DU SOL B.Com 3rd Year Human Resource Management Notes Chapter 19 Emerging Horizons in Human Resource Management
What do you mean by Human Resource Information system ? Discuss its various elements.
Information Technology In HRM
Computers have made possible scientific and industrial advances that could not be imagined some thirty or forty years ago. Todays, computers are used to solve a large number of tedious problems with the aid of present day computers a large number of space programmmes have become a reality.
Today, computers are employed in complex calculations and processing of columinous date. The beneficial aspect of computers includes speed and ac-curacy which are important for solving complex problems in modem world.
The use of computers in industry has increased tremendously. They are used for all industrial functions from purchasing and investory control to preparation of accounts and for all managerial functions-planning, organising, staffing, direction and control. Computers facilitate the installation of effective Human Resource Information System (HRIS) in modem organisation.
Concept of Human Resource Information System.
Human Resource Information System is concerned with the use of computers in collecting, classifying recording and disseminating various information about the human resources in the organisation. HRIS refers to the system of gathering, classifying, processing, recording and dyseminating the information required for efficient and effective management of human resources in the organisation.
It is primarily responsible for attracting, hiring, developing and maintaining the firm’s work force. In any organisation, different decisions are taken at different levels of management hierarchy. Information is needed for taking these decisions and quality of decisions largely depends upon the nature and kind of information provided for taking these decisions.
The electronic age has given us “immense ability to retrieve and analyse data. Therefore, designing of an effective HRIS in vital for the effective working of an organisation around electronic computers in case of big organisation. In order to property assign responsibilities to managers and to computer system, it is important to consider the relative strengths of the two resources.
It is true that human being perceive problems that univeve tedious calculations and highly subjective data. Computers on the other hand solve problem very quickly and accurately, but are of little help in gaining insight to the whys of ill-defined problems. So, a distributions is to be made in deciding under what circumstances, a computer can be of help in solving management problems. Computerisation can be effective because it provides favourable environment for individuals to exercise their best unique abilities. Organisational ability and the development of individual abilities are the keys for the successful performance of any enterprise.
Elements of HRIS or Scope of HRIS
A computerised Human Resource Information System is designed to monitor, control and influence the movement of human beings from the time they join the organisation till the time they leave it. Thus, the scope of computerised HRIS is very vast and it includes information about the following sub-systems—
- Job-analysis and design sub system. Since individuals are employed for various jobs, it is essential to computerised job-related information about every job before and after redesigning.
- Manpower Planning Sub-system. It includes information that could assist human resource mobilisation, career planning, succession plannings and inputs for skill development.
- Recruitment and selection sub-system. It includes advertisement module, applicants, profile, appointment and placement data.
- Training sub-system. It provides, information for designing course material system for need based,training, appraisal of training programme etc.
- Appraisal Sub-system. It consists of information about performance rating which serve as inputs for promotion, transfer, increment, succession, planning and career planning. .
- Payable sub-system. It consists of information concerning wages and salary, wage incentive, wage increment, allowances, perquisite, or fringe benefits, deductions for provident fund etc.
- Maintenance sub-system. It contains data regarding health, safety and welfare of employes.
- Personnel Research sub-system. It is a bank of historic and current data about employees attitudes absenteeism, turnover, etc. which may be used for different types of analysis.
- Personnel Administration sub-system. It is intended to keep personal records of each employee as regards leave, transfer promotion, increment etc.
Integrated Human Resource Information System (HRIS) :
The computerised HRIS virtually integrates the information relating to different sub-system discussed above. It serves as a common date base of information on job, people and organisation variables. Integrated HRIS involves the following elements—
- Automated Analysis Methods. Data on job, people and organisation are gathered by the system through diagnostic questionnaires that query human respondent and analyse the data.
- Decision support. This supports specific HRD decision making. The format is designed to answer specific questions.
- Multiple Application. Various sub-systems of HRIS are so integrated that data generated or used by one segment or sub-system can be accessed and used by other sub-systems also such as data generated and used by selection sub-system may be used for training sub-sys- tern or for compensation sub-system.
