JOMO KENYATTA UNIVERSITY

OF
AGRICULTURE & TECHNOLOGY
JKUAT SODeL

SCHOOL OF OPEN, DISTANCE AND eLEARNING

P.O. Box 62000, 00200

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Nairobi, Kenya

E-mail: [email protected]

HEH 2410: Human Resource Information Systems

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 HEH 2410: Human Resource Information Systems

This presentation is intended to covered within one week.

The notes, examples and exercises should be supple-

mented with a good textbook. Most of the exercises have

solutions/answers appearing elsewhere and accessible by

clicking the green Exercise tag. To move back to the same

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page click the same tag appearing at the end of the solu-

tion/answer.
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Errors and omissions in these notes are entirely the re-

sponsibility of the author who should only be contacted

through the Department of Curricula & Delivery

(SODeL) and suggested corrections may be e-mailed to

[email protected].

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LESSON 5
Training & Development Modules
Standard training modules includes several areas (see). How-

ever design and deliver training programs depending on specic

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situations:

Standard and Customized Training Modules

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• Presentation skills

• Change management

• Negotiating

• Sta leadership

JJ II • Selling skills

J I • Eective teams

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• Conict management

• Coaching and mentoring

• Customized Programs at all levels/mediums.

5.1. Compensation Management

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Concept
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The literal meaning of compensation is to counter balance.

In the case of human resource management, compensation is re-

ferred to as money and other benets received by an employee

for providing services to his employer. Money and benets re-

ceived may be in dierent forms base compensation in money

form and various benets, which may be associated with employ-

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ees services to the to the employer like provident fund, gratuity
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JJ II
J I Figure 5.1: Training & Development Modules

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Figure 5.2:
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insurance scheme and any other payment which the employee

receives or benets he enjoys in lieu of such payment. Cascio

has dened compensation as follows;  compensation includes di-

rect cash payments, indirect payments in the form of employees

to strive for higher levels of productivity.

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Compensation Policy is derived from organizational strategy

and its policy on overall human resource management. In order

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to make compensation management to work eectively, the or-

ganization should clearly specify its compensation policy, which

must include the basis for determining base compensation, in-

centives and benets and various types of perquisites to various

levels of employees .

JJ II The policy should be linked with organizational philosophy

J I on human resources and strategy. Besides many external fac-

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tors, impinge on the policy, must also taken care of. Job anal-

ysis and evaluation .Job analysis provides basis for dening job

description and job specication with the former dealing with

various characteristics and responsibilities involved in a job and

dealing and the latter dealing with qualities and skills required
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in performer, job analysis also provides base for job evaluation

which determines the relatives worth of various jobs in the or-

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ganization, The relative worth of various jobs determines the

compensation packages attached with each job.

• Analysis of Contingent Factors

Compensation plan is always formulated in the light of various

factors, both external and internal, which aect the operation of

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human resource management system. Various external factors
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are conditions of human resource market, cost of living, level of

economic development, social factors, pressure of trade unions

and various labor laws dealing with compensation management.

Various internal factors are organization's ability to pay and

employee's related factors such as work performance, seniority,

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skills, etc. These factors may be analyzed through wage/salary

survey.
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• Design and Implementation of Compensation Plan

After going through the above steps, the organization may be

able to design its compensation plan incorporating base compen-

sation with provision of wage/salary increase over the period of

time, various incentive plans, benets and perquisites. Some-

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times, these are determined by external party, for example, pay
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commissions for Govt. employees as well as for public sector

enterprises. After designing the compensation plan, it is im-

plemented. Implementation of compensation plan requires it's

communication to employees and putting this into practice.

Evaluation and Review

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•
A compensation plan is not rigid and xed one but is dynamic
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since it is aected by a variety of factors which are dynamic.

Therefore, compensation management should have a provision

for evaluating and reviewing the compensation plan. After im-

plementation of the plan, it will generate results either in terms

of intervening variables like employee satisfaction and morale

or in terms of end-result variable like increase of productivity.

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However, this latter variable is more important. The evaluation
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of compensation plan must be done in this light. If it does not

work as intended, there should be review of the plan necessitat-

ing a fresh look.

