Chapter 3: Human

resource information
management systems

Presentation prepared by
Troy Fuller
University of Notre Dame

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 Learning objectives

• On successful completion of this slide set, you will

be able to:
– Describe the relationship between strategic
HRM and human resource information
management systems (HRIMS)
– Explain the use of HRIMS in contemporary HR
functions
– Outline the decision-making processes that
need to be followed when introducing HRIMS

(cont.)
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 Learning objectives

– Explain the key issues determining success or

failure of an HRIMS
– Describe how an effective HRIMS facilitates the
achievement of HRM objectives.

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 FastFacts

• Young Australians spend an average of 3.4 hours a

day using the internet.
• An Australian Human Resources Institute (AHRI)
internet poll found that HRIMS were primarily used
by respondents for recruitment and performance
appraisal.
• Seventy per cent of Australian companies with
more than 10000 employees use SAP and Oracle
HRIMS.
What is suggested by these facts?
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 Human resource information
management system (HRIMS)
• Human resource information management system
(HRIMS)
– A computerised system used to gather, store,
analyse and retrieve data in order to provide
timely and accurate reports on the management
of people in organisations.
– There must be a reason for automation – linked
to business outcomes.

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An HRMIS model

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 HR vs. payroll systems

• An integrated function
– Payroll and HR should be integrated to create
and maintain a complete system and to prevent
unnecessary duplication of effort,
OR
• Separate activities
– Payroll is seen as an accounting system that
processes a large number of transactions while
the HRIMS is used for planning and decision
making.

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 Managing information

• Database management
– Involves the input, storage, manipulation and
output of data
• Knowledge management
– Deals with an organisation’s ability to collect,
store, share and apply knowledge in order to
enhance its survival and success.

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 Use of HRIMS

• In high-tech organisations, technology is seen as a

strategic and competitive tool.
• HRIMS can assist in decentralisation of time
consuming and expensive HR transactions.
• This results in better informed and faster decision
making.
• Employees can access and update their own
information (low value-added activity).

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 HRIMS issues

• Flexibility
– Key element to system’s success and future
value is the ability to use the data in ways that
may not have been thought of when introducing
the system.
• Confidentiality
– Potential for invasion and abuse of employee
privacy by both authorised and unauthorised
personnel.

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HRMIS design

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 Legal and management concerns

• Cyberloafing
– Employee abuse of the internet and email
• Sending confidential information and / or
breaching intellectual property rights
• Defamation or harassment claims
• Carefully worded policies governing use of email
and the internet are essential
• Need to find a balance between permissiveness
and surveillance.

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Spell it out

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 Three options for HRIMS

• It is important to justify the cost of setting up and

implementing an HRIMS. There are three main
options:
– Design an in-house system using either internal
or external resources, or a combination of both.
– Buy a system ‘off-the-shelf’ and commence
operation.
– Buy a system as above but work with the vendor
to modify it to better satisfy the organisation’s
requirements.
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 Outsourcing

• Apparent lower cost, simplicity and convenience

• Successful outsourcing allows the HR department
to focus on its core business.
• The organisation needs to assess whether
outsourcing is the best way to go for them. It has
pitfalls and downsides, as well as potential
benefits.

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 Resolution of key issues

• Again, the issues must be explored, including:

– A clear view of the HRM function
– The ‘bells and whistles’ trap
– Payroll system or HRIMS
– Knowing the jargon
• Hardware
• Software
• Vapourware
– Using the ‘show me’ test
(cont.)
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 Resolution of key issues (cont.)

– Extracting data and reports

– Knowing when to call for help
– Seeking integration between people,
policies/procedures, information flow and
computers.

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 Relationship with other departments

• The HRIMS must be in line with the organisation’s

strategic objectives.
• It must be help improve productivity and reduce
costs.
• There should be strong working relationships with
the IT and Accounting departments (and others, as
appropriate).

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 Evaluating the HRIMS

• Is time spent entering data justified by accuracy,

timeliness and value of information generated?
• Is HRIMS response time appropriate?
• Is HRIMS integrated with the payroll system?
• Is HRMIS able to generate answers to specific
questions?
• Is HRIMS able to generate ad hoc, on-request
reports as well as regular detailed reports?
• Is cost of HRIMS outweighed by benefits?
• Who can (or should) answer these questions?
Who should be involved and kept informed?
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 Summary

• The purpose of the HRIMS is to assist both the HR

manager and line managers in decision making.
• The HRIMS must generate information that is
accurate, timely and related to the achievement of
the organisation’s strategic business objectives.
• Flexibility in system design and use cannot be
ignored.
• As the HRM function continues to change, so too
must the supporting systems.

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