- Every Access and user friendliness. The computerised HRIS facilitates easy access to date. Whenever required.
Any person who knows the operation of a computer can retrieve the required information. Application of computers in modern organisation can help in processing organisational date, job data and personnel (people) data. Organisation data include data relating to organisational competitiveness and market, e.g. the life cycle of company its structure and cultures management styles, employee attitudes, work culture, customer satisfaction etc.
Job data include the proposed duties and responsibilities of the person handling the job, performance standard lists to be used on the job, compensable factors and competency requirements. People or personnel data may include demographic information of the employees like age, sex, race etc. work-history, education leave, training and development, history, competency assessment, performance appraisal data and career path data etc. These information in computers may be used by any person who knows the operation of a computer for any purpose, he likes.
What are the functions, objectives and significance of Human Resource Information System ? How will you design HRIS in an organisation ?
Functions, Objectives, Significance And Designing Of HRIS:
Functions of HRIS. There are two main functions of Human Re-source Information System (HRIS) as follows—
1. Data collection and 2. Data management
1. Data collection.
As far as collection of data is concerned i.e., who should collect what data and in what form and how often ? Very much depends upon the objective of the organisation. As because the objectives of the organisation differ front each other, so nature and form of data will vary from organisation to organisation. The manner of data collection will also depend upon the purpose for which data is required. After collection of data, irrelevant data should be removed and the relevant data only should be properly classified and tabulated so that it can be used when needed.
2. Data Management.
A good data management system involves the * following sub-functions—
- Processing operations viz. classifying, analysing, summarising and editing the data.
- Storage of data viz – indexing, coding and filing of information.
- Retrieval of date, whenever required
- Evaluation i.e., judging the relevance and accuracy of the information before its use.
- Dissemination i.e. providing the required data to the concerned personnel, in the right form and right levels. ‘
Data management system should be capable of giving efficient service in term of day to day processing of information. Moreover, the system should not be rigid. It should be subject to change whenever required. The same information may be needed in different forms at different levels and for different purposes. In efficient system should be also to quickly respond to these types of demand from different sources.
Objectives of HRIS
The following are the main purposes of HRIS.
- The main purpose of developing are efficient information system is to supplement corporate planning and central system without it, information system is meaningless.
- It helps in managerial decision making by making the desired information in the right form and at the rights time.
- It is an important tool to effective communication. Upward and downward. A good system should given continuous feedback to the management so that the management may take timely decisions and exercise effective control. Thus, it facilitates control.
- The other aim of HRIS is to improve the corporate image because the communication with outsiders is handled systematically and quickly.
- Data collection and data management should have the minimum and reasonable cost.
- Its aims should be provide necessary security and secrecy for important and/or confidential information. ‘
- To keep the information up-to-date.
Benefits/Significance of HRIS:
A well organised HRIS will lead to the following benefits
- Integrated view of human resource function
- Availability of timely and accurate information about human resources engaged in the organisation.
- Development of performance standards for the human resources.
- Development of individuals through linkage between performance,
reward and job training.
- Capability to quickly and effectively create cross-functional teams for problem solving.
- Design and implementation of training programmes based on knowledge of organisational needs.
- Economy management of human resource data.
Designing of Human Resource Information System. The steps in designing a Human Resource Information system are as given below—
The main purpose of HRIS is to provide necessary information for decision making purposes. The design and development of an effective HRIS should start with an analysis of the type of decisions and type of supporting situation in which the managers generally get involved. Stellers and Richard have suggested the following four steps in this regard—
- Defaming and analysing the type of decisions that are made both operational as well as those related to policies within the organisation to keep the organisation going.
- Determining the types of existing policies that influence or put constraints on the ways the decisions are made Or should be made.
- Identifying or isolating the type of data that is relevant and needed for decision making.
- Establishing a mechanism and a set of procedures for fathering such data and appropriately processing this data into useful information.
At this stage, a Human Resource Information centre should be established. At this centre, all the hardware and software and technical help necessary to gather all information should gathered at one place and then classify and tabulate it to give it the shape of managerial information. This centre will work in coordination with other centres of the enterprise. The information system should be integrated with the overall management control system of the organization.