5.2. Job Evaluation

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For xing compensation to dierent jobs, it is essential that there

is internal equity and consistency among dierent job holders.

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Job evaluation aims to provide this equity and consistency by

dening the relative worth of dierent jobs in an organization.

Job evaluation is the process of determining the relative worth

of dierent categories of jobs by analyzing their responsibilities

and consequently, xation of their remuneration.

JJ II International Labor Organization (ILO) has dened a job

J I evaluation as follows:  Job evaluation is an attempt to deter-

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mine and compare demands which the normal performance of

a particular job makes on normal workers without taking into

account the individual performance of the workers concerned .

The denition of job evaluation provided by ILO has been

adopted by others. For example, French has dened job eval-

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uation as follows:  Job evaluation is a process of determining

the relative worth of the various jobs within the organization,

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so that dierential wages may be paid to jobs of dierent worth.

The relative worth of a job means relative value produced. The

variables which are assumed to be related to value produced

are such factors as responsibilities, skills, eorts and working

conditions .

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5.2.1. Objectives of Job Evaluation

The basic objective of job evaluation is to determine the rela-

tive contributions that the performance of dierent jobs makes

towards the realization of organizational objectives. This basic

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objective of job evaluation serves a number of purposes which

may be grouped into three categories: wage and salary xation,

restructuring job hierarchy and overcoming anomalies.

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• Wage and Salary Fixation

The basic principle of wage and salary xation is that it should

be based on the relative contributions of dierent jobs and not

on the basis of who the job holders are. If this principle is

JJ II adopted, the rst requirement is to identify the likely contri-

J I butions of dierent jobs. This is what job evaluation precisely

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does. It provides the information about what is the worth of a

job in terms of its contributions to the achievement of the orga-

nizational eectiveness. From equity point of view, this method

is more appropriate.

5.2.2. Restructuring Job Hierarchy

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Job evaluation helps in restructuring job hierarchy. Job hier-

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archy refers to arranging various types of jobs in the order of

their importance wither on ascending basis or descending ba-

sis. Sometimes, job hierarchy becomes too lengthy creating ad-

ministrative problems and creating organizational problems by

increasing the number of levels in the organization. In today's

JJ II context, more emphasis is being put on at structure instead of

J I tall one. Job evaluation exercise can be undertaken to reduce

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the number of job levels by merging closely related jobs together.

For example, successive Pay Commissions appointed by Govt.

of India have recommended reduction in number of pay scales

by merging two or more scales into one in order to reduce their

number in job hierarchy.

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• Overcoming Anomalies
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Job evaluation, if carried on periodically and objectively, helps

in overcoming various anomalies which may develop in an or-

ganization over the period of time with regard to compensation

management. Knowles and Thompson have identied that there

are following anomalies and evils which may develop in an or-

ganization and may be overcome by job evaluation.

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1. Payment of high wages and salaries to persons who hold
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jobs and positions not requiring great skill, eort and re-

sponsibility;

2. Paying beginners less than that they are entitled to receive

in terms of what is required of them;

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3. Giving a raise to persons whose performance does not jus-

tify the raise;

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4. Deciding rates of pay on the basis of seniority rather than

ability;

5. Payment of widely varied wages and salaries for the same

or closely related jobs and positions; and

6. Payment of unequal wages and salaries on the basis of race,

JJ II sex, religion, or political dierences.

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5.2.3. Problems in Job Evaluation

Like any other technique of human resource management, job

evaluation is not free from certain shortcomings and limitations.

Various problems involved in job evaluation may be grouped into

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two categories: technical and operational.

Technical Problems
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There are some technical problems involved in eective job eval-

uation, which are of the following nature.

1. Job evaluation establishes hierarchy of jobs based on their

worth. Though there are various methods developed for

this purpose, these are not completely objective. For ex-

JJ II ample, often the question is asked: `Should grass-cutters

J I (gardeners) get more than gas-cutters (welders)'? Similar

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such questions may be raised if there is lack of objectivity.

