367 - Human Resource Information System

HUMAN RESOURCE
INFORMATION SYSTEM
(FOR PRIVATE CIRCULATION ONLY)

2019
PROGRAMME COORDINATOR
Dr. Padmpriya Irabatti
COURSE DESIGN AND REVIEW COMMITTEE

Prof. Dr. Prasanna Deshmukh Prof. Dr. Asha Nagendra
Prof. Vijay Masarkar Prof. Sudhir Sant
Prof. Debashish Dutta Prof. P. A. Noronha
Mr. Rajendra B. Sabnis
COURSE WRITERS
Dr. Asha Nagendra Prof. Deepika Pandita
Ms. Manjiri Kulkarni
EDITOR
Ms. Neha Mule
Published by Symbiosis Centre for Distance Learning (SCDL), Pune

July, 2013
Copyright © 2019 Symbiosis Open Education Society

All rights reserved. No part of this book may be reproduced, transmitted or utilised in any form or by any
means, electronic or mechanical, including photocopying, recording or by any information storage or retrieval
system without written permission from the publisher.
Acknowledgement
Every attempt has been made to trace the copyright holders of materials reproduced in this book. Should any
infringement have occurred, SCDL apologises for the same and will be pleased to make necessary corrections
in future editions of this book.
PREFACE
The human resource information system (HRIS) is basically a database system developed to assist
HR in decision-making and reporting. It is normally one of the elements of the overall management
information system (MIS) of an organization. It is indeed an IT-enabled HR service available to the
HR managers for data analysis and decision-making. HRIS helps the HR managers in making a quality
decision by ensuring them an adequate and timely availability of all relevant information. The scope
of HRIS is so wide that it can provide information about every aspect of an employee, beginning
with his recruitment and ending with his retirement. As such, HRIS facilitates the use of computer
technology to streamline HR operations, cut costs and eventually enhance the effectiveness of human
resource management.
This SLM overcomes the cross-disciplinary challenge in teaching the course by drawing on the expertise
of leaders in HR and IT/IS fields. Human resource information systems (HRIS) has become a crucial
area of attention for management professionals. A major challenge in teaching the course is its cross-
disciplinary nature. HR students find it difficult to grasp the IT//IS side of the subject and vice versa.
This book uses a balanced approach in dealing with HR and IT/IS issues by drawing from experts in
both areas in order to overcome the technical nature of the subject.
The book represents the intersection of the best thinking and concepts from the two fields that changed
the role of HR in organizations from record keeper to strategic partners. The basic philosophy of this
book is the integration of technology with people management in HRIS, which will create a distinct
competitive advantage for organizations.
We sincerely hope that this book will be interesting and useful and will help students and readers to
learn this subject in a more meaningful and useful manner.
Dr. Asha Nagendra

Prof. Deepika Pandita
Ms. Manjiri Kulkarni
iii
ABOUT THE AUTHORS
Dr. Asha Nagendra, MSc, PhD, Post-Doctoral Research Fellow of Indian Council of Social Science
Research (ICSSR), New Delhi. A post graduate in Resource Management from Bangalore University,
she completed her PhD in Organizational Management from Pune University. Subsequently, she was
awarded a Senior Research Fellowship for Post Doctoral Research in Human Resource Management
by Indian Council of Social Science Research (ICSSR). She has been teaching at Symbiosis
International University for the last nine years. In 2010, she was appointed Director, Symbiosis Centre
for Management Studies (UG), at Noida, UP, the off campus institute of Symbiosis International
University, Pune and has returned after successfully setting up the institute at NOIDA in 2010. With
her strong research background, she is a PhD guide in 4 Universities including Symbiosis International
University, Pune. Nine students have received PhD under her guidance, while seven are pursuing PhD
presently in the Faculty of Management. With a rich experience of thirty five years of teaching and
research, she has conducted Faculty Development Programs on “Writing a Research Paper” at various
institutes. Currently, she is a Professor at the Symbiosis Institute of Management Studies, Khadki, Pune.
Prof. Deepika Pandita has co-authored the book. She did her Masters in Management Studies (MMS)
in Human Resources from Mumbai University and M.Com. from Mumbai University and DHRM
from Welingkars Institute of Management & Studies and is currently pursuing PhD. She is certified
in Occupational Personality Questionnaire (OPQ) by SHL Training Academy, United Kingdom,
certified in DISC for Personal Profile Analysis (PPA) and Human Job Analysis (HJA) from Thomas
Assessment Private Limited. She is also “Certified Psychometric Test Professional” (CPTP) from
Carlton University, USA through Middle Earth Consultants. Presently, she is a full time Faculty In
charge for HR at SIBM, Pune.
Ms. Manjiri Kulkarni has completed MPM, M.Com. and is pursing PhD in Human Resource. Her
two papers have been published in both National as well as International Conferences in 2012 and
2013. She has rich experience of 12 years in Human Resource profession in industry. At present, she
is associated with Symbiosis Open Education Society, Pune.
iv
CONTENTS
Unit No. Title Page No.

1 Evolution of Human Resource Information System 1-18
1.1 Introduction
1.2 Evolution of HRM and HRIS
1.3 HR Activities
1.4 Interface between HR and Technology
1.5 Concept of Human Resource Information System
1.6 Need for Human Resource Information System
1.7 Types of HRIS
1.8 System Development Process for HRIS
1.9 Interdependence of HRIS and HR Activities
Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading
2 Introduction to Database Management System 19-40
2.1 Introduction
2.2 Definitions
2.3 Data Sharing
2.4 Relational Database
2.5 MS Access and Database
2.6 Data Warehousing and Data Mining
2.7 Information Security and Cyber Laws
2.7.1 Components of Information Security
Summary
Keywords
Suggested Reading
v
3. Design of Human Resource Information System 41-54
3.1 Introduction
3.2 Definitions
3.3 HRIS Architecture
3.3.1 Types of HRIS Architecture
3.4 Cloud Computing
3.5 System Implementation of HRIS
Summary
Keywords
Suggested Reading
4. HRIS – Need Analysis 55-70
4.1 Introduction
4.2 Definitions
4.3 System Development Life Cycle
4.4 Human Resource Planning and HRIS
4.5 Global Positioning System of HRIS
Summary
Keywords
Suggested Reading
5. Human Resource Analytics 71-88
5.1 Introduction
5.2 Definitions
5.3 HR Matrices
5.4 Workforce Analysis
5.5 HR Process Efficiency
5.6 Using HR Matrices in Workforce Analysis
5.7 HR Accounting
5.7.1 Advantages of HR Accounting
5.7.2 Disadvantages of HR Accounting
5.7.3 Methods of HR Accounting
Summary
Keywords
Suggested Reading
vi
6. Introduction to the Management of Change 89-104
6.1 Introduction
6.2 Definitions
6.3 What is Change
6.4 Process of Change Management
6.5 Models of Change Process
6.6 Individual and Organisational Issues in HRIS Implementation
6.6.1 Individual Issues for HRIS Implementation
6.6.2 Organisational Issues for HRIS Implementation
Summary
Keywords
Suggested Reading
7. Outsourcing and HRIS 105-114
7.1 Introduction
7.2 Definitions
7.3 Need for HR Outsourcing
7.4 Advantages of HR Outsourcing
7.5 Payroll System
Summary
Keywords
Suggested Reading
8. Talent Management 115-130
8.1 Introduction
8.2 Concept and Significance of Talent Management
8.3 Talent Management Life Cycle
8.4 Talent Management and Corporate Strategy
8.5 Talent Management and Business Culture
8.6 Talent Management and HRIS
8.7 HRIS and Competency Mapping
Summary
Keywords
Suggested Reading
vii
9. E-Recruitment and Selection 131-152
9.1 Introduction
9.2 Recruitment and Technology
9.2.1 Forms of Recruitment
9.3 E-Recruitment
9.3.1 E-Recruiting Methods
9.4 Advantages of E-Recruitment
9.5 Limitations of E-Recruitment
9.6 Features of E-Recruitment
9.7 Points for Consideration for Effective E-Recruitment
9.8 Recruiting Yield Pyramid
9.9 Scenario of E-recruitment in India
9.9.1 Current Scenario
9.9.2 Recent Trends
9.9.3 Prevalent Practices
9.10 Technology Issues in Selection
9.11 Selection of Human Resource Information
Technology (HRIT)
Summary
Keywords
Suggested Reading
10. Training and Development in E-learning Organisations 153-172
10.1 Introduction
10.2 Role of E-Learning and E-Training
10.2.1 Benefits and Drawbacks of E-Learning
10.3 HRIS Application in Training
10.4 Learning Management System
10.4.1 Advantages of LMS
10.4.2 Disadvantages of LMS
10.5 HRIS -T&D: Implementation Problems
Summary
Keywords
Suggested Reading
viii
11. Performance Management System and Compensation 173-192
11.1 Introduction
11.2 Performance Management System
11.3 Compensation
11.4 Compensation Policies and Objectives
11.4.1 Essentials of an Equitable and Ideal Compensation and Rewards
Systems
11.4.2 Compensation and Benefits in Perspective
11.5 Compensation Structure
11.5.1 Compensation and Benefits: A Tool to attract Talent
11.5.2 Critical Factors in attracting Talent to an Organisation
11.6 Wage and Salary Determination
11.6.1 The Wage Determination Process
11.6.2 Possible Deductions from Wage/Salary
11.7 Possible Inputs to the Payroll Process
11.8 Preparation of Payroll/Wage Sheet
Summary
Keywords
Suggested Reading
12. International HRM and HRIS 193-204
12.1 Introduction
12.2 Definitions
12.3 Classification of International Business
12.4 Global Diversity in HRM
12.5 International Staffing
12.6 Dealing with Expatriates
12.7 Challenges before HRIS
Summary
Keywords
Suggested Reading
ix
x
Evolution of Human Resource Information System
UNIT
1
Structure:
1.1 Introduction
1.2 Evolution of HRM and HRIS
1.3 HR Activities
1.4 Interface between HR and Technology
1.5 Concept of Human Resource Information System
1.6 Need for Human Resource Information System
1.7 Types of HRIS
1.8 System Development Process for HRIS
1.9 Interdependence of HRIS and HR Activities
Summary
Keywords
Suggested Reading
Evolution of Human Resource Information System 1

Notes
Objectives
----------------------
After going through this unit, you will be able to:
----------------------
• Describe the evolution of Human Resource Management and HRIS
----------------------
• Classify HR activities
---------------------- • Relate HR, Technology and HRIS
---------------------- • Justify the need of HRIS in proactive organisations
----------------------
---------------------- 1.1 INTRODUCTION
---------------------- The function of Human Resources (HR) departments is generally

administrative and common to all organisations. Organisations may have
---------------------- formalised selection, evaluation and payroll processes. The HR function consists
of tracking existing employee data which traditionally includes personal histories,
---------------------- skills, capabilities, accomplishments and salary. To reduce the manual workload
---------------------- of these administrative activities, organisations began to electronically automate
many of these processes by introducing specialised human resource management
---------------------- systems.
---------------------- Experts are of the opinion that there is a need to develop the art of human
and humane management to counterattack the challenges posed by the 21st
---------------------- century organisations. It is proved that the organisations with competitive and
comparative advantages, who can attract, train, develop and retain the brightest
----------------------
human talent in the global marketplace will remain in the businesses. Today’s
---------------------- organisations need to balance the resources available with them to achieve the
desired output and profitability for survival and growth.
----------------------
As you all know, the resources available to the firm can be classified into
---------------------- human and material resources. In an attempt to gain a competitive advantage in
the international market it is realised that managing human resource is the most
---------------------- difficult task and also require more efforts. To gain a competitive advantage in
the marketplace, timely and accurate information related to present employees
----------------------
and potential employees is required by the organisations. With the evolution
---------------------- of computers and information technology, generation of such information has
become much easier through the creation of Human Resource Information System
---------------------- (HRIS).
----------------------
1.2 EVOLUTION OF HRM AND HRIS
----------------------
Human resources are the most important assets an organisation has and
---------------------- their effective management is the key to its success and this success is most
likely to be achieved if the personal policies and procedures of the organisation
----------------------
are closely linked with the achievements of corporate objectives and strategic
---------------------- plans. The term human resource management refers to the activity of employing
2 Human Resource Information System

people, developing the resources possessed by them, utilising, sustaining and Notes
compensating their services in accordance with the requirements of the job.
----------------------
Human Resource Information System describes how information technology
is playing a dominant role in the management of human resources in modern ----------------------
organisations. There is a shift in the roles and the responsibilities of HRM in
organisations. Previously, HR was responsible for transactional activities; now it ----------------------
is more responsible for transformational activities. Transactional activities are the
----------------------
routine activities such as changing an employee’s personal details in the system
and HR records whereas transformational activities are the activities which add ----------------------
value to the organisation’s goals and objectives. Example of a transformational
HR activity would be to train the employees to become more quality conscious, ----------------------
reduce wastages and improve customer handling skills.
----------------------
Pre-World War II Scenario
----------------------
In the early 20th century and prior to World War II, the personnel function
was restricted to activities like timekeeping and maintaining employee’s records. ----------------------
HR used to act as a caretaker of the employees. Before World War II, the
prevailing management philosophy was called scientific management as many ----------------------
studies and experiments were conducted to maximise employee productivity.
----------------------
It was accepted that through time and motion study, most efficient use of
human abilities could be made in the production of goods and services. The job ----------------------
could be broken down into various tasks and the number of tasks to be completed ----------------------
by individual employee during an average workday could be calculated. During
this time, there were very few government interventions in employment relations ----------------------
and therefore, employment terms, practices and employment conditions were
left to the owners of the factories. Employers set up labour departments to take ----------------------
care of the interests of workforce by keeping the records on health and safety, ----------------------
number of hours worked and payment due thereof. It is worth mentioning that
recordkeeping was the major clerical function in the design of a Human Resource ----------------------
Information System; however, there were no computers to automate the personnel
records at this time in history. Manual paper records were kept and we can still ----------------------
find the paper records and files in many smaller and mid-sized organisations ----------------------
today.
Post-World War II (1945–1960) ----------------------
Post-World War II situation had a great impact on further growth and ----------------------
development of personnel function. Employers realised that workers’ satisfaction,
----------------------
morale and motivation had impact on the organisational profitability. It was also
noticed that it is not only the money but other sociological and psychological ----------------------
factors such as recognition, job satisfaction and working conditions which
influenced organisational commitment. The systematic manpower planning, ----------------------
job classifications and occupational categorisation in the military organisation
----------------------
during the War had positively contributed in recruitment, selection, job analysis
and other personnel functions in commercial organisations. Due to the abusive ----------------------
employee practices prior to the War, employees started forming unions, which
played an important role in bargaining for better employment conditions. ----------------------

Notes During this time, computers were used to store and retrieve employee’s
information. The practices of maintaining employees’ records in computers
---------------------- were initiated by the armed forces during this time. In commercial organisations,
computers were majorly used for recording of transaction, billing and stock
---------------------- management. Slowly payroll functions were automated which facilitated
---------------------- employee compensation. Employees opposed the use of computer technology
despite many advantages.
----------------------
Social Issues Era (1963–1980)
---------------------- This phase witnessed increased employee friendly policies, occupational
safety and health of employees and social welfare. Major amendments were
----------------------
made in the existing labour laws in India as per the International Labour
---------------------- Organisation’s (ILO) conventions and recommendations. All this had an impact
on the functioning of the personnel department. It was Herculean task for the
---------------------- personnel department to collect, compile, analyse, process and generate relevant
data for statutory compliance.
----------------------
Due to new developments in computer technology there was a significant
---------------------- growth of HR functioning. Excessive use of computers in production and
operations and in Human Resource Management led to maximisation of
----------------------
organisational profits and better productivity at lower cost. Due to increasing
---------------------- influence of trade unions and collective bargaining, employers were pressurised
to provide socially acceptable working conditions, health care and post-retirement
---------------------- benefits. The personnel functions got transformed from protector to that of the
caretaker of employees.
----------------------
Cost-Effectiveness Era (1980 to the Early 1990s)
----------------------
With increasing global competition, organisations increased their focus
---------------------- on cost-cutting through computerisation and automation. Human Resource
Management, which was administrative in nature, was pressurised to comply with
---------------------- the requirements of the state laws. From employee administration, the HR focus
---------------------- got shifted to employee involvement and employee development. As technology
was getting cheaper day by day, HR was expected to add value to production of
---------------------- goods and services and to improve the effectiveness and efficiency of manpower.
---------------------- It was realised that people management cost is almost two-thirds of the
total cost which further created pressure on HR department to have a review at
---------------------- their managerial and operative functions and other organisational development
activities. The focus got shifted to reviewing returns on investments. Almost
---------------------- every organisation started adopting technology to get the routine things done.
---------------------- The focus was on value addition activities.
Emergence of Strategic HRM (1990 to Present)
----------------------
Due to large scale competition, increasing globalisation, increased customer
---------------------- focus and technological breakthroughs, business process reengineering initiatives
were taken in many organisations worldwide. All this led to reduced workforce,
----------------------
flat organisational structure, autonomous work teams and more emphasis on
---------------------- outsourcing.

Organisations today have realised that if they want to capture the market Notes
then they should invest in human resource. Human resource management has
become a function of strategic relevance and attracting, engaging and retaining ----------------------
quality manpower is becoming more challenging. Nowa- days the buzzwords
are HR scorecard, return on investment and market share. ----------------------
The HR department has emerged as a strategic partner due to various ----------------------

reasons. Strategic HRM (SHRM) has occupied an important position in the
----------------------
overall business management. SHRM derives its importance from organisation’s
resource-based view that employees are human capital and a strategic asset to ----------------------
achieve overall business goals. The success of SHRM is dependent on elements
such as organisational culture, nature of business activities and overall business ----------------------
strategy.
----------------------
The significance of HR and the information provided by an HRIS can
be found in the human reources planning (HRP) function. HRP is concerned ----------------------
with analysing the need for employees in the future and their availability in the
----------------------
market. For example, if a company wishes to expand its present capacity in a
new geographical area, using the system-generated reports, HRP can help in ----------------------
estimating the status of supply of qualified manpower in the proposed locality.
Thus, the availability of potential workforce in the labour market is important ----------------------
in strategic decision to build the new infrastructure which could require huge
----------------------
capital investment.
HR strategies are based on business strategies (cost minimisation, quality ----------------------
enhancement and investment) and business settings (production, services, public
----------------------
sectors and non-government organisations etc.). There is a change in focus from
handling workforce to having a strategic outlook to utilise people more effectively. ----------------------
HRIS’s objective is to expand the range of HRM beyond the organisation to
include every stakeholder, i.e., customers, suppliers, investors and competitors, ----------------------
both nationally and internationally.
----------------------
Check your Progress 1 ----------------------
Fill in the blanks. ----------------------
1. Organisational resources can be categorised as physical, organisational ----------------------

and _______.
----------------------
2. Activities, such as employing people, developing the resources
possessed by them, utilising, sustaining and compensating their ----------------------
services is referred to as _________ function.
----------------------
3. Routine activities performed by HR department are also called
_______ activities. ----------------------
4. During social issues era, the recommendations and conventions of ----------------------
______ impacted labour laws.
----------------------
----------------------

Notes
Activity 1
----------------------
Refer various secondary sources to find out the growth and development of
----------------------
HR and HRIS in Indian industries. Also, try to analyse the situation which
---------------------- led to shift of people management from HRM to Strategic HRM.
----------------------
1.3 HR ACTIVITIES
----------------------
HRM responsibilities involve things like recordkeeping, recruiting,
---------------------- selection, training, employee relations, professional growth and development,
---------------------- employee benefits and compensation. HR functions involve multitasking and
that’s why it is said that HR performs the following activities:
----------------------
●● ransactional: Day-to-day recordkeeping, entering payroll information,
T
---------------------- employee status changes, administration of employee benefits, etc.
●● raditional: Planning, recruiting, selection, training, compensation and
T
---------------------- performance management.
---------------------- ●● ransformational: These HR activities add value to the organisational
T
functioning, for example, cultural or organisational change, structural
---------------------- realignment, strategic redirection and increasing innovation. It is
---------------------- estimated that most HR executives and managers spend nearly 65% to
75% of energy and efforts on the transactional activities, 15% to 30%
---------------------- on traditional activities and less than 15% efforts on transformational
activities.
----------------------
There has been a variance between the way HR professionals allocate their
---------------------- efforts and what contributes worth for the organisation. The maximum amount
of time and expenses of HR management are concentrated at the administrative
---------------------- level. However, HR management adds supreme value at the strategic level and
---------------------- the administrative activities turn out to be a limited value for the organisation.
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig 1.1: Cost of HR vs. Value Addition by HR

---------------------- Source: www.nmatec.com
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig 1.2 HR Management Roles
(Source: www.nmatec.com) ----------------------
----------------------
1.4 INTERFACE BETWEEN HR AND TECHNOLOGY
----------------------
The extensive use of Information Technology has helped in reducing HR
costs and times as well improved the quality of human efforts. It is felt that ----------------------
the HR executives are failing to maintain their importance in a computerised
----------------------
environment. This calls for redefining and transforming the role of HRM through
value-added, strategic initiatives and interventions. Experts believe that this also ----------------------
involves learning of new skills by HR managers and rethinking the way the HR
department is organised and discharges its roles and responsibilities. With the ----------------------
improved job skills of HR personnel, technology is accepted as HR’s partner
----------------------
in progress. While having a modern, upgraded and full-fledged system will not
only make HR a strategic business partner, it can also act as a strong foundation ----------------------
and an effective support system in the achievement of HR objectives.
----------------------
State True or False. ----------------------

1. HRIS and HRMS is one and the same. ----------------------
2. Technology has dominated the administrative role of HRM.
----------------------
3. HR department spends approximately 65% –75% efforts on
transformational activities. ----------------------
4. For HR department to be more effective, operational role is more ----------------------
important than strategic role.
----------------------
----------------------
----------------------
----------------------

Notes
Activity 2
----------------------
Study the HR functions of few big organisations. List down the various
----------------------
activities which fall under administrative, operational and strategic roles of
---------------------- HRM.
----------------------
1.5 CONCEPT OF HUMAN RESOURCE INFORMATION
----------------------
SYSTEM
----------------------
Human Resources Information System means the systems and processes
---------------------- at the intersection between human resource management and information
technology. It merges HRM as a discipline and in particular its basic HR activities
---------------------- and processes with the information technology field, whereas the programming
of data processing systems evolved into standardised routines and packages of
----------------------
enterprise resource planning (ERP) software.
---------------------- Michael J Kavanagh and others defined HRIS as ‘a system used to acquire,
---------------------- store, manipulate, analyse, retrieve and distribute information regarding an
organisation’s human resources’. In other words, Human Resource Information
---------------------- System provides a method by which an organisation collects, maintains,
analyses and reports information on people and jobs. It applies to information
---------------------- needs at the macro level as well as to the micro level.
---------------------- An HRIS is not simply the use of computer hardware and associated HR
software. HRIS includes technology − hardware and software; it also includes
---------------------- people, forms, policies and procedures and updated data. It can be noted that
---------------------- an organisation not having a computerised system still has people management
system in place. It means that the paper systems followed by organisations before
---------------------- the computer technology are still comparable with today’s HRIS. The speed of
computerised system is good today just because these organisations maintained
---------------------- proper records on papers. The term HRIS is understood as a computerised system
---------------------- designed and implemented to manage the organisational human resources.
Currently, human resource information and management systems encompass
---------------------- activities such as:
---------------------- 1. Payroll
---------------------- 2. Time and attendance
3. Performance appraisal
----------------------
4. Benefits administration
----------------------
5. HR management information system
---------------------- 6. Recruiting/learning management
---------------------- 7. Performance record
---------------------- 8. Employee self-service

9. Scheduling Notes
10. Absence management
----------------------
11. Analytics
----------------------
The payroll module automates the pay process by gathering data on
employee time and attendance, calculating various deductions and taxes and ----------------------
generating periodic pay cheques and employee tax reports. Data is generally
fed from the human resources and timekeeping modules to calculate automatic ----------------------
deposit and manual cheque writing capabilities. This module can encompass
----------------------
all employee-related transactions as well as integrate with existing financial
management systems. ----------------------
The time and attendance module gathers standardised time and work- ----------------------
related efforts. The most advanced modules provide broad flexibility in data
collection methods, labour distribution capabilities and data analysis features. ----------------------
Cost analysis and efficiency metrics are the primary functions.
----------------------
The benefits administration module provides a system for organisations
to administer and track employee participation in benefits programmes. These ----------------------
typically encompass insurance, compensation, profit sharing and retirement.
----------------------
The HR management module is a component covering many other HR
aspects from application to retirement. The system records basic demographic ----------------------
and address data, selection, training and development, capabilities and skills
management, compensation planning records and other related activities. Leading ----------------------
edge systems provide the ability to “read” applications and enter relevant data to ----------------------
applicable database fields, notify employers and provide position management and
position control. Human resource management function involves the recruitment, ----------------------
placement, evaluation, compensation and development of the employees of an
organisation. Initially, businesses used computer-based information systems to: ----------------------
●● Produce pay cheques and payroll reports ----------------------

●● Maintain personnel records ----------------------
●● Pursue talent management
----------------------
Online recruiting has become one of the primary methods employed by
HR departments to garner potential candidates for available positions within an ----------------------
organisation. Talent management systems typically encompass:
----------------------
●● Analysing personnel usage within an organisation
●● Identifying potential applicants ----------------------
●● Recruiting through company-facing listings ----------------------

●● ecruiting through online recruiting sites or publications that market to
R ----------------------
both recruiters and applicants
The significant cost incurred in maintaining an organised recruitment ----------------------
effort, cross-posting within and across general or industry-specific job boards ----------------------
and maintaining a competitive exposure of availabilities has given rise to the
development of a dedicated applicant tracking system. ----------------------

Notes The training module provides a system for organisations to administer
and track employee training and development efforts. The system, normally
---------------------- called a Learning Management System (LMS), allows HR to track education,
qualifications and skills of the employees, as well as outlining what training
---------------------- courses, books, CDs, web-based learning or materials are available to develop
---------------------- which skills. Courses can then be offered in date specific sessions, with delegates
and training resources being mapped and managed within the same system.
---------------------- Sophisticated LMS allows managers to approve training, budgets and calendars
alongside performance management and appraisal metrics.
----------------------
The employee self-service module allows employees to query HR related
---------------------- data and perform some HR transactions over the system. Employees may query
their attendance record from the system without asking the information from HR
----------------------
personnel. The module also lets supervisors approve O.T. requests from their
---------------------- subordinates through the system without overloading the task on HR department.
Many organisations have gone beyond the traditional functions and
----------------------
developed human resource management information systems, which support
---------------------- recruitment, selection, hiring, job placement, performance appraisals, employee
benefit analysis, health, safety and security, while others integrate an outsourced
---------------------- applicant tracking system that encompasses a subset of the above.
---------------------- The Analytics module enables organisations to extend the value of an
HRMS implementation by extracting HR related data for use with other business
---------------------- intelligence platforms. For example, organisations combine HR metrics with
other business data to identify trends and anomalies in headcount in order to
----------------------
better predict the impact of employee turnover on future output.
---------------------- The objective of HRIS is to provide precise information to the stakeholders
---------------------- of the system. For all those who are responsible for the organisational functioning,
HR information in organisation, it may be used for:
---------------------- 1. Strategic, tactical and operational assessment by top management
---------------------- 2. Avoiding lawsuit, controversies and maintaining good public relations
and industrial relations
----------------------
3. Evaluating the effectiveness of organisational programmes, policies,
---------------------- procedures and practices
---------------------- 4. Supporting day-to-day operations in organisation
---------------------- The systems and process focus helps organisations keep the customer
perception in mind, since quality is primarily clear and operationalised in terms
---------------------- of total customer contentment. Today’s competitive environment requires
organisations to incorporate the activities of each functional department while
---------------------- keeping the customer in mind. An effective HRIS helps by providing the
---------------------- technology to generate accurate and timely employee information to fulfill its
objective.
----------------------
----------------------

1.6 NEED FOR HUMAN RESOURCE INFORMATION Notes
SYSTEM
----------------------
There are many advantages to organisations in using HRIS. Few of them
are as follows: ----------------------
●● RIS provides comprehensive information which enables organisations

H ----------------------
to provide structural connectivity across various units and activities and
----------------------
expedite the speed of information transactions across verticals.
●● Increased HR competitiveness by improving HR activities and improving ----------------------
various processes across verticals.
----------------------
●● ollecting suitable data and converting them to information and
C
knowledge for timely and quality decision-making. ----------------------
●● roducing a larger number and range of precise and real-time HR-related
P ----------------------
information.
●● eorganising and enhancing the competence and efficiency of HR
R ----------------------
functions. ----------------------
●● hifting the focus of HR from the processing of transactional to strategic
S
Human Resource Management. ----------------------
●● Reengineering and redefining HR processes and functions. ----------------------
●● nhancing employee happiness by delivering HR services more swiftly
E
----------------------
and perfectly.
The ability of the organisation to explore the potential of HRIS depends on ----------------------
a variety of factors, such as
----------------------
●● he magnitude of the organisation, with big firms normally reaping bigger
T
payback; ----------------------
●● he amount of top management support and commitments towards the
T ----------------------
purpose;
----------------------
●● Acessibility and availability of factors such as time, money and people;
●● R viewpoint of the company as well as its vision, organisational culture,
H ----------------------
structure and systems;
----------------------
●● dministrative capability in cross-functional decision-making, employee
A
participation and training; and ----------------------
●● he ability and motivation of human resources in adopting change, such
T ----------------------
as amplified computerisation across and between functions.
In determining the benefits and influence of an HRIS to an organisation, ----------------------
typical bookkeeping and accounting methods do not work with the HRM function. ----------------------
While there are several concrete benefits in implementing an HRIS, such as
payroll efficiencies and reduction in employment costs due to mechanisation, ----------------------
there are several intangible or unseen benefits as well. It includes staff satisfaction
with smooth and efficient HR processes and freeing up HR from routine, ----------------------
administrative matters to focus on policy issues. ----------------------

Notes Enterprise resource planning (ERP) software applications are a set of integrated
database applications or modules that carry out the most general company
---------------------- functions, including HR, general ledger, accounts payable, accounts receivable,
order administration, inventory control and customer relationship management,
---------------------- etc. Obviously, HRM’s emphasis on knowledge management, human capital
---------------------- stewardship and relationship building can provide considerable assistance in the
implementation and use of ERPs.
----------------------
---------------------- Check your Progress 3
---------------------- Multiple Choice Multiple Response.
---------------------- 1. HR activities can be categorised as:

i. Technical
----------------------
ii. Transactional
----------------------
iii. Traditional
---------------------- iv. Transformational
---------------------- 2. The success of HRIS depends on factors like:
---------------------- i. The amount of top management support and commitment

ii. Managerial competence and employee involvement
----------------------
iii. Technical infrastructure
----------------------
iv. Qualified technical team
----------------------
---------------------- Activity 3
---------------------- Undertake a sample study of the HR functioning of few medium, large scale
---------------------- and multinational organisations. Try to contrast the application and relevance
of HRIS of these organisations.
----------------------
---------------------- 1.7 TYPES OF HRIS

---------------------- There are many typologies for classifying computer-based information
systems; following are the most basic types of systems. The experts in computer
----------------------
sciences placed systems under three basic categories:
---------------------- 1. Electronic Data Processing (EDP)
---------------------- 2. Management Information Systems (MIS)
---------------------- 3. Decision Support Systems (DSS)
----------------------
----------------------

