HRM Module-1

Human resource management (HRM)

Definition:

Human resource management (HRM) is the practice of recruiting, hiring, deploying and
managing an organization's employees.

According to Armstrong (1997), Human Resource Management can be defined as “a

strategic approach to acquiring, developing, managing, motivating and gaining the commitment
of the organisation’s key resource – the people who work in and for it.”

HRM is often referred to simply as human resources (HR). A company or organization's

HR department is usually responsible for creating, putting into effect and overseeing
policies governing workers and the relationship of the organization with its employees.

Functions of HRM:

Human Resource Management functions can be classified in following three categories.

● Managerial Functions,
● Operative Functions, and
● Advisory Functions

The Managerial Functions of Human Resource Management are as follows:

1. Human Resource Planning - In this function of HRM, the number and type of
employees needed to accomplish organizational goals is determined. Research is an
important part of this function, information is collected and analyzed to identify current
and future human resource needs and to forecast changing values, attitude, and
behaviour of employees and their impact on organization.

2. Organizing - In an organization tasks are allocated among its members, relationships

are identified, and activities are integrated towards a common objective. Relationships
are established among the employees so that they can collectively contribute to the
attainment of organization goal.

3. Directing - Activating employees at different level and making them contribute

maximum to the organization is possible through proper direction and motivation.
Taping the maximum potentialities of the employees is possible through motivation and
command.

4. Controlling - After planning, organizing, and directing, the actual performance of

employees is checked, verified, and compared with the plans. If the actual performance
is found deviated from the plan, control measures are required to be taken.

The Operative Functions of Human Resource Management are as follows:

1. Recruitment and Selection - Recruitment of candidates is the function preceding the

selection, which brings the pool of prospective candidates for the organization so that the
management can select the right candidate from this pool.

2. Job Analysis and Design - Job analysis is the process of describing the nature of a job
and specifying the human requirements like qualification, skills, and work experience to
perform that job. Job design aims at outlining and organizing tasks, duties, and
responsibilities into a single unit of work for the achievement of certain objectives.

3. Performance Appraisal - Human resource professionals are required to perform this

function to ensure that the performance of employee is at acceptable level.

4. Training and Development - This function of human resource management helps the
employees to acquire skills and knowledge to perform their jobs effectively. Training an
development programs are organized for both new and existing employees. Employees
are prepared for higher level responsibilities through training and development.

5. Wage and Salary Administration - Human resource management determines what is

to be paid for different type of jobs. Human resource management decides employees
compensation which includes - wage administration, salary administration, incentives,
bonuses, fringe benefits, and etc,.

6. Employee Welfare - This function refers to various services, benefits, and facilities that
are provided to employees for their well being.

7. Maintenance - Human resource is considered as asset for the organization. Employee

turnover is not considered good for the organization. Human resource management
always try to keep their best performing employees with the organization.

8. Labour Relations - This function refers to the interaction of human resource

management with employees who are represented by a trade union. Employees comes
together and forms an union to obtain more voice in decisions affecting wage, benefits,
working condition, etc,.
9. Personnel Research - Personnel researches are done by human resource management
to gather employees' opinions on wages and salaries, promotions, working conditions,
welfare activities, leadership, etc,. Such researches helps in understanding employees
satisfaction, employees turnover, employee termination, etc,.

10. Personnel Record - This function involves recording, maintaining, and retrieving
employee related information like - application forms, employment history, working
hours, earnings, employee absents and presents, employee turnover and other other data
related to employees.

Roles of HR Manager:
Competencies of HR Managers:

HR managers must have four primary competencies: communication, analysis

capabilities, relationship-building skills and leadership qualities.

1. Communication

An HR manager must be able to communicate with everyone in the workplace -- from

line staff to executive leadership. In addition, communication skills are important for HR
managers to interact effectively with outsourcing providers, union leaders, public
officials and employees, prospective employees and colleagues. They need to know when
to adapt their communication skills to the audience and the situation. For example, HR
managers must be able to convey the importance of fair employment practices to the
company's executive team with the same genuineness and passion as they would to
hourly employees.

