Role of Human Resource Information System

in Banking Industry of Developing Countries

Dr. Harman Preet Singh
Assistant Professor, PGDAV College
University of Delhi, Delhi, India
hpsingh@pgdav.du.ac.in
Dr. Sunita Jindal
Associate Professor, giBS
GGS IP University, Delhi, India
sunitajindal@gmail.com
Sekh Abdul Samim
Sr. Relationship Manager, IIPM
Bhubaneswar, India
samim20_cet@yahoo.co.in
Abstract- The deployment of Human
Resource Information System (HRIS) in
banking is the fruit of development of
Information Technology (IT). It has
emerged as an important interdisciplinary
tool to achieve vital organizational Human
Resource (HR) objectives. HRIS is applied
in personnel administration, salary
administration, leave/absence recording,
skill
inventory,
medical
history,
performance appraisal, training and
development, HR planning, recruitment,
career planning, negotiations etc. In
developing
countries,
the
banking
industry has gone from a basic process to
convert manual information keeping
systems into computerized systems. HRIS
has become a vital tool to IT enable HR
processes. In this paper, the role of HRIS
in transforming the banking industry of
developing countries is discussed. HRIS in
banks of various developing countries like
India, Pakistan, Indonesia, Thailand, Sri
Lanka and Kenya are studied. It is done to
explore the current status and potential
utility of HRIS in developing countries.
Based on the study, certain practical
suggestions have been given to manage
and improve HRIS in banking industry of
developing countries. It comes out that an
appropriate integrated IT platform should

be chosen for HRIS. There should be

effective harmonization between HR
processes and IT platform. In the nutshell,
this paper establishes HRIS as a
prominent interdisciplinary tool to
effectively manage organizations and
brings forth synergies among disciplines
of HR, IT and banking in the context of
developing countries.
Keywords- Banking industry, developing
countries, HRIS, IT
I. INTRODUCTION
Human Resource Information System
(HRIS) is a concept which utilizes the
development of Information Technology (IT)
for effective management of the Human
Resource (HR) functions and applications.
HRIS enables systematic procedure for
collecting, storing, maintaining, and
recovering data required by the organizations
about their human resources, personnel
activities and organizational characteristics
[1]. It acquires, stores, manipulates,
analyzes,
retrieves,
and
distributes
information about an organizations human
resources [2].
HRIS
helps
organizations
in
managing all HR information. It helps in
recoding and analyzing employees and

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Dr. Harman Preet Singh, Dr. Sunita Jindal, and Sekh Abdul Samim

organizational information and documents,

such as employee handbooks, emergency
evacuation and safety procedures [3][4]. It
helps organizations to keep an accurate,
complete and updated database that can be
retrieved from reports and manuals [5]. For
instance, the University of Minnesota at
Rochester generates a payroll distribution
report,
which
identifies
university
employees salaries from different accounts
such as academic department account,
administrative department account and
research grant account. Such a report
typically takes thirty hours to generate, but
through HRIS it can be done in minutes by
the end users [6].
The nature of HRIS varies among
organizations in relation to their size. In
small organizations, it tends to be informal
whereas in large organizations, it is more
formal and coordinated. Lengnick-Hall and
Moritz prompt HRIS to be implemented at
three different levels [7]:

The publishing of information

The automation of transactions
Transformation of HR into a strategic
partner with the line business
II. COMPONENTS OF HRIS

There are three major functional components

of HRIS [8]:

Input function It enters personnel

information into the HRIS. Data entry in
the past had been one way, but today,
scanning technology permits scanning
and storage of actual image of an original
document, including signatures and
handwritten notes.
Maintenance function It updates and
adds new data to the database after data
have been entered into the HRIS.
Output function It is the most visible
function of HRIS. In order to generate
valuable output for computer users,
HRIS processes output, makes necessary
calculations and formats the presentation.

It should be noted that most

important elements of HRIS are not the

computers, rather, the information. So, the

components of HRIS should support validity,
reliability and utility of information.
III. HRIS IN BANKS
In recent times, the financial as well
as non-financial processes of banks have
undergone significant transformation. The
manual system adopted by the banks was the
cause of procedural delays, outdated as well
as
inaccurate
information,
improper
documentation, higher expense of storing
files and their safety. HRIS has transformed
banks financial as well as non-financial
processes from manual to automatic
computerized systems. Banks are able to
integrate different HR functions by using
third generation of feature-rich, broad-based
and self-contained HRIS.
The third generation HRIS is much
more than a mere data repository and has
hastened the emergence of Strategic HRM in
banks of developing countries [9]. Due to
Strategic HRM, banks HR professionals are
encouraged to innovate their IT usage and
become more effective [10][11]. HR
department is emerging as an information
center, internal consultant, change agent,
service provider, cost manager, business
partner, facilitator, and consultant [12].
IV. HRIS IN BANKING INDUSTRY OF
DEVELOPING COUNTRIES
Historically, the banking industry of
developing countries has faced significant
difficulties. HRIS is causing significant
benefits for the banking industry of
developing countries. In order to ascertain
the benefits, prominent banks in some
developing countries are selected. For
example, State Bank of India (SBI) is the
largest state-owned bank with largest branch
network in India. So, it is chosen for the
study of HRIS. Likewise, prominent banks
are selected for Pakistan, Indonesia,
Thailand, Srilanka and Kenya. The
prominent banks of selected developing
countries along with their necessary details
are shown in Table 1.