EDP is primarily electronic storage of information and was initially applied Notes
to computerise official procedure. Its features consist of:
----------------------
●● ocus on data, storage, processing and flows across verticals
F
●● Efficient transaction dispensation ----------------------
●● Scheduled and optimised computer runs
----------------------
●● Integrated files for connected jobs
●● Management information system for the stakeholders ----------------------
This category of HRIS was the earliest form introduced in the HR field and ----------------------
fits in with the transactional level of HR activities.
----------------------
In the MIS category, the characteristics include:
●● An information caters to the exact requirement of middle managers ----------------------
●● Structured information flows to serve each stakeholders ----------------------
●● I ntegration of EDP jobs by various business function such as production
----------------------
MIS, marketing MIS, logistic MIS, finance MIS etc. )
●● Effective search of data and report generation with a database) ----------------------
This type of HRIS emerged as technology improved over time and it ----------------------
fits the traditional level of HR activities, such as procurement, development,
compensation, integration and maintenance of employees. ----------------------
Decision Support System (DSS) are focused still higher in the organisation, ----------------------
with an emphasis on the following characteristics:
----------------------
●● Decision focused, aimed at top management
●● Prominence on flexibility, adaptability and quick response ----------------------
●● User initiated and controlled ----------------------
●● Support for the personal decision-making styles of individual managers
----------------------
HRIS at this level began to emerge in the cost-effectiveness era of HRM
development and it fits the transformational level of HR activities which adds ----------------------
value to organisational processes.
----------------------
1.8 SYSTEM DEVELOPMENT PROCESS FOR HRIS ----------------------
From the engineering and information processing literature, the formal ----------------------
design of any information processing system is supposed to follow a set of steps
labeled the System Development Life Cycle (SDLC). The traditional SDLC is ----------------------
somewhat difficult to use as originally specified. But there is agreement that the ----------------------
SDLC has five general phases:
----------------------
1. Planning
2. Analysis ----------------------
3. Design
----------------------
4. Implementation
5. Maintenance ----------------------

Notes M. J. Kavanagh applying the main concepts and phases of the traditional
SDLC to the HRM function recommended the following system development
---------------------- process for an HRIS:
---------------------- “The HRIS development process refers to the steps taken from the time
a company considers computerising its human resources functions through the
---------------------- analysis, design, development, implementation, maintenance, evaluations and
improvement of the system.” This system development process is quite similar
----------------------
to the one proposed by Alfred J. Walker (1982). He indicated that development
---------------------- of an effective HRIS should follow seven stages:
1. Proposal to Management
----------------------
2. Needs Analysis
----------------------
3. System Specifications
---------------------- 4. System Design
---------------------- 5. System Development
---------------------- 6. Installation and Conversion
7. Evaluation
----------------------
The system development process begins when the company first begins
---------------------- to consider computerising its HR functions. It is important to document this
---------------------- beginning of the process so that it can be considered when the system is being
evaluated and maintained. Another critical point is the importance of the
---------------------- evaluation and, as needed, improvements to the system. This evaluation must be
continuous and occur not only after the system has been implemented but also at
---------------------- every stage of the development. The quality of these evaluations of the system
---------------------- will depend heavily on the documentation of the stages of the entire system
development process. The documentation of the planning and development
---------------------- of a system is one of the most important determinants of successful system
implementation and continued improvement.
----------------------

---------------------- Match the following.
---------------------- i. EDP a. Management software
ii. MIS b. Management system for effective governance of Human
---------------------- Resources
---------------------- iii. DSS c. Aimed at top management involved in strategic decision
iv. HRMS d. Electronic storage of information
----------------------
e. Executive data providers
---------------------- f. Information useful for managers
----------------------
----------------------

Notes
Activity 4
----------------------
Visit any manpower intensive organisation and interview a senior HR official.
----------------------
Try to find out his views on the relevance of EDP and MIS in Decision Support
System. Identify the position of HRIS in effective HRMS of that organisation. ----------------------
----------------------
1.9 INTERDEPENDENCE OF HRIS AND HR ACTIVITIES
----------------------
Figure 1.3 depicts a model of HR activities centred on HRIS. This model
depicts the interrelatedness of the parts of HR activities that can affect the ----------------------
functioning of the organisation. The HRIS drive various HR programmes that ----------------------
provide management the tools for efficient and effective use of employees.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 1.3 Uses of HRIS
----------------------
(Source: www.nmatec.com)
----------------------
Summary
----------------------
●● uman Resource Information System means the systems and processes
H
----------------------
in the intersection of Information Technology and Human Resource
Management. ----------------------
●● he evolution of the field of HRIS, from its initial role of a record keeper
T
----------------------
concerned with only transactional HR activities to one of becoming a
strategic partner can be witnessed in many organisations. ----------------------
●● he development in the field of HRIS led to reduction in the time and
T
efforts spent by HR professionals and now they can focus more on value- ----------------------
adding activities. ----------------------
●● lectronic data processing, Management information system and Decision
E
support system are classification of computer based information system. ----------------------

Notes ●● RIS contributes in effective management of human resources of today’s
H
organisation.
----------------------
---------------------- Keywords
---------------------- ●● lectronic data processing: The use of automated methods to process

E
commercial data.
---------------------- ●● anagement information system: It provides information that
M
---------------------- organisations require to manage themselves efficiently and effectively.
●● uman resources: The set of individuals who make up the workforce of
H
---------------------- an organisation, business sector or economy.
----------------------
----------------------
1. What are the factors that changed the role of HRM from a caretaker of
----------------------
records to a strategic partner?
---------------------- 2. How does technology help deliver transactional, traditional and
transformational HR activities more efficiently and effectively?
----------------------
3. Substantiate the need for an HRIS in modern organisations.
----------------------
4. Explain how an organisation that is yet to use technology to automate its
---------------------- HR function can graduate from EDP to MIS and finally to DSS.
----------------------
----------------------
Check your Progress 1
---------------------- Fill in the blanks.
---------------------- 1. Organisational resources can be categorised as physical, organisational
and human resources.
----------------------
2. Activities, such as employing people, developing the resources possessed
---------------------- by them, utilising, sustaining and compensating their services is referred
to as Human Resource Management function.
----------------------
3. Routine activities performed by HR department are also called
---------------------- transactional activities.
---------------------- 4. During the social issues era, the recommendations and conventions of
International Labour Organisation (ILO) impacted labour laws.
----------------------
----------------------
----------------------
----------------------
----------------------

Check your Progress 2 Notes
State True or False.
----------------------
1. False
----------------------
2. True
3. False ----------------------
4. False ----------------------
----------------------
----------------------
Multiple Choice Multiple Response.
----------------------
1. HR activities can be categorised as:
i. Transactional ----------------------
ii. Traditional ----------------------

iii. Transformational ----------------------
2. The success of HRIS depends on factors like:
----------------------
i. The amount of top management support and commitment
----------------------
ii. Managerial competence and employee involvement
----------------------

Match the following. ----------------------
i. – d.
----------------------
ii. – f.
----------------------
iii. – c.
iv. – b. ----------------------
----------------------
Suggested Reading
----------------------
1. Badgi, Satish M. 2012. Practical Guide to Human Resource Information
----------------------
Systems. New Delhi: PHI Learning.
2. Kavanagh, Michael J. 2009. Human Resource Information Systems: ----------------------
Development and Application. New Delhi: Sage Publications. ----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Introduction to Database Management System
UNIT
2
Structure:
2.1 Introduction
2.2 Definitions
2.3 Data Sharing
2.4 Relational Database
2.5 MS Access and Database
2.6 Data Warehousing and Data Mining
2.7 Information Security and Cyber Laws
2.7.1 Components of Information Security
Summary
Keywords
Suggested Reading
Introduction to Database Management System 19

Notes
Objectives
----------------------
----------------------
• Define databases and associated concepts
----------------------
• Describe Relational Databases and related terminologies
---------------------- • Work on MS Access, a relational database from Microsoft
---------------------- • Explain the concepts of data warehouses and data mines
---------------------- • Elaborate on Information Security and Cyber laws
----------------------
2.1 INTRODUCTION
----------------------
As we all know, data is all about facts and figures pertaining to a certain
----------------------
object or set of objects that can be easily accessed and maintained as and when
---------------------- needed. For example, if we collect details such as address, type, specialties and
review ratings about hotels in the city, it will be termed as a data about hotels
---------------------- from that city. This can be stored, accessed and maintained easily as and when
needed, to add a new hotel opened, delete the closed hotels etc.
----------------------
All businesses need data about the objects they deal with. Hotel business
---------------------- needs data about their competitors, their area locations, their customers, suppliers,
food products etc. These businesses must need some medium to store these
----------------------
details permanently so that they can access them whenever needed in the future.
---------------------- Previously, they used to have the data in registers, but since computers and
information systems entered into the businesses, books and registers have been
---------------------- replaced by disks, drives and tapes. When we store such details or data on disks
or tapes, it is always in the form of files or databases in general.
----------------------
So considering the above, we can define a Database as collection facts and
---------------------- figures about certain object or set of objects, to have them stored permanently
using tools of information technology and keep maintaining them as and when
----------------------
needed. These tools primarily include
---------------------- ●● ardware tools such as computers, disks, drives, tapes, networking
H
---------------------- components etc.
●● oftware tools such as database, database management systems, computer
S
---------------------- programs, internet etc., which are managed for storing the data from the
---------------------- database.
In short, Database is a collection of the data about an object, which can
---------------------- be accessed and maintained easily. Database management system (DBMS) is
software, which manages or maintains the data from the database. The data
----------------------
management or maintenance includes defining, modifying or deleting the
---------------------- database, adding, deleting, modifying data from the database and controlling
the access to use the database.
----------------------

Based on these concepts, let us understand some important definitions. Notes
2.2 DEFINITIONS ----------------------
●● Data: Facts and figures about an object or set of objects. ----------------------

●● I nformation: It is processed data or it is an outcome after processing the ----------------------
data according to need.
----------------------
●● atabase: A collection of data to be stored by using tools of information
D
technology. ----------------------
●● atabase Management System (DBMS): It is software that manages or
D
----------------------
maintains the data from the database. It is used for storing, accessing in
control and maintaining (with addition, deletion and modification of data ----------------------
and database).
----------------------
●● ata Sharing: It is an ability of Databases to allow multiple authorised
D
users to access the data from the database in consistent manner. ----------------------
●● ata integrity: It is an ability of the databases to maintain and assure
D
----------------------
accuracy and consistency of data over its entire life cycle.
●● atabase Administrator (DBA): An independent authority to maintain
D ----------------------
security, safety and access control of the data and database within an
----------------------
organisation.
●● DB: Relational Database is a collection of data items organised as a
R ----------------------
set of formally described tables, from which data can be accessed and
maintained easily. ----------------------
●● rimary key: A field, which has unique value and can be used to identify
P ----------------------
a row from the table.
----------------------
●● oreign key: It is a field in a relational table that matches a primary key
F
of another table. ----------------------
●● eferential Integrity: It is that property of the relational databases, which
R ----------------------
refers to any field in a table, which is declared as a foreign key and which
can contain either a null value or only values from a parent table’s primary ----------------------
key
----------------------
●● ow: It is called as record in relational table, also named as instance of
R
table or object. ----------------------
●● Column: It is called as field or an attribute of table.
----------------------
●● Table: Combination of row and columns (records and fields).
----------------------
●● Domain: A set of data values for a column.
●● ata Warehouse: A central repository of data, which is developed by
D ----------------------
integrating databases and data from different authentic sources, used
----------------------
for analysis and reporting purposes. Phenomenon of developing and
maintaining data warehouses is called Data Warehousing. ----------------------
----------------------

Notes ●● ata Mart: A small set of data warehouse, which includes set of information
D
relevant to specific business area, function, department or specific group
---------------------- of users.
---------------------- ●● ata Mining: Process of semi-automatically analysing large databases to
D
find patterns that are valid, have hold on new data with some certainty.
---------------------- ●● I nformation security: It is defined as a well-informed sense of assurance
---------------------- that the information risks and controls are in balance.
●● Cyber Law: Cyber Law is the law that governs cyber space.
----------------------
---------------------- Multiple Choice Single Response.
---------------------- 1. It is an ability of Databases to allow multiple authorised users to

access the data from the database in a consistent manner.
----------------------
i. Data Sharing
---------------------- ii. Data Mart
---------------------- iii. Data Mining
---------------------- iv. Information security
----------------------
Activity 1
----------------------
---------------------- 1. Identify the data components to create the database for students, courses
and subjects of college having various courses, various subjects for
---------------------- each course and number of students enrolled for the courses.
---------------------- 2. Create a table showing the above database with your own understanding.
Table columns will be the data components and rows will be the data
---------------------- values.
----------------------
2.3 DATA SHARING
----------------------
Data sharing is an ability of the any database to allow multiple users to
---------------------- access data. When data is collected in a database, it could be of use to other
---------------------- users from the same organisation or group too, so having it in multiple copies
for these users is not at all advisable, as it incurs cost and same data in multiple
---------------------- places looses data integrity (explained below). Therefore, keeping the database
common, getting it shared among number of users and allowing them to access
---------------------- it in a controlled manner can help to prevent unauthorised use and to keep data
---------------------- protected as needed.
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 2.1 : Data Sharing ----------------------
Data sharing is one of the important characteristics of Databases, as it brings ----------------------
data integrity into the database. Data integrity is as ability of having same data
everywhere within the organisation. Keeping the copies of same data at multiple ----------------------
places is not at all recommended, as it needs to be well maintained, which cannot
be practically done at all the places where data has been duplicated. This also ----------------------
results into data redundancy, which needs to be avoided to make the database ----------------------
cost and time efficient.
So, Data integrity is also one of features of Databases, which refers to the ----------------------
maintaining and assuring the accuracy and consistency of data over its entire ----------------------
life-cycle.
----------------------
Data sharing leads further to maintain data integrity among the database.
Therefore, there is a need of some control mechanism through which database ----------------------
is controlled, as it needs to be. These controls typically need access control and
concurrency control. ----------------------
Access control refers to the controls to be exercised while accessing the ----------------------
data from the database. They include protection of data from unauthorised usage,
prevention of data loss due to any reasons such as virus attacks, hacking, natural ----------------------
hazards etc.
----------------------
Concurrency controls refer to the controls that need to be exercised when
the data is being accessed by more than one authorised users simultaneously. ----------------------
Lack of concurrency control in such data sharing environment will result into ----------------------
data inconsistency or data loss. To avoid it, some controls such as timestamps,
locking protocols etc. could be used and data consistency is maintained. ----------------------
These controls are maintained by in independent authority called database ----------------------
administrator (DBA). Depending on the size and complexity of database and size
of the organisation (number of database users), DBAs work on access control ----------------------
strategy and implement it according to the need of the organisation (under the
control of database owner, for example, HR department in the above case). ----------------------
----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. _____________ is the ability of the database to allow multiple users
---------------------- to access data.
----------------------
----------------------
Activity 2
---------------------- 1. Identify the authentic and authorised users of Student database

maintained by the administration department of a college where
---------------------- we have lot of facilities apart from regular academic programs and
---------------------- courses, such as labs, library, hostel, placement, alumni, gymnasium,
sports club, cultural club etc.
---------------------- 2. Draw the diagram showing who will be accessing the student database
---------------------- as mentioned in the above case. Also show how is it accessed and who
will be controlling the data access.
----------------------
---------------------- 2.4 RELATIONAL DATABASE

---------------------- Now we are aware of what the database is and how it is organised let us
see some types of databases.There are three major types of databases:
----------------------
1. Hierarchical Database (HDB)
----------------------
2. Network Database (NDB)
---------------------- 3. Relational Database (RDB)
---------------------- The software that manages data from the respective databases is termed as
DBMS of that type of database, viz HDBMS for hierarchical databases, NDBMS
---------------------- for network databases and RDBMS for relational databases.
---------------------- Hierarchical database and respective HDBMS were the earlier stage
databases where organisations used to work on data stored in the form of parent-
----------------------
child relationships. Lot of applications used this database but later on, it was
---------------------- found to be little cumbersome, as it leads to data redundancy and did not have
efficient methods of handling complex relationships in the database.
----------------------
Later on, Network Database and NDBMS came into existence to help
---------------------- application developers to maintain data without data redundancy. But the problem
of having complex data structures and relationships remained, as it was and it
---------------------- ultimately resulted into complex algorithms and non-maintainable source code.
It was still manageable up to a certain extent but organisations wanted to have
----------------------
some better solution on bringing the cost and time efficiency in storing and
---------------------- accessing the data from the database.
In late 80’s, Relational Database and related RDBMS came into existence
----------------------
and application developers started using them as an efficient data management
system. Let us now focus more on the understanding this RDB and RDBMS Notes
with some more details.
----------------------
Relational Database (RDB) is a collection of data items organised as a set
of formally described tables from which data can be accessed and maintained ----------------------
easily. Let us see some examples to make it clearer.
----------------------
Assume that we are collecting data for students of a college. We need roll
number, name, address and city, telephone number and course for which he has ----------------------
been admitted. To show this, we can draw the table as under:
----------------------
Table Name - STUDENT
Roll Name Address City Telephone Course ----------------------
Number number code ----------------------
20131 Kishor Kumar 123, IT Park, Kolkata 12345678 C001
20132 Lata Mangeshkar 234, Juhu Mumbai 98765432 C001 ----------------------
20133 S. P. Bala 345, TT Nagar Chennai 24681357 C002
20134 Mohammad Rafi 456, Dadar TT Mumbai 97865431 C002 ----------------------
From the above table, it is very difficult to know the details of the courses ----------------------
C001, C002 etc. and there could be need of knowing them so it becomes
incomplete information. To complete it, we must have one more table to describe ----------------------
the courses being conducted in the college with its name and fees.
----------------------
Table Name – COURSE
----------------------
Course Code Course Name Course Fees
C001 Masters in Business Administration 1,20,000/- per year ----------------------
C002 Masters in Information Technology 1,50,000/- per year
C003 Masters in HRM 1,00,000/- per year ----------------------
Now, we have a feel of completion at least up to a certain extent where ----------------------

we can say these students have been admitted for those courses and we have
----------------------
details of the courses as well. Here we need to refer to both the tables to say
this is complete information. Here we can add/delete/modify the students from ----------------------
STUDENT database and COURSE database independently. No data will be
duplicated, which could have been otherwise. (If these two tables join, it will ----------------------
result into data duplication for a course for each row of Student Table.)
----------------------
So set of these two tables is said to be a relational database. We can
understand one very important aspect here: we must have one data element ----------------------
common to keep the relationship between two or among many tables. We can
----------------------
see here that Course Code is common between these two tables. The same can
happen for more than two tables also. ----------------------
Now let us see some important concepts here.
----------------------
Primary key: A row of table must be identified by some unique data element.
This data element is termed as ‘primary key’ of the table. Each table has to have ----------------------
at least one primary key. This key must be unique and not null (must have some ----------------------
value; it cannot be left blank).
----------------------

Notes For example, Roll number, as it is unique for each student, will be treated
as primary key of the STUDENT table. Similarly, Course code will be primary
---------------------- key of COURSE Table as shown above. Both should be unique and not null;
they must contain appropriate value and cannot be left blank in any case.
----------------------
Foreign Key: When you relate two tables, one data element or column must
---------------------- be common between these two tables, for example, Course code is common in
above two tables STUDENT and COURSE. This common data element and
----------------------
column must be a key column, a primary key of one of the tables. So this primary
---------------------- key when taken in another table to relate, will become foreign key of that table.
Here, Course code from COURSE Table is primary key of COURSE Table and
---------------------- course code of STUDENT table will be foreign key of STUDENT table.
---------------------- A foreign key is a field in a relational table that matches a primary key in
another table. The foreign key can be used to cross-reference tables.
----------------------
Referential Integrity: This is one another important property of Relational
---------------------- databases. Any field in a table, which is declared as a foreign key, can contain
either a null value or only values from a parent table’s primary key.
----------------------
For example, course code in STUDENT table above should have only
---------------------- those values, which are available in the column of Course codes in COURSE
table or they can be Null. You cannot have any other value for Course code in
---------------------- STUDENT table which does not exist in the column of Course code of COURSE
---------------------- Table. NULL value is an exception for this, if needed.
Now let us see some of the important terms used in relational databases.
----------------------
Refer to figure below and try to understand the definitions.
----------------------
Row is called record in relational table, also named as instance of table or object.
---------------------- Column is called field or an attribute of table.
---------------------- Table is a combination of row and columns (records and fields).
---------------------- Domain is a set of data values for a column.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig. 2.2 : Relational Database

---------------------- Now let is study one more example of relational database to bring more clarity.
---------------------- Case statement: A trading company engaged in selling various domestic
electronic products has lot of customers from different areas of the city. Let us
design a database for maintaining the orders received from these customers for Notes
the respective products.
----------------------
So let us design a table of all products being sold by the company (sample below).
Table name – PRODUCT ----------------------
Product ID Product Name Manufacturer Product Price Quantity ----------------------
in hand
P1 Refrigerator Kelvinator 12000 10 ----------------------
P2 Television Samsung 10000 20
----------------------
P3 Microwave Philips 7000 10
Now let us design a table to store customer data (sample below). ----------------------
Table name – CUSTOMER ----------------------
Customer Customer City Area Telephone Outstanding ----------------------
ID Name Number Amount
C1 Mahesh R Sinhgad Road 9886752341 10000 ----------------------
C2 Manjiri K Karve Road 9867536121 200000
C3 Amit P Pune Camp 8726738212 0 ----------------------
Now we need to have one more table, which will maintain the record of ----------------------
orders of these customers for the respective products. So let us design a order
----------------------
table which will be relational table referring to above two tables (Sample below).
The table below will refer to both the above tables with their primary ----------------------
keys (Product ID and Customer ID of PRODUCT and CUSTOMER tables
----------------------
respectively). These primary keys, when taken on ORDER table, are called
foreign keys, as described above. ----------------------
Table Name – ORDER ----------------------
Order Number Order Date Customer ID Product ID Order Qty
10001 12/12/2012 C1 P1 2 ----------------------
10004 01/01/2013 C3 P2 3 ----------------------
10006 03/02/2013 C2 P1 1
10007 03/03/2013 C3 P3 3 ----------------------
Now, in this relational database, we have three tables, PRODUCT, ----------------------
CUSTOMER and ORDER, where PRODUCT and CUSTOMER are known
as base tables, (which can also be termed as Master tables) and ORDER table ----------------------
is known as derived/relational table, (which can also be treated as transaction
----------------------
table).
Above relational database also follows referential integrity, where we have ----------------------
only those values in foreign key domains of ORDER table, which exist in the
----------------------
primary key domains of their respective base tables.
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. Relational Database is a collection of data items organised as a set
---------------------- of formally described tables from which data can be accessed and
maintained easily.
----------------------
----------------------
Activity 3
----------------------
A trading company maintains the information of contractual employees, their
---------------------- attendance and monthly wages. By making your own assumptions, design a
---------------------- relational database taking care of all these specification and assumptions made.
----------------------
2.5 MS ACCESS AND DATABASE
----------------------
Now, we are familiar with what is relational database and how is it designed
---------------------- to cater to the needs of an organisation. We have also seen couple of examples to
make it more effective. So far, we were doing this exercise on a piece of paper;
----------------------
how about using some tool to do so?
---------------------- Let us use MS Access, as a tool to work on relational database. MS Access
is a database tool developed by Microsoft. Simple and straightforward database
----------------------
applications from small businesses can be developed by using MS Access.
---------------------- MS Access is the integration of three basic components:
---------------------- 1. Relational Database
---------------------- 2. Graphical User Interface (user friendly interface)
3. Some software development tools
----------------------
Now let us open MS Access from MS Office installed on the machine. Click
---------------------- the MS Access icon/option in the program list.
---------------------- To create Database, we have to use a local template; use the following steps:
---------------------- ●● tart Access. The ‘Getting Started with Microsoft Office Access’ screen
S
appears.
---------------------- ●● lick Local Templates. Icons representing local templates appear at the
C
---------------------- centre of the window.
●● Click the icon for the template you want to use.
----------------------
●● Click the Browse button. The File New Database window appears.
---------------------- ●● Locate the folder in which you want to store your database.
---------------------- ●● Click OK.
----------------------

●● Click Create. Access creates and opens your database. Notes
●● pen the Navigation pane. Access displays the tables, queries, forms,
O
reports and other objects related to the database you selected. You may ----------------------
wish to display the objects by type. ----------------------
To open an existing database
----------------------
●● Click the Office button. A menu appears.
●● Click Open. ----------------------
●● Locate the folder in which you stored your database. ----------------------
●● Click the database name.
----------------------
●● Click Open. Access opens the database.
----------------------
To create blank Database
●● Start Access. ----------------------
●● Click Blank Database. ----------------------
●● ype the name you want to give your database in the File Name field.
T
----------------------
Access will automatically append .accdb to the name.
●● Click the Browse button. The File New Database window appears. ----------------------
●● ocate the folder in which you want to store your database. Note that the
L ----------------------
name of the file appears in the File Name field.
●● Click OK. ----------------------
●● lick the Create button. Access creates the database and opens a datasheet
C ----------------------
with the Table Tools available to you.
----------------------
To add fields to the table
●● Click the Add New Field column label. ----------------------
●● Activate the Datasheet tab. ----------------------
●● Click Rename in the Fields & Columns group. ----------------------
●● Type the field name.
----------------------
●● Press Enter. Access creates the field.
●● ype the next field name. Access creates the field. Continue until you
T ----------------------
have created all of the fields in your table.
----------------------
●● Press Enter without entering a field name to end your entries.
----------------------
OR
●● Right-click the Add New Field column label. A menu appears. ----------------------
●● Click Rename Column. ----------------------
●● Type the field name.
----------------------
●● Press Enter. Access creates the field.
●● ype the next field name. Access creates the field. Continue until you
T ----------------------
have created all of the fields in your table ----------------------

Notes To set field properties to each field
●● Click the field for which you want to set the field properties.
----------------------
●● Activate the General tab in the Field Properties area.
---------------------- ●● Set the properties you want to set.
---------------------- ●● Repeat steps 1 through 3 until you have set all the properties for all fields.
---------------------- So you can do the following for each of the tables created:
●● Enter Records.
----------------------
●● Import a Table into Access from Excel.
---------------------- ●● Modify a Table.
---------------------- ●● Move around a Table.
●● Select Columns and Rows.
----------------------
●● Delete a Record.
----------------------
●● Resize a Column or Row.
---------------------- To sort, filet and create relationships
---------------------- ●● ou can sort Access data so you can view records in the order you want
Y
to view them and you can filter data so you only see the records you want
---------------------- to see. This lesson teaches you how to sort and filter an Access table.
---------------------- ●● ccess data is stored in multiple tables. Relationships join tables together
A
so you can work with the data from multiple tables. This lesson also
---------------------- teaches you how to create relationships.
---------------------- o Sort a Table
o Filter a Table
----------------------
o Apply a Specialised Filter
----------------------
o Hide Columns
---------------------- o Freeze Columns
---------------------- o Format a Table
---------------------- o Compute Totals
o Find and Replace
----------------------
o Create Relationships
----------------------
o Create forms, reports using data retrieval queries
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
Activity 4
----------------------
Start the MS Access on your computer and work on the following using any
----------------------
database we have studied in above examples.
●● Create the database using local template. ----------------------
●● Create another table by using blank database method. ----------------------
●● dd the files to both the tables by referring to any table from above
A
----------------------
examples.
●● et the properties (of your own choice) to each of the fields from all
S ----------------------
the tables created.
----------------------
●● dd the data using grid format method and save it with suitable table
A
names. ----------------------
●● ry sorting, filtering and creating relationships and play around with
T ----------------------
the fields and records till you become comfortable with the process.
----------------------
2.6 DATA WAREHOUSING AND DATA MINING ----------------------
Now we are comfortable to create and manage the database according to ----------------------
the need of an organisation. Now let us see some advance Database concepts ----------------------
and management techniques such as Data warehousing and Data Mining.
Data Warehousing (DW) ----------------------
It is a database used for analysis and reporting purposes. When companies ----------------------
integrate data from different authentic industry databases or other data sources and
----------------------
develop some central repository, it is known as Data Warehouse. The phenomenon
of storing and maintaining it is generally termed as data warehousing. Data ----------------------
warehouses store current as well as historical data and are used for creating
trending reports for senior management reporting such as annual and quarterly ----------------------
comparisons. Data warehouse should be subject-oriented, integrated, consistent,
----------------------
up-to-date and well-maintained.
In late 80’s, IBM’s Database Researchers had come up with an idea of ----------------------
developing large enterprise database by integrating small business databases for
----------------------
the purpose of supporting business decision-making functions of the executive
managers of the organisation. But nowadays, scope has been so advanced that ----------------------
Data warehousing techniques have come up with a separate strategic business
unit, where it has become a service capability for IT companies to serve their ----------------------
client in building their data warehouses and maintaining them throughout their
----------------------
life cycle.
Following are some of the application areas, where Data warehouses have ----------------------
been successfully implemented.
----------------------
●● Financial services: Risk analysis and credit cards, fraud detection
----------------------

Notes ●● rading: Sales and claims analyses, shipment and inventory control,
T
customer care and public relations
---------------------- ●● Production: Cost control, supplier and order support
---------------------- ●● Transport industry: Vehicle management
---------------------- ●● elecommunication services: Call flow analysis and customer profile

T
analysis
---------------------- ●● ealth care service: Patient admission and discharge analysis and
H
bookkeeping in accounts departments
----------------------
Data storage has been the major focus for defining the data warehouse.
---------------------- Data is collected from primary sources and then it will undergo processes such
as Cleaning, Transforming and Cataloging; then it will be made available for use
----------------------
to all authorised users and other business professionals for data mining, online
---------------------- analytical processing, market research and decision support. So this refers to
following major components of Data warehousing system.
----------------------
a. Storing and maintaining data to keep it up to date
---------------------- b. Retrieving Data from well maintained data stores
---------------------- c. Analysing it
---------------------- d. Extracting, loading and transforming it
e. Managing data dictionaries (data about data) etc.
----------------------
Let us see some of the types of architectures by which Data Warehouses
---------------------- are developed.
---------------------- 1. Single layer architecture: Here objective is to minimise the amount
of data stored while achieving the business goal. It does not have data
---------------------- redundancy. It works with Source layer (operational Data), Middleware
---------------------- (Data Warehouse) and Analysis and Reporting tools.
2. Two-layer architecture: It has a separation of data warehouse staging
---------------------- and actual physical data warehouse. So it works with Source Layer,
---------------------- Data staging, Data warehouse layer and Analysis and Reporting layer.
In this architecture, Data marts are viewed as a part of primary data
---------------------- warehouse. Data Mart is a small set of data warehouse, which includes
set of information relevant to specific business area, function, department
---------------------- or specific group of users.
---------------------- 3. Multilayered Architecture is also developed by adding some layers in
between, depending on the need of any application or business. So we
---------------------- can find several modified architectures (three-tier, four tier etc.) while
---------------------- working on different DW applications.
Data Mining
----------------------
Data mining is the process of analyzing data from different perspectives
---------------------- and summarising it into useful information - information that can be used to
increase revenue, cuts costs or both. Data mining software is one of a number
----------------------

of analytical tools for analyzing data. It allows users to analyze data from many Notes
different dimensions or angles, categorise it and summarise the relationships
identified. Technically, data mining is the process of finding correlations or ----------------------
patterns among dozens of fields in large relational databases.
----------------------
Following are some of the important applications, where Data mining has
been successfully implemented. ----------------------
●● anking: Loan/credit card approval - predict good customers based on
B ----------------------
old customers.
----------------------
●● ustomer relationship management: Identify those who are likely to leave
C
for a competitor. ----------------------
●● Targeted marketing: Identify likely responders to promotions.
----------------------
●● raud detection: Telecommunications, financial transactions from an
F
online stream of event, identify fraudulent events. ----------------------
●● anufacturing and production: Automatically adjust knobs when process
M ----------------------
parameter changes.
●● edicine: Disease outcome, effectiveness of treatments, analyse patient
M ----------------------
disease history, find relationship between diseases. ----------------------
●● Molecular/Pharmaceutical: Identify new drugs.
----------------------
●● cientific data analysis: Identify new galaxies by searching for sub
S
clusters. ----------------------
●● eb site/store design and promotion: Find affinity of visitor to pages and
W
----------------------
modify layout.
Data mining process ----------------------
●● Problem formulation ----------------------
●● Data collection
----------------------
o Subset data: Sampling might hurt if highly skewed data
----------------------
o Feature selection: Principal component analysis, heuristic search
●● Pre-processing/ cleaning ----------------------
o Name/address cleaning, different meanings (annual, yearly), ----------------------
duplicate removal, supplying missing values
----------------------
●● Transformation
o Map complex objects, e.g. time series data, to features, e.g. ----------------------
frequency
----------------------
●● Choosing mining task and mining method
----------------------
●● Result evaluation and visualisation
----------------------
----------------------
----------------------