2. Analytical and Critical Thinking

Analytical and critical thinking skills are a must for HR leaders. An HR manager has to
exercise sound judgment and engage in high-impact decision-making in a number of
areas. The ability to analyze situations and view the implications of certain decisions from
a critical perspective is particularly useful for HR leaders. For example, the decision
whether to outsource one or several HR functions isn't something that happens without
considering the impact outsourcing has on individual employees as well as the
organization overall. HR managers also are involved in representing the company in
matters involving employment litigation, which requires that they be able to justify the
company's actions related to employment decisions such as hiring and firing.

3. Relationship-Building

Creating a cohesive HR department that works collaboratively to achieve the goals of the
department as well as help the organization reach its goals related to workforce
development is a competency that HR managers must have. Relationship-building and
interpersonal relationship skills are fundamental to an HR manager's success. One of the
challenges HR faces is establishing credibility with employees -- many employees equate
their HR departments with the school principal's office, which suggests a level of
intimidation and trepidation associated with their view of HR's purpose. That being said,
an HR manager must have the ability to establish credibility and trust as well as balance
the obligation to be an advocate for both the organization and its employees.

4. Leadership

Leadership skills are an essential competency for HR managers. HR managers are

responsible for creating strategic plans for the HR department as well as the overall
workforce. Therefore, leadership skills are critical, particularly in the process of justifying
the functional elements of a strategic plan to the company's management team. In
addition, HR managers have to direct the activities of the HR department, and in doing
so, they need the type of leadership skills that influence HR generalists' and HR
specialists' commitment to the HR department goals.

HR POLICES:

Human resource policies are continuing guidelines on the approach of which an

organization intends to adopt in managing its people.

They represent specific guidelines to HR managers on various matters concerning

employment and state the intent of the organization on different aspects of Human
Resource management such as recruitment, promotion, compensation, training,
selections etc. They therefore serve as a reference point when human resources
management practices are being developed or when decisions are being made about an
organization's workforce.
A good HR policy provides generalized guidance on the approach adopted by the
organization, and therefore its employees, concerning various aspects of employment. A
procedure spells out precisely what action should be taken in line with the policies.

Why Policies are Important?

There are several Policies that serve important functions:

● Communicate expectations and values to employees of the organization.

● Protect the organization from all legal employment claims
● Document all the policies and make sure they are implemented in the organization
● Being unbiased, fair and transparent towards employees
● Helping the organization in decision making
● Protect employees and the organization from all type of expediency pressures

Areas where policies are commonly established:

1. Code of Conduct
2. Confidentiality
3. Conflict of Interest
4. Compensation
5. Overtime
6. Working conditions
7. Attendance
8. Hours of Operations
9. Termination
10. Recruitment
11. Privacy
12. Employee Information
13. Bereavement Leave
14. Compassionate Leave
15. Vacation
16. Sick Leave
17. Maternity, Parental, and Adoption Leave
18. Unpaid Leave
19. Performance Management
20. Discrimination and Harassment
21. Health and Safety
22. Accident Reporting
 23. Family Leave
24. Short Term Disability, Long Term Disability
25. Grievance/Conflict Resolution
26. Learning and development
27. Benefits and Eligibility
28. Jury Duty
29. Formal complaint process
30. Disciplinary
31. Workplace Violence
32. Alcohol and Drug Use Policy
33. Use of Company Equipment

Types of Human Resource Policies

There are two different parts of human resource (hr) policies, first half of the human
resource policies and procedures are formulated on the basis of their source and second
half of the human resource policies are provided on the basis of their description. And
detailed information about these Human resource policies and procedures are stated
below.

On the basis of source:

In this source-based human resource policies the actual activities in which all the
employment policies are generated mainly rely upon their managers and employees
working needs and wants. Moreover, this reliance can be classified in different terms of
words and they are as follows.

1. Originated policy:

The actual nature of working in relation to the originated policy is handled and
established by the senior manager so that the senior manager can understand all the
necessary requirements of the employees.

