Human Resource Development Systems

Ever since the organisations had been involved in some activity, the human being working there  as employees are continued to be considered as valued assets. This is the reason for relevance of  human resource management just like any other resource management. Organisational effectiveness and efficiency, growth of business, sustenance of competitive advantage can be attributed to  the development of an appropriate corporate culture within an organisation by integrating business and human resource strategies. HRD management emphasizes on optimum utilization of human resources by formulating consistent and coherent policies aimed at promoting commitment to the organisation. This commitment of employees yield optimum level of efficiency from them and unleash a wave of creativity in the midst of the working environment which is less compliant and most confident of the human resource.

Traditionally, information systems for HRD had been  restricted to personnel management systems whose purview include recruitment, placement, training and development, compensation and maintenance. Human resource development systems have extended these personnel systems to incorporate ties of  these traditional functions with other major systems of organisation viz. marketing, finance, production  and inventory control. Justification of above incorporation lies in the fact that human resource is a  common element in all the existing subsystems within an organisation.  Having understood the  importance of Human Resource Development Systems in an organisation it is not too difficult to perceive that Human Resource Development Systems should have involvement of top level management in persistent human resource planning. This planning is imperative to boost quality of people the company needs in present and future scenario linked with productivity plans.

Human Resource Planning Systems (HRPS)

Human resource planning is governed by the demand and supply forecasting techniques to identify the current and the future human resource requirements of an organisation.  Demand forecasting is an estimation of future requirements in human resources in number and  quality.  Generally, the basis of the forecast is the annual budget that is translated  into activity levels  for various management functions. The popular techniques used in demand forecasting are work analysis and ratio analysis.  Work analysis initiates with the information on estimated saleable products or budgeted volumes of output for individual departments. This information is drawn from the  project budget or the annual corporate budget. On the basis of the above information the productive  hours  are compiled in a project. The productive hours yield information on estimation of direct  labor requirement or number of permanent employees. For example, suppose in a manufacturing  company the planned output for a year is 60000 units. Standard working hours for a unit output are  15 hours. Then planned hours for work in a year are 60000x 15= 9,00,000 hours. Let the productive  hours per worker in a year be estimated as 4000 hours. Then the number of direct labor involved  in production is estimated as 900,000/4000=225. Thus, activity level forecast is used to determine the  direct labor requirements. Ratio trend analysis is accomplished by employing past ratios, say,  the  number of direct and indirect workers in similar projects. In this analysis considerations on changing methodology of management style and past experience is also taken as a factor.  Further cost benefit analysis combined with ratio trend analysis yield the estimation of indirect labor requirement of non permanent employees or consultants sourced from outside the organisation. Supply forecasting estimates the number of people that shall be available from within and outside the organisation taking into consideration estimated absenteeism, wastage of time or other internal and external environmental factors.

Human Resource Information Systems (HRIS)

Since the scope of human resource management continues to transcend the trivial personnel managerial functions it would be appropriate to discuss the HRD information systems classified as typical personnel management information systems and human resource management information systems.

Personnel Management Information Systems (PMIS)

PMIS are traditional operational management based systems that undertake the data processing of  routine personnel activities such as payroll and employee personnel data constituting address, marital status, rank, department, employment histories, vacation, leave records, qualifications, skills, special assignments, training  undertaken, increment or promotion with due date, performance grade, etc.

The importance of PMIS cannot be undermined considering the volume and intricacy of payroll data processing and wide scope/ variations in general reports required for day to day personnel  management. Computer based payroll systems  generally run on batch processing mode. A batch run is used to generate payslips and  print cheques by processing the whole of data needed for the purpose, periodically. The payroll system works on the salary structure of the employee, his leave records and generates gross pay of employee by making appropriate deductions, adjustments or additions on account of loans, tax, insurance, provident fund, superannuation fund, conveyance, overtime or any other relevant data. This data is generally available in different files of payroll database system and is linked with a key field known as employee code. Besides payroll, PMIS constitutes integrated operational information system  that contains all activity based and remuneration based information pertaining to the employee such as leave record, performance grading, perks and allowances entitlement, other confidential reports, appointment letter documents, etc.

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Human Resource Management Information Systems (HRMIS)

Consideration based on an employee as a resource ordains human resource planning by the HRD management in consultation with the top management. HRMIS are primarily based on the requirements of human resource planning.  The scope of HR management includes work design, recruiting, performance analysis, reward and motivation plan, work evaluation, salary structure design, employees’ skill analysis and systematic training. The work design includes decisions on the content of a particular job in an organisation in terms of techniques, systems and procedures.  There is a need to maintain data on particulars of the jobs, duties, responsibilities and interrelationships of  the tasks force and the skills. A typical information system that has gained importance may be referred to as skill inventory information system or human resource assessment bank. The objective of such information system is to identify the talent resources of the organisation to optimise its effective use. This information system includes a computer simulation work force model. The simulation technique is used to evaluate alternative human resource plans such as new recruitment, transferring, retraining, project feasibility, etc., under various human resource management approaches.

Another significant human resource information system is salary control information system. The salary control information system ensures that the salary policies of the company are implemented in such a way that the salary costs remain within a limit of the human resource budget. The human resource budget is a product of number of employees to be recruited or maintained and the rates at which they are to be paid over a budget year. The genesis of the human resource budget is based upon the salary surveys in the industry, human resource plans, present salary levels and the forecasts of additional costs arising from general and individual salary reviews. This budget relies upon the current business held by the company and the forecast of the additional business projected to be garnered by the company by the diversification or the marketing plans. The salary control information system provides a system of salary audit. The salary audit ensures that the salary levels are in direct correlation with the ever fluctuating market rates in the industry. The external data from the industry is required to be compared with the internal data of the salary structure within the company. A salary control ratio suggesting how far the average salary for a grade in an organisation vary from the industry average may be calculated. For example, if (Average of all salaries in a grade)/(Average salary of the industry for the same grade) is equal to 1 then the distribution of the salary may be considered on target. Otherwise, if this ratio is less than or greater than 1 then such case ordains a proper study to justify or correct such variation. The appropriate differential without much discrimination ought to be maintained between the new staff and the old staff. The salary progression  policy has to be formulated such that unjustifiable upgradation  in the salary or the position of a particular segment of staff or individual may not erode the motivation of the majority of the staff. The other decisional aspect that salary control system is supposed to inspect is the phenomenon  known as salary attrition. Salary attrition occurs as the number of new recruits join at a lower salary than the number of old staff leave the company so that the salary costs over a period are maintained at a budgetary level subject to overall regular increments. The attrition measurement in terms of retaining merit in relation to a salary financing system is a high level decisional area. The salary control information systems should be designed to assist decision making in the forecast of future expenditure on salary and access  the actual costs incurred by the company on account of attrition.

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Scope and Trends in Human Resource Management Information Systems

The ultimate aim of human resource management is manifold. Most significant aspect of HRM is the management development in particular, improving upon all round skills of the staff and motivating them for optimum performance in general. The information systems are needed to build to assess the performance of each employee in relation with their key objectives and responsibilities. Most information systems for human resource management provide a system of organisation review, human resource review, performance appraisals, management skill inventory and training schedules. These are the important decisional support systems that most of the top line managers rely upon for strategic planning and tactical and operational control.

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