Notes 2.7 INFORMATION SECURITY AND CYBER LAWS
---------------------- As we all know, a successful organisation should have multiple layers of security
in place. Some of them are:
----------------------
●● Physical security
---------------------- ●● Personal security
---------------------- ●● Operations security
●● Communications security
----------------------
●● Network security
----------------------
●● Information security
---------------------- Here we will focus more on information security.
---------------------- According to Jim Anderson and Inovant, Information security is defined as
a well-informed sense of assurance that the information risks and controls are in
---------------------- balance.
---------------------- Information Security is basically the protection of information and its
critical elements, including systems and hardware that use, store and transmit
---------------------- that information. Policy, Awareness, Training, Education and Technology are
some of the tools of ensuring information security.
----------------------
It basically has three major aspects to work with – Confidentiality, Integrity
---------------------- and Availability.
---------------------- ●● onfidentiality refers to restricting information access and disclosure to
C
authorised users.
----------------------
●● Integrity refers to the trustworthiness of information resources.
---------------------- ●● Availability refers to availability of information resources.
---------------------- 2.7.1 Components of Information Security
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 2.3 : Components of Information Security
----------------------
As shown in the above figure, Information Security has following major components.
---------------------- 1. Management of Information Security: Organisation should have
appropriate resources and their management to secure the information
----------------------
being stored and generated within the organisation.
---------------------- 2. Computer and Data Security: IT components like hardware, software and
networking components need to be well protected to maintain data and
----------------------
information security.
3. Network Security: Internet is the major source through which information Notes
is shared among number of users. So there must be strong practices in
place to secure information. ----------------------
Information can be stolen through internet; practice is un-authentic, it is ----------------------
called as hacking (refer to the figure below). So one must have proper
firewall and other related tools through which information can be secured ----------------------
and used only by authorised users throughout the globe. So Information
----------------------
security should be considered a balance between protection and
availability. To achieve balance, level of security must allow reasonable ----------------------
access, yet protect against threats.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 2.4 : Computer as the Subject and Object of an Attack ----------------------
4. Information Security Project Team: Team must be formed to enforce
----------------------
information security within the organisation. The team will consist of
number of individuals who are experienced in one or more facets of ----------------------
technical and non-technical areas:
----------------------
– Champion
– Team leader ----------------------
– Security policy developers
----------------------
– Risk assessment specialists
– Security professionals ----------------------
– Systems administrators ----------------------
– End users
----------------------
Following are the key roles in practicing information security in the
organisation. ----------------------
●● Data Owner: Responsible for the security and use of a particular set ----------------------
of information.
●● ata Custodian: Responsible for storage, maintenance and
D ----------------------
protection of information.
----------------------
●● ata Users: End users who work with information to perform their
D
daily jobs supporting the mission of the organisation. ----------------------
5. Communities of Interest: Community of practice of Information security ----------------------
will be formed by bringing following roles in a group and enforce security
practices in the organisation. ----------------------

Notes ●● Information Security Management and Professionals
●● Information Technology Management and Professionals
----------------------
●● Organisational Management and Professionals
---------------------- 6. Cyber Laws: Cyber Law is the law which governs cyber space. Cyber
---------------------- space includes computers, networks (internet, intranet and extranet),
software, data storage devices (such as hard disks, USB disks etc.), the
---------------------- Internet, websites, emails and even electronic devices such as cell phones,
ATM machines etc.
----------------------
Law encompasses the rules of conduct that have been approved by the
---------------------- Government. These laws are in force over a certain territory and they must be
obeyed by all persons on that territory; if not, it could lead to government action
---------------------- such as imprisonment or fine or an order to pay compensation.
---------------------- Cyber law encompasses laws relating to the following:
---------------------- a. Cyber Crimes: Cyber crimes are unlawful acts where the computer is
used either as a tool or a target or both.
----------------------
b. Electronic and Digital Signatures: Electronic signatures are used to
---------------------- authenticate electronic records. Digital signatures are one type of electronic
signature. Digital signatures satisfy three major legal requirements –
---------------------- signer authentication, message authentication and message integrity.
---------------------- c. Intellectual Property: Intellectual property refers to creations of the
human resource using their brain and mind, for example Story, Song,
---------------------- Poetry, article, source code, design pattern etc.
---------------------- d. Data Protection and Privacy: Data protection and privacy laws aim to
achieve a fair balance between the privacy rights of the individual and
---------------------- the interests of data controllers such as banks, hospitals, email service
---------------------- providers etc. These laws seek to address the challenges to privacy caused
by collecting, storing and transmitting data using new technologies.
----------------------
----------------------

1. Cyber law encompasses laws relating to the
----------------------
i. Cyber crimes
----------------------
ii. Data protection and privacy
---------------------- iii. Database management
---------------------- iv. Communities of interest
----------------------
----------------------
----------------------

Summary Notes
●● atabase is collection of the data about an object, which can be accessed

D ----------------------
and maintained easily. Database management system (DBMS) is software,
----------------------
which manages or maintains the data from the database.
●● ata sharing is an ability of the any database to allow multiple users
D ----------------------
to access data. Data sharing is one of the important characteristics of
----------------------
Databases, as it brings data integrity in to the database.
●● elational Database is a collection of data items organised as a set of
R ----------------------
formally described tables from which data can be accessed and maintained
----------------------
easily.
●● S Access is a database tool, which has an integration of three basic
M ----------------------
components, Relational Database, Graphical User Interface (user friendly
interface, software development tools. ----------------------
●● ata Warehousing is a database used for analysis and reporting purposes.

D ----------------------
Data Mining is the process of semi-automatically analysing large
databases to find patterns that are valid, have hold on new data with some ----------------------
certainty. ----------------------
●● I nformation Security is basically the protection of information and its
critical elements, including systems and hardware that use, store and ----------------------
transmit that information. Policy, Awareness, Training, Education and ----------------------
Technology are some of the tools of ensuring information security.
●● yber Law is the law, which governs cyber space. Cyber space includes
C ----------------------
computers, networks (internet, intranet and extranet), software, data ----------------------
storage devices (such as hard disks, USB disks etc.), the Internet, websites,
emails and even electronic devices such as cell phones, ATM machines ----------------------
etc.
----------------------
Keywords ----------------------
●● Database Management System: is a computer program (or more ----------------------

typically, a suite of them) designed to manage a database, a large set of
structured data, and run operations on the data requested by numerous ----------------------
users. ----------------------
●● Hierarchical Database: It is a data model in which the data is organized
into a tree-like structure. The data is stored as records which are connected ----------------------
to one another through links. ----------------------
●● Relational Database: It is a database management system (DBMS) that
is based on the relational model. ----------------------
●● Network Security: Consists of the policies adopted to prevent and ----------------------
monitor authorized access, misuse, modification, or denial of a computer
network and network-accessible resources. Network security involves the ----------------------
authorization of access to data in a network, which is controlled by the
----------------------
network administrator.

Notes ●● Systems Administrators: Also called as sysadmin, is a person who
is responsible for the upkeep, configuration, and reliable operation of
---------------------- computer systems; especially multi-user computers, such as servers.
----------------------
----------------------
1. What do you mean by Database? Describe DBMS in brief.
----------------------
2. Is Data sharing a key aspect of DBMS? How does it deal with Data
---------------------- Integrity? Illustrate.
---------------------- 3. What is Relational Database? Describe the concepts Primary key, Foreign
key and Referential Integrity.
---------------------- 4. Describe Employee Database with its structure in detail.
---------------------- 5. What can you do by using a tool called MS Access? Describe its data
management functions in brief.
----------------------
6. How do we distinguish between Data Warehousing and Data Mining?
----------------------
7. Why is information security important? Discuss with suitable examples.
---------------------- 8. What are the types of cyber laws? Describe each in detail.
---------------------- 9. What do you mean by information security? Discuss its need in brief.
---------------------- 10. What are the types of information security? Discuss each in detail.
11. Write a note on internet security.
----------------------
12. What do you mean by Cyber laws? What are the contents of cyber laws?
----------------------
---------------------- Answers to Check your Progress

Multiple Choice Single Response.
----------------------
1. It is an ability of Databases to allow multiple authorised users to access
---------------------- the data from the database in a consistent manner.
---------------------- i. Data Sharing

Fill in the blanks.
----------------------
1. Data sharing is the ability of the database to allow multiple users to access
---------------------- data.
----------------------
1. True
----------------------
----------------------

----------------------
1. Cyber law encompasses laws relating to the
----------------------
i. Cyber crimes
ii. Data protection and privacy ----------------------
----------------------
Suggested Reading
----------------------
1. Maheshwari, Sharad and Ruchin Jain. DBMS – A Complete Practical
----------------------
Approach.
2. Garcia-Molina, Hector. Database systems. ----------------------
3. MS Access Manual, Microsoft ----------------------
4. Cyber Crimes & Digital Evidence – Indian Perspective. ASCL publication. ----------------------
5. Ecommerce – Legal Issues. ASCL publication.
----------------------
6. IPR & Cyberspace - the Indian perspective. ASCL publication
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Design of Human Resource Information System
UNIT
3
Structure:
3.1 Introduction
3.2 Definitions
3.3 HRIS Architecture
3.3.1 Types of HRIS Architecture
3.4 Cloud Computing
3.5 System Implementation of HRIS
Summary
Keywords
Suggested Reading
Design of Human Resource Information System 41

Notes
Objectives
----------------------
----------------------
• nalyse the design and architecture of Human Resource Information
A
---------------------- System
---------------------- • Discuss cloud computing and its use in HRIS implementation
• Describe the way of implementing HRIS in an organisation
----------------------
----------------------
3.1 INTRODUCTION
----------------------
To have successful implementation of Human Resource Information
---------------------- System (HRIS) within the organisation, one must think of having the compact
and comprehensive system design done for constructing the HRIS software. This
---------------------- unit deals with the entire systems development and implementation process,
which needs to be adopted for HRIS. The focus would be more on HRIS
----------------------
implementation process. This unit will identify different stakeholders, potential
---------------------- users and the type of information that the HRIS will be managing and storing
to help decision- makers take effective decisions. This unit will also introduce
---------------------- the technical infrastructure with different options suitable for implementing
HRIS within the organisation. Careful planning, dedicated team, support from
----------------------
senior management and awareness of potential risks and their mitigation plans
---------------------- will make this implementation a success story. The implementation process will
further provide opportunities of re-engineering and systematically improving the
---------------------- HR processes, which will ultimately become best practices in HRM.
---------------------- Following are some of the important points to remember:
---------------------- 1. Who will be the customer of data, process and the results, which are
generated after processing the data (could be in the forms of decisions
---------------------- that are made to develop the business).
---------------------- 2. Everything whatever is done is a process designed to support organisational
strategic goals and HRIS implementation process will in turn help improve
---------------------- the HR processes.
---------------------- 3. Poor implementation of HRIS will result in the failure of meeting the
organisational needs.
----------------------
4. Careful attention to every step in system design process will further
---------------------- lead to the successful implementation of HRIS and will ultimately help
improve HR practices to be implemented in the organisation.
----------------------
----------------------
----------------------
----------------------

3.2 DEFINITIONS Notes
IS architecture: It is an approach of building the information systems to meet ----------------------
the business needs.
----------------------
Master data: Any information that is considered to play a key role in the core
operation of a business. It is basically the reference data and does not undergo ----------------------
frequent changes.
----------------------
Transaction data: Data describing an activity or event and the change as a result
of a transaction and is usually described with verbs. ----------------------
User interface: Visual part of computer application or operating system through ----------------------
which a user interacts with software or hardware.
----------------------
Graphical User Interface (GUI): The user interface which uses windows, icons
and menus and which can be manipulated by a mouse. ----------------------
Tier: Level of structure or any architecture.
----------------------
Server: A computer or computer program that manages access to a centralised
resource or service in a network. ----------------------
Client: A client is a piece of computer hardware or software that accesses a ----------------------

service made available by a server.
----------------------
HTML: Hypertext Markup Language is the set of markup symbols or codes
inserted in a file intended for display on a World Wide Web browser page. ----------------------
----------------------
----------------------
----------------------
1. Data describing an activity or event and the change as a result of a
transaction is usually described with verbs is known as: ----------------------
i. Transaction data ----------------------
ii. Client
----------------------
iii. HTML
----------------------
iv. Graphical User Interface
----------------------
Activity 1 ----------------------
----------------------
Using Internet extract information about HRIS architecture and learn the
diagrams on different types of system architectures and prepare your own ----------------------
notes.
----------------------
----------------------
----------------------

Notes 3.3 HRIS ARCHITECTURE
---------------------- Before understanding the HRIS architecture, we must understand who are
the end-users or customers of HRIS and how and what is the importance of data
---------------------- according to them.
---------------------- End-users of HRIS are categorised into two classes: Employee and non-
employee end-users.
----------------------
A) Employee end users include managers, analysts, technicians, clerks
---------------------- and employees. We will in detail about each one of them from the
HRIS perspective.
----------------------
1. Managers: For people in managerial positions such as Director, GM,
---------------------- MD, CEO, senior managers, etc., HRIS is a handy tool, which can be
used anytime for getting accurate and up-to-date data and information
----------------------
from stored databases. HRIS provides them the information in the form of
---------------------- reports on performance management, recruitment and retention, employee
management, team management, project management, etc. They use these
---------------------- reports for planning, decision-making, organising resources, controlling
processes, etc. These plans and decisions could be like promoting
----------------------
employees, hiring people, increasing salary, taking disciplinary actions,
---------------------- etc.
2. Analysts: They are the critical end-users of HRIS. They collect data
----------------------
from different sources, examine and validate it and provide appropriate
---------------------- alternatives with supporting data to help managers in planning, decision-
making, organising, controlling, etc. They make use of data processing
---------------------- and reporting tools like query builders/generators, report generators, etc.
Analysts must know the data processing life cycle where they understand
----------------------
how data is collected, how is it verified, processed, updated, stored and
---------------------- presented according to the need of senior management. For example,
analysts are asked to generate the list of employees eligible for promotion
---------------------- to managerial positions. Therefore, analysts must know the criteria
required to be fulfilled by employee to get promoted as managers and that
----------------------
criteria should be used to filter the data from the employee database and
---------------------- appropriate report must be generated and presented to the requester.
3. Technicians: They are the group of HRIS experts who take care of access
----------------------
authorisation for data and tools usage. They understand the need of all HR
---------------------- team members based on their work profile, roles and responsibilities and
accordingly they ensure that these team members get appropriate access
---------------------- to make their work easier. These end-users are highly technical and are
competent to write computer programs and scripts to configure the setting
----------------------
of HRIS software. Primarily, in case of new upgrades, technicians help
---------------------- other end-users to work without any challenge. If, for example, there
is a change to be implemented in the current performance appraisal
---------------------- system, these technicians first undergo the training of how it has been
technically done and then they convert that into simple language and help
----------------------

all appraisers to work on this new change without any problem. Notes
4. Clerks: They are just like analysts who handle most parts of HRIS, but
----------------------
not like analysts who need in-depth data analysis knowledge. Clerks work
only on the process, which has been in place while interacting with the ----------------------
HRIS. They are given periodical tasks, which they have to work on given
frequency and will have to report to their seniors. For example, some of ----------------------
them are responsible for data backups every weekend; some of them are
----------------------
responsible for generating special category of reports for every week, etc.
5. Employee: An individual employee is also treated as an end user of ----------------------
HRIS, as he or she will have to deal with it to enter routine transactions
----------------------
like reporting attendance, submitting leaves applications, submitting
resignations, other service requests, etc. This ‘access to employee as an ----------------------
end user’ will reduce the job of the team of clerks, who in turn will enter
the details requested by an individual employee. ----------------------
B) Non-employee end users include candidates and agents or business ----------------------
partners.
----------------------
1. Candidates: They are the end-users who have got very limited access to
HRIS of an organisation. They interact with only one part of the system ----------------------
where they can enter their resumes or profiles for job-seeking purpose.
They will be given temporary login ID and password to enter the profile ----------------------
and submit and track with some number, if any. ----------------------
2. Agents or business partners: They are the external agencies who help
the organisation in talent search, delivering specialised trainings, etc. ----------------------
They also will have very limited access to HRIS where they can upload ----------------------
their candidates’ resumes, trainer profiles, etc. and keep interacting with
the teams associated through this access. ----------------------
HRIS provides primarily three types of data: ----------------------
1. Master information about employees and related aspects like roles,
----------------------
responsibilities, core competencies, etc.
2. Master information about the organisation like jobs, openings, hierarchical ----------------------
structure, compensation and HR policy based information, etc.
----------------------
3. Transactions, which are generated by first two master information
components, for example, employee assigned job details to work on, ----------------------
employee travels to different client sites, etc. ----------------------
So, HRIS Architecture generally has the following major components:
----------------------
1. User interface, which includes forms/data entry screens, menus to select
the options to work on and various reports generated. ----------------------
2. Application processing like processing the data captured through ----------------------
user interfaces such as leaves approved and balance updated, incentive
calculations based on performance ratings, pay processing based on ----------------------
monthly transactions reported by employee and approved by senior
----------------------
management, etc.

Notes 3. Data storage is the capability to store the data captured through user
interfaces and data processed through application processing in the form
---------------------- of database. This deals further with data security and safety to keep it
validated and for long run without any loss of data. Access to this data is
---------------------- always controlled and recorded for audit purpose.
---------------------- 3.3.1 Types of HRIS Architecture
---------------------- In general, there are four types of architecture, which are used to build the
applications. HRIS is no exception to this.
----------------------
1. Single-tier architecture where user interface, application processing and
---------------------- data storage, all three components reside on one single machine or in
single environment like IBM Mainframes, Microsoft environment, etc.
----------------------
---------------------- User
---------------------- Interface Application
Processing Database
----------------------
----------------------
Fig.3.1: Single-tier HRIS Architecture
----------------------
In this type of architecture, user interface, application processor and the
---------------------- database, all components are developed by using the tools belonging
to the same environment or technology, so integration of it with other
----------------------
application components does not become the major challenge.
---------------------- Microsoft Integrated Development Environment (IDE),for example,
provides wide range of Graphical User Interface (GUI) tools like Visual
----------------------
Studio through which excellent user interface can be developed and
---------------------- integrated with its own strong database like MS SQL server and VB
scripting can be done to process the data according to the business rules
---------------------- set up while developing the application.
---------------------- 2. Two-tier architecture where user interface (tier 1) will be developed
independently by using suitable GUI tools, which may not be from the
---------------------- same technology environment and database and application processing
---------------------- logic (commonly called tier 2) which could be developed by the tools
from the same technology environment.
----------------------
----------------------
User Application
---------------------- Processing
Interface Database
----------------------
----------------------
----------------------
Fig.3.2: Two-tier HRIS Architecture
This architecture is also known as client server architecture. The user Notes
interface is generally installed with all clients and server has a set of
application running in client server mode with very strong active database, ----------------------
which gets updated in real- time mode.
----------------------
Let us take an example of ATM applications; we have lot of terminals
across locations where customer can use the interface to operate their ----------------------
bank accounts. There are centralised servers, which work according to the
----------------------
instructions given by these clients or terminals by the authentic customers.
The account database is immediately updated as soon as transaction is ----------------------
completed. This is called realtime processing. Most of the applications
run on these ATMs are developed using Client Server architecture (two- ----------------------
tier).
----------------------
3. Three-tier architecture, where the server plays two roles: a database
server and an applications server. ----------------------
With the development of two and three-tier architectures, HRIS ----------------------
professionals still manage user interface but the focus is more on
processing demanding applications through application server, which is ----------------------
the middle layer in this type of architecture. If, for example, two recruiters
----------------------
updated the same job position at the same time, a transaction processor
would ensure that both updates were entered into the database. This ----------------------
allows several users to access the central database simultaneously.
----------------------
This type of software, which perform tasks between the client and the
database server is known as middleware − software that manage data and ----------------------
transactions before they are saved to the database. There are a couple of
drawbacks with both 2-tier and 3-tier systems. First, a large amount of ----------------------
information has to move from the client computer across the network to ----------------------
the server to execute database transactions quickly, which necessitates
the use of significant bandwidth or the ability to move lots of data quickly ----------------------
between computers.
----------------------
----------------------
User Application Database
Interface Server Server & ----------------------
Database ----------------------
----------------------
Fig.3.3: Three-tier HRIS Architecture
----------------------
Secondly, all clients need to have the user interface installed on their
machines along with drivers to access the database from database ----------------------
server. The corollary issue of this requirement is that employees need to
be trained on this application. Therefore, HRIS access is possible only ----------------------
within the organisation; that is, only those residing within the local area
----------------------
network of the organisation. This is typically called an intranet where
HRIS can easily be installed and made available to all the employees of ----------------------
the organisation with suitable access controls.
Notes For example, an organisation having 10,000 employees will be given
those many accounts through which they can access the applications from
---------------------- the applications server and data from the data server, process it at the
client side and save the processed data back to the data server. Suppose
---------------------- an employee wants to apply for leave, he will access leave management
---------------------- application from the application server, run it on the client with suitable
user interface, see the leave balance data from data server and submit the
---------------------- online leave form with leave details needed. Once it is approved by his
manager, data is updated in database on server and the employee will get
---------------------- an alert about leave approval or rejection. Manager (approver) here will
---------------------- also get an alert on his machine when his team member applies for any
leave. This also works in the same fashion as explained above.
----------------------
4. N-tier architecture works in a very complex and multiple platform
---------------------- environment. There will be multiple locations and multiple hardware and
software environment within the organisation where applications servers,
---------------------- database servers and web servers transactwith each other on controlled
manner.
----------------------
----------------------
---------------------- Database Application Web

Server & Server/s Server/s
---------------------- Database
----------------------
---------------------- User
Interface
----------------------
---------------------- Fig.3.4: N-tier HRIS Architecture

---------------------- In this type of architecture, all other components work as they function
in earlier three types of architectures but in N-tier architecture, we have an
---------------------- additional component called web server/s. The internet browser communicates
to one or more web servers through Hyper Text Markup Language (HTML). The
----------------------
web server manages various client sessions to accommodate many users at the
---------------------- same time. The web server passes requests to the application server, where the
business logic for the application is executed.
----------------------
Generally, Enterprise Resource Planning (ERP) applications run on these
---------------------- types of architectures. Here HRIS, if works in this type of architecture, will also
interact with other business applications installed on applications servers and
---------------------- help transact the entire business accordingly.
---------------------- For example, when Payroll is run, these financial-related transactions need
to be registered in the company’s General Ledger (GL) application. Typically,
---------------------- GL exists within the Financial/Accounting component of large ERP systems
---------------------- from SAP, Oracle and Microsoft. Therefore, GL transactions must be interfaced
between Payroll and these systems.
Notes
----------------------
----------------------
1. Which all components are developed by using the tools belonging to
the same environment or technology, so integration of it with other ----------------------
application components does not become the major challenge?
----------------------
i. User interface
----------------------
ii. Application processor
iii. Database ----------------------
iv. Enterprise Resource Planning ----------------------
----------------------
Activity 2 ----------------------
The notes which are prepared by you in Activity 1, needs to be mapped to ----------------------
Section 1.4, where the HRIS architecture is described with different types.
While mapping please refer to the diagrams drawn here with the diagrams ----------------------
from your Google search. This learning needs to be documented as a part of ----------------------
your understanding.
----------------------
3.4 CLOUD COMPUTING ----------------------
This is one of the contemporary architectures and techniques to deliver ----------------------

information technology resources over the internet. Instead of keeping HR data
----------------------
on company’s hard drives or updating applications for company’s needs, one
can use the service on internet at other locations to store the data and use the ----------------------
applications. Doing this way will give rise to certain privacy applications.
----------------------
Cloud computing allows everyone to use software and hardware resources
which are managed by third party remotely. These services can be online storing of ----------------------
data, social networking sites, webmails or online business applications, etc. This
model allows accessing information and other hardware and software resources ----------------------
from anywhere. It allows shared pool of such resources like storage capacity,
----------------------
networking capability, processing power, specialised business and corporate
applications. ----------------------
Following are some of typical characteristics of cloud computing: ----------------------
●● On-demand self-service, where clients can request and manage their
own computing resources. ----------------------
●● road network access allows variety of services to be offered over the
B ----------------------
internet.
----------------------
●● esource pooling, where clients can choose suitable computing resources
R
from the pool of resources available over the internet. ----------------------

Notes ●● apid elasticity means services could be anything required in the
R
business, large or small in nature.
---------------------- ●● easured service means services used are tracked and billed to the
M
---------------------- clients based upon usage.
HRIS can also use this type of architecture when needed. The need could
---------------------- be based on the nature of organisation and type of HR operations happening in
---------------------- the organisation. The benefits of cloud computing for businesses are obvious,
but for human resource professionals, cloud-computing applications may be
---------------------- particularly useful. In larger corporations, HR teams can be spread over different
areas of a building or even different areas of the country and in different time
---------------------- zones. This is likely to result in a lack of communication, where recruiters cannot
---------------------- easily talk to team members working in payroll or benefits or vice versa and HR
team members do not always have ready access to information monitored and
---------------------- updated by another department.
---------------------- The 21stcentury HR professionals are management partners, key players in

their company; as such they are involved in most aspects of a company’s activities
---------------------- and decisions and, of course, they interact with the entire workforce. However,
many smaller companies have been reluctant to purchase HR software, perhaps
---------------------- because of cost concerns. Cloud computing makes it affordable for any size of
---------------------- business; there is no need for in-house IT technicians, server space or expensive
software and site licenses; any professional with an internet browser or mobile
---------------------- device can access the cloud. Software as a Service (SaaS) providers have been
offering cost-effective solutions for HR departments for some years now; SaaS
---------------------- is a cloud-computing model.
---------------------- Cloud computing also ensures that companies have instant and continual
access to the latest advances and legal issues as they may affect human resource
----------------------
issues. All information is automatically updated, meaning team members can
---------------------- be confident their information is current. Security is another concern for HR
professionals, who deal with sensitive information; virtual services have some of
---------------------- the most sophisticated security systems imaginable, assuring the HR department
and the entire workforce. Additionally, access to sensitive information can readily
----------------------
be made limited to certain individuals within a company. Cloud computing
---------------------- offers multiple advantages with no apparent downside; it’s a win-win solution
for businesses’ HR needs.
----------------------
---------------------- State True or False.
---------------------- 1. Cloud computing also ensures that companies have instant and
continual access to the latest advances and legal issues as they may
---------------------- affect human resource issues.
----------------------
----------------------

Notes
Activity 3
----------------------
Design and draw any two HR applications using cloud computing. You can
----------------------
refer to Google for suitable examples.
----------------------
3.5 SYSTEM IMPLEMENTATION OF HRIS ----------------------
A project team has the main responsibility to ensure the organisation, ----------------------
groups and individuals accept and adopt the implementation of Human Resource
----------------------
Information System. Project implementation focuses on installing the newly built
or purchased HRIS in the organisation. The implementation process requires a ----------------------
tactical plan that follows certain milestones from development and testing to the
final product in use. The implementation of HRIS can follow one of the three ----------------------
approaches. These approaches are categorised as:
----------------------
a) Direct cutover
----------------------
b) Parallel implementation approach
c) Phased implementation approach ----------------------
Each of these approaches has advantages and disadvantages which make ----------------------
it suitable for a certain project. Choosing the correct way of implementation of
HRIS has a vast impact on the project to be successful or failure. ----------------------
a. Direct cutover means that the project has a go live on an agreed date ----------------------
when the old HRIS is shut down and the new HRIS is turned on. This is
----------------------
the most effective way if the old HRIS is giving a poor performance or no
HRIS exists at all, which requires an instant launching of the new HRIS. ----------------------
It is critical to evaluate that the failure of the implementation does not
heavily impact the organisation. The HRIS has to be tested thoroughly ----------------------
before using it. Direct cutover is quick but has problems as well associated
----------------------
with it. There is no way of going back if the old HRIS is shut down and
the new one is not working. The organisation can suffer major delays, ----------------------
lose revenues and miss deadlines.
----------------------
b. Parallel implementation approach allows the old HRIS and new HRIS
to run concurrently for a certain time. This approach is handy if the ----------------------
new HRIS has problems and failures, which have a huge impact on the
organisation. This allows both HRISs to run at the same time when the ----------------------
organisation can compare the outputs of both systems. A parallel approach
----------------------
allows the organisation to see the functionality and proper performance
before the old HRIS is turned off. This can be stressful for employees ----------------------
because entering data in two HRISs and comparing them requires more
man-hours. ----------------------
c. Phased implementation approach allows accomplishing implementation ----------------------
in different parts. The first step is to implement employee information,
secondly the objectives and finally performance management. This ----------------------

Notes approach allows the project team to learn from the experiences during the
implementation so the later implementation steps go smoothly. A phased
---------------------- approach implementation might take more time but it might not be so
risky. Project management is easier for the project team.
----------------------

---------------------- 1. ___________________ allows accomplishing implementation in
different parts.
----------------------
----------------------
Activity 4
----------------------
What is your idea about HRIS implementation approach for small scale
---------------------- organisations? Discuss with your friends and draw suitable models
----------------------
---------------------- Summary
---------------------- ●● he end users of HRIS are categorised into two classes – employee and
T
non-employee end users. Employee end users include managers, analysts,
---------------------- technicians, clerks and employees. Non-employee end users include
candidates and agents or business partners.
----------------------
●● RIS provides primarily three types of data: master information about
H
---------------------- employees and related aspects, master information about the organisations
and transactions, which are generated by first two master information
----------------------
components.
---------------------- ●● here are four types of architecture which are used to build HRIS. They
T
are: single-tier architecture, two-tier architecture, three-tier architecture
----------------------
and N-tier architecture.
---------------------- ●● loud computing allows everyone to use software and hardware resources
C
which are managed by third party remotely. These services can be online
----------------------
storing of data, social networking sites, webmails or online business
---------------------- applications, etc. Cloud computing offers multiple advantages with no
apparent downside; it’s a win-win solution for businesses’ HR needs.
---------------------- ●● he HRIS implementation can follow one of the three approaches: direct
T
---------------------- cutover, parallel implementation approach and phased implementation
approach.
----------------------
----------------------
----------------------
----------------------

Keywords Notes
----------------------
●● User Interface: In the industrial design field of human–machine
interaction, is the space where interactions between humans and machines ----------------------
occur. The goal of this interaction is to allow effective operation and
control of the machine from the human end. ----------------------
●● Cloud Computing: It is a model for enabling ubiquitous, convenient, ----------------------
on-demand access to a shared pool of configurable computing resources.
●● Direct Cutover: An old system is decommissioned (removed) and a new ----------------------
system takes its place at the same time. ----------------------
Self-Assessment Questions ----------------------
----------------------
1. Discuss the concept of HRIS architecture and its need for an organisation.
2. Who are the different users of HRIS? Discuss their roles in brief. ----------------------
3. Explain the types of information considered for HRIS implementation ----------------------
4. Describe the different components of HRIS architecture and their role or ----------------------
importance.
5. Compare and contrast the types of HRIS architecture. ----------------------
6. What is cloud computing? How is it useful in HRIS implementation? ----------------------

Discuss.
----------------------
7. Discuss the process and approaches of HRIS implementation.
----------------------
Answers to Check your Progress ----------------------
----------------------
1. Data describing an activity or event and the change as a result of a
transaction is usually described with verbs is known as: ----------------------
i. Transaction data ----------------------
----------------------
----------------------
----------------------
1. Which all components are developed by using the tools belonging to the
same environment or technology, so integration of it with other application ----------------------
components does not become the major challenge?
----------------------
i. User interface
ii. Application processor ----------------------
iii. Database ----------------------

Notes Check your Progress 3
----------------------
1. True
----------------------

---------------------- 1. Phased implementation approach allows accomplishing implementation

in different parts.
----------------------
---------------------- Suggested Reading

---------------------- 1. Kavanagh, Michael J. (ed.), Mohan Thite (ed.), and Richard D. Johnson
(ed.).2011. Human Resource Information Systems: Basics, Applications,
---------------------- and Future Directions. Sage Publication.
---------------------- 2. Walker, Alfred J. 1993. Handbook of Human Resource Information
Systems: Reshaping the Human Resource Function with Technology. Mc-
---------------------- Graw Hill.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

HRIS – Need Analysis
UNIT
4
Structure:
4.1 Introduction
4.2 Definitions
4.3 System Development Life Cycle
4.4 Human Resource Planning and HRIS
4.5 Global Positioning System of HRIS
Summary
Keywords
Suggested Reading
HRIS – Need Analysis 55