Moreover, these senior managers provide these guidelines to their subordinates to

improve and develop their professional career. Therefore, it is necessary to understand
the originated policies for the empowerment of the employees of the company.

2. Implicit policy:

With the help of these policies, the managers can express their intention in favour of the
company. First of all the actual importance of these implicit policies are implied because
of the nature and behaviour of the managers.
And that is why these implicit policies are also called and recognized by the name of
implied policies of the company. It is quite clear that these implicit policies are recognized
by the managers of the company.

Therefore, it is necessary to understand that these policies are made in favour of the
manager’s requirement.

3. Imposed policies:

The nature of working in the company doesn’t include only the management of the
company. Moreover, as a matter of fact, the organizational structure of the company even
depends upon the governmental agencies of the company.

The human resource policies and procedures of the company will also provide with the
provision that, part of the policy of the company can be governed and favoured by the
governmental agencies or trade unions.

It is one of the policies which is made for the development of the staff and workers value
in the company.

4. Appealed policy:

It is not an actual policy, as its name suggests it is such kind of policies which are
requested by the managers of the company, so the management of the human resource
policy will consider looking into a certain situation which is not included in all the above-
mentioned policies.

The appealed policies can be generated by the managers and employees of the company,
but the final decision of that appeal, whether it is accepted or rejected can be decided by
the human resource management of the company.

On the basis of the description:

The human resource policies and procedures of the company are made for the advantage
and benefit of the company employees and their employment. And the nature of the
working of the human resource policy which is made on the basis of its description can
be derived on behalf of the company development.

1. General policy:

It is one of the policies which is based on the description of its working. The human
resource policy based on their description established some of the general policies. These
general policies are completely different from the rest of the policies generated from the
human resource management of the company.
As these general policies don’t belong to any particular issues of the company, and that
is why it is named as the general policy of the company.

2. Specific policy:

As its name suggests, the specific policies are those types of policies in an organisation
which is related to specific issues of the company such as staffing, recruitment and salary-
related issues. Therefore, these specific policies are designed to undertake those specific
issues of the company.

DIFFERENCE BETWEEN HRM AND HRD

Human Resource Management (HRM) is a branch of management; that is concerned with
making best possible use of the enterprise’s human resources, by providing better
working conditions, to the employees. It involves those activities that arrange and
coordinates the human resources of an entity. Further, it aims at maintaining good
relations at various levels of management.

On the other extreme, Human Resource Development (HRD) is a wing of HRM that keeps
focusing on the growth and development part of the organisation’s manpower. There are
many people, to whom HRM and HRD convey the same meaning, but this is not true.
We have compiled an article here, to make you understand the differences between HRM
and HRD. Have a look.

Comparison Chart

Basis for
HRM HRD
Comparison

Human Resource Management Human Resource Development means

refers to the application of a continuous development function
Meaning principles of management to that intends to improve the
manage the people working in the performance of people working in the
organization. organization.

Subset of Human Resource

What is it? Management function.
Management.

Function Reactive Proactive

 To improve the performance of the To develop the skills, knowledge and
Objective
employees. competency of employees.

Process Routine Ongoing

Dependency Independent It is a subsystem.

Concerned Development of the entire

People only
with organization.

Emerging challenges of HRM:

1. Managing Workforce Diversity:

An important challenge that human resource managers face involves workforce

diversity, i.e., the increasing heterogeneity of organisations with the inclusion of
employees from different groups such as women, physically disabled persons, retired
defence personnel, backward classes, ethnic groups, etc.

Whereas globalisation focuses on differences between personnel from different countries,

workforce diversity addresses differences among people within the same country.

For instance, more and more women have been joining the organisations in India and
women executives have also been occupying important positions at the middle and top
levels in the organisations. This in itself is a challenge for organisations as, traditionally,
the Indian society has been male dominated.

Workforce diversity has significant implications for the management. The managers will
be required to shift their approach from treating each group of workers alike to
recognizing differences among them and following such policies so as to encourage
creativity, improve productivity, reduce labour turnover and avoid any sort of
discrimination.