The system designer has to take the decision in respect of the number of files to be maintained, the equipment to be used for processing of date such as manual electronic or automatic processing, etc., the personnel to be employed for the purpose and the ways of processing and storing the information required on an exceptional basis above all, a cost benefit analysis of the system is essential.
While implementing the HRIS the alternatives available in this connection are
- The old information flow may be allowed to continue as it is and the new system may be installed to meet the requirements of the new operation;
- the old system may be scrapped completely and the new system should be supplanted a new;
- phasing the installation of the new system and scrapping the old one.
For putting the HRIS into practice, it is important to appoint new personnel and train them to operate the system.
4. Feed Back.
The regular feedback regarding the actual functioning of the HRIS is a must for the desinger to note and fill up the gap between planning and implementation.
The changes in the environment also need to be incorporated. If the HRI?S is not corrected at this stage of these deviations, it will lead to malfunctioning of the system. Hence, the system should be continuously reviewed in the light of changed that occur in the environment both without and outside the organisation. Necessary steps will have to be taken to modify the system in the wake of these changes.
Discuss the concept of Business Process Re-engineering and examine the role of Human Resource Manager in carrying out Business . process re-engineering in the organistion ?
Business Process Re-engineering
In this globally completive dynamic environment of modem business, Business Process Re-engineering l?as become very crucial. One of the important task of the human resource manager is to ensure that all the processes in the business are adding value, and if not, they must be obliterated which is basically the philosophy of the Business process Re-engineering. Actually re-engineering means that management should start a fresh discarding everything of the past (except human beings including customers), as if it is free from all bindings, of the past decision.
It is a process of rethinking and redesigning of those processes which create value to the customer and get rid of those which are useless and have value as antiques or which are good for museum. The pioneer of re-engineering, Michael Hammer and James Champy have defined the Business Process Re-engineering as “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvement in critical contemporary measures of performance such as cost, quality, service and speed”.
Nature and objectives of Business Process Re-engineering.
One of the basic assumptions of the Business Process re-engineering is that the traditional way of organising departments and processes around very specialized task (i.e., organising departments in the principle of specialisation) is inherently duplicative, wasteful and unrepensive to the firm’s customers. In BPR, therefore, several jobs are combined into one so that an assembly line process is replaced by generalists who carry out all the tasks of the process themselves.
Thus BPR leads to workers making more decisions. Moreover checks and controls are reduced to the minimum and the more emphasis is an carefully selecting and trading the new generalists who can perform the whole process themselves thus creating new values for the customers. Customers are benefitted in the sense that each customer ends up with a single point of contract with checking on the status of an order.
2. BPR onlynelim9nates unwanted operations from the business process. It does not aim at getting rid of people. Its emphasis is mainly how an organisation is structured. It should not be confused with automation. BPR offers a radical new principles that the new design of work is based not on classical hierarchical arrangement or division of work and specialisation but an end to end processes and creation of new values for customers.
Objectives Of business Process Re-engineering
Re-engineering is intended to accomplish four objective as follows
- Total customer satisfaction. ‘
- Meeting keen competition or improving competitive advantage.
- Introducing planned change.
- Creating smart business process.
Today customers are well informed, they have knowledge, they are demanding more, they are sophisticated, they know their needs and given written and precise specifications of the product required. Besides they have wider choice and greater range of alternatives. Today competition is not local or gentle, it is global and cut-throat. BPR and strategic planning can help a lot. Lastly change is dizzy or unsteady. What was unthinkable yesterday is routine or usual today.
Some people feel that re-engineering is nothing but restructuring. But it is not so. Restructuring requires a business organisation to decides it core competencies and decide which areas it should continue to operate and diversity and which one it should get out. Once the company decides its core competencies, it can look around to customers and their desires, their expectations, look to its rivals and then put its vision and mission into reality through the involvement of all its employees in reconstruction and re-engineering.
After the announcement of the industrial policy of 1991, which paved way for liberalisation and’globalisation of Indian economy many big companies in India are busy in identifying their core competencies deciding in which business area, they should continue to operate and which sectors they should ‘ get out of and choosing their diversifications synergistically. At the same time, they are seeking alliance with transnationals and even domestic companies.