Notes
Objectives
----------------------
----------------------
• Specify the needs of development of HRIS
----------------------
• Describe the process System Development Life cycle
---------------------- • Explain the global positioning system of HRIS
----------------------
4.1 INTRODUCTION
----------------------
Software for business applications, whether it is intended to perform a single
---------------------- task or it is intended for use as a company-wide, integrated system, should be
---------------------- tailored to fit the unique needs and goals of an organisation. The software should
be capable of performing all the required functions effectively and efficiently.
---------------------- Careful attention is needed to be given to developing such software products
as the organisation generally makes huge investments and naturally expects
---------------------- return on investment in terms of productivity from these software products.
---------------------- In order to develop these software products, the organisation has to undergo
certain processes like identifying and planning the functional requirements of the
---------------------- software, designing the new solution, developing the software, meeting the design
specifications, testing it as per the planned specifications and then implementing
---------------------- the software as a system in the organisation to make it completely operational
---------------------- for the end users. This process is generally known as System Development Life
Cycle (SDLC).
---------------------- SDLC process could be either followed by the end user company by using
---------------------- internal software development team or could also be outsourced to some software
development vendors to get it developed. In such cases, software development
---------------------- vendors will follow SDLC and the end user company will support them through
the requirements, user acceptance testing and implementation.
----------------------
There are various software development models such as Waterfall, Spiral,
---------------------- iterative, agile etc. Depending on the end user company requirements, the
development team or vendor will adopt the software development model and
----------------------
the software product is developed and implemented in the organisation.
---------------------- HRIS is also one of the business applications, which in turn will be a
software product of the similar nature. So, development team of HRIS will also
----------------------
have to follow some SDLC model to implement HRIS in the organisation.
---------------------- But these days, organisations have been spread across the globe, having
multiple offices with centralisation and decentralisation of control. HRIS
----------------------
implemented in such environment needs to have distributed data processing
---------------------- capabilities. Global positioning HRIS will help these organisations follow
distributed data processing with great deal of accuracy, efficiency, productivity
---------------------- and effectiveness. Global positioned HRIS are web-enabled and will be developed
and implemented in Client Server application architecture where end user can
----------------------
easily operate it with having any geographical constraints.
●● SDLC: System/Software Development Life Cycle, an approach of ----------------------
developing the software
----------------------
●● nd Users: users who would be using the software when it will be live
E
environment (production) ----------------------
●● aterfall Model: Sequential SDLC Model operates with one step at a
W
----------------------
time and ends with a software product at the end of all the steps
●● ource Code: Software programs written in any one of the programming
S ----------------------
languages like C, C++, COBOL, Java, Dot Net etc.
----------------------
●● xecutable Code: A software code getting generated after compilation
E
of source code, which can run without source code and which is non- ----------------------
editable.
----------------------
4.3 SYSTEM DEVELOPMENT LIFE CYCLE ----------------------
SDLC is an approach of developing any application using tools from ----------------------
information technology, especially software tools like database, programming
languages, utilities etc. It is basically a step-wise methodology for developing ----------------------
any software. It is a systematic pattern of tasks or activities which, if followed ----------------------
strictly, will result into a very good software, meeting all functional and non-
functional requirements of the organisation. ----------------------
It generally contains following primary steps: ----------------------
1. Identify the need, purpose and objective of new system
----------------------
2. Requirement analysis
----------------------
3. Design new software specifications according to the requirements
4. Develop the software according to the design specifications ----------------------
5. Test the software according to the requirements and design ----------------------
6. Implement the fully developed and successfully tested software ----------------------
Now, let us see each of them in details.
----------------------
1. Identify the need/purpose and objectives of the new system
----------------------
Generally if end users are working on the existing system, which is manual
or computerised or semi-computerised, they always come with some suggestions, ----------------------
changes and complaints about the current system. They all, when validated,
verified and found worth considering, are converted in the form of requirements ----------------------
of new system. Most of the times, these generated requirements can become
----------------------
the base for your new system development. Sometimes, management wants to
develop something new in the form of software or service that can also be the ----------------------
requirement. So requirements are generally generated from
----------------------
a. Problems or challenges being faced from current system
b. Functions not covered in the existing system ----------------------

Notes c. Performance issues with current system
d. Technological/functional/geographical/social constraints of the current
----------------------
system
---------------------- e. Changes in organisational/government policies, rules and regulations
---------------------- f. Leveraging new technology to compete the current market etc.
---------------------- System feasibility study will have to be carried out before finalising
the requirements. This study is to check whether new system undertaken for
---------------------- development is worth developing. This study could be economical, technical,
operational, legal feasibility study etc.
----------------------
●● conomical feasibility study deals with cost benefit analysis of the system,
E
---------------------- which further leads to checking return on investment (ROI) of the system.
---------------------- ●● echnical feasibility of the system deals with checking whether current
T
hardware and software resources are well enough to develop this new
---------------------- system.
---------------------- ●● perational feasibility assessment focuses on the degree to which

O
the proposed development projects fits in with the existing business
---------------------- environment and objectives with regard to development schedule,
delivery date, corporate culture and existing business processes.
----------------------
●● egal Feasibility Study of the system deals with whether proposed system
L
---------------------- complies with the respective legal framework.
Once these requirements are understood, discussed, found feasible from
----------------------
all above aspects, well conceived, well convinced and finalised, they will be
---------------------- documented and taken for next step with its scope, objectives, constraints and
related details with appropriate sign-off from senior management. This is also
---------------------- the time where the team has to decide on technology to be adopted for this
new system development. This decision primarily focuses on programming
----------------------
environment, database platform, operating environment etc. to be used further
---------------------- for system development and implementation.
---------------------- Sometimes, based on the high level requirements itself, user management
decides to go for readymade software available in the market and dilute the need,
---------------------- developing it with SDLC. Then they prefer to go with software procurement
process instead of software development process. Need is specified, quotations
---------------------- are invited, vendor shortlisted and software purchased and installed to get
---------------------- requirements fulfilled.
Sometimes, based on requirements, user management decides to outsource
---------------------- this software development activity to some reputed software development
---------------------- vendor, where the vendor will carry out the SDLC and user management will
only support for requirements analysis, user acceptance testing, final sign off
---------------------- and implementation process.
---------------------- 2. Requirement Analysis

This is the process of discovering, analyzing, defining and documenting
----------------------

the requirements that are related to a specific business objective. And it is the Notes
process by which you clearly and precisely define the scope of the project, so
that you can assess the timescales and resources needed to complete it. Many a ----------------------
times, this phase is also called Requirement Engineering. Some requirements are
unknown even to users, so some help is needed to discover them and considered ----------------------
for proposed system. This is generally carried out by Business Analysts or Domain ----------------------
Experts as a part of Software Development team.
----------------------
Managers and users make their wish-lists about what they would like the
software to do. Analysts ask questions about the intended use of the software, ----------------------
what type of data will be processed, how the software should handle the data
and how the data can be accessed once in the system. ----------------------
At the end of this phase, the software development team should have ----------------------
a detailed list of functions that the system will perform. Emphasis is on the
system’s objectives, rather than the way in which the system will achieve them. ----------------------
Following steps are generally followed in requirements analysis phase of the
----------------------
system development.
a. Identify key stakeholders: Identify the key people who will be affected ----------------------
by the project. Start by clarifying exactly who the project’s sponsor is.
----------------------
This may be an internal or external client. Either way, it is essential that
you know who has the final say on what will be included in the project’s ----------------------
scope. Then, identify who will use the solution, product or service. These
are your end-users. Your project is intended to meet their needs, so you ----------------------
must consider their inputs.
----------------------
b. Collect the requirements from identified key stakeholders: You will
have to ask each of these key stakeholders or groups of stakeholders ----------------------
for their requirements from the new product or service. What do they ----------------------
want and expect from this project? They might respond to your queries,
which you will have to document and keep for further analysis. Here, ----------------------
some fact-finding techniques or data-gathering techniques are used
to capture the requirements from these stakeholders. These techniques ----------------------
include interviews, surveys, questionnaires, document study or passive ----------------------
observation depending on mutual convenience. Analysts can choose the
best suitable method or a proper mix of those methods to gather the data ----------------------
from these stakeholders.
----------------------
c. Classify the requirements collected: To make analysis easier, consider
grouping the requirements into these four categories: ----------------------
●● Functional Requirements – These define how a product/service/ ----------------------
solution should function from the end-user’s perspective. They
describe the features and functions with which the end-user will ----------------------
interact directly.
----------------------
●● Non-Functional requirements include
●● Operational Requirements, which define operations that must ----------------------
be carried out in the background to keep the product or process ----------------------
functioning over a period of time.

Notes ●● Technical Requirements, which define the technical issues that must
be considered to successfully implement the process or create the
---------------------- product.
---------------------- ●● Transitional Requirements, which are the steps needed to implement
the new product or process smoothly.
---------------------- d. Document the requirements with proper sign off from the stakeholders:
---------------------- Once you have gathered and categorised all of the requirements, determine
which requirements are achievable and how the system or product can
---------------------- deliver them.
---------------------- To interpret the requirements, do the following:

i. Define requirements precisely – Ensure that the requirements are:
----------------------
●● Not ambiguous or vague.
----------------------
●● Clearly worded.
---------------------- ●● ufficiently detailed so that everything is known. (Project over-runs
S
and problems usually come from unknowns that were not identified
---------------------- or sufficiently well-analyzed.)
---------------------- ●● Related to the business needs.
---------------------- ●● isted in sufficient detail to create a working system or product
L
design.
---------------------- ii. Prioritise requirements – Although many requirements are important,
---------------------- some are more important than others and budgets are usually limited.
Therefore, identify which requirements are the most critical and which
---------------------- are “nice-to-haves”.
---------------------- iii. Analyze the impact of change – Carry out an Impact Analysis to make
sure that you understand fully the consequences your project will have for
---------------------- existing processes, products and people.
---------------------- iv. Resolve conflicting issues – Sit down with the key stakeholders and
resolve any conflicting requirements issues. You may find Scenario
---------------------- Analysis helpful in doing this, as it will allow all those involved to explore
how the proposed project would work in different possible “futures”.
----------------------
v. Analyze feasibility – Determine how reliable and easy-to-use the new
---------------------- product or system will be. A detailed analysis can help identify any major
problems.
----------------------
vi. Once everything is analyzed, present your key results and a detailed report
---------------------- of the business needs. This should be a written document.
---------------------- vii. Circulate this document among the key stakeholders, end-users and
development teams, with a realistic deadline for feedback. This can help
---------------------- resolve any remaining stakeholder conflicts and can form the part of a
---------------------- “contract” or agreement between you and the stakeholders.
viii. Finally, make sure you get the signed agreement of key stakeholders or
---------------------- representatives of key stakeholder groups, saying that the requirements,

as presented, precisely reflect their needs. This formal commitment will Notes
play an important part in ensuring that the project does not suffer from
“scope creep” later on. ----------------------
3. Design of new software specifications according to the requirements ----------------------
Systems design is simply the design of software. It implies a systematic
----------------------
and rigorous approach to design—an approach demanded by the scale and
complexity of many systems problems. System designers or architects will work ----------------------
on this step and convert all functional and non-functional requirements into
design specifications so as to enable software programmers to write appropriate ----------------------
source code to meet these requirements. A systems approach to design is
----------------------
entirely compatible with a user-centered approach. The core of both approaches
is focusing on understanding user goals. A systems approach looks at users in ----------------------
relation to a context and in terms of their interaction with devices, with each
other and with themselves. ----------------------
Generally, system design is done with system design document and follows ----------------------
two levels, High level Design specifications (for identifying the system processes,
functional components and their interfaces) and Low Level Design specifications ----------------------
(for detailing each of these identified processes and functional components with
----------------------
their actual layouts).
System design document can be used as prototype when it is done to help ----------------------
the end user understand how software will look like after development and ----------------------
implementation. Prototype includes the user interfacing components such as
Menu, Forms, reports, help messages, error messages etc. ----------------------
Design Document primarily includes the following components: ----------------------
●● ront End Design: Menu, Forms, reports, Help Messages, Error Messages
F
etc. ----------------------
●● ack end Design: Database layout, Programming Specifications in the

B ----------------------
form of algorithms or flowcharts
----------------------
Sometimes end users need to undergo review of these documents, called
design review, which ends with the sign off from the end user management or ----------------------
client. Modular approach is recommended to design the bigger applications to
enable developers to develop structured source code, testers to test the software ----------------------
module by module and end users to implement the system in phased manners, ----------------------
if decided.
4. Develop the software according to the design specifications ----------------------
Software programmers work on this step, called coding. In this step, ----------------------
source code is written by programmers/coders by referring to the system design
----------------------
document developed and signed off in step 3. The coding is done by using certain
coding standards governed by an organisation (client or development vendor or ----------------------
industry standards). The programming can be done in the same programming
environment as decided in the step 1, discussed above. Programmers can use ----------------------
structured programming techniques while writing the source code. Unit testing
----------------------
is also an additional work these programmers have to follow after completing

Notes the source code. Peer reviews and superior reviews are also done for the source
code before it is taken further for testing.
----------------------
5. Test the software according to the requirements and design
---------------------- This is the phase where software is tested and evaluated for the areas where
it does not meet user requirements and standards. Software testers will work in
----------------------
this step and execute the source code written by programmers in step 4, with an
---------------------- intention to find an error. They, in fact, plan the testing activity well in advance,
as parallel with requirements and design phase (step 2 and 3) and execute the
---------------------- programs by using test plan. The test plan generally includes test strategy tailored
for this system, test cases, test data etc.
----------------------
Testing of software is done with following two major types:
----------------------
●● lack Box testing, where software is tested only for its external interface
B
---------------------- with users and other systems like forms, reports etc.
●● hite Box testing, where software is tested with its internal components
W
----------------------
like database, Source code etc.
---------------------- There are two levels of the testing, which is carried out in the testing phase:
---------------------- ●● omponent level, also called unit testing phase, where each component
C
is tested for its independent functionality according to the design
---------------------- specifications.
---------------------- ●● I ntegration testing, where software is tested as a whole according to the
high level requirements and design.
----------------------
Let us learn some classifications of software testing.
---------------------- a. Acceptance Testing: Formal testing conducted to determine whether
---------------------- a system satisfies its acceptance criteria and to enable the customer to
determine whether to accept the system. This testing process is usually
---------------------- performed by customer representatives.
---------------------- b. Accessibility Testing: Type of testing, which determines the usability of

a product to the people having disabilities (deaf, blind, mentally disabled,
---------------------- etc.). The evaluation process should be conducted by persons with
disabilities.
----------------------
c. Alpha Testing: Type of testing a software product or system conducted at the
---------------------- developer’s site. This testing process is usually performed by the end user.
---------------------- d. Automated Testing: Testing technique that uses automation testing tools
to control the environment set-up, test execution and results reporting.
---------------------- This testing process is performed by a computer and is used inside the
testing teams.
----------------------
e. Beta Testing: Final testing before releasing application for commercial
---------------------- purpose. This testing process is typically done by the end-users or others.
---------------------- f. Boundary Value Testing: Software testing technique in which tests are
designed to include representatives of boundary values. It is performed by
---------------------- the QA testing teams.

g. End-to-end Testing: Similar to system testing, involves testing of a Notes
complete application environment in a situation that mimics real-world
use, such as interacting with a database, using network communications ----------------------
or interacting with other hardware, applications or systems if appropriate.
----------------------
h. Exploratory Testing: Black box testing technique performed without
planning and documentation. This testing process is usually performed ----------------------
by manual testers. This testing process is performed by QA teams.
----------------------
i. Load Testing: Testing technique that puts demand on a system or device
and measures its response. It is usually conducted by the performance ----------------------
engineers.
----------------------
j. Non-functional Testing: Testing technique which focuses on testing
of a software application for its non-functional requirements. Can be ----------------------
conducted by the performance engineers or by manual testing teams.
----------------------
k. Performance Testing: Functional testing conducted to evaluate the
compliance of a system or component with specified performance ----------------------
requirements. This testing process is usually conducted by the performance ----------------------
engineer.
l. Regression Testing: Type of software testing that seeks to uncover ----------------------
software errors after changes to the program (e.g. bug fixes or new ----------------------
functionality) have been made, by retesting the program. This testing
process is performed by the testing teams. ----------------------
m. Security Testing: A process to determine that an information system ----------------------
protects data and maintains functionality as intended. It can be performed
by testing teams or by specialised security-testing companies. ----------------------
n. Sanity Testing: A testing technique, which determines if a new software ----------------------
version is performing well enough to accept it for a major testing effort.
This testing process is performed by the testing teams. ----------------------
o. Smoke Testing: Testing technique, which examines all the basic ----------------------
components of a software system to ensure that they work properly.
Typically, smoke testing is conducted by the testing team, immediately ----------------------
after a software build is made.
----------------------
p. Stress Testing: A testing technique, which evaluates a system or
component at or beyond the limits of its specified requirements. This ----------------------
testing process is usually conducted by the performance engineer.
----------------------
q. Volume Testing: Testing, which confirms that any values that may
become large over time (such as accumulated counts, logs and data files), ----------------------
can be accommodated by the program and will not cause the program to ----------------------
stop working or degrade its operation in any manner. This testing process
is usually conducted by the performance engineer. ----------------------
However, all applications do not need all the above tests to be carried out. ----------------------
Depending on the requirements, nature and need of an application, these tests
have to be selected appropriately and included in the test plan. User acceptance ----------------------

Notes testing is the last testing done by end users may be in end user environment with
live data. Once this is through successfully, the system is said to be implementable
---------------------- and it can be taken for next step.
---------------------- 6. Implement the fully developed and successfully tested software
Once the software is fully successfully tested and found implementable, we can
----------------------
take it further for implementation. Implementation can be done in following
---------------------- mode according to the initial plans from end users (step 1)
●● ilot run – Here, the system is implanted with demo version to check its
P
----------------------
applicability and related issues. This is generally needed where end users
---------------------- and developers are unaware of certain technical, social and operational
issues or risks. To mitigate, they user pilot runs and assess for further full
---------------------- scale implementation.
---------------------- ●● arallel Run – Both new and old systems run in parallel so as to mitigate
P
the risk of failure of new system.
----------------------
●● irect change over – Here, the new system will take the place of old
D
---------------------- system and old system is discarded from operations.
●● hased – Here, the system is implemented in phases according to the
P
----------------------
plan made in initial stage of system development.
---------------------- System implementation phase generally include the following activities:
---------------------- ●● ite Preparation – It focuses on preparing the site (user or production
S
environment) with required hardware, system software, utilities etc.
----------------------
●● Software installation – Here the application software, which has been
---------------------- developed, will be installed with suitable software components like
database, source code, executable code, utilities etc.
---------------------- ●● Users Training – End users identify the need to be trained on using
---------------------- software effectively and handling system operations efficiently. They
need to be trained on working in live or production environment. This
---------------------- training is more of demonstration of system operations and hands-on
practice of the software integrated and implemented.
----------------------
●● anding over the documentation – The documentation, which has been
H
---------------------- done throughout the steps of SDLC, needs to be handed over with suitable
walkthroughs. It might include operations manual, programmer’s guide,
---------------------- error handling guidelines etc.
---------------------- ●● elp desk for trouble shooting – A help desk or service desk is needed
H
where end users can log the system operational issues and incidents.
---------------------- These issues and incidents need to be handled and resolved by dedicated
---------------------- system maintenance team.
●● ost implementation review – Ongoing assessment needs to be done on
P
---------------------- the system implemented in the user environment. Some period needs to
---------------------- be kept for constant observation. Logs of issues, risks, incidents posted
need be carefully studied so as to keep the system running and generate
---------------------- new requirements for upcoming versions of the same software.

Notes
----------------------
----------------------
1. It is the process of discovering, analyzing, defining and documenting
the requirements that are related to a specific business objective. ----------------------
i. User training ----------------------
ii. Requirement analysis
----------------------
iii. Software installation
iv. System implementation ----------------------
----------------------
Activity 1 ----------------------
Take an example of any one HR function of your organisation from payroll, ----------------------
leave management, performance appraisal etc. After discussion within your
----------------------
group, prepare the requirements document in your own words.
----------------------
4.4 HUMAN RESOURCE PLANNING AND HRIS ----------------------
Organisations need to do human resource planning so they can meet business ----------------------
objectives and gain a competitive advantage over competitors. Human resource
planning compares the present state of the organisation with its goals for the ----------------------
future and then identifies what changes it must make in its human resources to ----------------------
meet those goals.
----------------------
HR Planning Process is shown in the following figure.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 4.1 : HR Planning Process ----------------------
As shown in the figure, HR planning process works with two major steps: ----------------------
●● Forecasting of HR Demand
●● Forecasting of HR supply ----------------------
HR forecasting attempts to determine the supply and demand for various ----------------------
types of human resources and to predict areas within the organisation where
there will be labour shortages or surpluses. ----------------------

Notes There are three major steps to forecasting:
1. Forecasting the demand for labour
----------------------
2. Determining labour supply
----------------------
3. Determining labour surpluses and shortages
---------------------- Forecasting HR Requirements (Demand Analysis): Here the organisation is
---------------------- trying to predict future staffing needs by using the following techniques:
o Managerial Estimates
----------------------
o Sales Projections
----------------------
o Simulations
---------------------- o Vacancy Analysis (projected turnover)
---------------------- Forecasting HR Availability (Supply Analysis): Here the organisation is
trying to Predicting worker flows and availabilities by using following tools
---------------------- and techniques.
---------------------- o Succession or Replacement Charts
---------------------- o Skills Inventories (Use of HRIS)

o Labour Market Analysis
----------------------
o Markov Analysis (Transition Matrix)
----------------------
o Personnel Ratios
---------------------- HRIS is an application covering all these requirements of an organisation
---------------------- with high level of accuracy and consistency. An analysis is done on the basis
of facts entered into the systems and reports are generated to help management
---------------------- perform HR planning with above steps.
---------------------- Example: If the data of existing employees, their details, their current
state of allocations and engagements is entered into the HRIS by using suitable
---------------------- data entry forms and also if the data of upcoming projects (pipelined) is entered
suitably, then reports on current resources utilisation, estimated requirements
---------------------- and demand forecasted for next specific period can be generated to help HR
---------------------- management decide on hiring new resources.
---------------------- 4.5 GLOBAL POSITIONING SYSTEM OF HRIS

---------------------- HR Information Systems provide HR with the opportunity to become a more
---------------------- efficient and strategic function by standardising the majority of the organisation’s
HR processes, improving the quality and speed of available information and
---------------------- improving services to employees. These changes form the basis of a highly
competitive organisation.
----------------------
When planning for a HRIS, the organisation must outline its overall business
---------------------- strategy, system goals and objectives, critical success factors and the type of data
it aims to have. It is this outline that begins to shape the HRIS. It is imperative
----------------------

that the outline incorporate a degree of flexibility to allow for new developments Notes
in the organisation, business environment, technology or management thinking.
The system, If designed correctly, manages employee data in line with how the ----------------------
organisation is managed; hence the need for a multinational organisation to
implement a global HRIS. ----------------------
Generally, global positioning system of HRIS includes all potentially ----------------------

affected countries, cultures and political systems. These elements cannot be
----------------------
ignored and make the HRIS truly global.
In global HRIS, the global database is automatically updated by the local ----------------------
databases ensuring data is not only inputted correctly, but only once. By applying
----------------------
consistent standards for data management, global HRIS reporting becomes more
accurate and streamlined as all of the decision makers receive and have access to ----------------------
the same information. This information can then be used for in-depth analyses
to help HR and the organisation make better, more informed decisions. ----------------------
By applying a consistent process for capturing and maintaining employee- ----------------------
specific data (job, position and qualifications), the global HRIS can be used
to identify, plan and budget for employee training, succession planning and ----------------------
expatriate assignments. A multinational organisation with a global HRIS can very
----------------------
quickly and easily discover the right person to fill a specific position. Having
the ability to locate the best qualified employee regardless his or her location is ----------------------
a competitive advantage. Additionally, designing the system to identify which
employees are interested in overseas assignments will also make the expensive ----------------------
and time-consuming expatriate process quicker and easier.
----------------------
Using Global HRIS, compensation can be applied fairly across the globe
while still being aware of and understanding differences in compensation for ----------------------
similar jobs in various countries. A global HRIS should be able to identify ----------------------
different currencies and exchange rates, providing a final cost figure in any
currency. ----------------------
In short, in Global positioning HRIS, employees across the organisation, ----------------------
regardless of location, will feel more connected to each other and will have a
single point of contact. ----------------------
It is time to discard the transactional HRIS and software – payroll and ----------------------
benefits – and introduce the new age of strategic HRIS and software – performance
management, succession planning and competency-based compensation and ----------------------
workforce analytics. As HR aims to transform to a more efficient and strategic
function, it must learn how to leverage technology and use it as a competitive ----------------------
advantage. If strategy is the real driver behind technology, HR Managers actively ----------------------
pursuing a global strategy will be able to guide the organisation, the system and
the vendors to create new solutions. And HR Executives who are accountable for ----------------------
the success of the global businesses must support the global HRIS effort. With
all of these efforts, HR may finally be able to transform. ----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. HRIS is an application covering all these requirements of an
---------------------- organisation with high level of accuracy and consistency.
----------------------
---------------------- Activity 2
---------------------- Collect any one report of your organisation, which helps HR management
perform HR planning effectively.
----------------------
----------------------
Summary
----------------------
●● RIS is a system, which needs to be acquired in the organisation either by
H
---------------------- developing the software by internal or getting it developed from external
vendor or going for purchasing readymade HRIS available in the market.
----------------------
●● hen HRIS Application needs to develop, developers have to follow
W
---------------------- a disciplined way of software development called SDLC. It comprises
Scope, Objectives, Requirement analysis, Design, Develop Source Code,
---------------------- Testing and Implementation.
---------------------- ●● rocess needs to be followed by assessment so that new requirements
P
may be generated to repeat the SDLC process for upcoming versions.
---------------------- User management, End users/Stakeholders, Business analysts, Designers/
---------------------- Architects, Programmers, Testers etc. are important roles that need to be
played in SDLC.
---------------------- ●● R planning has to happen with demand and supply forecasting. Different
H
---------------------- tools and techniques are used to carry out this balance in order to utilise
the current HR and plan for future need of HR. HRIS helps perform this
---------------------- effectively by generating different MIS reports.
---------------------- ●● lobal positioned HRIS are web-enabled and will be developed and
G
implemented in Client Server application architecture where end user
---------------------- can easily operate it with having any geographical constraints. Global
positioning HRIS is distributed HRIS where organisation has been spread
---------------------- across the globe and the application will help the management work on
---------------------- HR practices quiet efficiently and effectively.
----------------------
----------------------
----------------------
----------------------

Keywords Notes
----------------------
●● Systems Design: It is the process of defining the architecture, components,
modules, interfaces, and data for a system to satisfy specified requirements. ----------------------
●● Simulations: It is the imitation of the operation of a real-world process
or system over time. The act of simulating something first requires that ----------------------
a model be developed; this model represents the key characteristics or ----------------------
behaviors/functions of the selected physical or abstract system or process.
●● Markov Analysis: Statistical technique used in forecasting the future ----------------------
behavior of a variable or system whose current state or behavior does not ----------------------
depend on its state or behavior at any time in the past in other words, it
is random. ----------------------
----------------------
----------------------
1. What do you mean by SDLC? Discuss the steps in brief.
----------------------
2. Discuss different methods of acquiring HRIS in the organisation. Elaborate
each method in brief. ----------------------
3. What is requirement analysis? How is it carried out in the organisation to ----------------------
develop the application?
4. Describe different roles being played in SDLC. ----------------------
5. What is HR planning process? How is it carried out in the organisation? ----------------------

6. What is the role of HRIS in HR Planning process? Illustrate. ----------------------
7. Write a detailed note on Global HRIS.
----------------------
8. What do you mean by HR planning? How is it carried out?
----------------------
9. What is the use of HRIS in HR Planning? Discuss with suitable example.
----------------------
----------------------
----------------------
----------------------
1. It is the process of discovering, analyzing, defining and documenting the
requirements that are related to a specific business objective. ----------------------
i. Requirement analysis ----------------------
----------------------
----------------------
1. True ----------------------
----------------------

Notes
Suggested Reading
----------------------
1. Kavanagh, Michael J., Richard D. Johnson, Mohan Thite. Human Resource
---------------------- Information Systems: Basics, Applications, and Future Directions.
2. Managing Requirements Website, Ludwig Consulting Services, LLC,
----------------------
http://www.jiludwig.com/
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------

Human Resource Analytics
UNIT
5
Structure:
5.1 Introduction
5.2 Definitions
5.3 HR Matrices
5.4 Workforce Analysis
5.5 HR Process Efficiency
5.6 Using HR Matrices in Workforce Analysis
5.7 HR Accounting
5.7.2 Disadvantages of HR Accounting
Summary
Keywords
Suggested Reading
Human Resource Analytics 71

Notes
Objectives
----------------------
----------------------
• Explain human resource matrices and workforce analysis
----------------------
• Discuss human resource process efficiency
---------------------- • Use HR matrices in workforce analysis
---------------------- • Describe the ways HR accounting is carried out
----------------------
5.1 INTRODUCTION
----------------------
According to the current state of transformation in HR profession, executives
----------------------
are treating employees as their most valuable business asset and competitive
---------------------- differentiator for organisational success. HR professionals are being asked by
senior policymakers to prove the value of HR programmes to the bottom line. To
---------------------- prove this value, these senior executives need to work on some facts and figures
which will be in the form of matrices. These facts and figures are required to be
----------------------
collected from actual practitioners and put up into some formulae to arrive at
---------------------- some scenario and its interpretation. They are generally known as HR matrices in
common terms. In this unit, we will learn about such matrices which will generally
---------------------- govern the workforce management practice in large organisations. HR metrics
focus on communicating whether critical long-term people management strategies
----------------------
drive productivity and deliver a workforce necessary to achieve business goals
---------------------- that improve financial and organisational effectiveness and performance.
The ultimate goal is to communicate to senior policymakers on high-
----------------------
level implications through the charts, dashboards, graphs, executive summary
---------------------- document, etc. It goes beyond measuring activities to include the effectiveness
of the results. They help illustrate the impact of HR strategies to the business
---------------------- effectiveness. HR metrics are still in their initial stage and will take years to refine
into truly effective measures that go beyond efficiency measures of activity to
----------------------
analytics predicting the impact or outcome of people strategies on business goals.
---------------------- This process has two major stages – Metrics and Analytics, Metrics generate
the scenario by collecting facts and figures from different authentic internal or
----------------------
external sources and Analytics interpret the scenarios to help senior management
---------------------- to take it to next level of strategic decision.
---------------------- It begins by the management identifying two or three people management

strategies. Next is the selection of the people drivers defining the key outcomes of
---------------------- strategies and the key performance indicators (metrics) that will be communicated
up to senor leadership in high-level dashboards. The second step is identifying
---------------------- the analytics that link HR strategies to the business. The result is a complete map
---------------------- with a line of sight from high-level strategy all the way to defined data elements.
In addition to the above, we also would understand the way HR accounting
---------------------- is carried out by making effective use of the HR matrices derived from the

business practices and also how organisations can improve on their productivity, Notes
efficiency and effectiveness in their performance.
----------------------
5.2 DEFINITIONS ----------------------
●● Metrics: They are the units of measurements. ----------------------
●● ey performance indicators (KPI): The business related attributes on
K
which performance is measured and showcased to the senior management. ----------------------
●● takeholders: The people, departments, parties getting impacted by the
S ----------------------
decisions and initiatives taken by the organisation.
----------------------
●● anagement Information System: The system which generates
M
valuable information in the form of reports, graphs, dashboards, executive ----------------------
summary etc. for the sake of management functions like planning,
controlling, decision-making organising, staffing, etc. ----------------------
----------------------
5.3 HR MATRICES
----------------------
As we have seen, ‘HR matrices’ is a fundamental way to measure the cost
and impact of HR practices being adopted by the organisation and the success ----------------------
and failure of those practices. Information generated on this will help executive
management take effective decisions in favour of the business of an organisation. ----------------------
They enable a company to track year-to-year trends and changes in these critical ----------------------
variables. It is how organisations measure the value of the time and money spent
on HR activities in their organisations. ----------------------
Below are major categories of HR metrics and aspects they often measure. ----------------------
1. Organisational/Strategic HR metrics are those which are in the form
----------------------
of executive summary to be provided to top level management of the
organisation. They primarily include revenue per employee, productivity ----------------------
ratio, people profit, employee satisfaction and pulse to understand what
they say. ----------------------
a. Revenue per employee = Total revenue/Total number of full-time ----------------------
employees
----------------------
b. Productivity = Output for every rupee of people costs spent (people
cost include salary, benefits, training and HR department costs. ----------------------
c. People profit = Number of people rupee spent in order to get one ----------------------
rupee of profit
d. Employee satisfaction = what employees are saying and feeling. ----------------------
This will help organisation understand the pulse of an employee ----------------------
which ultimately help design employee satisfaction strategies as far
as possible. ----------------------
2. Recruiting metrics measure activities involved in the stages of attracting ----------------------
and selecting top talent. Decision-makers frequently want to quantify
variables such as new hire performance, turnover rates of new hires, ----------------------