When workforce diversity is managed properly, there would be better communication,

better human relations and congenial work culture in the organisation.

2. Meeting Aspirations of Employees:

There has been a rise in the proportion of employees in today’s industries who belong to
the younger generations whose aspirations are different from those of the earlier
generations. Today’s workers are more careers oriented and are clear about the lifestyle
they want to lead. Considerable changes have been noted in the career orientation of the
employees.

They are becoming more aware of their higher level needs and this awareness would
intensify further among the future employees. The managers would be required to evolve
appropriate techniques to satisfy the higher level needs of the employees and develop
suitable plans for their career advancement.

3. Empowerment of Employees:

There has been a general change in the profile of workforce in industrial and other
organisations. The organisations in future will get better qualified and career oriented
young employees. The proportion of professional and technical employees will also
increase as compared to the blue collared employees.

They will seek greater degree of participation in goal setting and decision-making and
also demands greater avenues of self-fulfilment. To respond to these demands,
organisations will have to be redesigned or restructured to empower the employees so
that they have sufficient autonomy or freedom to take decisions while performing their
jobs.

Empowerment involves giving the employees more information and control over how
they perform their jobs. Various techniques of empowerment range from participation in
decision-making to the use of self-managed teams. In future, organisations will follow
team structures which will pave the way for empowerment of lower levels.

Empowerment would be all the more necessary to speed up the process of decision-
making, make use of environmental opportunities and to serve the customers and society
better.

4. Management of Human Relations:

Management of human relations in the future will be more complicated than it is today.
“Many of the new generation of employees will be more difficult to motivate than their
predecessors. This will in part be the result of a change in value system coupled with
rising educational levels. Greater skepticism concerning large organisations and less
reverence for authority figures will be more common. Unquestioning acceptance of rules
and regulations will be less likely.”

Since workforce in future will comprise better educated and self-conscious workers, they
will ask for the higher degree of participation and avenues for self- fulfilment. Moreover,
the proportion of professional and technical employees will increase in relation to blue-
collar workers. The ratios of female employees in the total workforce wall also rise.
Integration of women within managerial ranks might itself be a problem.

Money will no longer be the sole motivating force for majority of the workers. Non-
financial incentives will also play an important role in motivating the workforce. In short,
human resources will be treated as assets which will appear in the Balance Sheets of
business organisations in future.

5. Dynamic Personnel Policies and Programs:

The Human Resource Manager of tomorrow will not only look after personnel functions,
but will also be involved in human resource policies and programs for the entire
organisation. Similarly, human resource management is not merely going to be an
exclusive job of the HR Manager, but every executive in the organisation would be made
responsible for the effective management of people in his unit.

Thus, management of human resource will receive greater attention of all managers from
top to bottom. The human resource manager would play a key role in the formulation of
personnel policies, programs, plans and strategies of the organisation. Every HR program
will have to be properly planned and directed by the human resource manager in
consultation with the line and functional managers.

6. Building Responsive Organisation:

The Human Resource Manager will have to contribute tremendously to the building up
of responsive organisation. Creating adaptive customer-oriented organisation would
require soliciting employees’ commitment and self-control and encouraging
empowerment of employees.
Instead of imposing himself as the traditional boss, the future manager will have to think
of himself as a ‘team-leader’, ‘internal consultant’ and ‘change facilitator’.

7. Creating Dynamic Work-Culture:

The human resource manager will have to mobilise a new work ethic so as to assist the
top management in setting up and enforcing quality standards. Greater efforts will be
needed to achieve group cohesiveness because workers will have transient commitment
to groups.

As changing work ethic requires increasing emphasis on individuals, jobs will have to be
redesigned to provide challenge to the employees. Flexible starting and quitting times for
employees [flexitime] may become necessary. Further, focus will shift from extrinsic to
intrinsic motivation of employees.