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Role of Human Resource Information System in Banking Industry of Developing Countries

In each of the prominent banks

shown in Table 1, HRIS adopted by them is
studied. The description of HRIS adopted by

each bank in a developing country is

represented in Table 2.

TABLE 1
PROMINENT BANKS IN DEVELOPING COUNTRIES
Country
India

Pakistan

Indonesia

Thailand

Srilanka

Kenya

Prominent Bank
State Bank of India
(SBI)

Details
SBI is the largest state-owned Indian banking and financial services
company by total assets and turnover. It has the largest branch network in
India with over 16,000 branches. It also has more than 130 oversees
branches [13].
State Bank of Pakistan SBP is the central bank of Pakistan. It regulates and supervises Pakistans
(SBP)
financial system and conducts monetary policy. It manages foreign
exchange and maintains close relationship with international financial
institutions [14].
Bank Indonesia (BI)
BI is the central bank of The Republic of Indonesia. It maintains the
monetary stability and strengthens the effectiveness of monetary
management. It maintains the security and effectiveness of the payment
system [15].
Bank of Thailand (BT) BT is the central bank of Thailand. It strives to provide a stable financial
environment for sustainable economic growth in order to achieve
continuous improvement in the standard of living of the people of
Thailand [16].
Sampath Bank (SB)
SB is a licensed commercial bank in Srilanka. It was the first bank in
Srilanka to operate with fully computerized database and technologies. It
first introduced ATMs and one day clearing of cheques in Srilanka[17].
Kenya Commercial
KCB is a prominent financial service provider in Kenya. It is the largest
Bank (KCB)
banking network in the region having more than 150 branches throughout
Kenya. It also possesses largest number of own-branded ATMs in Kenya
[18].
TABLE 2
HRIS IN BANKS OF DEVELOPING COUNTRIES

Country
India

Bank
SBI

Pakistan

SBP

Indonesia

BI

Thailand

BT

Srilanka

SB

Kenya

KCB

Description
SBI uses HR software interfaces. Interfaces allow for data to be transferred from one
system to another. HRIS assures that the data in system is up to date and accurate. So, it
enables integrated HR payroll software solutions.
SBP uses oracle based HRIS in different units like employees database unit, service record
& compliance unit, HR automation unit etc. HRIS enables discovery of more efficient and
less time consuming processes. It also enables efficient performance management of
employees.
BI employs HRIS to store data of more than 6000 employees. For this purpose, it deploys a
database application, known as SIMASDAM. Strategically, the bank has strengthened IT
support and information system. However, it has been observed that BI has not properly
estimated its system requirements while employing HRIS. Adoption of HRIS can help BI
tremendously, if it correctly identifies its system requirements and level of sophistication.
BT employs HRIS as a Management Information System (MIS) for training administration,
time management, customized payroll management etc. Furthermore, HRIS is used for
employee life-cycle, relationship and transaction management.
SB is using HRIS to re-engineer its business processes. It plans to cover all records of
employees from their recruitment till their retirement. So, it intends to cover information
like employees personal information, work details, leave records, payroll information etc in
HRIS. For this purpose, a sophisticated and well integrated HRIS need to be deployed.
KCB employs oracle based HRIS to keep pace with the changing needs of organization and
work force. HRIS helps KCB to efficiently manage employee records. Oracle database is
used as a single source of information. This eliminates data redundancy, reduces the
possibility of conflicting data in different databases, and creates a consistent, complete as
well as a reliable picture of every employee.

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Dr. Harman Preet Singh, Dr. Sunita Jindal, and Sekh Abdul Samim

V. CHALLENGES IN
IMPLEMENTATION OF HRIS
The effective implementation of
HRIS requires re-engineering of business
processes, which many banks find hard to
adopt. The banks employees lack sufficient
training to adopt the new system. At the
same time, the information systems of most
of the banks are disparate, which reduces
their efficiency. So even if banks implement
HRIS, it is a fairly long and peace-meal
exercise. It is very important to view the
implementation of HRIS as a whole to
ensure system integrity.
VI. CONCLUSION
HRIS has a very wide scope in banks
of developing countries. It is applied in
personnel
administration,
salary
administration, leave/absence recording, skill
inventory, medical history, performance
appraisal, training and development, HR
planning, recruitment, career planning,
negotiations etc. It is very important for a
bank to clearly identify its system
requirements before implementing HRIS.
This would enable to decide the appropriate
level of sophistication of HRIS and would
lead to optimal utilization of scarce
resources. HRIS database should be used as
a single source of all information. This
would lead to the development of an
integrated HRIS platform for the whole
organization. Such integrated platform is
preferable over singular optimization as it
leads to effective information exchange
between HR processes and HRIS IT
platform. Information management in HRIS
can be outsourced if the underlying
processes are coherent and there are
foolproof privacy laws in place.
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