economic
conditions, they anticipated growing their technology commitment
for strategic human capital talent management, as well as for
workforce management, service delivery, and business intelligence.
Service-Oriented Architecture and
eXtensible
Markup Language
• Service-oriented architecture (SOA) “is a paradigm for organizing and
utilizing distributed [computing] capabilities that may be under the
control of different ownership domains . . . providing a uniform means to
offer, discover, interact with, and use capabilities to produce desired
[business] effects”.
• It is focused on providing overall service that is well defined, self-
contained, and context and platform independent; in other words, it is
focused on adding value to the organization’s business purpose rather
than simply adding technological value.
• In effect, SOA is a collection of internal and external services that can
communicate with each other by point-to-point data exchange or through
coordination among different services to achieve a business purpose.
SOA Business Modeling Process
The architectural benefits of SOA include:
• IT consolidation opportunities and standards-based integration, using
a standards-based approach to integration for IT systems that are very
complex and heterogeneous to reduce both cost and complexity over
time;
• faster implementation and change management through reuse,
modeling, and composite development; and
• improved alignment of business processes and IT implementation.
The four HR administrative approaches
• The self-service portal is an electronic access point to an organization’s
HRM information, such as company policies, benefits schedules, an
individual’s payroll data, or other records; access may be via the
organization’s computers and intranet or remotely from other locations via
the Internet.
• A shared-service center (SSC) is a technology-enabled HRM group focused
on value creation by providing excellent service to internal customers while
reducing costs through increased efficiency and continuous improvement.
• Human resources outsourcing (HRO) is the practice of contracting with
vendors to perform HR services and activities.
• Offshoring is an extension of outsourcing that involves contracting with
vendors outside a nation’s boundaries to effect additional cost savings or
gain other benefits over domestic outsourcing alone.
Theory and HR Administration
• The first theory that explains alternative approaches to HR administration is the
resource-based view of the firm (Barney, 1991, 2001).
• The resource-based view of organizations, argued that organizations are bundles of
resources, identified as physical capital, organizational capital, and human capital.
Physical capital includes an organization’s technology, geographic locations, physical
assets (e.g., plants, money), and access to raw material.
• Organizational capital includes its formal reporting structure; its coordinating,
planning, and organizing systems; and its internal and external group relationships.
• Human capital includes the experience, capabilities, relationships, and insights of
individual employees.
• Taken together, these resources are combined and managed to determine an
organization’s opportunity to win sustainable competitive advantage in the
marketplace.
• A second theory that explains alternative approaches to HR
administration is transaction cost theory (Coase, 1937; Williamson,
1975).
• Transaction cost theory suggests that organizations can choose to
purchase the goods and services they need in the competitive
marketplace or make those goods and services internally.
• Transaction costs are the expenses associated with an economic
transaction, whether internal or external.
Self-Service Portals and HRIS
• Employee self-service (ESS) HR portals, provides an electronic means
for a company’s employees to access its HR services and information.
• Such portals provide a single sign-on capability for employees, who
can individually complete transactions for their personal data.
• ESS portals can range from simple intranet websites that allow
employees to access static HR policies, such as safety requirements,
to sophisticated Internet websites that allow employees to access and
change their individual records.
EMPLOYEE SELF SERVICE FUNCTIONALITY
Advantages of Self-Service Portals for HR
Administration
• Improved speed and quality of service to employees and managers
• Simplified routine inquiries and changes.
• Reducing the number of inquiry transactions requiring direct HR staff
involvement helps keep information current.
• Self-service portals also enhance employee satisfaction by permitting
employees to control when and where such access activities occur, empowering
employees, increasing their productivity, especially for those who travel
frequently, and offering privacy for those who prefer to handle such matters
without the presence of coworkers.
• Selfservice portals facilitate easy, increased access to HR information, helping
employees ensure that important personal data (such as individual job
performance appraisals used by managers in making decisions about salary
increases, promotions, or other employment rewards) are accurate and current.
Disadvantages of Self-Service Portals for
HR
Administration
• Permitting employees to access company data through self-service
portals may increase the possibility of security breaches and the
associated negative outcomes, like identity theft, for affected
employees.
• Employees are concerned that even having their data in a company’s
HRIS can lead to misuse of such information by others in the
organization and may feel their privacy is invaded when organizations
fail to limit access to personal data housed in HRIS.
• In addition to security issues, HR administrators may find that unions
and managers resist using the self-service portals.
Shared-Service Centers and HRIS
• Powell (2004, p. 6) identified the following common elements of SSCs:
• Centralizing or decentralizing of business processes
• Using economies of scale to reduce unit costs
• Developing customer relationship models to better meet the needs of
customers
• Concentrating on cost reduction to enhance competitive positioning
• Deploying quality tools to ensure continuous process improvement
Advantages of Shared-Service Centers for
HR
Administration
• Advantages of SSCs for HR administration:
• permitting HR administration managers to focus on delivering the timely, high-quality
transactions necessary to fulfill corporate requirements, such as mandated governmental
reporting,
• removing the artificial barriers inherent in the generalist-specialist continuum common in
HR organizations, smoothing work and communication processes.