2. Another problem in establishing job hierarchy through job

evaluation comes in the form of changing prole of job fac-

tors because of changes in environmental variables such as

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technology, social structure and processes, and interna-

tional impact. Therefore, a job hierarchy, which may be

workable at one point of time, may not work at another

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point of time. Thus, in order to make job evaluation ef-

fective, it should be undertaken at regular intervals.

3. Job evaluation is a costly and technical exercise. There-

fore, many organizations do not prefer to take it in a for-

mal way. Rather, they prefer to go through prevailing

JJ II practices.
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Operational Problems
Besides the technical problems, there are some operational prob-

lems too in job evaluation. These are of the following types:

1. Linking jobs, based on job evaluation, and wages and salaries

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is not completely possible because of the operation of sev-

eral forces in the environment. There are substantial dif-

ferences between job factors and the factors emphasized by

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the human resource market. Often it has been observed

that these external factors change with the time, e.g., pre-

viously, engineers were the highest earners but now the

sequence is followed by medicos, MBAs and now informa-

tion technology professionals in ascending order through

JJ II over the period of time, their job factors have remained

J I the same.

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2. Job hierarchy created through job evaluation may create

human problems in an organization particularly if it has

been taken for the rst time and results into fundamental

dierences as compared to the existing system. In such

a situation, job evaluation may face resistance from the

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employees.

3. Job evaluation is, generally, suited to large organizations

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where human resource management system has been for-

malized. In comparatively smaller organizations, this may

not result in much advantage. The existence of various

problems in job evaluation does not mean that it should

not be undertaken. In fact, this should be undertaken.

JJ II The problems identied above indicate that suitable safe-

J I guards should be provided while undertaking job evalua-

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tion to make it more productive.

5.3. Job Evaluation and Performance Appraisal

Sometimes, a misplaced perception arises in which job evalua-
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tion is equated with performance appraisal. This happens be-

cause of the contribution of both in wage/salary determination.

However, both are quite dierent concepts, use dierent meth-

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ods and have dierent objectives as shows:

Comparison of Job Evaluation and Performance Appraisal

5.3.1. Process of Job Evaluation

Job evaluation is process consisting of several steps (see). Na-

JJ II tional institute of Personnel Management has prescribed the fol-

J I lowing steps in job evaluation process:

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1. Analyze and prepare job description

2. Select and prepare a job evaluation plan.

3. Classify jobs into dierent categories

4. Install the job evaluation program, and

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5. Maintain the program.

A more comprehensive job evaluation process has been presented

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below:

Job Analysis

•
Job evaluation process starts with the base provided by job anal-

ysis. Job analysis identies various dimensions of a job in two

forms: job description and job specication.

JJ II Job description provides responsibilities involved in the per-
J I formance of the job while job specication provides attributes
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required in the job performer. Both these taken together provide

information about various factors involved in dierent jobs.

5.3.2. Evaluation Information

• System's support for Planning & Control
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Establishing and monitoring internal controls over human re-

source (HR) information are important management functions.

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Internal control is fundamental to addressing risks to the com-

pleteness and accuracy of information and thus to providing as-

surance over the reliability of HR information, its compliance

with applicable laws and regulations and the eectiveness and

eciency of operations. Increasingly, entities are utilizing Hu-

JJ II man Resource Management Information Systems (HRMIS) to

J I assist in managing their workforce and in meeting their employer

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JJ II Process of job

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obligations.

The eective discharge of these responsibilities is necessary

to support the develop- ment and implementation of government

programs and activities. However, the integration of technology

to support managing a modern workforce can introduce a range

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of informa- tion management risks. With this emphasizes the

important role of both system and manual controls in main-

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taining the integrity and condentiality of HR information. It

provides an overview of signicant risks and controls that are rel-

evant to key HR functions, with par- ticular focus on managing

risks through implementation of better practice principles.

It identies better practice system controls, and describes

JJ II manual or process controls that are relevant to support or strengthen

J I the implementation of system controls. It discusses risks and

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controls associated with the design, implementation and main-

tenance of the HRMIS and will be useful to assist HR system

managers and practitioners to:

• Implement better practices to improve the eectiveness

and eciency of HR and payroll processes;

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• Strengthen system controls and appropriately manage and

segregate user access to key system functions; and

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• Increase awareness of system controls within the People-

Soft and SAP HR systems that are used by a large number

of Government entities.