In future, changes will have to be initiated and managed to improve organisational

effectiveness. A work culture conducive to absorption of changes in the technological,
economic, political, socio-cultural and international environment will have to be
nourished by the HR/Personnel executives if they want to acquire higher status in
industry and society.

They will also have to make top management more actively involved in the development
of human resources for meeting the challenges of environment and enhancing
organisational effectiveness.

Over the years, human resource management has emerged as a discipline in its own right
and the HR manager as a professional. Professional dynamics will enhance its prestige
and quality of service. However, its survival and success in future will depend upon the
judicious application of knowledge and skills available.

Human resource management will emerge as a well-established, well-respected and

well-rewarded profession, comparable to other established professions provided the
challenges and opportunities are successfully exploited for its advancement.

8. Building Core Competence and Creating Competitive Advantage:

The human resource manager has a great role to play in developing core competence by
the firms. A core competence is a unique and unimitable strength of an organisation
which may be in the form of human resources, marketing capability, or technological
capability. If the business is organised on the basis of core competence, it is likely to
generate competitive advantage.

Because of this reason, many organisations have restructured their business by divesting
those business activities which do not match core competence or acquiring those business
activities which fit their core competence such as Gujarat Ambuja acquiring cement
companies and Reliance Industries acquiring yam companies.

In fact, organisation of business around core competence implies leveraging the limited
resources of the firm. It needs creative, courageous and dynamic leadership having faith
in the organisation’s human resources.

In today’s globalized market piece, maintaining a competitive advantage is the foremost

goal of any business organisation. There are two important ways a business can achieve
a competitive advantage. The first is cost leadership which means the firm aims to
become the low-cost leader in the industry.

The second competitive strategy is differentiation under which the firm seeks to be
unique in the industry in terms of dimensions that are widely valued by the customers.

Putting these strategies into effect carries a heavy premium on having a highly committed
and competent workforce. Such a workforce would enable the organisation to compete
on the basis of market responsiveness, product and service quality, differentiated
products and technological innovation. Creation of competent and committed workforce
is a great challenge for the human resource manager.

8. Outsourcing HRM Functions:

These days, many organisations are outsourcing routine HRM functions so as to focus on
strategic HR issues that affect corporate performance and shareholder value. The HRM
functions which are of routine type and can be safely outsourced include recruitment,
selection, compensation, job evaluation, training, etc. Outsourcing of such functions
would enable the management pay greater attention to core business activities.

The term ‘outsourcing’ means getting some service from external service providers or
agencies rather than performing it within the organisation. This practice is called Business
Process Outsourcing (BPO). The basic feature of BPO is that companies hire out on
contract those services or tasks which fall outside the area of their ‘core competence’.
For example, a business enterprise may outsource employment of personnel, training of
personnel and payroll accounting to a specialised service provider, often called a BPO
film.

WORKFORCE DIVERSITY:

Workforce diversity is a valuable asset for any business that seeks a competitive
advantage in the global economy. Learn about the issues associated with workforce
diversity and take a quiz to test your knowledge.
Some of the key characteristics of workforce diversity include race, ethnicity, gender,
age, religion, ability, and sexual orientation. A company that embraces diversity can
broaden its skill base and become more competitive and innovative. Workforce diversity
also brings with it a number of issues and challenges.

Dimension of Workforce Diversity:

Some people dimensions of workforce diversity are described below:

(i) Age:

People belonging to different age groups cause diversity in workforce. Young people may
be enriched with health, merit, capacity for hard-work etc.; while elderly people may
possess more maturity than their junior counterparts and are full of experiences of life.

(ii) Gender:

Male workers are usually aggressive, bold and materialistic; while female workers
possess sympathy for others and are more concerned with quality of life. What is
important to observe is that people of both sex have material differences in outlook,
nature, habits etc.; as differences between males and females are the design of God who
created mankind.

(iii) Education:

In an organisation people may range from less educated to highly educated. Educated
people have a broad outlook and are open-minded. They are endowed with logic and
rationality and usually dislike discrimination among individuals on petty grounds of
caste, colour, religion etc.