• SSCs also encourage the efficiency and standardization necessary to support
strategic cost-control goals by consolidating individuals responsible for
transactions, providing organizations with greater motivation to redesign
procedures and create more effective ones.
• Finally, such centers facilitate development of the measures of efficiency, quality,
and customer responsiveness that are necessary to demonstrate appropriate
contributions to strategic goals.
Disadvantages of Shared-Service Centers for HR
Managers
• Creating SSCs may lead to unanticipated power shifts in organizations.
For example, combining financial and HR transactions in a single center
may lead to reduced emphasis on HR transactions since business
managers are especially concerned with the budget reporting
associated with financial transactions.
• SSCs can lead to depersonalization. For example, line managers,
accustomed to personal contact with HR professionals, may feel
isolated when handling transactions through self-service portals.
• Similarly, they may feel abandoned when traditional communication
patterns are disrupted because specialists have been consolidated in
SSCs.
Outsourcing and HRIS
• Outsourcing, is the practice of contracting with vendors to perform
one or more HR services and activities.
• Outsourcing contracts should include specific pricing agreements
(e.g., flat or fixed fee per process or per employee served, unit prices
per transaction levels, hourly and overtime rates, revenue sharing,
risk-reward sharing, failure penalties), expected performance and
associated measures (e.g., transaction quality standards, error rates,
system availability and downtime, customer satisfaction levels, hours
of operation), and terms and conditions (e.g., start and end dates,
extensions permitted, termination agreements, dispute resolution
procedures, audit procedures).
Reasons to Pursue HR Outsourcing
• Even organizations with large, effective recruiting staffs may elect to
outsource executive or specialty recruitment functions (e.g., recruiting for
multilingual positions) to external search firms that have unique expertise.
• Similarly, organizations may outsource only annual benefits enrollment,
flexible spending accounts (FSA) administration, or payroll administration.
• The outsourcing of discrete HR functions is attractive for two reasons.
• First, discrete HRO can achieve cost savings by eliminating the company’s need to
hire highly specialized HR professionals (e.g., executive recruiters) or those with the
HRIS expertise necessary to perform infrequent functions (e.g., FSA administration).
• discrete HRO can reduce the HR administration costs associated with frequent, high-
volume transactions such as payroll.
Advantages of HR Outsourcing
• The advantages of HR administration outsourcing can be both
financial and strategic.
• Organizations seeking to increase financial profitability and enhance
shareowner value might employ HRO to reduce ongoing expenses for
employees and software, forestalling capital expenditures for new
buildings and equipment.
• The strategic advantages of HRO might include the ability of the
organization to better focus on its core business by transforming the
HR function.
• By outsourcing the simpler, transaction-based function, the HR
department can move from its historical focus on administrative
activities to a new position as strategic business partner.
Disadvantages of HR Outsourcing
• One big disadvantage of HRO is the likelihood that the organization
will not achieve its strategic goals.
• Another disadvantage of HRO includes the loss of institutional
expertise in the outsourced functions, making an HRO decision
reversal difficult or impossible.
Offshoring and HRIS
• Technological capabilities and global competition have combined to
make HRO a global business, and offshoring for MNEs is quite
complex.
• Offshore ownership may include opening a new subsidiary in the
foreign country, entering into a joint venture with an existing firm in
that country, or purchasing an existing firm.
• By comparison, offshore outsourcing is a traditional contractual
relationship with an existing firm.
HR Strategic Goal Achievement and the Balanced
Scorecard
• A balanced scorecard is both a management and a measurement
system that “enables organizations to clarify their vision and strategy
and translate them into action, . . . [providing] feedback around both
the internal business processes and external outcomes to continuously
improve strategic performance and results”.
• Kaplan and Norton (1996) define the four components of the balanced
scorecard as financial, customer, internal business processes, and
learning and growth.
• Inclusion of these components represents an organization’s
commitment to balancing its strategic goals and reflects the
expectations of its multiple stakeholders.
Balanced Scorecard Components
HRM and the Balanced Scorecard
• HR professionals understand the impact effective human capital
management has on an organization.
• However, unless measures to reflect the value-added nature of HRM
in leveraging human capital are developed and linked to the strategic
goals reflected in a firm’s balanced scorecard, it is unlikely that
organizations will view such HRM-linked activities as strategic.
HR Scorecard, Its Measures, and Its
Alignment
With the Organization’s Balanced
Scorecard
• HR professionals want to identify the processes and measures that support the
strategic goal of customer retention.
• The steps they might take are as follows:
1. Specify the business strategy to be supported (e.g., customer retention).
2. Identify leading (e.g., on-time order delivery) and lagging (e.g., customer satisfaction
level) indicators.
3. Identify associated internal processes (e.g., worker productivity, product quality).
4. Identify HR linkages (e.g., training, rewards).
5. Specify the HR strategy (e.g., offer enhanced productivity training for workers to reduce
product time to market and ensure on-time order delivery).
6. Measure worker productivity increase, on-time deliveries, and reduction in customer
complaints to demonstrate the strategic value of HR training in the “Customer” and
“Learning and Growth” balanced scorecard categories.
Sample HR Scorecard Measures Linked to a Firm’s Balanced Scorecard