STEPS IN IMPLEMENTING AN HRIS

The following steps should be followed in setting up an HRIS.

Inception of idea. Idea must originate somewhere. The originator should make a preliminary report
justifying the need for an HRIS. The most critical part of this step is to clearly illustrate how an HRIS can
assist management in making certain decisions.

Feasibility study. The present system should be studied to highlight the problem areas and the likely
benefit of an HRIS. It should carry out a cost-benefit analysis of the HRIS in terms of labour and material
as also the intangible savings, such as increased accuracy and fewer errors.

Selecting a project team. Once the feasibility study has been accepted and the resources allocated, a
project team should be selected. The project team should consist of a human resource representative,
who is knowledgeable about the organization's human resource functions and activities, and the
organization itself, and also a representative from management information system. As the project
progresses, additional clerical people from the human resource department will need to be added.

Defining the requirements. A statement of requirements specifies in detail exactly what the system
needs to do. A larger part of the statement of requirements normally deals with the details of the
reports that will be produced, the objective here being to make sure that the mission of an HRIS truly
matches with the management's needs of an HRIS.

Vendor analysis. The purpose of this step is to determine what hardware and software are available that
will best meet the organization's needs at the least price. This is a difficult task. This involves discussions
with various vendors on how their HRIS will meet the organization's needs. This will help in making a
decision of going to the 'off-the-shelf' package or to develop the system internally.

Contract negotiations. The contract stipulating the price, delivery, vendors' responsibilities with regard
to installation, service maintenance, training to organization employees, etc., may be negotiated.

Training. Project team members may first be trained to use the system and then they could train all
users from other departments.

Tailoring the system. It involves making changes to the system to best fit the organizational needs.

Collecting data. Data is collected and fed into the system.

Testing the system. Purpose of the testing is to verify output of HRIS and make sure that it is doing what
it is supposed to do. All reports need to be critically analyzed.

Starting up. Even after testing, often some additional errors surface during the start-up. These need to
be sorted out.

Running in parallel. Just for the security, the new system is run in parallel with the old till the new
system stabilizes and people gain confidence in its operation.
Maintenance. It normally takes several months for the HR people to get acquainted with HRIS.

Audit. After a year or so, the project team should audit the performance of HRIS and if required,
corrective actions should be taken.

BENEFITS of HRIS
The following benefits are derived from the system:

• Higher speed of retrieval and processing of data

• Reduction in duplication of efforts leading to reduced cost

• Ease in classifying and reclassifying data

• Better analysis leading to more effective decision making

• Higher accuracy of information/report generated

• Fast response to answer queries

• Improved quality of reports

• Better work culture

• Establishing of streamlined and systematic procedures

• More transparency in the system

LIMITATIONS OF HRIS

(a) It can be expensive in terms of finance and manpower requirements

(b) It can be threatening and inconvenient to those who are not comfortable with computers. For
computerized information to be useful at all levels, there is an urgent need for large-scale computer
literacy.

(c) Often the personnel designing HRIS do not have a thorough understanding of what constitutes
quality information for the users. Thus, the user managers do not get exactly the reports which they
want. Producing information that is of quality to the users requires an investment in time, effort and
communication on the part of HRIS managers.

(d) Computers cannot substitute human being. Human intervention will always be necessary. Computers
can at best aid the human effort. The quality of response is dependent upon the accuracy of data input
and queries fired. The 'Garbage-in Garbage-out' (GIGO) is the key expression in any computerized
system.
(e) In many organizations, the system is operated in batch mode with the records being updated once a
week. On-line facility in multi-user environment needs to be developed so that the reports generated
are not out of phase with the realities. In many a situation, the stale information is as good as no
information.

RECRUITMENT

Recruitment is the process of searching for prospective employees and stimulating them to apply for the
job in the organization.

" A planned recruitment programme has the following basic components:

Organizational goals and objectives why does the organization exist, what are the goals and objectives
to be pursued?