(iv) Culture:
Culture is a complex of race, religion, language, social traditions and values etc. People
from different cultural backgrounds may have ethnic orientations i.e. a sense of
favoritism towards their nation, race or tribe, which they belong to.

(v) Psychology:

(Psychology is the kind of mind that one has that makes one think or behaves in a
particular way). In a organisation, there are people with different psychology. Some may
be optimistic or pessimistic; some may be bold or timid or so on. Psychology may be a
gift of Nature or a manifestation of family background or social affiliations.

Significance of Workforce Diversity Management:

Workforce diversity management is significant for the following reasons:

(i) Ability to Deal with Diverse Market:

Culturally diverse workforce can better appreciate the needs, feedings, and attitudes of
culturally diverse consumers. Thus workforce diversity increases the competence of a
corporation to deal with a market; that consists of diverse consumer groups in respect of
age, sex, culture etc.

(ii) Better Decision-Making:

People from heterogeneous backgrounds may aid management in better decision-

making, by offering suggestions from a wide range of perspectives and orientations. In
fact, heterogeneous groups of people may be more creative and innovative; when they
pool their knowledge and experiences and agree on a common solution to a tricky
problem; which might aid management in making excellent decisions for the
organisation.

(iii) Better Human Relations:

Workforce diversity management aims at developing and nurturing a common

organisational culture and climate; which enable people from diverse culture and
backgrounds to co-exist peacefully. Such a common organisational culture and climate
leads to better human relations in the enterprise and produces all-round organisational
and managerial efficiency.
(iv) Preventing Unnecessary Labour Turnover:

When in an organisation there is good workforce diversity management; women and

other dis-satisfied people are prevented from leaving the organisation. In case otherwise,
when there is large labour turnover because of poor workforce diversity management;
investment made in manpower may go waste, with other bad consequences for the
organisation. In fact, employees leave the organisation when they do not feel comfortable
and duly cared for by management.

(i) Building of Goodwill of the Enterprise:

Companies with excellent workforce diversity management build goodwill in the society.
As such, talented people of society with diverse backgrounds and culture get attracted
towards it for seeking suitable employment. Such companies never have a problem of the
scarcity of skilled, educated and talented human capital.

EMPLOYEE EMPOWERMENT:

Employee empowerment is giving employees a certain degree of autonomy and

responsibility for decision-making regarding their specific organizational tasks. It allows
decisions to be made at the lower levels of an organization where employees have a
unique view of the issues and problems facing the organization at a certain level.

Theoretical Approaches to Empowerment

Three theoretical approaches have been used to study empowerment: socio-structural

perspective, psychological approach, and the critical perspective.

The socio-structural perspective focuses its attention on developing or redesigning

organizational polices, practices, and structures to give employees power, authority, and
influence over their work.

The psychological approach focuses on enhancing and enabling personal effectiveness by

helping employees develop their sense of meaning, competency, self-determination, and
impact.
The critical perspective challenges the notion of employee empowerment and argues that
efforts to create empowerment may actually lead to more, albeit less-obvious, controls
over employees.

The Benefits of Employee Empowerment

Empowered employees are loyal, committed and potentially more productive. When
employees are given the tools and resources needed to successfully manage or lead their
own projects, work toward their goals and drive their own career, the benefits are endless.

Empowered employees are more likely to:

● Go the extra mile

● Follow best practices
● Be more productive
● Have good communication
● Embrace change
● Have a “can do” attitude
● Provide better customer service

Advantages to Employee Empowerment

Employee empowerment provides some distinct advantages. Employee empowerment

should lead to increased organizational responsiveness to issues and problems. Another
advantage of employee empowerment should be an increase in productivity. It should
also lead to a greater degree of employee commitment to organizational goals since
employees can take some degree of ownership in the decisions made toward goal
achievement.

VRS:

Voluntary retirement scheme is a method used by companies to reduce surplus staff. This
mode has come about in India as labour laws do not permit direct retrenchment of
unionized employees.

VRS is based on mutual agreement between the employer and employees, under which
an employee agrees to voluntarily separate from the organization on payment of agreed
compensation by the employer.