Notes impact of a poor hire and return on investment in a new hire in order to
measure the success of the recruiting process.
----------------------
a. On-job performance of new hires explains whether we hired more
---------------------- productive people this year than last year. We also can work on
computing the new hire time to productivity.
----------------------
b. Impact of poor hires or failure rate − what is the percentage of the
---------------------- people that we hired in this year is not up to the mark? What has
happened to them? Here, we also can track the number of employees
---------------------- who voluntarily leave the organisation before probation.
---------------------- c. Turnover rates of new hires would be determined based on how
frequently and how much work outputs are gained from newly
---------------------- hired employees. This can be computed based on the productivity
of new hires (as described above).
----------------------
d. In this type of metrics, we also can compute average tenure of new
---------------------- hires, if needed by the management.
---------------------- e. If needed, we can work on calculating ‘How many people do we
take from our competitors?’
----------------------
f. And finally we also can measure satisfaction of managers and
---------------------- applicants with our recruitment process and results. This can be
done through some feedback mechanism after recruitment.
----------------------
3. Retention metrics often measure important aspects of turnover.
---------------------- Management often wishes to quantify such variables as turnover rate,
average tenure, the rate of a skilled worker or the financial impact of
----------------------
employee turnover. Results often indicate how much each separating
---------------------- employee is costing the company and help the company create proactive
plans to prevent the loss of top talent.
----------------------
So, basically we must address two basic questions by providing retention
---------------------- metrics − first is what is the turnover rate of our key/top performers as
compared to our competitors and second is what is the turnover rate of
---------------------- bottom performers? These two questions become the core part on retention
metrics.
----------------------
Potential retention metrics include:
----------------------
1. Overall employee turnover (not recommended)
---------------------- 2. Performance turnover in key jobs (where performance turnover
---------------------- means that top performer turnover is “weighted” more heavily
and bottom performer turnover more lightly than average worker
---------------------- turnover)
---------------------- 3. Preventable turnover in key jobs (where a sample exit survey is
used to identify the real reasons individuals left the organisation for
---------------------- and whether the turnover could have been reasonably prevented)
---------------------- 4. Diversity turnover in professional, managerial and technical
positions
5. The dollar impact of employee turnover in key positions Notes
6. Managers’ overall satisfaction rate with HR’s retention efforts and
----------------------
the impact of these efforts on team productivity (survey of a sample
of managers) ----------------------
4. Training and development metrics quantify the learning processes of
----------------------
new employees and include activities such as orientation, training process
time and costs and the time and cost of on-the-job learning. Results often ----------------------
demonstrate the success of professional development processes and how
much they help the organisation achieve its business goals. ----------------------
a. Percentage of employees who report that they are satisfied with the ----------------------
learning and growth opportunities provided by the firm (survey of a
sample of employees) ----------------------
b. Percentage of employees who report that they are satisfied with on- ----------------------
the-job learning, project assignments for growth and development
and job rotations (survey of a sample of employees) ----------------------
c. Percentage of employees who report that they are in the leading edge ----------------------
of knowledge in their profession (survey of a sample of employees)
d. Percentage of new hires that report excellent training opportunities ----------------------
among the top three reasons for which they accepted the job (survey
----------------------
of new hires in which they force-rank their job acceptance factors)
5. Employee relations metrics focus on the employee relations area to ----------------------
analyse whether poor performing employees rapidly improve their
----------------------
performance or are terminated within a year.
a. Percentage of employees who report that they have a bad manager ----------------------
(based on an employee survey, comparing this year’s percentage to ----------------------
last year’s)
b. Turnover percentage of low-performing managers and employees ----------------------
within one year of receiving the low rating ----------------------
c. Percentage of low-performing employees who are on a performance
management programme ----------------------
d. Percentage of employees who are in any performance management ----------------------

programme who improved at least one level on performance
----------------------
appraisal ratings within one year
e. Manager satisfaction with the impact of HR’s employee relations efforts ----------------------
on their team’s productivity (survey results of a sample of managers)
----------------------
6. Compensation metrics are very important from employee satisfaction
perspective. Organisation does this through different tools and ----------------------
computational methods. The focus is on understanding the compensation
----------------------
and benefits scenario in the organisation as compared to the competitors.
Trend is analysed every year and different metrics are studied and strategic ----------------------
decisions could be made to stand in the competition from employee
benefits perspective. ----------------------

Notes The major metrics are as under −
a. The amount in total compensation and benefits costs that it took
----------------------
to generate a dollar of revenue (as an indication of compensation
---------------------- effectiveness, where this year’s ratio would be compared to last
year’s ratio)
---------------------- b. Percentage of employees who are satisfied with their compensation
---------------------- (survey of a sample of employees on their satisfaction with the
rewards and the expectations of the firm)
---------------------- c. Percentage of employees who are rated in the top performance
---------------------- appraisal level and who are paid above the average salary for their
position (and vice versa)
---------------------- d. Percentage of the average employee’s pay that is “at risk” based on
---------------------- the employee’s on-the-job output
e. Percentage of top-performing employees who resigned for
---------------------- compensation-related reasons (using a post-exit survey, identify the
---------------------- percentage of top performers who listed pay issues among their top
three reasons for leaving)
----------------------
----------------------

1. It is a fundamental way to measure the cost and impact of HR practices
----------------------
being adopted by the organisation and the success and failure of those
---------------------- practices.
i. BCG Matrix
----------------------
ii. HR matrices
----------------------
iii. Employee relations metrics
---------------------- iv. Compensation metrics
----------------------
---------------------- Activity 1
---------------------- Identify the scenarios where we can apply the HR metrics by reviewing the
---------------------- above list of metrics and develop a case study.
----------------------
5.4 WORKFORCE ANALYSIS
----------------------
Workforce analysis is the basis for performing workforce planning. It basically
---------------------- involves three major steps –
---------------------- 1. Demand Analysis: It focuses more on demand of human resource for
upcoming organisational projects, expansion plans, initiatives, etc. So this
---------------------- will be the phase where future needs of the organisation will be evaluated.

2. Supply Analysis: It emphasises on the availability of appropriate human Notes
resources in the market and their possibility of making them join the
organisation within given time frame. ----------------------
3. Gap Analysis: It is done to understand the difference between demand ----------------------
and supply analysed above for a specific period and situation.
----------------------
Altogether, this process yields information that can be melded together with
the other components of workforce planning to form a strategic plan to cope with ----------------------
the workforce challenges of the future. The whole analysis should be revisited
periodically to identify new trends and factors. ----------------------
Now let us see them in more details. ----------------------
1. Demand Analysis: This will primarily focus on evaluating future needs ----------------------
of the organisation. To do this, some of following questions need to be
addressed by involving different stakeholders and decision- makers. ----------------------
o How essential is each job? ----------------------
o What job functions, if any, could be consolidated?
----------------------
o How many people are needed in the future to perform each job?
----------------------
o What knowledge, skills, competencies and abilities (KSA) are
needed to perform anticipated job functions? ----------------------
o What technology changes will be made?
----------------------
o What processes could be done more efficiently or effectively?
----------------------
o What activities can the agency stop doing or give up?
----------------------
o Are there opportunities for reorganisation?
o What are the organisation’s strategic objectives? ----------------------
o What are the organisation’s diversity objectives? ----------------------
2. Supply Analysis: This step is generally the easiest because much of the ----------------------
information has been collected already somewhere in the organisation.
Evaluating current employee and demographic data will help identify ----------------------
future needs as well as a projected workforce strategy. Following are
some of the information components to work on for supply analysis: ----------------------
o Existing employee data ----------------------
o Termination reports ----------------------
o Exit interviews
----------------------
o Employee surveys
----------------------
o Recruitment data
o External agencies and their performance in the past ----------------------
o Strategic planning documents ----------------------

o Current budget and position reduction information ----------------------

Notes o External influences on operations
o External labour market and economic data
----------------------
3. Gap Analysis: This step compares demand and supply and finds the gap
---------------------- to analyse further. This step can be completed in a fairly straightforward
manner. Simply take the demand analysis results and match them to your
----------------------
supply results. Any mismatches indicate either a projected unmet need or
---------------------- a surplus, either of which presents a challenge.
To fill the gaps between current resources and future needs, use the results
----------------------
of the other core components of your workforce plan to craft possible
---------------------- solutions. Some approaches include:
---------------------- o Ensure employees with obsolete skills receive the training needed
so they can continue to contribute.
---------------------- o Hire and maintain employees who can develop and use ever-
---------------------- changing technology.
o Provide a workplace and work opportunities that retain employees.
----------------------
o Train employees in skills that support the agency’s strategic
---------------------- direction to ensure valuable use of time and resources.
---------------------- o Document the processes, methods, tools and techniques for positions
requiring special skills and responsibilities.
----------------------
o Determine the best use of positions by analysing needs rather than
---------------------- just refilling the position in the same way.
---------------------- o Increase efficiencies in recruitment and hiring processes by

proactively identifying future anticipated vacancies and completing
---------------------- some of the steps in the exam development process prior to positions
being vacated.
----------------------
o Identify training needs, classification and compensation issues,
---------------------- organisational or position changes.
---------------------- o Research labour market availability of candidates and possibilities
to “self-grown” for certain positions.
----------------------
o Create affirmative action strategies in an effort to maintain and
---------------------- increase diversity within the department.
So we can summarise the following as the major objectives of workforce
----------------------
analysis leading to workforce planning:
---------------------- 1. Benefits: Defining quantifiable business objectives involves identifying
---------------------- what you want to achieve within a certain time frame. Using this technique
in business planning allows you to measure the results at the end of that
---------------------- time frame to validate that your business functions effectively and to
make adjustments if not. If you don’t create realistic objectives for hiring
---------------------- and maintaining your workforce, you might end up with either too many
---------------------- or too few employees.

2. Defining needs: To ensure your company achieves its strategic goals, Notes
strive to have the right number and type of personnel in place to complete
job tasks. Defining job roles and responsibilities includes listing job ----------------------
functions, minimum education and experience requirements to complete
job tasks, abilities required and specialised duties or constraints, such as ----------------------
travel. You should also identify the pay rate. To define interdependencies, ----------------------
you can create a responsibility matrix that indicates responsible,
accountable, consulting and informational roles on a project-by-project ----------------------
basis.
----------------------
3. Managing Costs: Your goal in workforce planning mainly involves
identifying the appropriate staffing levels to meet your business needs ----------------------
at the lowest possible cost. This may include hiring temporary workers
----------------------
to fulfill seasonal needs or unexpected volume. It also may involve
training your employees to perform more than one job. Cross-training ----------------------
your staff helps you adjust to changing demands. To reduce your number
of employees, you might also reclassify lower-priority positions as ----------------------
contingent or outsource specialised work. This allows you to sustain a
----------------------
more flexible workforce.
4. Setting standards: Comprehensive workforce plan usually describes ----------------------
job levels, such as entry, expert and master. Establishing standards
----------------------
set expectations for worker performance. By defining job levels, you
establish a career path for each type of role. This helps employees ----------------------
develop professionally and usually leads to employee satisfaction. It
also establishes a succession pipeline by making sure you have trained ----------------------
personnel available to take over job tasks when more experienced people
----------------------
retire or take on different jobs. To maintain an effective workforce, ensure
that you have the best mix of skills, knowledge and expertise that you ----------------------
can afford for both the short and long term. For example, hiring entry-
level employees typically supports your growing business with lower- ----------------------
cost employees.
----------------------
5. Maintaining competitive advantage: To attract the top talent, your
workforce planning strategy must define innovative and creative strategies ----------------------
for locating, recruiting, interviewing, hiring, orienting and training the
----------------------
workforce. By allocating your resources effectively, you can meet your
strategic goals. If employees need additional credentials to stay abreast ----------------------
of changes in technology, reserve a budget and time to accomplish this
objective. Workforce analysis and planning allows you to align your ----------------------
compensation and benefits with industry expectations. By using online
----------------------
workforce planning and scheduling tools, you can generate reports that
help you accomplish your goals. ----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. Defining job roles and responsibilities includes listing job functions,
---------------------- minimum education and experience requirements to complete job
tasks, abilities required and specialised duties or constraints, such as
----------------------
travel.
----------------------
---------------------- Activity 2
---------------------- Discuss the scenarios where we can work on workforce planning with certain
hypothetical project requirements, by referring to the above aspects.
----------------------
----------------------
5.5 HR PROCESS EFFICIENCY
----------------------
In almost every type of business, human resources budgets constitute
---------------------- a significant part of management expenses and production costs. Increasing chaos
in overlapping HR business processes could lead to unexpected cost escalation
----------------------
in a critical situation. This is one of the major reasons why HR process is always
---------------------- expected to be optimised and efficient as far as possible. So HR department,
in support of senior management would always attempt to make these HR
---------------------- processes more and more effective, efficient and productive. This cannot happen
immediately as it need long journey to go along with lot of attempts of good
----------------------
and bad practices. This well-directed HR experience should result into high HR
---------------------- process maturity.
HR process efficiency in any organisation is generally elaborated with the
----------------------
presence of highly matured HR process framework which ultimately contribute
---------------------- to the overall business maturity and development. The key to success in this case
lies in a systematic approach to optimising business processes, focusing on the
---------------------- HR function.
---------------------- They primarily include:
---------------------- ●● Human resource (workforce) planning

●● Recruitment and selection
----------------------
●● Training and development
---------------------- ●● Compensation and benefits
---------------------- ●● Employee administration service management
●● Performance appraisals
----------------------
●● Employee relations
----------------------
●● Employee separation
----------------------

Each of these functions should have laid-down processes and they should be Notes
formulated in the form of HR policy framework. Strict control practices should
be in place to control the deviations from the policies. ----------------------
These processes need to be checked and verified for their benefits from both ----------------------
employee and organisation perspectives and sometimes need to be revisited, if
not working well, as decided. These revisions should be done periodically based ----------------------
on the feedback obtained from its authentic end-users. The feedback mechanism
----------------------
is a part of collecting data points on specific parameters and generating reports
using metrics described above. ----------------------
5.6 USING HR MATRICES IN WORKFORCE ANALYSIS ----------------------
Here, HR metrics play a vital role in making all decision-makers know the ----------------------
exact scenario on the current process framework. This should be presented to ----------------------
them in the form of reports, dashboards or executive summary. This becomes
a part of Management Information System (MIS) which management will use ----------------------
as a tool to make the processes efficient. The workforce analysis will be used
with these metrics in enhancing HR process efficiency and would further lead ----------------------
to develop workforce management to the greatest possible level. ----------------------
Now let us see some examples of metrics and their use in making respective
----------------------
HR process efficient.
1. In the recruitment process, suppose a dashboard has reported data ----------------------
demonstrating poor hiring process, i.e., percentage of the people that we
----------------------
hired in this year is not up to the mark, then management can focus on
revising the recruitment process in such a manner where controls can be ----------------------
more strict and stringent to screen the candidates applied for the critical
positions. They can introduce some more scrutiny and strict mapping ----------------------
with the actual need of the organisation.
----------------------
2. In the compensation and benefits process, if the report has come up with
an inference saying percentage of employees who are satisfied with ----------------------
their current compensation is very less and further this might result into
----------------------
high attrition rate this year, senior management can come up with some
appropriate compensation and benefits offer and related policies to keep ----------------------
the employees satisfied and retain with the organisation. This further
would result into high productivity from the organisation perspective. ----------------------
3. In the process of maintaining good employee relations, one periodic report ----------------------
has been focusing on percentage of employees who report that they have
a bad manager and after investigating it has been found valid, decision- ----------------------
makers can take appropriate action and ensure this will not get repeated ----------------------
henceforth.
In a similar way, many examples could help organisation understand the ----------------------
current level of HR process efficiency. The roadmap could be defined and strictly ----------------------
followed to reach the target HR process maturity level by adopting appropriate
practices, put them together while achieving the target. ----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. ___________ in any organisation is generally elaborated with the
---------------------- presence of highly matured HR process framework which ultimately
contributes to the overall business maturity and development.
----------------------
----------------------
Activity 3
----------------------
---------------------- Develop a case study to demonstrate the help of HR metrics in developing

the practice of workforce management.
----------------------
---------------------- 5.7 HR ACCOUNTING

---------------------- HR Accounting is accounting for people as an organisational resource. It
---------------------- involves measuring the costs incurred by business firms and other organisations to
recruit, select, hire, train and develop human assets. It also involves measuring the
---------------------- economic value of people to the organisation. HRA is the process of identifying
and measuring data about human resources and communicating this information
---------------------- to interested parties. Thus, we can say that financial accounting reflects the costs
---------------------- of assets such as building and machinery and HRA shows human resource as
capital and not as expense.
---------------------- HR accounting is needed in the organisation because of following the reasons:
---------------------- 1. It provides cost/value information for making management decisions
about acquiring, allocating, developing and maintaining human resources
---------------------- in order to attain cost-effectiveness.
---------------------- 2. It allows management personnel to monitor effectively the use of human
resources.
----------------------
3. It provides a sound and effective basis of human asset control, that is,
---------------------- whether the asset is appreciated, depleted or conserved.
---------------------- 4. It helps in the development of management principles by classifying
the financial consequences of various practices. Basically, HRA is a
---------------------- management tool which is designed to assist senior management in
understanding the long-term cost and benefit implications of their HR
----------------------
decisions so that better business decisions can be taken by the decision-
---------------------- makers.
---------------------- 5. If such accounting is not done, then the management runs the risk of
taking decisions that may improve profits in the short run but may also
---------------------- have severe repercussions in the future.
----------------------

6. These functions are the key transformational processes that convert human Notes
resources from ‘raw’ inputs (in the form of individuals, groups and the
total human organisation) to outputs in the form of goods and services. ----------------------
HRA indicates whether these processes are adding value or enhancing
unnecessary costs. ----------------------
7. In addition to facilitating internal decision-making processes, HRA ----------------------

also enables critical external decision-makers, especially the investors
----------------------
in making realistic investment decisions. Investors make investment
decisions based on the total worth of the organisation. HRA provides the ----------------------
investors with a more complete and accurate account of the organisation’s
total worth and therefore, enables better investment decisions. ----------------------
8. Furthermore, in a business environment where corporate social ----------------------
responsibility is rapidly gaining ground, HRA reflects the extent to which
organisation contributes to society’s human capital by investing in its ----------------------
development.
----------------------
9. Finally, in an era where performance is closely linked to rewards and,
therefore, the performance of all groups/departments/functions needs ----------------------
to be quantified to the extent possible, HRA helps in measuring the
----------------------
performance of the HR function as such.
Now let us see some examples to illustrate this need. ----------------------
1. Very often organisations hire young people from outside on very high ----------------------
salaries because of an immediate business requirement. Later on, however,
they find that the de-motivating impact of this move on the existing ----------------------
experienced staff has caused immense long-term harm by reducing their ----------------------
productivity and by creating salary distortions across the organisational
structure. ----------------------
2. The conventional financial statements treat HR investments as ----------------------
expenditures. Consequently, their income statement projects expenditures
to acquire place and train human resources as expenses during the current ----------------------
year. The balance sheet, thus, becomes distorted as it inaccurately presents
the “total assets” as well as the “net income” and, thereby, the “rate of ----------------------
return” which is the ratio of net income to the total assets. HRA helps in ----------------------
removing this distortion.
----------------------
The advantages are: ----------------------
1. Information source: HRA provides information about the worth of ----------------------
human resource. This information can be used to take decision regarding
internal source of recruitment or the external source of recruitment. ----------------------
2. Potential investors: It assists potential investors to judge about a company ----------------------
on the basis of utilisation of the human resource. HRA is considered
a more accurate accounting method of ascertaining the return on total ----------------------
resources employed by a firm.
----------------------

Notes 3. Database: It provides necessary database to devise a suitable promotion
policy, create a congenial work environment and provide job satisfaction
---------------------- to the workforce.
4. Performance appraisal technique: It can be used to evaluate the
----------------------
performance of an employee in terms of the cost incurred on training and
---------------------- development.
5. Effectiveness of HR policies: It provides valuable information regarding
----------------------
the effectiveness of HR policies and practices.
---------------------- 5.7.2 Disadvantages of HR Accounting
---------------------- The disadvantages are:

1. Difficulty in measurement: In case of HRA, it is difficult to measure the
---------------------- value of human resource as well-designed accounting practices do not
---------------------- exists for measuring the value of human resources.
2. Difficult to compare: The value of human resources of two organisations
----------------------
cannot be compared easily as different organisations follow different
---------------------- models.
3. Increase in labor turnover: In the light of increased human resource
----------------------
mobility, HRA does not sound convincing as valuation of human asset/
---------------------- HR is based on the assumption that the employee will remain in the
organisation for a specified period of time.
----------------------
4. Opposition from trade union: It may not be acceptable to the employees
---------------------- and union as valuation of human resource might lead to disparity in the
wages.
----------------------
5. Lack of evidence: There is very less data available to support the
---------------------- contention that HRA facilitates better and effective management of
human resource.
----------------------
----------------------
There are two types of methods or approaches in HR accounting − Monetary
---------------------- Methods and Non-monetary Methods.
Monetary methods are based on cost or economic value of human resource.
----------------------
Following are some of the important methods.
---------------------- 1. Historical Cost Method: This method was developed by Rensis Likert
and it takes into account the actual cost incurred on human resource. Here
----------------------
two types of costs are taken into account, namely acquisition cost and
---------------------- learning cost.
---------------------- Acquisition cost refers to the expense incurred on recruitment selection

and placement. Learning cost refers to expenses incurred on training and
---------------------- development.
---------------------- According to Rensis Likert, all costs are to be capitalised and thereafter
capitalised cost is amortised, i.e., written off over the period an employee
---------------------- serves the organisation. In case the employee leaves the organisation

before the expected service period, the remaining amount is written off in Notes
the same year.
----------------------
2. Replacement Cost Method: In this method, the cost of replacing an
existing employee is taken into account. This method assists the human ----------------------
resource manager to plan by making the information available on the cost
involved in acquiring the people in the future. ----------------------
3. Opportunity Cost Method: It is used to value those employees who ----------------------
have rare skills and are in short supply. Managers willing to acquire these
types of employees are willing to offer bid prices. The bid price is arrived ----------------------
at by calculating the actual or expected rate of earnings to be earned by
----------------------
such employees. Thus, if an employee can be hired easily there would be
no element of opportunity cost for that employee. ----------------------
4. Asset Multiplier Method: This method assumes that there is no direct
----------------------
relationship between cost incurred on an employee and his value for the
organisation because the value of an employee depends on various factors ----------------------
like motivation, working condition and employee attitude towards work
and the organisation. In this context multiplier refers to an instrument ----------------------
that relates personal worth of employee to the total asset value of the
----------------------
organisation.
5. Economic Value Method: Here the human resource is valued on the ----------------------
basis of the contribution he is likely to make to the organisation till ----------------------
his retirement. The payment due to the employee in the form of pay,
allowance, benefit, etc. are estimated and then discounted to arrive at the ----------------------
present economic value of the individual.
----------------------
Non-monetary Methods based on value of HR and are of two types:
1. Expected Realisable Value Method: Here the expected realisable ----------------------
value of an employee is measured through behavioural measures. For ----------------------
example, psychometric tests are used to measure the promotability and
transferability of employees. Similarly, attitude surveys are used to ----------------------
measure employee satisfaction, level of motivation, etc.
----------------------
2. Discounted Net Present Value of Future Earnings: This method was
propounded by Rensis Likert and it takes into account three variables ----------------------
namely: (a) Causal, (b) Intermediate and (c) Output. This is used to
----------------------
measure the effectiveness of human capital. The relationship between the
variables can be illustrated as follows: Causal variables like leadership ----------------------
style and behaviour affects intermediate variable such as morale,
motivation and commitment to work. This in turn affects output variable ----------------------
such as production, sales, profit, etc.
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. The following are the advantages of HR Accounting:
----------------------
i. Information source
---------------------- ii. Potential investors
---------------------- iii. Database
---------------------- iv. Opportunity Cost Method
----------------------
Activity 4
----------------------
---------------------- Develop a case study to demonstrate each of the HR accounting methods

with some hypothetical scenario.
----------------------
---------------------- Summary
---------------------- ●● R matrices generally govern the workforce management practice in
H
---------------------- large organisations.
●● R metrics focus on communicating whether critical long-term people
H
---------------------- management strategies drive productivity and deliver a workforce
---------------------- necessary to achieve business goals that improve financial and
organisational effectiveness and performance.
---------------------- ●● R metrics is used in developing the practice of workforce analysis and
H
---------------------- that further leads to workforce planning.
●● R accounting is carried out by making effective use of the HR matrices
H
---------------------- derived from the business practices. Organisations can improve upon
their productivity, efficiency and effectiveness in their performance.
----------------------
---------------------- Keywords
---------------------- ●● Information Source: is a source of information for somebody, i.e. anything
---------------------- that might inform a person about something or provide knowledge about
it.
---------------------- ●● Labor Turnover: The ratio of the number of employees that leave a
company through attrition, dismissal, or resignation during a period to
----------------------
the number of employees on payroll during the same period.
---------------------- ●● Metrics: Parameters or measures of quantitative assessment used for
measurement, comparison or to track performance or production.
----------------------
----------------------

Notes
----------------------
1. Define HR Metrics. Discuss the need for it in the organisation.
2. Discuss the classification of HR metrics according to the process ----------------------
framework.
----------------------
3. Define Workforce Analysis. Why do organisations need workforce
analysis? ----------------------
4. Describe the role of HR metrics in Workforce Management (Analysis and ----------------------

Planning).
----------------------
5. What is HR accounting? Why is it needed?
----------------------
6. How is HR accounting carried out? Discuss the methods with suitable
examples. ----------------------
7. Discuss the advantages and disadvantages of HR accounting.
----------------------

Multiple Choice Single Response. ----------------------
1. It is a fundamental way to measure the cost and impact of HR practices ----------------------
being adopted by the organisation and the success and failure of those
practices. ----------------------
ii. HR matrices ----------------------
----------------------
----------------------
1. True
1. HR process efficiency in any organisation is generally elaborated with ----------------------
the presence of highly matured HR process framework which ultimately
contributes to the overall business maturity and development. ----------------------
----------------------
1. The following are the advantages of HR Accounting:
----------------------
i. Information source
ii. Potential investors ----------------------
iii. Database ----------------------
----------------------

Notes
Suggested Reading
----------------------
1. Durai, Pravin. 2012. Human Resource Management. New Delhi: Pearson
---------------------- Education India.
2. Sullivan, John. 2003. HR Metrics The World Class Way. Kennedy
----------------------
Information.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Introduction to the Management of Change
UNIT
6
Structure:
6.1 Introduction
6.2 Definitions
6.3 What is Change
6.4 Process of Change Management
6.5 Models of Change Process
6.6 Individual and Organisational Issues in HRIS implementation
6.6.1 Individual Issues for HRIS Implementation
Summary
Keywords
Suggested Reading
Introduction to the Management of Change 89

Notes
Objectives
----------------------
----------------------
• Define the ‘change’ from HR perspective
----------------------
• Describe the process of change management from HR perspective
---------------------- • Explain the models of change implementation process
---------------------- • Specify the individual and organisational issues in HRIS implementation
in an organisation
----------------------
---------------------- 6.1 INTRODUCTION

---------------------- Change is constant everywhere- in all facets of personal and professional
life. Whoever it is- an individual, group or a business- he needs to positively
---------------------- face the upcoming changes to survive. From the business perspective, change
---------------------- is something that makes the entire organisation strategically think of adopting
it at all possible levels. Most of the times, change only can make a business
---------------------- survive; otherwise, as the time goes, businesses will be at stake. Hence it is
recommended that change has to be accepted by all businesses positively and
---------------------- taken as an opportunity to keep the business up to mark or rather make it more
---------------------- and more efficient and effective.
Most of the times, changes are inevitable to keep the enterprise running.
----------------------
For example, if a bank does not work on e-banking technology, customers will
---------------------- not be giving any preference to deal with this bank and ultimately the bank will
lose a huge business from such clients. The situation where customers are very
---------------------- much aware about and prefer e-banking will enforce the bank to switch on to
this change and make all banking operations automated to help their customers
----------------------
and garner more business from them. This is an example of change from the
---------------------- organisation perspective to retain their customers and keep the business up to
date or even increase the same.
----------------------
So, change can be anything; it can be with people, process, operations,
---------------------- product or service or anything from any aspect of the business or organisation.
Changes could be related to business development, marketing, production
---------------------- technology, financial plans or strategies, demand and supply, inventory control,
information technology and so on. Human Resource Management is no exception
----------------------
to this. We also have lots of changes occurring in this field from the human
---------------------- resource perspective.
Change is a process, which focuses on to change the entire organisation’s
----------------------
scenario into a totally updated one. As human resource department itself is known
---------------------- as a change agent, they have to recruit people with a broad vision; such people
can introduce each change in such a way that it can be acceptable by everyone
---------------------- in the organisation.
----------------------

Some important aspects of change management are as follows: Notes
●● hange management is a process which helps an organisation move from
C
----------------------
a current state to a future or desired state.
●● hange management starts with creating a vision and then the organisation
C ----------------------
recruits individuals to work for the vision.
----------------------
Let us look at these and some other aspects of change management from
HR point of view. ----------------------
----------------------
6.2 DEFINITIONS
----------------------
●● hange: An appropriate modification needed to be done in people,
C
process and products to create, develop and maintain business and face ----------------------
cut-throat competition
----------------------
●● Implementation: Process of bringing plan into action
●● takeholders: Individuals or groups getting impacted or influenced by
S ----------------------
the change in the organisation
----------------------
●● hange champions: The team leading and enabling the changes as
C
proposed and planned in change management plan ----------------------
----------------------
6.3 WHAT IS CHANGE
----------------------
Basically, change is an appropriate modification needed to be done in
people, process and products to create, develop and maintain business and face ----------------------
cut-throat competition.
----------------------
In general, change is initiated due to some challenge in developing, operating
and maintaining business, to be faced by an individual, group or an organisation. ----------------------
The organisational changes can be categorised into four types - operational
----------------------
changes, strategic changes, cultural changes and political changes.
●● perational Changes are more related to the business operations or
O ----------------------
transactions such as Sales, Purchase, Recruitment and Selection, payroll
----------------------
or Bonus calculations, leave management, financial calculations etc.
●● trategic changes deal with changes in leaderships, organisational
S ----------------------
hierarchy, compensation and benefits, business promotions, mergers and
----------------------
acquisitions, strikes and lockouts etc.
●● ultural changes deal with modification of a society through innovation,
C ----------------------
invention, discovery or contact with other societies. Cultural change
may require changes in organisation practices, physical environments, ----------------------
relationships at all levels and workforce models, leading to better outcomes ----------------------
for consumers and direct care workers without inflicting detrimental costs
on providers. ----------------------
●● olitical changes relate to the state, government, public administration,
P ----------------------
policy-making, etc.
----------------------