Apart from diversifications and acquisitions most of the business groups are thinking to operate global. At the same time, they are trying to flatten organistional hierarcies, decentralise decision making. Shap floors are being automated, workers and managers are being trained/retrained to meet higher quality standards so that the company may respond quickly to the changes in the environment.
Now we come to know that restructuring is not the same as re-engineering. Restructuring is one possible outcome of re-engineering. In fact re-engineering ‘ could have many other outcomes such as
- Redefinition of roles and responsibilities;
- organisation wide information system implementation;
- Training for achievement motivation,
- process innovation,
- business process elimination,
- redesign of process,
- redefinition of business domain.
Many businessmen in India feel that elimination of existing processes is not possible in one go as it involves a huge cost which a businessman can-not be or and BPR is therefore, a buzz word for MNGs or very big companies.
Cost involved should never be analysed in isolation, instead cost-benefit analysis is a better tool for decision making. If there is going to be a net gain, then they should go for that otherwise they should rethink of elimination of all processes in one go, they should affect the change gradually.
Although, re-engineering a single process may not lead to significant improvement in the overall performance of the company unless.the improvement in that particular process is dramatic. In case, resource is a constraint and the organisation can implement re-engineering in one process only then it should follow the following guidelines ,
- Identify those processes which can be avoided in early stages,
- Give priority to those processes which can make maximum contri-bution to the overall bottom line or towards achieving any specific corporate mission like customer satisfaction or creating niche-makes etc.
Role of Human Resource Manager in BPR. Human Resource Man-ager can play a key rple in the effective implementation of reengineering in the organisation in the following ways-
(i) Creating commitment to Re-engineering.
Implementing re-engineering successfully means winning employees commitment. Even the most brilliant reorganisation and organisational changes can be undermined if the employees are adamant not to accept the change. Therefore winning people’s commitment is the to the success HR manager can play a big role in winning such commitment through HR practices such as value-based hiring, building a sense of community and installing an effective two way communication.
(ii) Team Building.
BPR generally results in reorganizing the workforce from functional departments to process oriented teams such as team of employees for processing credit requests. HR manager can play a key role in building such teams by providing necessary communications between top management and the team open and free flowing.
(iii) Developing Multi-skilled workers.
With re-engineering, jobs generally change from specialised tasks to multi-dimensional generalists work. Each worker in the team is responsible for a broader and more enriched job sharing joint responsibility with their fellow team members for performing all activities of the whole process and not a small piece of it based on specialisation. It means acquiring much broader range of skills from day to day. HR manager can play a key role here for acquiring high potential employees and train them for the successful implementation of BPR.
(iv) Creating Empowers Jobs.
BPR requires creation of empowered jobs to perform a better set of task with relatively less supervisions. Human Resource manager can advise in designing and redesigning the jobs.
(v) Shifting Focus from Activities to Results.
Re-engineering create work of that is measured in terms of results not in terms of activities. It will help the HR managers to reevaluate the compensation system in the organisation. In particular, performance and results should be the primary factors for determining compensation.
What are the causes of failure in Business Process re-engineering ? How can it be made effective ?
Causes Of Failure In BPR And Making It Effective
Causes of Failure in BPR. Business process re-engineering may fail due to the following reasons—
- Lacking focus on business process. _
- Ignoring everything except process redesign.
- Settling for results major or minor.
- Placing prior constraints on the definition of the problem and the scope of re-engineering efforts.
- Allowing existing corporate culture and management attitude to prevent re-engineering from getting started.
- Assigning smearier who does not understand hand to re-engineer the efforts.
- A will not to spend resources devoted to the re-engineering.
- Start re-engineering when the chief executive is about to retire in a very short period. Such a, person has no will or interest in re-engineer the business processes.
- Pulling back the re-engineering process when people resisted the re-engineering changes.
- Failure to make a distinction re-engineering from other improvement programmes.
How TO Make BPR Effective ?