Job design what are the specific duties and responsibilities of each employee?

Job success criteria what distinguishes successful performance from unsuccessful performance, and
how it is measured? For example, for a salesman, these criteria could be volume of sales exceeding Rs
10 lakh, repeat sales of more than 60 per cent, report submission accurately and in time, etc.

Job specification what traits and qualities in the individual are related to successful performance of
jobs? For example, adequate (5 years) sales experience, above 75 points in aptitude for sales job, good
communication skills, etc.

Sources of recruitment what sources of recruitment are relevant and economical for the organization?

SELECTION

Selection is the process of discovering the qualifications and characteristics of the job applicant in order
to establish their likely suitability for the job position.There could be two types of errors in selection
decisions:

Reject errors Rejecting candidates who would have performed successfully on the job.

Select errors Selecting candidates who later perform poorly on the job. An effective selection system
should endeavour to minimize both these errors. This is possible if the system is impartial, has a degree
of objectivity and a fairly uniform standard of assessment. Though the benefits of good selection are
clear, demerits in poor selection are not so obvious. The cost of advertising, management time involved
in selection and training and expense of dismissal are relatively easy to calculate as compared to long-
term effects such as lowering of morale, reduced quality of products and services which are difficult to
be quantified.

STAGES IN SELECTION PROCESS

Stage 1: Screening of Application Forms Before detail selection can take place, it is necessary to
reduce the applicants to manageable proportions. This may be done by initial screening of the
information received through letters, curriculum vitae (CV) or application forms or a combination of
these.

The following guidelines may be used while interpreting information from an application form:

Access quantifiable factors - Check factual data from the application form against the minimum
acceptable requirements set out in the person specification such as age, qualification, and experience.

Check for consistency - Skilled selectors soon develop a feel about good applicants based on the
consistency of the data contained in their application forms. Are there any gaps between school and
higher education and if so what happened during this time? Does the career record contain a series of
jobs running consecutively one to the next or are there periods unaccounted for? Check the form in this
way for ambiguous information and follow this up at the interview stage.

Stage 2: Tests These include tests of intelligence, aptitude, ability and interest. Tests in intellectual
ability, spatial and mechanical ability, perceptual ability and motor ability have shown to be moderately
valid predictors for many semi-skilled and unskilled operative jobs in the industrial organizations.
Intelligence tests are reasonably good predictors for supervisory positions. But the burden is on
management to demonstrate that any test used is job related. There are two sets of tests-performance
and psychological. These are discussed below:

Performance simulation tests - These tests are aimed to find out if the applicant can do the job
successfully by asking him to do it. They have become very popular these days.

The two of the known performance simulation tests are: (i) Work Sampling (ii) Assessment Centres

Psychological test - Psychological tests are regarded by some as having almost magical properties but
can easily be misused and misinterpreted by untrained people. These tests tend to be used as an easy
option in the decision making process with managers becoming over-dependent on the test
results.Various psychological tests are described below:

(i) Intelligence Tests (ii) Aptitude Tests. (iii) Interest Tests (iv) Personality Test

Stage 3: Selection Interview Interviews are designed to probe into areas that cannot be
addressed by the application form or tests. These areas usually consist of assessing candidates'
motivation, ability to work under stress, inter-personal skills, ability to 'fit-in' the organization. Where
these qualities are related to job performance, the interview should be a very valuable tool. For
example, these qualities have demonstrated relevance for performance in upper managerial positions.
So the use of the interview in selecting executives makes sense.

Stage 4: Selection Decision In practice, the final decision will probably be between three or four
candidates, since most will have been eliminated during the earlier stages, or at the application form
stage, through failing to meet the quantitative requirements. The rest will be eliminated after the
interview, again on the quantitative evidence or through failure to meet requirements based on
personality or motivation

Human resource demand forecasting

Human resource (HR) demand forecasting is the process of estimating the future quantity and quality of
people required. The basis of the forecast must be the annual budget and long-term corporate plan,
translated into activity levels for each function and department.