Notes If these changes are related with any aspect of human resources, the change
is considered as HR change and associated change management practices have
---------------------- to be followed to accommodate the change. The above types also apply to HR
department. Following examples will clarify this better.
----------------------
a. If any change is needed in recruitment process due to certain issues
---------------------- being faced to hire the suitable candidates, the change is considered as
HR process change. It is classified under operational change and change
----------------------
management process need to be adopted accordingly, e.g. introducing
---------------------- the outsourcing of it to the recruitment vendor with suitable controls and
framing of associated vendor policy after formal approval from senior
---------------------- management.
---------------------- b. If the host organisation has decided to acquire another guest organisation,
then HR acquisition strategy needs to be changed and should be in
---------------------- place to accommodate the employee of guest organisation with suitable
compensation so as to meet the host organisation needs. This change is
----------------------
considered as strategic change for both organisations.
---------------------- c. If an organisation proposes to open an office in some other country and
develop business there, there would be a need of local management
----------------------
where the culture of the location should not be a barrier in developing
---------------------- the business. People should be given cultural training to match the needs
and remove the barrier. This change is more of cultural change. The
---------------------- organisation should frame the process of adopting these cultural changes,
which will in turn help develop the business globally.
----------------------

---------------------- 1. Which type of change is more related to business operations or
transactions like Sales, Purchase, Recruitment and Selection, payroll
----------------------
or Bonus calculations, leave management, financial calculations?
---------------------- i. Operational changes
---------------------- ii. Strategic changes
---------------------- iii. Cultural changes

iv. Political changes
----------------------
----------------------
Activity 1
----------------------
Identify the scenarios where you can apply the HR change management
---------------------- process to develop the business across the globe.
----------------------
----------------------

6.4 PROCESS OF CHANGE MANAGEMENT Notes
The processes of change management have two important phases. The first ----------------------
level reviews the exact plan as well as the road map to be decided to achieve the
desired result. The second level consists of observation of the introduced change, ----------------------
which is always helpful for further changes.
----------------------
Change management process in HR would generally be handled by HR
change champion team. It typically comprises five steps: ----------------------
1. Motivation for change ----------------------

2. Creating Vision and high level roadmap for target state of achievement ----------------------
3. Gain and develop political support
----------------------
4. Transition Management
----------------------
5. Maintenance of steady state in the change implemented (Sustenance)
Let us discuss these steps in detail. ----------------------
1. Motivation for change: Organisational change would start with a certain ----------------------
stage and lead to an uncertain stage (know area to unknown area), so there
is always a risk of rejection and resistance from stakeholders, as it might ----------------------
adversely affect people’s competencies, worth and coping abilities. The ----------------------
stakeholders do not support change unless compelling reasons convince
them to do so. Hence, first attempt should be made with two tasks: a) ----------------------
Creating readiness for change and b) Overcoming resistance to change.
----------------------
To create readiness for change: The change champion team should
conduct boot camps or workshops where the change is described and ----------------------
discussed with the mass audience to create awareness. This workshop
----------------------
should be well planned and should illustrate the genuine need to have
change. It sensitises an organisation to pressures for change. It should ----------------------
also reveal discrepancies between current and target or desired states and
convey credible positive expectations for the change. ----------------------
To overcome resistance to change: At the organisation level, resistance ----------------------
to change can come from three sources. Technical resistance comes
from the habit of following common procedures and the consideration ----------------------
of sunk costs invested in the status quo. Political resistance can arise
----------------------
when organisational changes threaten powerful stakeholders, such as
top executive or staff personnel or call into question the past decisions ----------------------
of leaders. Finally, culture resistance takes the form of systems and
procedures that reinforce the status quo, promoting conformity to existing ----------------------
values, norms and assumptions about how things should operate.
----------------------
2. Creating Vision and high level Roadmap to reach to target state from
current state: Generally, a vision describes the core values and purposes, ----------------------
which guide the organisation, as well as an envisioned future toward
----------------------
which change is directed. It provides a valued direction for designing,
implementing and assessing organisational changes. The vision also can ----------------------

Notes energise commitment to change by providing members with a common
goal and a compelling rationale for why change is necessary and worth
---------------------- the effort.
---------------------- 3. Gaining and developing political support: To do this, one must assess
the change agent’s power, identify the stakeholders and influence them to
---------------------- accommodate the proposed change.
---------------------- 4. Transition Management: Implementing organisational change involves
moving from the existing organisation state to the desired future state.
---------------------- There are three major activities and structure to facilitate organisational
transition: activity planning, commitment planning and change-
----------------------
management structures.
---------------------- Activity planning uses the high level roadmap created while introducing
the change. The list of tasks is generated and reviewed. Activity planning
----------------------
should clearly identify, temporally orient and integrate discrete change
---------------------- tasks and should link these tasks to the organisation’s change goals and
priorities.
----------------------
Commitment planning focuses on strategy for gaining full support and
---------------------- commitment from identified stakeholders.
---------------------- Change management structures entails that because organisational

transitions tend to be ambiguous and need direction, special structures
---------------------- for managing the change process need to be created. These management
structures should include people who have the power to mobilise
---------------------- resources to promote change, the respect of the existing leadership and
---------------------- change advocates and the interpersonal and political skills to guide the
change process.
---------------------- 5. Maintenance of steady state in the change implemented: All the above
---------------------- five activities can help to sustain momentum for carrying change through
to completion: providing resources for change, building a support system
---------------------- for change agents, developing new competencies and skills, reinforcing
new behaviours and staying the course.
----------------------
Change management involves financial implication also. To introduce any
---------------------- change, the management has to involve finance authorities so that necessary
inputs can be involved from finance point, to visualise or project future financial
----------------------
implications. The authorities need to prepare necessary analysis to study the right
---------------------- implication of the change. It is necessary to ensure that the change will bring
some positive effect, before really going for any type of changes.
----------------------
It is an old proverb that necessity is the mother of invention, as people have
---------------------- to know well or be psychologically ready to accept the change taking into account
the importance and need of the change to be implemented. This requires highly
---------------------- matured, well-trained project managers, who can lead their team in crisis. The
project manager should always be ready to do as well as make his team to do
----------------------
the unplanned steps. At times, he has to opt for correct style of leadership, i.e.
---------------------- sometimes he has to be an autocratic leader by making few things compulsory

or even force his team to do certain activities without explaining to them or Notes
convincing them to do so. He has to have full control over the project so that at
any point of time in crisis, he should be in a position to face the crisis in a such a ----------------------
way that it will not affect the day to day activity and his team will also be able to
contribute to resolving the crisis. He should motivate his team and inculcate such ----------------------
type of atmosphere that his team is always on their toes to face any unplanned ----------------------
result of the change. The project manager should prepare his team to change
their job profiles, if required because at times it may happen that he hands over ----------------------
some responsibility to a person in a different role.
----------------------
The project manager should be able to create such good bonding in his team that
they should feel that they are one entity and not separate. If any part of our body ----------------------
is injured, the entire body is hurt; likewise if any of the team members lacks
----------------------
behind, the ultimate performance of the projects gets hampered.
Each one of the team members should own the responsibility of some or the ----------------------
other task. Trust is a very important thing. The project manager should gain
----------------------
confidence and trust of his team members. He should always see to it that at any
point of time, this trust should not be broken or disturbed. The most critical part ----------------------
of change is its unplanned result. The project manager should be able to make
his team face even unforeseen circumstances. This is a part of risk management. ----------------------
Though the unsuccessful change process involves lot of financial implications,
----------------------
this experience helps in future project management for introducing any change.
----------------------
----------------------
1. The ______________ of change management has the full responsibility
to manage the ongoing process. ----------------------
----------------------
Activity 2 ----------------------
----------------------
Apply the change management process for revising the compensation and
benefits for the employees of your organization and write a complete plan ----------------------
to work on this.
----------------------
----------------------
6.5 MODELS OF CHANGE PROCESS
----------------------
Following are some of the models of change process:
1. Action Research Model ----------------------
2. Lewin’s Change Model ----------------------
3. Change Equation Formula
----------------------
4. Nadler’s Congruence Model
5. Kotter’s Process of Leading Change ----------------------

Notes 1. Action Research Model
This model is used when any complex type of change is to be introduced
----------------------
in an organisation as well as in a society. In this model, people as well
---------------------- as the circumstances to be effected or affected are also involved. This is
the best suited model for any type of sensitive change to be introduced in
---------------------- an organisation as well as society, where the result is most unpredicted.
The important part of this model is involvement of people as well as
----------------------
improvement as per the process moves. Philosophical basis of this model
---------------------- is Gestalt’s psychology, pragmatism and democracy. This action research
model works on a periodic review and on the basis of that review and its
---------------------- application, the future course of action is planned.
---------------------- This model consists of following important aspects:
●● Mechanism to define the problem
----------------------
●● Collection of relevant information
----------------------
●● Choosing appropriate solution and implementation
---------------------- ●● Taking review of the result or the output
---------------------- ●● Maintenance
This generates practical and propositional forms of knowledge as an
---------------------- outcome.
---------------------- 2. Kurt Lewin’s Change Model: This model works on three-phase process:
Unfreeze, Change and Freeze. It is possible to take these stages to quite
---------------------- complicated levels.
---------------------- The Unfreezing is about getting ready to change. It involves getting to
a point of understanding that change is necessary and getting ready to
----------------------
move away from our current comfort zone. This stage involves moving
---------------------- ourselves or a department or an entire business towards motivation for
change.
----------------------
The Change is considered as a process or transition. Transition is the inner
---------------------- movement or journey we make in reaction to a change. This second stage
occurs as we make the changes needed.
----------------------
The Freezing stage is about establishing stability once the changes have
---------------------- been made. The changes are accepted and become the new norm. People
form new relationships and become comfortable with their routines.
----------------------
Lewin’s concern is about reinforcing the change and ensuring that the
---------------------- desired change is accepted and maintained into the future. Without this,
people tend to go back to doing what they are used to doing. This is
---------------------- probably what Kurt Lewin meant by freezing - supporting the desired
---------------------- change to make sure it continues and is not lost.
This model is useful to frame a process of change for people – a process
---------------------- that is quite easy to understand. Of course, each stage can be expanded to
---------------------- aid better understanding of the process.

3. Change Equation Formula: Richard Beckhard and David Gleicher have Notes
developed this formula as a model for facilitating the change process in
the organisation in its application. This model is useful to identify the ----------------------
major factors, which may affect the process and ultimately the output.
There are three factors to work on this formula cum model: ----------------------
a. D = Dissatisfaction with how things are now ----------------------

b. V = Vision of what is possible ----------------------
c. F = First (concrete steps that can be taken towards the vision)
----------------------
If the product of these three factors is greater than R, which is Resistance,
then change is doable or possible to implement. Even if one of these three ----------------------
factors is comparatively low and the product becomes less than R, then ----------------------
change is not capable of overcoming the resistance; hence change is not
possible. ----------------------
To ensure a successful change, it is necessary to use influence and strategic ----------------------
thinking in order to create vision and identify those crucial, early steps
towards it. In addition, the organisation must recognise and accept the ----------------------
dissatisfaction that exists by communicating industry trends, leadership
ideas, best practice and competitive analysis to identify the necessity for ----------------------
change. ----------------------
4. Nadler’s Congruence Model: The congruence model views organisations
as interacting components that exist in relative harmony or fit with one ----------------------
another. ----------------------
The four main components are
----------------------
●● Individuals
----------------------
●● Tasks
●● Formal processes ----------------------
●● Informal processes ----------------------
Organisational problems arise when there is a poor fit among these
components. Changes in one component can affect other components ----------------------
because of the personal and process linkages that exist within organisations. ----------------------
The congruence model places the greatest emphasis on the transformation
----------------------
process between inputs and outputs.
The inputs include ----------------------
●● xternal environment, such as competition and government regulation;
E ----------------------
financial, human and other resources
----------------------
●● Organisational culture
●● Strategic decisions necessary to meet future challenges and opportunities ----------------------
The outputs refer to ----------------------
●● Products and services
----------------------

Notes ●● Overall performance and effectiveness
The implementation of the congruence model involves
----------------------
●● Identifying the symptoms of problems
---------------------- ●● Determining the gaps between inputs and outputs
---------------------- ●● Describing the fit between an organisation’s components
---------------------- ●● Identifying problem areas and

●● Developing an action plan to deal with these problems
----------------------
5. Kotter’s Process of Leading Change
---------------------- This model suggested by John Kotter has eight steps for leading the
---------------------- change in the organisation.
a. Create urgency: For change to happen, it helps if the whole
---------------------- company really wants it. Develop a sense of urgency around the
---------------------- need for change. This may help you spark the initial motivation to
get things moving.
---------------------- b. Form powerful partnerships: Convince people that change is
---------------------- necessary. This often takes strong leadership and visible support
from key people within your organisation. Managing change is not
---------------------- enough – you have to lead it.
---------------------- c. Create a vision for change: When you first start thinking about
change, there will probably be many great ideas and solutions
---------------------- floating around. Link these concepts to an overall vision that people
can grasp easily and remember. A clear vision can help everyone
----------------------
understand why you are asking them to do something. When people
---------------------- see for themselves what you are trying to achieve, the directives
they are given tend to make more sense.
----------------------
d. Communicate the vision: What you do with your vision after you
---------------------- create it will determine your success. Your message will probably
have strong competition from other day-to-day communications
---------------------- within the company, so you need to communicate it frequently and
powerfully and embed it within everything that you do.
----------------------
e. Remove obstacles: Removing obstacles can empower the people
---------------------- you need to execute your vision and it can help the change move
forward.
----------------------
f. Create short-term wins: Create short-term targets – not just one
---------------------- long-term goal. You want each smaller target to be achievable, with
---------------------- little room for failure. Your change team may have to work very
hard to come up with these targets, but each “win” that you produce
---------------------- can further motivate the entire staff.
---------------------- g. Build on the change: Each success provides an opportunity to

build on what went right and identify what you can improve.
----------------------

h. Anchor the changes in corporate culture: Finally, to make any Notes
change stick, it should become part of the core of your organisation.
Your corporate culture often determines what gets done, so the ----------------------
values behind your vision must show in day-to-day work. Make
continuous efforts to ensure that the change is seen in every aspect ----------------------
of your organisation. This will help give that change a solid place in ----------------------
your organisation’s culture. It is also important that your company’s
leaders continue to support the change. This includes existing staff ----------------------
and new leaders who are brought in. If you lose the support of these
people, you might end up where you started. ----------------------
----------------------
----------------------
----------------------
1. Main components of Nadler’s Congruence Model are:
----------------------
i. Individuals
ii. Tasks ----------------------
iii. Final processes ----------------------

iv. Informal processes ----------------------
----------------------
Activity 3 ----------------------
Imagine the scenarios where you can adopt suitable change process model ----------------------
described above and make a note of each of them with brief details.
----------------------
----------------------
6.6 INDIVIDUAL AND ORGANISATIONAL ISSUES IN
HRIS IMPLEMENTATION ----------------------
The overall success of HRIS implementation is dependent upon the team, ----------------------
i.e. people who are the important part of the process, the organisation’s climate ----------------------
and its technological capabilities.
----------------------
As the individual and organisational issues commonly arise while
implementing HRIS in the organisation, we must understand them in detail and ----------------------
see to that they do not become barriers in implementing HRIS successfully.
----------------------
Individual issues are very important; they primarily are socialisation,
sensitivity to privacy and predisposition to trust. Organisational issues are ----------------------
organisational trust and pooled interdependence, organisational community and
organisational culture. ----------------------
----------------------
----------------------

Notes 6.6.1 Individual Issues for HRIS Implementation
The individual issues are discussed below.
----------------------
●● ocialisation: It a process in which the newcomer in the organisation
S
---------------------- gets himself trained and opts for required knowledge so that he can be
easily accepted by or is adjusted to his colleagues as well as his reporting
----------------------
authorities. The culture and values are inculcated in the new employees
---------------------- during this process. New employees explicitly socialised to the role and
significance of the HRIS technology will experience higher levels of
---------------------- HRIS technology trust.
---------------------- ●● ensitivity to privacy: Privacy concerns regarding confidentiality,
S
disclosure policies and copyright issues have generated heightened
---------------------- apprehension for both individuals and organisations. Higher levels of
personal sensitivity to privacy will lead to lower levels of HRIS technology
----------------------
trust.
---------------------- ●● redisposition to trust: Predisposition to trust represents an individual’s
P
expectation toward trusting. Individuals that exhibit a greater overall
---------------------- predisposition to trust will express higher levels of HRIS technology
---------------------- trust.
----------------------
Organisational issues that may hamper HRIS implementation are as follows:
----------------------
●● rganisational trust: According to our conceptualisation, organisational
O
---------------------- trust is largely a product of corporate or government social reputation,
especially in the early stages of the employee-organisation relationship.
---------------------- When employees choose to join a firm, they usually do so having had
limited pre-employment interaction with organisational teams. From
----------------------
this perspective, the trust assessment is applied to the organisation as a
---------------------- whole and is independent of personal trust evaluations of selected firm
members. Organisational social capital is a similar construct in that it also
---------------------- calls attention to the character of social relations within the organisation.
Higher levels of organisational trust lead to higher levels of HRIS
----------------------
technology trust.
---------------------- ●● ooled interdependence: Each part of the organisation makes a discrete
P
contribution to the whole and is supported by the organisation. In
----------------------
situations of pooled interdependence, team members work independently
---------------------- and interdependence is anchored in the task for which they are collectively
responsible. Higher levels of pooled interdependence lead to higher levels
---------------------- of HRIS technology trust.
---------------------- ●● rganisational community: An organisational community is a
O
collective of individuals aligned around common interests, goals,
---------------------- principles or goods. Building an organisational community is an ongoing
process rather than a particular type of fixed organisational structure.
---------------------- An employee’s purposeful interaction with the HRIS carries with it a
----------------------

statement of community membership since individuals are increasingly Notes
asked to provide sensitive information, as HRIS technologies become
more deeply embedded into the social fabric of an organisation. Higher ----------------------
levels of organisational community lead to increased levels of HRIS
technology trust. ----------------------
●● rganisational culture: Organisational culture is often defined as being

O ----------------------
composed of a number of elements, of which organisational trust is
one. Organisational culture reflects a corporation’s fundamental beliefs ----------------------
about how it should function, its accepted norms of behaviour and the ----------------------
path to achieve its goals. The cumulative effect of each trust violation
at the individual level is a loss of trust in the organisation as an entity ----------------------
and an incremental change in the overall culture of the organisation.
Organisations with a high trust culture will experience higher degrees of ----------------------
trust in their HRIS technology. ----------------------
1. Organisational culture is often defined as being composed of a ----------------------

number of elements, of which organizational trust is one.
----------------------
----------------------
Activity 4
----------------------
How do you interpret the individual and organizational issues impacting
----------------------
HRIS implementation?
----------------------
Summary ----------------------
●● o summarise, change can be anything; it can be with people, process,

T ----------------------
operations, product or service or anything from any aspect of the business
or organisation. So changes could be related to business development, ----------------------
marketing, production technology, financial plans or strategies, demand ----------------------
and supply, inventory control, information technology etc. Human
Resource Management is no exception to this. We also have a lot of ----------------------
changes occurring from human resource perspective.
----------------------
●● hange management is a process, which helps an organisation move from
C
a current state to a future state. Change management starts with creating a ----------------------
vision. Then the organisation recruits individuals to work for the vision.
----------------------
●● I ndividual issues include socialisation, sensitivity to privacy and
predisposition to trust. ----------------------
●● rganisational issues are organisational trust and pooled interdependence,
O ----------------------
organisational community and organisational culture.
----------------------

Notes Keywords
----------------------
●● Obstacles: is an object, thing, action or situation that causes an obstruction.
---------------------- There are, therefore, different types of obstacles, which can be physical,
economic, biopsychosocial, cultural, political, and technological.
---------------------- ●● Change Management: Refer to a project management process wherein
---------------------- changes to the scope of a project are formally introduced and approved.
---------------------- Self-Assessment Questions

----------------------
1. What do you mean by change? Discuss it from HR perspective with
---------------------- suitable examples.
2. Describe the process of change in brief from HR point of view.
----------------------
3. What are the models available for change process? Describe each of them
---------------------- in detail.
---------------------- 4. Describe individual issues affecting HRIS implementation.
---------------------- 5. Describe organisational issues impacting HRIS implementation.

---------------------- 1. Which type of change is more related to business operations or
transactions like Sales, Purchase, Recruitment and Selection, payroll or
---------------------- Bonus calculations, leave management, financial calculations?
---------------------- i. Operational changes
----------------------
----------------------
Fill in the blanks.
----------------------
1. The project manager of change management has the full responsibility to
---------------------- manage the on-going process.
----------------------
----------------------
---------------------- 1. Main components of Nadler’s Congruence Model are:
---------------------- i. Individuals
---------------------- ii. Tasks
iv. Informal processes
----------------------

----------------------
1. True
----------------------
Suggested Reading ----------------------
1. Ball, K.S. The use of human resource information systems: a survey, ----------------------
Personnel Review.
----------------------
2. Hong, K.K. and Y.J. Kim. The critical success factors for ERP
implementation: an organisational fit perspective, Information & ----------------------
Management.
----------------------
3. Lippert, Susan K. and Paul Michael Swiercz. Human resource information
systems (HRIS) and technology trust. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
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Outsourcing and HRIS
UNIT
7
Structure:
7.1 Introduction
7.2 Definitions
7.3 Need for HR Outsourcing
7.4 Advantages of HR Outsourcing
7.5 Payroll System
Summary
Keywords
Suggested Reading
Outsourcing and HRIS 105

Notes
Objectives
----------------------
----------------------
• Analyse the need for outsourcing in HR
----------------------
• State the advantages of outsourcing in HR
---------------------- • Discuss payroll as a case study for HR outsourcing
----------------------
---------------------- 7.1 INTRODUCTION

---------------------- Outsourcing is a tactical decision to assign a task or activity to an independent
service provider who determines how best to do the task or activity. The firm and
---------------------- the independent service provider become partners and may establish a long-term
---------------------- relationship. Some examples of outsourced activities are IT, HR, legal services,
manufacturing, research and development, dispatch, etc.
---------------------- In HR, outsourcing is done for those functions which have low strategic
---------------------- importance and low interdependence. Organisations have some different core
business and HR is considered a support function which can easily be outsourced
---------------------- to some competent vendor by using vendor selection process. HR functions
like recruitment and selection, staffing, salary administration/payroll, employee
---------------------- satisfaction surveys, etc. can be outsourced easily to get good services with
---------------------- considerably less payroll cost.
Organisations can get several benefits over outsourcing their HR functions.
---------------------- People with better quality and knowledge may be applied to an activity or task
---------------------- by the outsourcing firm. Administrative costs are possibly reduced when certain
tasks are outsourced. Outsourcing certain activities and employees which are
---------------------- not fitting in organisational culture may be used to preserve a strong culture or
employee morale.
----------------------
Some disadvantages are also there; outsourcing may lead to loss of control
---------------------- of certain activities which, for example, may be a problem for time-sensitive
projects. Outsourcing an activity may result in loss of the opportunity to gain
----------------------
knowledge and information that may have general application to other key
---------------------- processes and activities.
Payroll or salary administration is one of the best examples of outsourcing
----------------------
HR functions. Lot of vendors are available in the market which facilitate salary
---------------------- processing to the employees according to the HR compensation policies of the
organisation that too with high level of accuracy, consistency and efficiency.
----------------------
----------------------
----------------------
----------------------

Outsourcing: It is the process of assigning the contract of performing tasks or ----------------------
activities to the external competent service vendor.
----------------------
Vendor: The supplier selected for outsourcing.
----------------------
7.3 NEED FOR HR OUTSOURCING
----------------------
Outsourcing is a decision taken at strategic management level to give a ----------------------
task or activity to an independent contractor who determines how best to do the
task or activity. The concept of HR outsourcing is simple. By moving most or all ----------------------
HR processes to a single outside vendor, an organisation can cut costs, improve
services and help HR personnel shift their attention from pensions and payroll ----------------------
to business-critical strategies. ----------------------
These days, the most commonly outsourced HR functions include payroll,
benefits, employee-data management, information systems and contact centres. ----------------------
Organisations prefer outsourcing because of the following major reasons: ----------------------
----------------------
Work System
Design
----------------------
----------------------
Insource the Outsource the
Work Work ----------------------
----------------------
Contingent employees: Independent ----------------------
temps, consultants Contractor
----------------------
Fig.7.1: HR Outsourcing ----------------------
HR work system is designed with two major components: ----------------------
1. The work components (activities) which cannot be outsourced.
----------------------
2. The work components (activities) which can be outsourced.
----------------------
This decision most of the time depends on the nature of the organisation,
core business of the organisation, budget and degree of need of support functions ----------------------
like HR, finance, administration, etc.
----------------------
The work components which can be outsourced will further be scrutinised
for risk analysis and mitigation plans before finalising it for outsourcing. The ----------------------
outsourcing can be done to wither the independent contractors or contractual
employees (vendor based), temporary employees or consultants available in the ----------------------
market. The process of contracting should be in place to follow while contracts ----------------------
are done with these vendors.
----------------------

Notes Following are some of the major reasons to address the need for HR outsourcing:
1. To cut the cost: When an employee is recruited on organisation payroll,
----------------------
he/she must be given all the benefits and facilities, which, in turn will
---------------------- increase the cost to organisation and he/she, in a way, becomes the liability
of the organisation and in a result, payroll cost will be high if there are
---------------------- some more employees recruited for the same function. Here, substantial
cost is reduced when an organisation hands over such HR functions to a
----------------------
third-party provider and transfer an employee from the client organisation
---------------------- to the service provider to reduce headcount without sacrificing talent
altogether. Another factor to consider when using outsourcing to cut costs
---------------------- is maintaining realistic expectations.
---------------------- Here is an example. If an organisation recruits housekeeping staff for
cleanliness of the office premises, the staff becomes employee of the
---------------------- organisation where he/ she must be given all the compensation and benefits
according to the policies of the organisation. If there is more number of
----------------------
employees of this profile, the payroll cost of the organisation will be
---------------------- very high. This cost can be substantially reduced when the housekeeping
contract is given to their party with one contract cost per year or month.
----------------------
2. Making your core business a primary focus: Some organisations
---------------------- do have their primary focus on business development. They treat the
HR functions as their support and secondary focus. No wonder these
---------------------- organisations opt to outsource in order to help HR staff shift focus from
routine tasks to mission-critical strategies.
----------------------
But before you offload an HR department’s paperwork onto an outsourcer,
---------------------- one has to ensure that you have the right mix of in-house personnel to
---------------------- tackle important functions such as recruitment and retention, performance
appraisals, compensation and benefits, etc.
---------------------- For example, if the organisation’s primary focus is on manufacturing then
---------------------- resources will be primarily managed by head of manufacturing function.
He might need some support from HR practitioners. Now these HR
---------------------- practitioners may not be the employees of the organisation. This support
activity can be outsourced to some competent vendor who will work as
---------------------- business partner and consulting cost is paid to that vendor as compensation
---------------------- towards his service.
3. Hassle-free compliance: These days, HR departments have their
---------------------- hands full developing programmes and policies to ensure compliance
---------------------- with everything from the Fair Labour Standards Act (FLSA) to sexual
harassment laws. It’s all the more reason to seek the compliance expertise
---------------------- of an outsourcer. Here, an organisation may not be able keep full-time
staff to handle such legal matters. So outsourcing here will really be
---------------------- advisable.
---------------------- If, for example, an organisation’s management finds an employee is
breaching the organisational policies while working on the projects, a
----------------------

legal advisory committee consisting of some competent consultants could Notes
be appointed to resolve the matter where you may need any full-time
management looking after it as frequency is found to be very less for such ----------------------
matters.
----------------------
4. Access to cutting-edge best practices: For many HR departments, it’s
easy to get into a routine process framework, issuing the same forms and ----------------------
abiding by the same policies year after year. Now, here the problem is, the
----------------------
current practices need to be upgraded according to the time. The current
skills of existing staff might have been obsolete. The upgrading all of ----------------------
them could be a costly affair due their rigidity in the work and reluctance
to change. On the other hand, outsourcers have this wealth and breadth ----------------------
of experience and so looking to them for suggestions on how to improve
----------------------
processes is a very smart thing to do. Appointing external consultants
and vendors who have been in the same field since long, would really be ----------------------
advisable for developing the business.
----------------------
If, for example, an organisation has 15-year experience project managers
on board, but no one has upgraded their project management’s knowledge ----------------------
to utilise latest technology in managing the projects in the organisation
as current competition and age insist on it to retain them in the existing ----------------------
market. These senior project managers cannot train newly hired project
----------------------
managers as they are not up to the mark of current trends and technology
to be used in project management. An external training vendor who has ----------------------
lot of skilled and upgraded project management professionals can be
appointed to train these project managers and make them use those learnt ----------------------
skills in their projects.
----------------------
5. Employee satisfaction: Whether it’s the anonymity they grant employees
or the access to survey tools they offer to clients, outsourcers often boost ----------------------
employee satisfaction levels by helping companies improve management
----------------------
practices, lift morale and raise retention rates also.
For example, external satisfaction surveys are generally conducted by external ----------------------
vendor to bring the effectiveness through unbiased feedback. ----------------------
----------------------
1. It is a decision taken at strategic management level to give a task or ----------------------
activity to an independent contractor who determines how best to do
----------------------
the task or activity.
i. Upgrading ----------------------
ii. Hiring human resources ----------------------
iii. Providing training ----------------------
iv. Outsourcing
----------------------

Notes
Activity 1
----------------------
Arrange a group discussion on the different scenarios from HR practices and
----------------------
find out whether we can outsource or not. If yes, then describe the way of
---------------------- outsourcing and if no, describe the reasons why we cannot.
----------------------
7.4 ADVANTAGES OF HR OUTSOURCING
----------------------
As the organisation evaluates the outsourcing options and decisions in
----------------------
outsourcing different components of their operations, they will need to consider
---------------------- the advantages of outsourcing. When outsourcing is done for the right reasons,
it will certainly help organisation grow and cut the unnecessary costs and save
---------------------- money. Apart from monetary gains, organisations leverage following major
advantages from practice of outsourcing.
----------------------
1. Emphasis on Major Business Activities: In recent development periods,
---------------------- the operations of back office of an organisation will also get expanded.
This expansion may lead to consume human resources at the cost of the
---------------------- major or core activities which will make an organisation more successful.
---------------------- Outsourcing such activities will allow refocusing on those business
activities which are important without compromising on quality of service
---------------------- in the back office.
---------------------- 2. Saving on Cost and Efficiency: Functions of back office are complex
in nature, but the size of an organisation prevents in performing it at a
---------------------- consistent and reasonable cost. This is one more advantage of outsourcing
in the organisation.
----------------------
3. Decreased Overhead: The costs of performing a particular back-office
---------------------- function are extremely high which can be an overhead on the business.
An outsourcing those functions will reduce the costs very easily.
----------------------
4. Controlled Operations: The operations, on which costs are running out of
---------------------- budget, should be outsourced. Departments or functions or business units
which might have been identified over a period of time into uncontrolled
---------------------- and poorly managed areas are major considerations for outsourcing. In
addition, a service provider’s contract can bring quality management
---------------------- skills to an organisation than what would otherwise be available.
---------------------- 5. Flexible Staffing: Outsourcing will help to have flexible staffing which
is required to meet the seasonal or cyclical demands. It brings in some
---------------------- additional resources when the organisation needs them and releases them
---------------------- when the work is over.
6. Business Continuity and Risk Management: During the time of
---------------------- increased employee turnover, the situation will add uncertainty and
inconsistency to the operations. Outsourcing will provide a level of
----------------------
business continuity while reducing the risk which a second-rate level of
---------------------- operation would bring to the organisation.