The Business Process re-engineering can be made effective if the fol-lowing conditions are satisfied—
1. Support of Top Management.
BPR must begin from the top without the support of top management, it cannot be implemented. The top management should take imitative in this direction and develop a core team of competent people from different departments and divisions to plant and implement the re-engineering process.
2. Clarity of Purpose.
Before planning and developing a programme, the strategic purpose should be clearly defined so that it may be clear what business we want to be in and how to develop it to have a gain.
3. Choice of Right Processes.
Appropriate business processes should be chosen for re-engineering. Processes should be chosen and three criteria—
- dysfunctional processes,
- processes having maximum impact on customers and processes most susceptible to successful redesign. Dysfunctional processes which are troublesome, if not required in the system or are not in a position to be improved, they should deleted other processes should be improved.
4. Customers Angle.
The main purpose of re-engineering is customer satisfaction, so customer satisfaction should be at the centre. Preconceived notions should be discarded. Staff can be convinced for re-engineering by explaining them the impact of re-engineering on customer satisfaction.
5. Sense of Urgency.
Re-engineering should be implemented on urgent basis. At time frame should be implemented on urgent basis. A time frame should be kept for achieving results through re-engineering.
6. Proper climate.
Environment conducive to change must be created. For this purpose, involvement and participation of maximum people and union support are helpful in overcoming resistance to change.
What is downsizing and why is it needed ? Explain the role of human resource management in downsizing.
Downsizing involves organisational restructuring which results in decreasing the size of the organisation and often results in a flatter organisation structure so as to respond more readily to the pace of environmental changes. It is a kind of restructuring process in which the organisation closes down its non-core activities. In the context of human resource management, downsizing involves elimination of certain jobs with a view to improve work efficiency. Downsizing, as a strategy has been adopted throughout the world to achieve operational economics and increase efficiency to be able to survive and grow in the uncertain environment. As a strategy, the organisation reduces staff which is in excess of its needs. As a result, the firm gets rid of some of its employees.
Why Downsizing ?
Downsizing is resorted to the following reasons.
- Where an organisation suffers from over-staffing due to faulty human resource planning. More often, over-staffing is found in Indian Government offices.
- In some cases, downsizing is adopted due to technological advancement. Such advancement may result in a change in man-machine ratio.
- An organisation may start outsourcing some of its business functions. As a result, people engaged in those functions become surplus.
Downsizing may However, lead to following adverse consequences-
- Downsizing may create a feeling of insecurity among the employees causing low morale and high stress among employees. They may feel that they are paying the price for mismanagement.
- In this practice, it is also possible that some competent employees have to leave the organisation. This may erode the efficiency of the organisation.
- Implementation of performance improvement practices may be-come difficult because of the feeling of job’ insecurity created by downsizing.
Role Of Human Resource Management In Downsizing
Human Resource Management may implement the downsizing practice successfully in the organisation by adopting the following measures—
- HR personnel must dispel the negative effects of rumours through proper communication and must ensure that individuals are kept fully informed with facts and figures.
- Before adopting the downsizing practice, the HR professionals have to convince trade unions and win their support for downsizing.
- HR personnel must think of the difficulties of laid off employers and must devise programmes to assist them laid off employees when informed about lay off face many uncertainties and difficulties about service pay, retirement benefits, search for alternative job, transition assistance etc. These uncertainties need to be anticipated and taken care of.
What is Voluntary Retirement Scheme (VRS). Explain the main issues involved in VRS. Give merits and demerits of the VRS.
Voluntary Retirement Scheme (VRS)
Liberalisation and globalisation of Indian economy have exposed Indian firms to foreign competition. This has forced them the Indian firms to be efficient and cost effective. They have resorted to downsizing (or right size, as they call it) and say good bye to the surplus staff by offering them ‘golden handshake under the voluntary retirement scheme. Thus, in India downsizing is resorted through voluntary retirement scheme.
Voluntary retirement scheme involves separation of employees—both managerial and operative levels—based on mutual agreement between the organisation and its employees against an agreed compensation between the two parties. It is a voluntary act on the part of the employees to retire under the scheme offered by the employer.