VRS is different from downsizing because here employee are asked to retire voluntarily
and are not laid off by force. Secondly, in VRS employees are given attractive severance
package whereas in downsizing they are not given any monetary or non-monetary
benefits.

Following are some common reasons for announcing a VRS scheme:

1. Due to recession in the business.

2. Due to reduce labour costs to cut total cost of production.

3. Due to intense competition, the establishment becomes unviable unless downsizing is

resorted to.

4. Due to joint-ventures with foreign collaborations.

5. Due to takeovers and mergers.

6. Due to obsolescence of Product/Technology.

7. Due to the need for getting rid of surplus workforce without resorting to termination
of jobs.

DOWNSIZING:

Definition: Downsizing

Downsizing refers to the process of reducing the size of workforce by terminating the
employment of employees. It is also referred as layoff.

Downsizing is the permanent reduction of a company's labor force through the

elimination of unproductive workers or divisions. Downsizing is a common
organizational practice, usually associated with economic downturns and failing
businesses. Cutting jobs is the fastest way to cut costs, and downsizing an entire store,
branch or division also frees assets for sale during corporate reorganizations.

Downsizing is common in a recessionary situation where downsizing helps to cut costs.

Some companies also layoff a percentage of low performers every year to maintain a
competitive and efficient work force.

Employees asked to exit are often compensated by paying a fixed amount or a few
months salary. Downsizing not only affects the employees who have to exit the company,
but also the remaining employees who may fear themselves to be in a similar situation at
a later time.

HRIS:

A HRIS, which is also known as a human resource information system or human resource
management system (HRMS), is basically an intersection of human resources and
information technology through HR software.

This allows HR activities and processes to occur electronically.

To put it another way, a HRIS may be viewed as a way, through software, for businesses
big and small to take care of a number of activities, including those related to human
resources, accounting, management, and payroll.

A HRIS allows a company to plan its HR costs more effectively, as well as to manage
them and control them without needing to allocate too many resources toward them.

In most situations, a HRIS will also lead to increases in efficiency when it comes to making
decisions in HR. The decisions made should also increase in quality—and as a result, the
productivity of both employees and managers should increase and become more
effective.

A Human Resources Information System (HRIS) is a software or online solution that is

used for data entry, data tracking and the data information requirements of an
organization's human resources (HR) management, payroll and bookkeeping operations.
A HRIS is usually offered as a database. HRIS is geared toward enhancing the capacity
of HR management to:

● Absorb new and promising technologies

● Simplify workflow  Optimize precision, stability and credibility of workforce
data
● Simplify the deployment and collection of data

Components of Human Resource Information Systems (HRIS)

A human resource information system (HRIS) is a software package developed to aid human
resources professionals in managing data. Human resource professionals utilize these systems to
facilitate work flow, improve efficiency and store and collect information. Several companies offer
HRIS packages to employers. HRIS packages can be customized to the specific needs and
requirements of the employer.

1. Database

HRIS core offering includes a database to store employee information. HR professionals can input
all personnel data into the system which can be accessed from anywhere, round the clock. Types
of data that HR professionals collect in the database include compensation history, emergency
contact information, and performance review. The core database can also be viewed as an online
backup for paper files.

2. Time and Labour Management

Activities like time and labour management can highly time consuming. HRIS package allows
employees to input their own hours worked and allows managers to immediately verify vacation
requests, and the data is directly fed to the payroll. Time and labour management also improves
the HR department’s ability to track punctuality and attendance.

3. Payroll Function

Payroll function is yet another major component of a HRIS model. HR can easily download or
unload employee hours, and issue cheques or payroll deposits to employees. Salaried employees
can also be paid with substantially reduced risk of errors. The HRIS payroll software usually
improve tax compliance for locations with multiple tax levels.

4. Benefits

Some HRIS employers allow employers to establish and maintain medical benefits and retirement
investments through their software. Such applications allow employers to have one-stop shopping
experience for all their human resources data management needs. Other HRIS packages facilitate
medical benefits and retirement investment deductions for payroll but not the establishment of
those benefits.