7. Develop Internal Staff: When a company undertakes a large project Notes
which needs some particular skills and internal employees do not possess
them, onsite outsourcing of the project will bring people with the skills ----------------------
required. The regular staff can work alongside of them to acquire the new
skill set. ----------------------
----------------------
7.5 PAYROLL SYSTEM
----------------------
There’s more to managing small business payroll than writing cheques
and handing them out to employees on time. You need to keep accurate records, ----------------------
calculate and pay payroll taxes and communicate effectively with employees. ----------------------
Many small business owners are finding that they can simplify the process by
using an outsourced payroll provider to manage the entire process cost-effectively ----------------------
and efficiently.
----------------------
Outsourcing your payroll can provide your small business with a number
of important benefits: ----------------------
1. Save time: Using an outsourced payroll solution is typically more efficient ----------------------
for a small business than processing payroll internally. Leaving payroll to
experts frees up hours that you can devote to other important parts of your ----------------------
business. Whether it is your time, staff time or a combination, chances
----------------------
are the hours could be better spent winning more business, improving
customer service, fine-tuning business operations or launching a new ----------------------
product line. Among the areas where outsourcing will save time are:
----------------------
●● Processing payroll
●● Cutting and distributing pay cheques ----------------------
●● Calculating and paying withholding and employment taxes ----------------------
●● Preparing and distributing W-2s and 1099s at year-end
----------------------
●● Handling employee payroll inquiries
Many business owners underestimate the cost of processing payroll ----------------------
internally by failing to account for all hours spent and resources ----------------------
allocated to pay employees and maintain payroll paperwork. A thorough
cost assessment usually proves that a small business saves money by ----------------------
outsourcing the processing, tracking and filing of payroll documents.
----------------------
To assess your own internal payroll costs, consider:
●● ow much time spent is actually worth − consider the cost of your
H ----------------------
time and the time of anyone who processes or “touches” payroll. ----------------------
Often, many people in a small organisation are involved in the
various parts of payroll processing. ----------------------
●● hat savings would outsourcing provide − since an outside provider
W ----------------------
can handle all the responsibilities involved in managing payroll and
answering employee questions, a small business can often eliminate ----------------------
or reallocate an internal payroll resource.
----------------------

Notes 2. Avoid penalties: Calculating federal, state and local employment taxes
and filing payroll-related tax paperwork can be more than just a hassle.
---------------------- If it’s done incorrectly, your small business may face penalties and even
interest on money owed since the mistake was made. Outsourcing payroll
---------------------- does away with the risk of many of these costs and hassles because:
---------------------- ●● n outsourced payroll provider calculates payroll taxes based on its
A
expertise and close tracking of regulation changes.
----------------------
●● onthly or quarterly employment tax reports are managed by the
M
---------------------- payroll service, ensuring they are submitted correctly and on time.
---------------------- ●● ayroll providers may assume penalties that come as a result of
P
incorrect tax calculations.
---------------------- ●● nd-of-year paperwork — such as Form-16, Forms 12, etc. — are
E
---------------------- handled directly by the payroll provider, so they are sent out on
time.
----------------------
----------------------

---------------------- 1. A thorough cost assessment usually proves that a small business saves
money by outsourcing the processing, tracking and filing of _________.
----------------------
----------------------
Summary
----------------------
●● etermining that your organisation needs HR outsourcing is only the
D
---------------------- first step. After you’ve evaluated whether your business can benefit from
handing off HR responsibilities to a third-party provider, you need to
---------------------- figure out which vendor can best address your needs.
---------------------- ●● here are lot reasons why organisations prefer HR outsourcing; some
T
of them are cutting the costs, making your core business a primary
---------------------- focus, hassle-free compliance, access to cutting-edge best practices and
employee satisfaction.
----------------------
●● dvantages of outsourcing include primarily focus on core activities, cost
A
---------------------- and efficiency savings, reduced overhead, operational control, staffing
flexibility, continuity and risk management, develop internal staff, etc.
----------------------
●● ayroll is one of the common HR functions generally considered for
P
---------------------- outsourcing. Outsourcing your payroll can provide your small business
with a benefit of saving time and avoiding penalties.
----------------------
----------------------
----------------------
----------------------

Keywords Notes
----------------------
●● Payroll System: It is software which organizes all the tasks of employee
payment and the filing of employee taxes. ----------------------
●● Business Strategy: It is the means by which it sets out to achieve its
desired ends (objectives). It can simply be described as a long-term ----------------------
business planning. ----------------------
----------------------
1. What do you mean by HR outsourcing? Discuss with suitable examples.
2. What are the basic reasons for preferring an outsourcing for HR functions? ----------------------
3. Describe the advantages of HR outsourcing in brief. ----------------------
4. Describe how payroll is generally outsourced by organisations. What are ----------------------
its benefits?
----------------------
5. What are other HR functions we can outsource? Describe them in brief.
----------------------
----------------------
----------------------
----------------------
1. It is a decision taken at strategic management level to give a task or
activity to an independent contractor who determines how best to do the ----------------------
task or activity.
----------------------
iv. Outsourcing
1. A thorough cost assessment usually proves that a small business saves ----------------------
money by outsourcing the processing, tracking and filing of payroll
documents. ----------------------
----------------------
Suggested Reading
----------------------
1. Beaman, Karen V. 2004. Out of site: An Inside Look at HR Outsourcing.
Rector-Duncan, Inc. ----------------------
2. Lawler, Edward E., Dave Ulrich, Jac Fitz-enz, and James C. Madden. ----------------------
2004. Human Resources Business Process Outsourcing: Transforming
How HR Gets Its Work Done. Jossey-Bass. ----------------------
----------------------
----------------------

Notes
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Talent Management
UNIT
8
Structure:
8.1 Introduction
8.2 Concept and Significance of Talent Management
8.3 Talent Management Life Cycle
8.4 Talent Management and Corporate Strategy
8.5 Talent Management and Business Culture
8.6 Talent Management and HRIS
8.7 HRIS and Competency Mapping
Summary
Keywords
Suggested Reading
Talent Management 115

Notes
Objectives
----------------------
----------------------
• Discuss the concept and significance of Talent Management
----------------------
• State the correlation between talent management and corporate strategy
---------------------- • State the significance of culturally fit employees
---------------------- • List the advantages and disadvantages of HRIS
----------------------
8.1 INTRODUCTION
----------------------
---------------------- Talent management is one of the major concerns of HR professionals. We

come across many seminars, workshops and talks on this much debated topic.
---------------------- This unit is going to throw some light on the historic principles and procedures
adopted by many organisation related to talent management. You will also
---------------------- understand the significance of talent management and how it has become easier
---------------------- to manage the organisational talent with the help of human resource information
system.
---------------------- Talent management is not another term for the HR professionals. Talent
---------------------- management brings new perspective that unifies various HR activities such
as recruitment, hiring, training, promoting, retraining, career planning and
---------------------- succession planning. A decade back talent was primarily focusing on hiring
qualified and experienced individuals with a hope that they would easily fit in the
---------------------- organisational frame. Now the competition has posed new challenges. Matching
---------------------- individual skills to job requirement is insufficient. Talent management requires a
concrete HR plan that is focused towards developing the employees’ knowledge,
---------------------- skills and abilities. The ultimate product of talent management programme nested
with HRM functions is that individuals can become high performing employees
---------------------- who can contribute to growth, development and profitability of the organisation.
----------------------
8.2 CONCEPT AND SIGNIFICANCE OF TALENT
---------------------- MANAGEMENT
----------------------
To understand why Talent Management has become so focused, we must
---------------------- first look at the evolution of Human Resources.
Stage 1: Personnel Department
----------------------
In the early 1970s and late 1980s, the business function which was
---------------------- responsible for people was called the “Personnel Department”. The role of the
personnel department was to recruit manpower, pay them as per the industry
----------------------
standards and make sure they had the required benefits. The systems which grew
---------------------- up to support this function were batch payroll systems.
----------------------

Stage 2: Strategic HR Notes
In the 1980s and 1990s organisations realised that the HR function was in
----------------------
fact more vital and the concept of “Strategic HR” emerged. During this period,
organisations realised that the Head of HR had a much bigger role: recruiting the ----------------------
right people, training them, helping the company devise job roles and organisation
structures (organisation design), develop “total compensation” packages which ----------------------
consist of benefits, stock options and bonuses and serve as a central point of
----------------------
communication for employee health and contentment.
Stage 3: Talent Management ----------------------
We have now entered into a new era – the era of growth of “Talent ----------------------
Management”. While strategic HR continues to be a leading focus, HR and
Learning & Development (L&D) organisations are now paying attention on a ----------------------
new set of strategic issues. The challenge was to answer how can the recruiting
----------------------
process be more efficient and effective? How can the organisations develop better
managers and leaders? How to identify competency gaps? ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 8.1: Evolution of HR Function ----------------------
Today’s modern organisations focus on critical areas of human resource
----------------------
management such as performance management system, competency management,
career planning and succession planning. Management is always in the lookout ----------------------
for how to integrate HR with business objectives.
----------------------
At the international level, there are top organisations which follow best
talent management practices. Kimberly-Clark, Seagate, Capgemini, Steelcase are ----------------------
few of them. In India also there are organisations which are known for their best
practices in talent management. As per the survey conducted by Hay Group in ----------------------
association with Fortune India, Tata Consultancy Services, Hindustan Unilever
----------------------
Limited and ITC are the organisations where talent management practices are
considered to be the best. ----------------------
----------------------

Notes “Talent Management is the systematic cycle of planning, execution and
evaluation to manage the flow of talent into, through and out of the organisation
---------------------- to achieve goals and meet needs.”
---------------------- Enhancing employee performance with dynamic goal alignment/management
It is found that every department wants to play a key role in the achievement
----------------------
of organisational objectives. Making good use of these departmental needs,
---------------------- HR tries to ensure that they provide employees with a feeling where they feel
recognised. Employees automatically put in their best when they are made known
---------------------- of their performance and they are informed of what is expected from them.
The moment they come to know what is anticipated of them, they try to relate
----------------------
themselves with organisational objectives and develop commitment to their jobs.
---------------------- If organisations realise what drives their employees, they should initiate
a system to ensure that the organisational vision, mission, goals and objectives
----------------------
are explicitly communicated to each employee. The vision and mission of the
---------------------- organisation should be translated into departmental and individual roles and
objectives. Here, it is important to let each employee know their job profiles. The
---------------------- training and development efforts shall be to ensure that each individual should
contribute in organisational success. HR is responsible for monitoring, measuring
----------------------
and communicating the employee’s progress and organisational progress.
----------------------
8.3 TALENT MANAGEMENT LIFE CYCLE
----------------------
Organisations are made up of people: Every organisation strives to
----------------------
achieve success but it is necessary that the organisation do have all the material,
---------------------- financial and people resources to sustain and grow. Organisations need to
have uninterrupted process for procuring, training, managing, maintaining and
---------------------- compensating human resources.
---------------------- The following figure demonstrates the talent management life cycle.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig.8.2: Talent Management Life Cycle
----------------------

Talent Management Life Cycle is a continuous process that deals with Notes
human beings in an all-inclusive, holistic way ensuring that both employee and
employer reap the greatest benefit from their reciprocal association. ----------------------
----------------------
----------------------
----------------------
1. HRMS and HRIS are one and the same and perform similar functions.
2. The Talent Management Life Cycle process integrates the human ----------------------
resource activities into organisational strategy. ----------------------
3. Talent Management is the cycle of activities to manage the flow of
talent into, through and out of the organisation. ----------------------
4. Before 1970s, human resource management function was strategic in ----------------------

nature.
----------------------
----------------------
Activity 1
----------------------
Prepare a comparative phase-wise chart of various functions performed by
the HR department from its inception to the present. ----------------------
----------------------
8.4 TALENT MANAGEMENT AND CORPORATE ----------------------
STRATEGY
----------------------
Organisations which really wish to hire the best of employees across all
levels do have integrated approach towards people and talent management. As ----------------------
per the survey conducted in human intensive organisations, it was reported that ----------------------
more than 85% of senior officials considers talent management as the major
competitive and comparative advantage and a differentiating factor to attract and ----------------------
retain the best brains and highly successful leaders. Many organisations have
accepted this fact and are paying more attention towards employee learning and ----------------------
development to ensure business profitability. ----------------------
Talent management not only means identifying the potentialities of the
employees but it also means that the organisation should realise how best they ----------------------
can utilise their employees’ energy, enthusiasm and knowledge to achieve overall ----------------------
organisational purpose. Managers need to understand how they can develop a
pool of natural talents within the organisation and eliminate all the obstacles in ----------------------
achieving overall effective organisational performance.
----------------------
HRIS talent management solutions tries to bring together the need of policy
decision-makers, executives and employees and integrates the data across human ----------------------
resources process such as recruitment, selection, training and development, career
----------------------
development and succession planning. Based on survey reports, it is found that
those responsible and answerable for management spends most of their time ----------------------

Notes in looking out for right talent, developing them as per organisational criteria,
mentoring them and making them ready to take up higher responsibilities. The
---------------------- story does not end here, the retention of such bright employees is the biggest
challenge.
----------------------
Talent management takes a holistic view of each activity of an organisation
---------------------- and tries to foster an environment where there is clear communication of goals
and performance expectations from every single individual across the levels.
----------------------
Following are few of the talent management strategies adopted by today’s
---------------------- corporate:
●● Increasing the size of existing pool of talent
----------------------
●● Providing employees with greater job satisfaction
----------------------
●● Ensuring talent visibility across the organisation
---------------------- ●● Career and succession planning
---------------------- ●● Taking appropriate action based on individual performance
---------------------- 8.5 TALENT MANAGEMENT AND BUSINESS CULTURE

---------------------- It is globally accepted that organisational culture cannot be defined precisely
as it actually defines individual organisation’s personality. Organisation’s
----------------------
personality depends on business culture. Business culture is a combination
---------------------- of creativity, values, traditions, thinking and behavioural norms adopted by
employees and their formal and informal groups within the establishment.
---------------------- Organisational and business culture is intangible. The question arises is why
is it important? Business culture, associates’ response and more importantly
----------------------
employees’ morale directly contributes to business efficiency and effectiveness. It
---------------------- reduces wastage of resources and opens up new avenues for further development.
Positive organisational and business culture enhances customer orientation
---------------------- approach, goodwill, share prices and brings in more business.
---------------------- Human capital is the primary intangible source for culture creation and
culture plays a major role in talent acquisition, talent development and talent
---------------------- management. Organisations prefer employees not only with right skill, knowledge
and talent but they are keen on having ‘culturally fit’ employees.
----------------------
Culturally fit employees are expected to be more efficient, motivated, gel
---------------------- well with all and derive happiness and job satisfaction from what they do and
---------------------- the way they perform. All this translates and transforms into high performers and
such employees develop organisational commitment and are potential candidates
---------------------- for succession planning. Things may go wrong if the hiring decisions are taken
without considering the element of culture fit.
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. Talent management as a major competitive ________ for attracting
and retaining trained personnel and developing highly capable leaders. ----------------------
2. Talent management solution integrates the needs of the management, ----------------------
executives and employees into one system and unifies ________
across all the major HR processes. ----------------------
3. It is the organisational culture that defines an organisation’s _______. ----------------------
4. Organisations prefer to have employees who have right knowledge ----------------------
and ______ and are good cultural fit.
----------------------
Activity 2 ----------------------
Interview the HR manager of any big organisation and try to find out how ----------------------
they develop culturally fit employees.
----------------------
----------------------
8.6 TALENT MANAGEMENT AND HRIS
----------------------
Human Resource Information System has developed since early 1980s from
small computer applications to organised virtual storage of highly sophisticated ----------------------
human related information and processes. It has grown into a discipline for
HR professionals who think and believe in deploying technology for the best ----------------------
advantage of Human Resource functions. ----------------------
Employees in HRIS equipped organisatrions are making good use of the
----------------------
system to get answers to common questions and individual queries. HRIS saves
the time and efforts of HR executives so that now they can focus their attention ----------------------
on value-added organisational development activities.
----------------------
HRIS is increasingly being used to ensure human capital data is utilised in
a strategic way to both collect relevant data and enable the sharing of common ----------------------
data across the enterprise in a real-time environment. The Human Resource
Information System is a software or online solution for data entry, data tracking ----------------------
and data information needs of the Human Resources, payroll, management and
----------------------
accounting functions within a business. Normally, packaged as a database, many
companies sell some form of HRIS and every HRIS has different features. ----------------------
HRIS Advantages
----------------------
The advantages of HRIS in managing talent for a company are as follows:
----------------------
1. Handling and efficient management of employee details
2. Analysis of manpower information (department/branch/location wise) ----------------------
----------------------

Notes 3. Employee, policies, procedures and safety guidelines
4. Benefits administration including entitlement and updating status
----------------------
5. Complete integration with finance, compensation and accounting systems
----------------------
6. Applicant tracking and resume management
---------------------- An effective HRIS provides information on just about anything the company
---------------------- needs to track and analyse about employees, former employees and applicants.
Organisation selects a Human Resources Information System and customises it
---------------------- to meet its needs.
---------------------- With a suitable HRIS, Human Resources staff enables employees to do

their own benefits updates and address changes, thus freeing HR staff for more
---------------------- tactical functions. Additionally, inputs required for employee management,
knowledge development, personnel growth and development and equal treatment
---------------------- is facilitated.
---------------------- HRIS Disadvantages
---------------------- HRIS is not much recommended for small establishment as the employees
play many roles and are expected to change their profile more often. If the
---------------------- organisation is not big enough, HR activities and cost areas could be outsourcesd.
Following are few of the other disadvantages of an HRIS:
----------------------
1. Wrong date inputs deliver faulty results.
----------------------
2. Too costly technology and organisations cannot afford to update the
---------------------- system more often.
---------------------- 3. Difficult to find and appoint qualified professionals with human resources
functional area knowledge.
---------------------- 4. Hiring cost of HRIS specialist may be too high for small organisations.
---------------------- Consultants are much in demand nowadays as many top competitors are
very much into reviewing the existing processes. Consultants and advisors try
----------------------
to do SWOT analysis of such organisations and try to convert the organisational
---------------------- weakness into strengths. Though the services of consultants are beneficial,
organisations need to have technological strength in terms of HRIS solutions to
---------------------- identify, develop and manage the talent. These solutions allow HR executives
to:
----------------------
●● ndertake real-time salary and compensation review and compare the
U
---------------------- data with competitors.
---------------------- ●● onvert vision and mission of the organisation into departmental and
C
individual goals and objectives and ensure integration of efforts towards
---------------------- organisational growth and success.
---------------------- ●● eview at a glance the potential candidates for promotion/transfer and
R
other project opportunities.
---------------------- ●● Analyse existing pool of talent against future requirements.
----------------------

Notes
----------------------
----------------------
1. The Human Resource Information System (HRIS) is a software for:
----------------------
i. Data entry
ii. Data tracking ----------------------
iii. Report generation ----------------------
iv. Substitution of HR department ----------------------
2. Which of the following are the advantages of HRIS?
----------------------
i. Cheapest technology and cost-cutting tool
----------------------
ii. Applicant tracking and resume management
iii. Management of all employee information ----------------------
iv. Reporting and analysis of employee information ----------------------
----------------------
Activity 3
----------------------
Undertake a comparative analysis of the advantages and disadvantages of ----------------------
HRIS in modern organisations.
----------------------
8.7 HRIS AND COMPETENCY MAPPING ----------------------
Before understanding the concept of competency mapping it is important ----------------------

to understand what is competency. ----------------------
Competence (or competency) is the ability of an individual to do a job
----------------------
properly. A competency is a set of defined behaviours that provide a structured
guide enabling the identification, evaluation and development of the behaviours ----------------------
in individual employees.
----------------------
Competency Mapping
Competency is defined as the behaviours that employees must have or ----------------------
must possess or acquire to input into a situation in order to achieve high levels
----------------------
of performance. Competencies are a signal from the organisation to individual
employee of the expected areas and levels of performance. They provide the ----------------------
individual with an idea or indication as to what will be valued, recognised and
rewarded by the organisation. ----------------------
Competency mapping refers to the process of identifying the competencies ----------------------
essential to undertake and perform the given roles and responsibilities at a
given time. It comprises a process where each role or job is broken into tasks ----------------------
and activities and the required competency to perform such task is ascertained. ----------------------

Notes In simple words, these are technical, managerial, behavioural, conceptual
knowledge, attitudes, skills, etc. which are required to perform the defined task
---------------------- efficiently and effectively.
---------------------- The steps involved in competency mapping with an end result of job evaluation
include:
----------------------
1. Asking the incumbents to fill up Position Information Questionnaire
---------------------- (PIQ). The primary goal is to collect information from the job incumbents
about the essential or key behaviours necessary to perform their respective
---------------------- jobs.
---------------------- 2. Using the results of the job analysis, a competency based job description
can be developed. A sample of a competency based job description
---------------------- generated from the PIQ is analysed. The information collected from
the represented group of incumbents is then converted into standard
----------------------
competencies.
---------------------- 3. With a competency based job description, competencies of the human
---------------------- resource can be mapped. The competencies of the respective job description
become factors for assessment of the performance of employees. Using
---------------------- competencies help organisations to perform more objective evaluations
based on desired and non-desired behaviours.
----------------------
4. Based on the above, an organisation determines what competencies
---------------------- individuals need and accordingly the training and development programmes
can be designed. This will help organisations to focus on training needs
---------------------- and help employees bring ultimate success to the organisation.
---------------------- Methods adopted for Competency Mapping by Modern Organisations:
---------------------- Assessment centre: Assessment centre is a method to identify the
potential for growth of star performers. It is a procedure (not location) that uses
---------------------- a variety of techniques to evaluate employees for future responsibilities and
helps in management decisions. In assessment centres the employees are put
----------------------
into a challenging situation and they are expected to demonstrate desired job
---------------------- behaviours. Essential job elements are incorporated in situational tests to observe
their response and reaction.
----------------------
1. Group discussion: The candidates are brought together in small
---------------------- groups to discuss upon the agenda items and to give their opinion and
recommendations. It is assumed that all the group members are at the
---------------------- same level and have common basic information. The purpose of group
discussion is to identify the task and roles the candidates are capable
----------------------
of taking up. It also demonstrates individual level of awareness and
---------------------- assertiveness abilities.
---------------------- 2. In-tray: In-tray exercises are undertaken by the candidates individually.

The candidates are presented with official correspondence and each
---------------------- individual is required to deal with that correspondence as a responsible
person. This exercise is beneficial as the candidates assume new
---------------------- responsibilities of dealing with accumulated responses. Abilities that this

kind of exercise develops are situational judgment, establishing priorities, Notes
lookout for related information, social sensitivity in exhibiting courtesy
in written notes, scheduling meetings, etc. ----------------------
3. Interview simulation/role plays: In this technique the situation is ----------------------
duplicated to give a close resemblance of the actual job situation. In these
exercise, candidates meet individually with a role player or resource ----------------------
person. This method is much useful to develop sensitivity towards others
----------------------
and their roles because when the candidates play the role of a character,
they are expected to do justice to the assigned role. The candidates get a ----------------------
feeling that they are actually encountering all those conditions.
----------------------
4. Case studies/analysis exercises: Candidates are provided with actual
business data. The participants are expected to discuss and decide upon ----------------------
the case. Identifying the problem areas and finding the best-suited
solution is desired. This entire exercise makes the participants to think ----------------------
independently and develop decision-making skills. It also sharpens their
----------------------
analytical abilities.
B. Critical Incidents Technique ----------------------
This method was developed by Paul Pigors. This develops the participant’s ----------------------
intellectual ability, practical judgment and social awareness. It is described
as a set of procedures for systematically identifying the behaviour that ----------------------
contribute success or failure of individual or organisation in specific ----------------------
situation. A list of good and bad on the job behaviour is prepared for each
job. The participants come to know desirable and undesirable behaviours ----------------------
for successful performance and effective job delivery.
----------------------
C. Interview Techniques
Interview is exchange of views between interviewer and participant. ----------------------
Following careful steps are taken by organisations during and after the interview: ----------------------
1. Before the actual interview, the critical areas in which the questions will
----------------------
be asked are identified for judging the candidates’ ability and skills. It is
desired that these critical areas are defined with examples to form a scale ----------------------
to rate the responses.
----------------------
2. Next step is to scrutinise the information provided to identify knowledge,
skills and incidents in the career of the candidate, which may answer ----------------------
questions raised around the critical areas.
----------------------
3. To get a better response the interviewer is expected to create a comfort
level and to give a sense of confidence, trust and faith so that the ----------------------
candidate should open up more. By doing this the interviewer can gauge
the interviewee’s motive, attitudes, feeling, temperament, etc. which are ----------------------
otherwise difficult to comprehend. ----------------------
4. The fundamental step taken is establishing rapport, putting the interviewee
at ease conveying the impression that the interview is the conversation ----------------------
between two friends and not a confrontation between employer and ----------------------
employee.

Notes 5. Open-ended question should be asked to give more opportunity to the
candidate to speak and come out with his past experiences.
----------------------
D. Questionnaire
---------------------- It is a written list of questions that users are required to fill and return.
Following are few types of questionnaires:
----------------------
1. Common metric questionnaire examines some of the competencies
---------------------- related to work performance and have five sections: background, contacts
with people, decision-making, physical and mechanical activities and
----------------------
work setting.
---------------------- 2. Functional job analysis: The most recent version of functional job
---------------------- analysis uses seven scales to describe what employees do in jobs, such as
things, data, people, worker instructions, math and language. Each scale
---------------------- has several levels that are anchored with specific behavioural statements.
---------------------- 3. Multipurpose occupational system analysis inventory: In this method,

each job analysis inventory collects data from the office of personnel
---------------------- management system through a variety of descriptors, mainly tasks and
competencies.
----------------------
4. Occupational analysis inventory: It contains ‘work elements’ designed
---------------------- to yield more specific job information while still capturing work
requirements for virtually all occupations. Major categories of items are
---------------------- Information received, Mental Activities, Work Behaviour, Work Goals
---------------------- and Work Context.
5. Position analysis questionnaires help to measure job characteristics and
----------------------
relate them to human characteristics. It consists of job elements which fall
---------------------- into the following five categories.
i. Information Input (where and how the workers get information) ii.
----------------------
Mental Processes (reasoning and other processes that the workers
---------------------- use)
---------------------- iii. Work Output (physical activities and tools used on the job)
iv. Relationship with other person
----------------------
v. Job Context (the physical and social context of work)
----------------------
6. Work profile system: It is designed to help employers accomplish human
---------------------- resource functions. The competency approach is designed to yield report
targeted towards various human resource functions such as individual
---------------------- development planning, employee selection and job description.
---------------------- E. Psychometric tests
Psychometric tests are commonly used as part of a recruitment process.
----------------------
Employers use them to gain insights into a candidate’s skills and personality
---------------------- which can be more objective, reliable and scientifically valid than an interview
alone. Psychometric tests are becoming increasingly popular, particularly in large
---------------------- organisations, where senior management may be removed from the recruitment

process but seeks to ensure certain benchmarks are met when recruiting new Notes
employees.
----------------------
There are two broad categories of psychometric tests: personality & career
tests and aptitude & skills tests. ----------------------
1. Personality & career tests: These will look at areas such as:
----------------------
 Ways of thinking, feeling and acting in different situations;
----------------------
 Interpersonal style, conflict style, leadership style;
 Patterns of coping with stress; ----------------------
 Interests - how much do candidates like carrying out various types ----------------------
of activities at work;
----------------------
 Motivations – the energy with which candidates approach their
work and the different conditions which increase or decrease their ----------------------
motivation; and
----------------------
 Work values – the factors make work worthwhile for candidates.
----------------------
2. Aptitude & skills tests: These are designed to test the specific skills of a
candidate. They attempt to give an employer an objective indication of a ----------------------
candidate’s abilities in areas like:
----------------------
i. Verbal reasoning: Critical evaluation of written information and
reading comprehension. ----------------------
ii. Numerical reasoning: Logical interpretation of numerical and ----------------------
statistical information.
----------------------
iii. Abstract, mechanical or spatial reasoning: Pattern recognition,
logic and how quickly a candidate may be able to learn and master ----------------------
a new task.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
Match the following.
----------------------
i. Competency a. A mechanism to identify the potential for
---------------------- mapping employee growth.
ii. Critical incidents
b. The process of identification of the
----------------------
techniques competencies required to perform
---------------------- successfully a given job.
iii. Position analysis c. Structured job analysis instrument mostly
---------------------- followed by organisations to measure job
questionnaires
characteristics and relate them to human
----------------------
characteristics.
---------------------- iv. Assessment centres d. Examination centres
e. A set of procedures for systematically
---------------------- identifying the behaviour that contribute
---------------------- success or failure of individual or
organisation in specific situation.
---------------------- f. Competencies which are more critical.
----------------------
---------------------- Summary
---------------------- ●● he Human Resource Information System (HRIS) is a software or online
T
solution for data entry, data tracking and data information needs of the
---------------------- Human Resources, payroll, management and accounting functions within
---------------------- a business.
●● alent Management is the systematic cycle of planning, execution and
T
---------------------- evaluation to manage the flow of talent into, through and out of the
---------------------- organisation to achieve goals and meet needs.
●● alent management strategies are holistic in nature and aim at supporting
T
---------------------- such practices which develop the communication of goals and performance
---------------------- expectations across different levels in an organisation.
●● ompetency mapping is the process of identification of the competencies
C
---------------------- required to perform successfully a given job/role/a set of tasks at a given
point of time.
----------------------
---------------------- Keywords
---------------------- ●● alent management: The anticipation of required human capital by an
T
---------------------- organisation and setting a plan to meet those needs.
●● ompetency mapping: The process of identifying the competencies
C
---------------------- essential to undertake and perform the given roles and responsibilities at
a given time.
----------------------

●● orporate strategy: The overall scope and direction of a corporation and
C Notes
the way in which its various business operations work together to achieve
particular goals. ----------------------
----------------------
----------------------
1. Explain the stages of growth and development of the concept of talent
management. ----------------------
2. What are the critical issues which the organisations have to address while ----------------------
managing the organisational talent?
----------------------
3. Explain the talent management life cycle.
4. ‘Talent management and corporate strategy should go hand in hand.’ ----------------------
Justify the statement. ----------------------
5. State the advantages and disadvantages of HRIS.
----------------------
6. What are the different methods adopted by organisations to map the
competencies of the employees? ----------------------
----------------------
----------------------
----------------------
1. False ----------------------
2. True ----------------------
3. True ----------------------
4. False
----------------------
----------------------
1. Talent management is a major competitive differentiator for attracting ----------------------
and retaining trained personnel and developing highly capable leaders.
----------------------
2. Talent management solution integrates the needs of the management,
executives and employees into one system and unifies information across ----------------------
all the major HR processes.
----------------------
3. It is the organisational culture that defines an organisation’s personality.
----------------------
4. Organisations prefer to have employees who have right knowledge and
skills and are good cultural fit. ----------------------
----------------------
----------------------

----------------------
1. The Human Resource Information System (HRIS) is a software for:
----------------------
i. Data entry
---------------------- ii. Data tracking
---------------------- iii. Report generation
---------------------- 2. Which of the following are the advantages of HRIS?

ii. Applicant tracking and resume management
----------------------
iii. Management of all employee information
----------------------
iv. Reporting and analysis of employee information
----------------------

----------------------
Match the following.
---------------------- i. – b.
---------------------- ii. – e.
---------------------- iii. – c.
iv. – a.
----------------------
----------------------
---------------------- Suggested Reading

---------------------- 1. The Talent Management Handbook, By Berger, TATA McGRAW-HILL
Edition
----------------------
2. The Executive Guide to Integrated Talent Management edited by Pat
---------------------- Galagan, Kevin Oakes
---------------------- 3. Strategy-Driven Talent Management: A Leadership Imperative, edited by

Rob Silzer, Ben E. Dowell
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

E-Recruitment and Selection
UNIT
9
Structure:
9.1 Introduction
9.2 Recruitment and Technology
9.2.1 Forms of Recruitment
9.3 E-Recruitment
9.3.1 E-Recruiting Methods
9.4 Advantages of E-Recruitment
9.5 Limitations of E-Recruitment
9.6 Features of E-Recruitment
9.7 Points for Consideration for Effective E-Recruitment
9.8 Recruitment Yield Pyramid
9.9 Scenario of E-recruitment in India
9.9.2 Recent Trends
9.9.3 Prevalent Practices
9.10 Technology Issues in Selection
9.11 Selection of Human Resource Information Technology (HRIT)
Summary
Keywords
Suggested Reading
E-Recruitment and Selection 131

Notes
Objectives
----------------------
----------------------
• Discuss the concept of e-recruitment
----------------------
• Explain why modern organisations go in for e-recruiting
---------------------- • Classify e-recruitment methods and identify the latest trends
---------------------- • Discuss the limitations of e-recruitment
---------------------- • Plan the use of open source software in e-recruitment
----------------------
9.1 INTRODUCTION
----------------------
It is widely said that among all the other resources available, an organisation`s
---------------------- most vital assets are its human resources. Thus an organisation`s ability to
---------------------- attract and retain capable employees may be the single most determinant of
organisational effectiveness. The first point of contact for the potential employees,
---------------------- the recruitment function plays a vital role in determining organisation`s survival
and success in the turbulent environment.
----------------------
In simple terms, recruitment is understood as the process of searching for and
---------------------- obtaining applicants for jobs, so that the right people can be selected. Theoretically,
recruitment process is said to end with the receipt of applicants, in practice the
---------------------- activity extends to the screening of the applicants so as to eliminate those who
---------------------- are not qualified for the job. Some traditional ways of recruitment are as follows-
1. Advertisements in Newspapers
----------------------
2. Consultants
----------------------
3. Employment Exchanges
---------------------- 4. Radio & Television
---------------------- 5. Walk-ins & Write-ins
---------------------- Of late, the recruitment function has undergone a dramatic change as a result
of technology. The internet is one of the most popular IT methods of recruitment.
----------------------
----------------------
9.2 RECRUITMENT AND TECHNOLOGY
---------------------- During the last 6-7 years, a factor that invaded nearly every high-level
functional discussion was social media. It is clear that Facebook, LinkedIn and
---------------------- Twitter have played a dominate role in recruiting and development best practices.
2012 saw no fewer than 40 new vendors emerge to help organisations use social
---------------------- media to attract referrals. We also started to see early stage tools to use social
---------------------- media in talent assessment (pre/post hire) as well as applicant/candidate/employee
experience management. New tools brought much enhanced visibility into talent
----------------------

issues, but most talent-management metrics continue not to resonate with key Notes
leaders outside of the HR function. While recruiting will move forward at a
breath-taking pace, leadership development will also speed up. ----------------------
Managing Human Resource is very complex and involves so many ----------------------
interrelated activities. Hiring and retaining talented employees is in itself a very
big task. Procurement function tries to strike a balance between demand for ----------------------
and supply of employee. An organisation expects employees to perform and
----------------------
therefore, hiring right talents to complement organisational objectives is the
major task of HR department. Recruitment is the basic step in the staffing process. ----------------------
Recruitment is the process of identifying the sources of potential employees and
inspiring them to apply for jobs in an organisation. Recruitment focuses on two ----------------------
aspects- one, to identify the source of manpower based on job description and
----------------------
job specification and two, to take the potential candidates through the selection
process Recruitment process may be carried out by the organisational staff or it ----------------------
could also be outsources to a recruitment firm.
----------------------
During early industrialisation, recruitment was based on the apprenticeship
system where the job aspirants used to get trained on the job and then absorbed by ----------------------
the institution. Organisations used to prefer fully qualified and skilled candidates
due to which the skilled and qualified candidates were more desirable. The change ----------------------
in the organisational preferences gave rise to the trend of recruitment process in
----------------------
the middle of 19th century.
9.2.1 Forms of Recruitment ----------------------
There are various recruitment methods and the use depends on the ----------------------
organisational requirement:
----------------------
a. Internal and external method
----------------------
b. Direct, indirect and third party method
c. Centralised and decentralised method ----------------------
You have already learnt about the first two methods. The third form of ----------------------
recruitment requires elaboration. Centralised recruitment is where the branches
or departments are not involved in decision-making. Power is only concentrated ----------------------
in central department. Government organisations like RBI, SBI, RRB etc. prefer
----------------------
centralised recruitment process to save on cost, maintain standardisation in
processes and eliminate the element of biased choices. ----------------------
In decentralised recruitment, each branch or department enjoys autonomy ----------------------
and flexibility regarding recruitment. Decentralised recruitment is desired
by organisations who are geographically spread and are very big in size. ----------------------
Organisational culture and philosophy determines which form to adopt. Bausch
& Lomb, for example, have centralised recruitment policy, whereas G.E Opticals ----------------------
follow decentralised method of recruitment. ----------------------
The cost benefit analysis decides the source of recruitment. Internal sources
such as transfer and promotions are not preferred by the organisation as there is ----------------------
limited choice but external sources such as consultants and placement agencies, ----------------------
campus recruitment and newspaper advertisement are preferred.