Implementation of controls should have due regard to the cost

benet involved. Equally, reducing controls for cost-saving rea-

JJ II sons should be carefully managed as the operating risk prole
J I may be increased. The HRIS is important to strategic decision-
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making as well as supporting day-to-day operational planning

and administration. It intended for HR practitioners and sys-

tem managers and discusses signicant risks and controls rele-

vant to the eective management of key HR functions.HR and

payroll functions are closely linked and changes in one process

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may create issues in another. As such, there is an emphasis on

implementing controls to safeguard the privacy and integrity of

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information.

• Key Functions Modules in Information System's Sup-

port for Planning & Control
The major of signicant risks and controls that are relevant to

key HR functions. Establishing and monitoring the eectiveness

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of internal controls are important management functions and
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each chapter of the Guide provides details of better practice

controls that are relevant to mitigating risks.

5.4. HR and Payroll Data Management

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Input and maintenance of HR and payroll data poses a signif-

icant area of risk in any HRMIS. It is important that controls

are implemented to contribute to the maintenance of HR and

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payroll data that provides for accurate and complete employee

information and payroll transactions.

5.5. Workforce Management

Workforce management is a key strategic consideration within
JJ II government entities. As with most other organizations, human
J I capital is considered a signicant asset, and the recruitment and
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maintenance of the right workforce is the key to success for op-

erational and strategic objectives. The workforce management

activities within a HRMIS to strengthen processes associated

with the collection and maintenance of employee information,

and in this context, the main activities that are discussed are:
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• Employee commencements; and

• Employee exits and terminations.

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5.5.1. Payroll Processing and Administration

Payroll processing and administration is highly dependent on a

number of interP linking HR functions. The HRMIS provides a

number of functions in performing payroll calculations that are

JJ II crucial to ensuring that calculations are accurately performed.
J I There are a number of supporting controls, particularly relevant
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to payroll disbursement and posting of payroll expenses to the

General Ledger. The risks and controls relevant to:

• Time reporting;

• Payroll accounting; and

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• Processing of applicable deductions.

5.5.2. System Maintenance and Integration

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There are a number of functions and conguration options that

can be used within an HRMIS to enhance the control environ-

ment or to increase eciency within HR management processes.

The chapter recognizes that the extent of conguration of sys-

tem controls varies across organizations.

JJ II Factors such as entity size, size of the HR team, and whether
J I payroll processing is outsourced contribute to the business re-
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quirements to operate and congure controls. The chapter pro-

vides an overview on `additional congurable controls' that may

contribute to increasing the eciency of the HR function and

may equally contribute to the accuracy of the HR outputs.

Topics covered include:

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• Managing system interfaces;

• Managing system rules; and

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• Managing software updates.

Personnel Administration Data Systems (PADS) These provide

data needed to carry out the personnel administration responsi-

bilities of an employer. As the government legislates additional

protections and social programs, these responsibilities have in-

JJ II creased and are growing. Armative action requirements in
J I USA, health and safety regulations and pension plans regulation
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are many new sources of the employer's responsibilities. Payroll

and personnel planning data system (PPDS) are closely related

to PADS, all using the employee master le.

Not only accessing the le, but updating of le is often or-

ganized on a coordinated basis. Data items in the employee le

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are updated by the payroll system not for self but also for PADS

and PPDS. Payroll provides the most eective way to capture

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the new data for this updating activity.

Three Types of PADS

1. Personnel status reporting systems (Files used are Em-

ployee le, Job le).

2. Personnel action systems (Files used are Employee le, Job

JJ II le).

J I 3. Fringe benet administration systems (Files used are Em-

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ployee le, Insurance claims le, Insurance accidents le).

All the three data systems parallel the common administrative

responsibilities of the personnel department in large organiza-

tions. There may be other administrative responsibilities dier-

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ing from the above in some of the organizations which may give

rise to other types of data system. Fringe benet systems may

include a variety of systems like

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1. Group insurance,

2. Pension,

3. Prot sharing,

4. Credit union,

JJ II 5. Educational programs etc.

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