FACTORS AFFECTING HR DEMAND FORECASTING

Human Resource Demand Forecasting depends on several factors, some of which are given below.

Employment trends

Replacement needs;

Productivity;

Absenteeism; and

Expansion and growth.

IMPORTANCE OF HR DEMAND FORECASTING –

There are several good reasons to conduct demand forecasting. It can help:

i) quantify the jobs necessary for producing a given number of goods, or offering a given
amount of services;
ii) Determine what staff-mix is desirable in the future;
iii) Assess appropriate staffing levels in different parts of the organization so as to avoid
unnecessary costs;
iv) Prevent shortages of people where and when they are needed most; and
v) Monitor compliance with legal requirements with regard to reservation of jobs.

Forecasting Techniques:

HR Forecasting techniques vary from simple to sophisticated ones. Before describing each technique, it
may be stated that organizations generally follow more than one technique. The techniques are:

i) Ratio-trend analysis
ii) Regression analysis

iii) Work study techniques

iv) Delphi technique

v) Flow models

vi) Other forecasting techniques

1. Ratio-trend Analysis This is the quickest HR forecasting technique. The technique involves
studying past ratios, say, between the number of workers and sales in an organization and
forecasting future ratios, making some allowance or changes in the organization or its methods.
2. Regression Analysis This is similar to ratio-trend analysis in that forecast is based on the
relationship between sales volume and employee size. However, regression analysis is more
statistically sophisticated. A firm first draws a diagram depicting the relationship between sales
and workforce size. It then calculates regression line – a line that cuts right through the center of
the points on the diagram. By observing the regression line, one can find out number of
employees required at each volume of sales.
3. Work-study Techniques Work-study techniques can be used when it is possible to apply work
measurement to calculate length of operations and the amount of labor required. The starting
point in a manufacturing company is the production budget, prepared in terms of volumes of
saleable products for the company as a whole, or volumes of output for individual departments.
The budgets of productive hours are then compiled using standard hours for direct labor. The
standard hours per unit of output are then multiplied by the planned volume of units to be
produced to give the total number of planned hours for the period. This is then divided by the
number of actual working hours for an individual operator to show the number of operators
required.
4. Delphi Techniques Delphi Technique Named after the ancient Greek Oracle at the city of Delphi,
the Delphi technique is a method of forecasting personnel needs. It solicits estimates of
personnel needs from a group of experts, usually managers. The human resource planning (HRP)
experts act as intermediaries, summarize the various responses and report the findings back to
the experts. The experts are surveyed again after they receive this feedback. Summaries and
surveys are repeated until the experts’ opinions begin to agree. The agreement reached is the
forecast of the personnel needs. The distinguishing feature of the Delphi technique is the
absence of interaction among experts
5. Flow models - Flow models are very frequently associated with forecasting personnel needs.
The simplest one is called the Markov model. In this technique, the forecasters will:
1. Determine the time that should be covered. Shorter lengths of time are generally more
accurate than longer ones. However, the time horizon depends on the length of the HR plan
which, in tum, is determined by the strategic plan of the organization.
 2. Establish categories, also called states, to which employees can be assigned. These categories
must not overlap and must take into account every possible category to which an individual can
be assigned. The number of states can neither be too large nor too small.
3. Count annual movements (also called ‘ flows’) among states for several time periods. These
states are defined as absorbing (gains or losses to the company) or non-absorbing (change in
position levels or employment status). Losses include death or disability, absences, resignations
and retirements. Gains include hiring, rehiring, transfer and movement by position level.
4. Estimate the probability of transitions from one state to another based on past trends.
Demand is a function of replacing those who make a transition.
6. Other Forecasting Techniques New venture analysis will be useful when new ventures
contemplate employment planning. This technique requires planners to estimate HR needs in line with
companies that perform similar operations. For example, a petroleum company that plans to open a
coal mine can estimate its future employment needs by determining employment levels of other coal
mines