5. Employee Interface

Most HRIS packages allow for an employee to have limited user access. Employee users access a
part of the database where they can update their personal information, review pay scales, change
retirement benefit programs, update direct deposit information or download benefit election
documents.

6. Recruitment and Retention

Finally, it can be said that recruitment and retention are the most important components of HRIS.
It goes without saying that it is the anchor of all HR policies and systems. Finding new talent,
acquiring them, keeping them engaged and finally being able to retain them are the major task of
a HR person. HRs also have to ensure that employees are not only able to do their work, but they
are also provided with the required training; receives proper compensation and benefits from the
organization

TYPES OF HRIS (Human Resource Information System)

There are 4 Major types of HRIS :

I. Operational HRIS

II. Tactical HRIS

III. Strategic HRIS

IV. Comprehensive HRIS

I. Operational HRIS

● Operational HRIS is of immense help to the manager.

● It provides the manager with all the required data to support routine and
repetitive human resource decisions.

II. Tactical HRIS

● Tactical human resource information systems provide managers with support for
decisions that emphasize the allocation of resources.
 ● Within the domain of HR, these include recruitment decisions, job analysis, and
design decisions, training and development and also employee compensation
plans.

III. Strategic HRIS

Strategic HRIS focuses on supporting labour negotiations, workforce planning, and

certain specialized human resources software.

Major types of strategic HRIS comprise the following:

A. Information Systems Supporting Workforce Planning- Organization that are involved

in long-term strategic planning, such as those planning to expand into new market areas,
construct factories or offices in new locations, or add new products, will need information
about the quantity and quality of the available workforce to achieve their goals.

B. Specialized Human Resource Information Systems Software -There has been a great
deal of software that has been designed for the proper functioning of the human
resources.

Software that is specifically designed for the human resource management function can
be divided into two basic categories: comprehensive human resource information
systems software and limited-function packages that support one or a few human
resource activities

IV. Comprehensive HRIS

The computerization of HRIS has resulted in an integrated database of human resource

files., employee files, position, skills inventory files, affirmative action files, job analysis
and design files, occupational health and safety files, and many other human resource
files are constructed in a coordinated manner using database management systems
software so that application programs can produce reports from any or all of the files.

SOLUTIONS OFFERED BY HRIS

There are a number of solutions offered to a company that adopts a HRIS. Some of these
include solutions in training, payroll, HR, compliance, and recruiting. The majority of
quality HRIS systems include flexible designs that feature databases that are integrated
with a wide range of features available. Ideally, they will also include the ability to create
reports and analyze information quickly and accurately, in order to make the workforce
easier to manage.

Through the efficiency advantages conferred by HRIS systems, a HR administrator can

obtain many hours of his or her day back instead of spending these hours dealing with
non-strategic, mundane tasks required to run the administrative-side of HR.

Similarly, a HRIS allows employees to exchange information with greater ease and
without the need for paper through the provision of a single location for announcements,
external web links, and company policies. This location is designed to be centralized and
accessed easily from anywhere within the company, which also serves to reduce
redundancy within the organization.

USES OF HRIS

Personnel Administration: It encompasses personal information of an employee. These

may include name, address, date of birth, marital status, and the date of joining the
organization. It also contains the name and address of next kin of the employee concern.

Salary Administration: One of the functions of HRIS is to provide a report containing

information like present salary, benefits, last pay increase and proposed increase in future

Leave/Absence Increase: HRIS is also used to control leave/absence of employees. This is

done by maintaining a leave history of each employee. Every employee can be issued an
identity card writing every employee’s token number coded on it.

Skill Inventory: Recording employee skills and monitoring a skill data base is yet another
use of the HRIS. Such a skill record helps identify employees with the necessary skill for
certain positions or jobs in an organization

Performance Appraisal: HRIS maintains performance appraisal data such as the due date
of the appraisal, potential for promotion, scores of each performance criteria and alike.