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 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) 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)
I. Theoretical Background
The work of Wolfgang Mayrhofer (2004) states that social systems theory “as developed by Niklas Luhmann is an option for the theoretical foundation of Human Resource Management (HRM). After clarifying the advantages of using a grand (social) theory as the basic theoretical perspective, the roots of this social systems theory – the deterministic view of systems as machines, the open systems approach and non-linear systems theory – are addressed.” Upon the basis of the view of social systems as “autopoietically closed systems” Mayrhofer states that there are five primary contributions to a theoretical foundation of HRM identified and that those are as follows: “(1) the conceptualization of organizing and managing human resources as social processes, thus overcoming an individualistic angle; (2) the new importance of individuals as essential element in the system’s environment; (3) the abstention form far reaching or highly unrealistic assumptions about the ‘nature’ of human beings; (4) the interaction between various levels and units of analysis built into the theory which is essential for comprehensive and in-depth analyses of HR phenomena and (5) the openness for additional theories for which social systems theory provides the overall framework.” (Mayrhofer, 2004)
According to Mayrhofer, grand theories when borrowed from theoretically offer a clearer view of HR phenomena. HRM has its roots historically in tools and practices and has had to derive its theoretical foundation from other sciences. The HRM discussion is stated by Mayrhofer to be enriched by social systems theory and it is stated that this approach not only “contributes to the integration of HR research organizational theory discussion. This not only helps HR theory, but also strengthens the theoretical link to the general organizational theory debate, thus underscoring the vital role HR plays in an overall view of organizations.” (2004) Viewing HRM from the unified theoretical perspective enables the discussion concerning the various aspects of HR within a single theoretical language” and as well resulting is that novel methods of reconstruction and sense-making of HRM phenomena may be developed since the “categories of this framework can be used to reconstruct organizational reality in a different way than using classic organizational and HR theory categories.” (Mayrhofer, 2004)
Mayrhofer (2004) states as follows:
“A grand theory helps building practical decisions on sound assumptions about crucial elements within the myriad of practical elements that practitioners face. In addition, it allows practitioners more than an educated guess about the outcome of practical decisions since such theories at least roughly outline the link between crucial elements (‘variables. Beyond that, such grand theories offer a basic view of organizational reality.” (Mayrhofer, 2004)
The work of Mayfield, Mayfield and Lunce (2003) reports the development of a Human Resource Information Systems functions model, which is based upon general systems theory, academic research that is relevant, and observations of the practitioner. The model is stated to “underscore the “role of HRIS as the operational link between strategic organizational vision and human resources implementations.” Mayfield, Mayfield and Lunce relate that scholars in the field of management declare that “enhanced theoretical rigor is necessary to bridge the gap between research and practice.” (2003) Stated is that the response in the reported research is such that the model of Mayfield, Mayfield and Lunce (2003) has been drawn “from over a decade of HRIS studies, organizational learning and general systems theory of human resources developmental research, and other relevant work in organizational behavior and information systems literature.” It is stated that the models serves to “underscore the role of HRIS as the operational link between strategic organizational vision and human resources implementations.”
Human resources operations create organizational challenges that are of a dual nature but have outcomes that are interdependent. Mayfield, Mayfield and Lunce state:
“One summons organizational change that may be perceived as a threat to the status quo, while the other set of outcomes gives highly valuable potential benefits for organizational performance. This paradox stems from the requirement for U.S. businesses to improve productivity from their skilled workers in order to satisfy the demand shift from manufacturing to technological and intellectual innovations. This transformation means that both organizational productivity gains and competitive advantage depend on high quality worker competence. In other words, increasing productivity through people is now paramount. Consequently, essential human resource functions have recently become even more critical to general organizational well-being.” (Mayfield, Mayfield and Lunce, 2003)
It is reported that many organizations are using information systems technology to achieve these objectives, which are reported to be of a complex nature. (Mayfield, Mayfield and Lunce, 2003, paraphrased) HRIS functions that are successful are reported to provide key process support in the areas of: (1) executive decision-making; (2) employee training; (3) technology selection; (4) interdepartmental integration; and (5) organizational reporting structures.” (Mayfield, Mayfield and Lunce, 2003) It is the assumption of knowledge management that “knowledge and its complement, learning, are the forces that optimize organizational performance.” (Mayfield, Mayfield, and Lunch, 2003) Organizational knowledge is such that can be observed in intellectual capital comprised of ‘hard’ and ‘soft’ assets which are two clearly distinct categories while simultaneously being interdependent. (Mayfield, Mayfield and Lunce, 2003)
Mayfield, Mayfield and Lunce (2003) report that ‘hard’ intellectual capital assets are such as “legal documents, software and databases. Soft capital assets are of the nature of “people-centered organizational strengths including skills, expertise, culture and commitment.” These two categories are of the nature that can effectively integrate with well-designed HRIS. HRIS are stated to “make vital contributions to knowledge management by advancing organizational learning.” (Mayfield, Mayfield, and Lunce, 2003 Knowledge management is inclusive of training and which is delivered “in both cost- and time — effective ways with an HRIS.” (Mayfield, Mayfield and Lunce, 2003) HRIS further provides the necessary support for the introduction of ‘systems thinking’ in the organization. According to Weick (1979) and Wilkerson & Paul (1985) systems theory “also draws the boundaries for any given system along with definitional criteria that are especially important for preliminary research. In addition, researchers rely on systems theory to develop hypotheses about which units are required for a properly functioning system, how those units should interact, their strength of influence on overall system effectiveness and how to optimize unit interactions towards realization of strategic objectives.” (Mayfield, Mayfield, and Lunch, 2003)
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 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 datacan 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.
8. Mayrhofer, Wolfgang (2004) Social Systems Theory as Theoretical Framework for Human Resource Management – Benediction or Curse? Management Revue. 1 Jan 2004. Retrieved from: www.SuccessFactors.com/Performance. – This work examines social systems theory as it pertains to HRM.
9. Choosing A HRIS? (nd) Dresser and Associates. Retrieved from: http://web.inter.nl.net/users/houtzagers/paginas/Papers/HRIS2SV6.pdf.pdf – This work examines the needs for implementation of HRIS and the goals in increments over the three years following implementation of HRIS by the organization.
10. Kong, Eric and Thomson, S. Bruce (2009) An Intellectual capital perspective of and Practices. Knowledge Management Research and Practice 8. Dec 2009. Retrieved from: http://www.palgrave-journals.com/kmrp/journal/v7/n4/full/kmrp200927a.html – This work examines the relationships between intellectual capital and human resource management.
11. Foss, N.J. And Mahoney, J.T. ( ) Exploring Knowledge Governance. Illinois University. Retrieved from: http://www.business.illinois.edu/Working_Papers/papers/10-0101.pdf – This work reports that knowledge governance is characterized as a distinctive research subject, the understanding of which cuts across diverse fields in management.”
12. 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 3:4 2008. Retrieved from: http://www.waset.org/journals/ijhss/v3/v3-4-35.pdf – This work investigates the correspondence of theory and practice, a successfully implemented Knowledge Management System (KMS) is also examined.