VRS is not need to the Indian corporate sector as it has been practised in the part though at a very low magnitude. It waS only in 1991 when Indian resorted to liberalisation, privatisation and globalisation by opening its economy the world. Liberalisation increased competition almost without an advance notice.
It has forced many organisation to have a relook at their redundant human resources which has been a source of fat wage bills without any corresponding productivity. VRS has been applied as a downsizing strategy to cut the size of the wage bill by offering employes a golden handshake (a recreative compensation to the employees who opted for the scheme. The practice of VRS has been executed in both public and private sectors and in manufacturing and service sectors.
In the initial stage, VRS appeared attractive and many organisations successfully implemented it. But in many other cases attempt remained failed.
In order to make the VRS successful a number of issues must be tackled effectively. The main issues in VRS are as follows—
1. Need for VRS. First, the organisation, must identify the need for VRS. Is it r ally necessary to offer VRS in the organisation. In case there is surplus manpower in the organisation and management thinks that the surplus staff can be utilised somewhere else within the organisation, VRS is not to be resorted. If the management is of the view that without offering VRS, it cannot get rid of the problem of surplus staff and gat wage bills, VRS is necessary’. The type of employees to be covered in the scheme and those who opt for it need to be identified.
2. Cost benefit Analysis. Before launching a VRS, its implications for the organisation should be carefully examined. Its pros and cons should be considered deeply. VRS is a double edged weapon and not a panacea of all ills of human resource management. If the targeted employees are expected not to opt the scheme, the morale of the employees may go down. Suppose, employees who are supposed to be unemployable elsewhere in the industry do not opt the scheme and the talented staff leave the organisation under VRS, this state of affairs may be prove costly or rather fatal to the organisation because organisations may be left with poor quality staff.
3. Designing the scheme. There are two main issues involved in designing the VRS (i) What is being offered ? and (ii) To whom it is offered ?
4. (i) The first issue relates to compensation offered by the company. The practice differs from Company to company and sector to sector. For example, the private sector Hindustan Lever Limited offered a lumpsum payment of 2.25 times of July 1982 salary multiplied by the remaining years of service plus pension at the rate of 70 p.c. of normal pension counted up to 60 years of age (superannuation age).
In public sector, Department of public enterprises has prescribed three months salary for each completed year of services subject to a maximum of monthly salary multiplied by the number of months left for retirement. Public sectors bank offered 45 day salary for every year completed service or salary for balance period of service, whichever is less.’
(iii) The second question involved in designing VRS is who will be covered by VRS. Logically those employees should be covered by the scheme whose service are required least in future, Seniority vs. ment does not work here. It is a very contentious issue and should be decided very carefully. Unless, the employees to be covered are given specifically in the scheme, the scheme is supposed.to be operative to all the employees.
Qualifying clause may be had in the scheme. U.P. state textile corporation, while wanted to close its operations, offered VRS to all its employees. SAR (Steel Authority of India Limited) prescribed the minimum age limit for different categories of employees such as unskilled workers 40 years, skilled workers 43 years, Junior management, 46 years, and middle management 50 years.
5. Convincing Trade Unions.
In implementing the scheme success-fully, the management must take the trade union into confidence. Unless the trade union agrees to the pros and cons of the scheme, it is likely to fail. So management must convince the trade union before the implementation of the scheme.
Merits of VRS. The chief merits of VRS are—
- Lucrative compensation to employees through VRS prevents resentment among workers because the scheme is voluntary.
- It helps in downsizing the specific division/department.
- It offers a human route to retrenching excess workforce.
- It reduces the fate wage bill thus reduces the labour cost in manufacturing.
- It is likely to benefit those companies which are labour intensive.
Demerits of VRS, The VRS suffers from the following negative points—
- It creates sense of fear and uncertainties among the employees who stay with the firm.
- Exist cost may exceed the gain. Talented staff may got out and poor quality staff may stay.
- Operation of the scheme may spoil the reputation of the company “mainly when it fails to fulfil the objective if the scheme.
- Where trade unions oppose the scheme suggested by the manage-ment, it is likely to be spoiled.