Notes
----------------------
Fill in the blanks.
----------------------
1. During early industrialisation, recruitment was based on the _____
---------------------- system.
---------------------- 2. In ______ recruitment, each branch or department enjoys autonomy
and flexibility regarding recruitment.
----------------------
---------------------- 9.3 E-RECRUITMENT

----------------------
Those who are technologically literate and are aware of corporate world
---------------------- are also aware of e-recruitment sites. Every job aspirant desires to have a direct
contact with the employers and therefore they prefer to upload their resumes on
---------------------- the job portal or the company’s website. Even the rural applicants prefer to apply
online due to technological advances. A simple email attachment in just one click
---------------------- enables the applicants to reach their dream employers. Recruitment is a tool to
---------------------- search for the suitable candidates. Internet recruitment or online recruitment is
suitable to the organisations, which are automated. Though automation came
---------------------- late in Indian organisation, it was systematised by the 1990s.
---------------------- Why e-recruitment?

In August 1981 in Bangalore, Anita passed her MBA exam and was very
---------------------- confident of getting a suitable job. She knew that her qualification is enough
---------------------- to secure a good career. She visited many companies and posted her resume to
various organisations in an anticipation to receive positive response but she was
---------------------- least aware that the search for a suitable company will be a tedious and frustrating
experience. Every day she used to scan newspaper for job advertisements and
---------------------- visited each and every organisation just to submit her resume; the postal service
was also not reliable. This was the situation with many candidates during that
----------------------
time. The organisations were also struggling to find the right kind of talent.
---------------------- Similarly, Poineer Electricals in Surat were urgently in need of suitable
electrical engineers. They gave advertisement in major news papers but didn’t
----------------------
get any satisfactory response. Few candidates were interviewed but no one was
---------------------- found suitable.
The above two situation can give a clear understanding of the need for
---------------------- e-recruitment, which overcomes the geographical barriers and eases the search
---------------------- of suitable candidates. To enjoy the competitive edge, it is necessary for the
successful organisations to recruit high caliber staff. Inability to find suitable
---------------------- candidates is frustrating.
---------------------- Employers like Pioneer Electricals can now appeal to qualified candidates
across boundaries. Same holds true for candidates like Anita. Job seekers can
---------------------- apply for suitable jobs regardless of location. The use of internet has resulted
in widespread use of technology and sophisticated tools to advertise and attract
---------------------- wider audience.

9.3.1 E-Recruiting Methods Notes
Following are few of the most preferred e-recruitment methods:
----------------------
●● J ob boards: These are the centralised place where the employers publicise
the vacant positions of their organisations. Job applicants are on lookout ----------------------
for such openings and apply online. This saves time of both the employers
----------------------
and the job applicants. One of the disadvantages of job boards is that the
job openings are very generic in nature. ----------------------
●● mployer web sites: These are company owned and designed websites
E
----------------------
exclusively to catch the attention of professionals at a senior level.
Sometimes, many employers come together and create exclusive talent ----------------------
search websites. Directemployers.com is one of the not for profit
employers owned e-recruiting website, the members of which are many ----------------------
fortune 500 organisations.
----------------------
●● rofessional websites: Professional websites are created by the
P
professional bodies to promote their own interest and to strengthen their ----------------------
community’s knowledge base. These websites are very specific and the
members are from particular knowledge domain. For example, www. ----------------------
shrm.org and www.nationalhrd.org are visited by the HR professionals. ----------------------
----------------------
1. An organisation`s ability to attract and retain capable employees is ----------------------
the determining criteria for organisational effectiveness.
----------------------
2. Recruitment process is said to end with the receipt of application and
screening thereof. ----------------------
3. Employee selection is a part of recruitment. ----------------------
4. State Bank of India follows de-centralised recruitment system. ----------------------
----------------------
Activity 1
----------------------
Browse through various e-recruitment website to understand the concept of
----------------------
e-recruiting and how it enables jobseekers and employers. Note down some
peculiar observations. ----------------------
----------------------
9.4 ADVANTAGES OF E-RECRUITMENT
----------------------
The advantages of e-recruitment can be listed as below:
----------------------
●● Cost effective: Internet advertisement as compared to print media
and consultancy firms is much cheaper and most preferred by modern ----------------------
corporations. The shelf life of e-advertisement is much longer then the
print media. ----------------------

Notes ●● ime saving tool for both the employers and the applicants: Spreading
T
the manpower requirement on a click of a mouse takes a fraction of
---------------------- second, hence minimising the communication time. The responses are
immediate, direct without delays. Worldwide communication is possible.
----------------------
●● idens the search of suitable candidates: Globalisation has resulted in
W
---------------------- world becoming a smaller place. Industries are not ready to compromise
on the quality of manpower and are even ready to hire experts from across
---------------------- the continents. Also, vast pool of applicants could be created.
---------------------- ●● rovides clarity to candidates: Print advertisements are charges at the
P
rate of per square centimeter and therefore the advertisers struggle to fit
---------------------- the requirement in the word limit. Each additional word means increase in
cost due to which the sentences may get misinterpreted defeating the very
---------------------- purpose of communication. Sometimes the profiles remain explained
---------------------- leading to receipt of resume from unsuitable candidates. In internet, there
is no word limit due to which all the necessary requirements, profile and
---------------------- instructions could be expressed and explained clearly.
●● ide Scope for better match: Clear and detailed information eases the
W
----------------------
search for suitable match. Due to easy linkage with the other websites,
---------------------- more and more candidates could be attracted and after the job profile
matches, the candidates apply.
---------------------- ●● Standardisation: The applicants are required to submit their applications
---------------------- in the company specified format, which facilitates the consolidation of the
information from various sources.
---------------------- ●● Reservoir: Online application acts as a huge database. Whenever the
organisation runs short of employee for a position, the database acts as a
----------------------
reservoir and suitable candidates could be called.
---------------------- ●● Reduced paper work: The data is collected online, due to which the
paperwork is substantially reduced. Administrative work such as postages,
---------------------- filing, consolidating information and other manual documentation gets
---------------------- lessened.
---------------------- 9.5 LIMITATIONS OF E-RECRUITMENT

---------------------- After going through the advantages, let us see the limitations of e-recruitment:
---------------------- ●● omputer literacy required: E-recruitment is preferred by organisations
C
looking out for computer literate and qualified candidates. E-recruitment
---------------------- is popular and suitable for computer savvy applicants. Employers search
for suitable candidates based on certain keywords in the website, which
----------------------
simplifies the screening.
---------------------- ●● ast pool of applicants: This is beneficial at the same time disadvantageous
V
for the organisation because the huge applicant data base cannot be scanned
----------------------
in detail. Sometimes only the top candidates are called for interview based
---------------------- on the face value of their resume. Good candidates may get neglected as
the keywords do not match the search criteria. Candidates also have to
---------------------- prove their worth in the global competition.

●● asual attitude and approach of applicants: Many a times, non-
C Notes
serious candidates float their resume, just to know their market worth.
This defeats the very purpose of the serious employers. At the time of ----------------------
interview, the recruiter gets disappointed leading to wastage of time,
energy and resources of the employer. ----------------------
●● isclosure of information: Internet recruitment has posed many security
D ----------------------
related problems. The candidate’s information as well as the employer’s
full information is available on the websites. The proactive HR department ----------------------
automatically comes to know about the activities of their staff. Many a ----------------------
times, the organisational future plans of growth and expansions get
exposed to the competitors. ----------------------
9.6 FEATURES OF E-RECRUITMENT ----------------------
----------------------
Since e-recruitment has become very popular now, it is time to list some
of its features: ----------------------
●● peedy communication: Blogs are much popular now-a-days.
S
----------------------
Organisations and the employees communicate through the professional
blogs. Podcasts (services of digital media files), vodcasts (video podcasts) ----------------------
etc. are considered as a powerful tool of e-recruitment. These are two
way communication media, unlike mails and faxes, which are one way ----------------------
electronic communication tools.
----------------------
●● andidate’s preference: In the past, the employers used to have a
C
privilege of whom to recruit and select. The screening process was not ----------------------
very fair. Today, the applicants can choose their employers as the financial
----------------------
position of the company and the market goodwill is known to them. The
e-recruitment process gets influenced by the organisation’s image and ----------------------
culture. Candidates prefer the employers who provide career growth
opportunities and secured income. ----------------------
●● earch engine advertisement: Pay per click is becoming more attractive
S ----------------------
and convenient. Print advertisements are being phased out due to
popularity of search engine advertisements. ----------------------
●● SS feed: Job boards are embracing RSS feed. Hotjobs and Google are
R ----------------------
more popular. Google allows one to upload the jobs on Google Base
even when one does not have their own website. RSS can be read using ----------------------
software - RSS reader. It is a family of web feed formats, which is used
----------------------
to publish frequently updated blog entries, news headlines in a standard
format. ----------------------
----------------------
----------------------
----------------------
----------------------

Notes 9.7 POINTS FOR CONSIDERATION FOR EFFECTIVE
E-RECRUITMENT
----------------------
In order to gain maximum benefit from e-recruitment, certain points that
---------------------- an organisation needs to consider are as follows:
---------------------- ●● o strengthen the e-recruitment process, an organisation considers various
T
factors, the importance of which is Return on Investment. This enables
----------------------
the management to compare the risks and costs. An estimated return on
---------------------- investment calculation gets facilitated.
●● rganisations must have their own mix and match sources based on the
O
----------------------
corporate objectives. Therefore, recruitment policy must be proactive and
---------------------- flexible enough to accommodate market changes.
●● abour turnover rate and unemployment rate are determined based on the
L
---------------------- availability of manpower in the labour market. These rates will determine
---------------------- whether the organisation can afford to spend time on certain categories of
vacancies.
---------------------- ●● ffect of providing compensation details has to be considered. Wages,
E
---------------------- salaries, benefits, perks etc should be in line with the legal norms.
Chance for negotiation should be at the least. Compensation details of the
---------------------- organisations do not only get known to the candidates but will be known
to all.
----------------------
●● iscriminating words specific to gender, religion, age etc. must be avoided,
D
---------------------- e.g. ‘Freshers should not apply’ or ‘Position reserved for unmarried’.
---------------------- ●● or better results, the available pool of applicants should be updated and
F
revised from time to time. Static applicants’ database does not serve any
---------------------- purpose.
●● rganisations have to be more specific while deciding the websites.
O
----------------------
For special skills, special websites should be considered. For generic
---------------------- requirements, various job portals could be used.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. Some traditional ways of recruitment are
i. Advertisements in Newspapers ----------------------
ii. Linked-in ----------------------
iii. Consultants
iv. Employment Exchanges ----------------------
2. Advantages of e-recruitment are ----------------------
i. Scope for better match
----------------------
ii. Standardisation of formats
iii. Gives clear idea of job profile ----------------------
iv. Suitable for all kinds of jobs and all kinds of applicants ----------------------
----------------------
Activity 2
----------------------
Imagine that you are an HR consultant. What would you advise an employer
----------------------
to consider before it goes in for e-recruitment?
----------------------
9.8 RECRUITMENT YIELD PYRAMID ----------------------
A company needs to have a clear estimation of number of applicants to be ----------------------

generated to fill up the required number of positions.
----------------------
Example
----------------------
The organisation knows that it requires 50 entry level technicians next year.
Based on past experience, the organisation knows the ratio of offers made to actual ----------------------
new hires is 2:1, i.e. about half the people to whom it makes offers accept the job
offer. Similarly, the organisation knows that the ratio of candidates interviewed ----------------------
to offers made is 3:2, while the ratio of candidates invited for interviews to
----------------------
candidates actually interviewed is about 4:3. Finally, the organisation knows that
of six leads that come in from all its recruiting efforts, only one applicant typically ----------------------
gets an interview. Based on the above information, the organisation knows it
has to generate approximately 1200 leads to be able to invite 200 candidates ----------------------
for interviews. The recruitment yield pyramid based on above estimation is as
----------------------
follows:
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 9.1 : Recruitment Yield Pyramid
---------------------- [Source: Human resource management, Gary Dessler, 9th edition, Pearson
Education, 2005]
----------------------
E-recruitment increases the lead generation number. Thus, 1200 can increase
---------------------- to 2000 and the ratio of estimation can be more accurate. For example, if candidates
interviewed do not reach 100, 50 new hires will be difficult, but if the base number
----------------------
is increased, i.e. 1200+, selecting 50 candidates will not be a problem.
---------------------- Let us have a look at how HR and recruiting technology will evolve over
---------------------- the next four years.
Millennials will dictate evolution in HR Tech
----------------------
Most of the 10 million Millennials entering the job market during the next
---------------------- three years will expect a far better candidate experience than today’s. This,
more-demanding “customer” of human resources dictates that HR technology
---------------------- be upgraded to initiate timely candidate interaction and utilise social media as
---------------------- a communication tool. Essentially, rather than the cold shoulder being given
candidates now, evolving HR tools will deliver a digital handshake and a virtual
---------------------- smile (Mark Babbitt, YouTern).
---------------------- Embrace social media, digital technology, online video hiring
With more and more applicants spending increasing amounts of their online
----------------------
time using social media, HR technology will find new ways to use the social
---------------------- space to find great candidates. Social media will be used to find a larger and
more connected talent pool of candidates for companies looking for particular
---------------------- skill sets. Online videos will be embraced as a better way to get to know these
tech-savvy candidates faster and more personally than the traditional phone
----------------------
screens (Josh Tolan, Spark Hire).
---------------------- Video & crowdsourcing will impact HR technologies
---------------------- Because HR is always looking to lower hiring costs, HR technology trends will
shift toward techniques that not only work, but also save money. Two dirt cheap
---------------------- techniques that are kicking up the recruitment space are the use of video and

crowdsourcing in the recruitment sphere. Video allows employers to explain Notes
a lot of information to job seekers in a more engaging format that can also
promote their brand. Crowdsourcing is basically a ton of free help in creating ----------------------
and promoting a job (Rob Kelly, Ongig).
----------------------
A shift toward social performance
----------------------
The talent management industry isn’t currently keeping up with the demands
of employees who want user-friendly performance management platforms. ----------------------
Social Performance is slowly seeing adoption across the workforce and this
will continue in the next three years since it’s easy to use and deploy–not only ----------------------
HR, but for every leader and manager–in order to drive autonomy and results.
----------------------
It’s also ideal in meeting the need for HR processes to be continuous and allows
for more informal feedback in real-time (Morgan Norman, WorkSimple). ----------------------
Force HR to grow to a highly strategic organisation
----------------------
HR Technology is making our lives as HR practitioners much more efficient —
even in spite of the huge learning curve that most professionals face in adapting ----------------------
to new technology. As HR Tech continues to collect and display metrics, more ----------------------
and more businesses will be able to make strategic business decisions as a result
of these findings — not just from C-Level conversations that leave HR out ----------------------
(Joey Price, Jumpstart:HR).
----------------------
Social capabilities integrated into the platforms
When a candidate applies for a position, a HR manager or hiring manager ----------------------
will see the application and their social profiles as an integrated aspect of their ----------------------
application. For example, it will show what company the candidate worked
at, the recommendations they received while at that position from his or her ----------------------
LinkedIn profile, recent tweets and Facebook wall posts (Sudy Bharadwaj,
Jackalope Jobs). ----------------------
More advancements in technology, but focus on people will prevail ----------------------

Technology has an important place in recruiting, but it cannot entirely replace ----------------------
human interaction. Technology will continue to enable quick and cost-effective
recruiting through applicant tracking, screening, evaluating and communicating. ----------------------
Smart hiring managers will use technology to their benefit, but recognise the
----------------------
need for in-person meetings and phone calls to discover who the candidate
behind the computer is (Michele St. Laurent, Insight Performance). ----------------------
Technology determining fit will be critical ----------------------
The ubiquity of a professional persona and the amount of structured and
unstructured data surrounding it has created a massive problem determining ----------------------
signal from noise. The ability to create intelligent applications that leverage ----------------------
these data to quickly determine intent and fit will be critical to the success
of any new recruiting technologies, otherwise there can only be incremental ----------------------
improvement to legacy systems (Michael A. Morell, Riviera Partners).
----------------------
----------------------

Notes Employer value proposition, branding will be real recruiting difference
It will become much more like CRM and less tailored to the application of
----------------------
active job seekers. Employer value proposition and branding will be the real
---------------------- difference makers and the technology will evolve to support this. It will enable
talent acquisition leaders to engage with a community of talent via multiple
---------------------- channels (Larry Jacobson, Vistaprint).
----------------------
9.9 SCENARIO OF E-RECRUITMENT IN INDIA
----------------------
Indian jobsite market has long remained the stronghold of Naukri and
---------------------- Monster. Timesjobs and Clickjobs are also there. Over the last five years, after
Monster took over and killed jobsahead, they have seen a handful of entrants
---------------------- itpeople.com, cybermediadice.com etc but none of them managed to make a
---------------------- significant dent in the market or eat into the share of the two market leaders and
most of them wound up. Careerbuilder is still experimenting with partnerships
---------------------- and is yet to make a significant share. Here is a recap of the milestones in Indian
e-recruitment scenario in the last 3-4 years.
----------------------
●● US-based job search engine Simply Hired, a metasearch engine for job
---------------------- listings (thus also an example of vertical search), which claims to have
more than six million job listings worldwide, launched its India specific site
----------------------
SimplyHired.co.in. Simplyhired consolidates jobs from the top job boards,
---------------------- content sites, newspapers, organisations and company career sites together to
offer job seekers a single, powerful job search site - October 2008
---------------------- ●● echtribe, a jobs referral site shuts down, cites that the business model
T
---------------------- didn’t work out.- Jan 2009
●● Naukri launches www.firstnaukri.com, a fresher jobsite. - Feb 2009
----------------------
●● Naukri launches chatbot for jobs - Mar 2009
---------------------- ●● New online job referral site www.zyoin.com launched. - March 2009
---------------------- ●● ellojobs [Yellomdedia [Bangkok] and NDTV joint venture in India, shut
Y
Indian ops - Mar 2009
----------------------
●● ecession has taken a toll on the online market: Sanjeev Bikhchandani,
R
---------------------- CEO of job portal naukri.com said the Rs 800-crore online advertisement
market has been growing at about 20-25 per cent annually. But, the
---------------------- segment suffered last fiscal and the trend is likely to continue this fiscal,
he said. - Aug 2009
----------------------
●● onster.com launches rozgarduniya.com, a job engine for those in
M
---------------------- rural regions, in collaboration with ITC’s e-Choupal venture. The site is
currently available in English and Hindi and can be accessed at e-Choupals
----------------------
in 4 states — Madhya Pradesh, Maharashta, Uttar Pradesh and Rajasthan.
---------------------- The company plans to extend this to all the e-Choupals soon.
●● Naukri launches a salary comparison tool named Naukri Paycheck. - Aug 2009
----------------------
●● Timesjobs announced Campusdirect, similar to Naukri’s FirstNaukri.com
---------------------- ●● Monster ties up with DishTV

●● Clickjobs launched the pay per contact model. Notes
●● Timesjobs launched the Globalconnect platform
----------------------
●● Naukri launches premium section. http://www.naukri.com/premium.php
●● Wallstreetjournal adds naukri as the partner for its premiumjobs. ----------------------
●● Linkedin sets up India office. ----------------------
----------------------
There are thousands of resumes available on the job portals of IT
professionals. Over 120 million professionals use social network LinkedIn to ----------------------
exchange information, ideas and opportunities. Monster.com has more than
----------------------
2.5 crore registered jobseekers, with 20,000+ jobseekers registering daily and
20,000+ top companies using the job board for the purpose of hiring. This tells ----------------------
us how the Internet is bringing radical change to corporate recruiting. Earlier, the
pools of candidates from which companies could choose were limited. Companies ----------------------
could only hire the active job seekers, those who were unhappy with their previous
----------------------
jobs or those looking for the entry-level positions. For the managerial positions,
companies had to hire expensive head-hunters. Today, attracting good candidates ----------------------
towards your company is just a click away. Internet based recruitment facilitates
just-in-time hiring. By simply logging onto the Internet, recruiters can access the ----------------------
database of job portals and find thousands of resumes of qualified candidates for
----------------------
jobs at every level. Screening could be done within minutes and the potential
shortlisted candidates can be contacted immediately by sending a mass mail. ----------------------
Candidates ate shortlisted based on knowledge, skills, location preference, salary
expectations and availability for the interview stage. ----------------------
9.9.2 Recent Trends ----------------------
●● mployee referrals are coupled with social media: The employee
E
referral program in many organisations is operated in isolation as are the ----------------------
organisations’ social media efforts, but talent managers are beginning to ----------------------
realise that the real strength of social media is relationship-building by
your employees. With proper coordination, employee relationships can ----------------------
easily be turned into employee referrals. This realisation will lead to a
shift away from recruiters and toward relying on employees to build social ----------------------
media contacts and relationships. The net result will be that as many as
----------------------
60% of all hires will come from the combined efforts. The strength of
these relationships will lead to better assessment and the highest-quality ----------------------
hires from employee referrals.
●● mployer branding returns: Employer branding and building talent
E ----------------------
communities are the only long-term strategies in recruiting. True branding ----------------------
is rarely practiced, especially in the cash-strapped function of today, but
years of layoffs, cuts in compensation and generally bad press for business ----------------------
in general may force firms to invest in true branding. The increased use
of social media and frequent visits to employee criticism sites (like ----------------------
Glassdoor.com), make not managing employer brand perception a risky
----------------------
proposition. While corporations will never control their employer brand,
they can monitor and influence in a direction that is not catastrophic to ----------------------
recruiting and retention.
Notes 9.9.3 Prevalent Practices
Centralisation: Most organisations today have multiple solutions where data
---------------------- is stored. Whether it is recruitment ad data in their job distribution solution,
sourcing data in their Recruiting CRM or applicant / hire data in their ATS,
----------------------
there are a number of disparate solutions that contain data you need to make
---------------------- good decisions. The key is making sure these solutions speak to one another so
you can take this data and make it all available in one central location. Data is
---------------------- only as valuable as how accessible it is to you when you make decisions. This
makes centralisation vital. On top of this, recruiting data will be for the entire
---------------------- recruiting funnel from first click to becoming a hire in an organisation. Data
---------------------- will be tracked by every source used and be displayed together in order to get
a full view of the recruitment funnel and understand what recruiting initiatives
---------------------- provide the most ROI.
---------------------- Predictive Analysis: Once you have your data centralised, it is time to analyze
what is happening in your recruiting strategy. While there is value in providing
---------------------- raw data, an important value add that vendors are pursuing is taking this data
and providing their own analysis on top of it. In addition, vendors will continue
---------------------- to do better at providing users with the ability to play with the data and create
custom reports that are important to their organisation.
----------------------
Social Recruiting – Education & Value Add
---------------------- The value of social media in recruiting is immense. Not only does it provide a
---------------------- great way to engage with candidates on a platform where they feel comfortable
but it also provides a wealth of new data points to evaluate a candidate.
---------------------- Education
---------------------- In speaking with recruiting organisations, there is still a great need for
education on the social recruiting basics. These organisations are looking for
----------------------
help anywhere they can get it and many times are looking toward vendors for
---------------------- this knowledge. This education will go past how to leverage the vendor’s social
recruiting solutions but more towards how to build a comprehensive social
---------------------- strategy, which will include utilising their solutions as well as many of the great
social media marketing tools that exist in the marketplace. Most importantly,
----------------------
vendors will need to understand and be able to communicate the inherent benefits
---------------------- and tradeoffs that come with a social strategy.
Adding Value
----------------------
The problem today, however, is that a lot of the social solutions in recruiting
---------------------- field do not necessarily add value to the already fantastic social media marketing
---------------------- solutions that exist in the marketplace (and should be used for any social recruiting
strategy). It will be important for technology vendors to focus on adding value
---------------------- to the space and less on just checking the social recruiting check box on the RFP.
For example, being able to post status updates from your recruiting technology
---------------------- in and of itself does not add all that much value.
----------------------
----------------------

Bonus: Integration across all solutions Notes
With all the solutions that recruiting organisations use, it will be important to
----------------------
make sure they all play nice together. This includes with data, contacts, process
flow and many other areas. Vendors are sometimes very flexible in terms of ----------------------
their API and integration options so that organisations can leverage the right
technology for their situations. ----------------------
----------------------
----------------------
Fill in the blanks.
----------------------
1. Facebook, LinkedIn and Twitter are the examples of __________
media. ----------------------
2. Naukri, timesjobs and monster are the examples of _______. ----------------------
3. ________ is used to make sure sufficient numbers of potential
----------------------
employees would be selected (recruitment ratio).
4. Internet based recruitment facilitates _______ hiring. ----------------------
----------------------
Activity 3 ----------------------
Talk to job seekers and recruiters from different sections of society to find out ----------------------
the changing scenario in e-recruitment. Try to understand the role of social
----------------------
media and professional websites like linked-in.
----------------------
9.10 TECHNOLOGY ISSUES IN SELECTION ----------------------
As technology advances in recruitment and selection, it not only allows ----------------------
job seekers more options to find a career, it also allows companies to streamline
their hiring processes. Because of technology, organisations get hundreds, ----------------------
sometimes thousands of resumes on a daily basis. There is a need to organise ----------------------
the massive amounts of applications received, so most companies use a variety
of technologies to assist them. To have a better understanding of the technology ----------------------
issues in selection, it is imperative to understand what are the technologies used
in selection. ----------------------
Resume Databases and Applicant Tracking Technology ----------------------

Most organisations now use resume databases to help streamline their ----------------------
selection process. Resume databases can include installable and web-enabled
software. Applications are sent directly to the resume database and companies run ----------------------
queries to find applicants qualified for job openings. Queries can include a variety
of specified requirements, such as salary expectations, keywords, educational ----------------------
requirements and when the resume was submitted to narrow their search. ----------------------
----------------------

Notes Resume databases are useful because they save all resumes and applications
for each job opening, allowing companies to track information from candidates
---------------------- who have submitted their information. In most cases, this type of software allows
an organisation to set up interviews with template emails, schedule interview
---------------------- dates and times and also send template emails to all candidates who applied but
---------------------- were not selected for the job opening. This saves time and money by not having
to manually review and track resumes.
----------------------
There is one problem, however. Posting a resume online does not take
---------------------- much effort and time so not only the potential and prospectus candidates but
also those who are not interested in the job post their resumes. This results in
---------------------- increase in volume of resumes and many a times puts load on the server and the
system crashes down as the vendors and companies are not able to manage the
----------------------
data well.
---------------------- Online Testing and Assessments
---------------------- Online testing and assessments are used to allow companies to assess a
candidate’s skill and personality. Many organisations use these technologies to
---------------------- help with the selection process by applying these assessments even before they
set up an interview with a candidate. After assessments are completed, a company
----------------------
can chose a smaller amount of candidates to bring in for an interview.
---------------------- Online testing can include technical, administrative and academic
---------------------- assessments. Online assessments often involve evaluating a candidate’s
personality. Some organisations feel that certain personality traits excel in certain
---------------------- jobs. Some online testing and assessments can be customised to fit specific criteria
and customised for different positions within an organisation that require different
---------------------- skills.
---------------------- Even here, there is a problem. Technological glitches have been very
frequent and add a lot to the whole selection process. Many a times it happen
---------------------- that the server is not able to support the load when candidates are taking tests,
---------------------- sometimes the candidate data is not correctly been shown, many a times the
system logs off when a candidate is taking test or the interface is not very user-
---------------------- friendly; all of this makes the whole experience tedious and most of the time the
candidates complain of slow internet speed, which creates a very uneven field
---------------------- and leads to frustration. Companies might lose on good candidates due to such
---------------------- technological issues and candidates might get discouraged to apply further in
the organisation due to incompetent web applications.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

9.11 SELECTION OF HUMAN RESOURCE INFORMATION Notes
TECHNOLOGY (HRIT)
----------------------
HR department is responsible for maintaining employee information
as well as the information related to resources and their effective allocation ----------------------
and utilisation. Huge amount is spent on employee benefit plans and their ----------------------
implementation. In large organisations, it becomes difficult to feed, update and
change all information more frequently and hence selection of good human ----------------------
resource information technology is necessary. These information systems and
solutions will stand the test of time. ----------------------
HR professionals have to choose the appropriate HR information technology ----------------------

software, which would provide the desired degree of flexibility and scalability
----------------------
as these software are expected to import all kinds of data from spreadsheets,
database, documents and files. The software are expected to be able to accept ----------------------
and filter information from various sources. Though such data exploration
process should be automated, many online solutions require the raw data to be ----------------------
manipulated before it is forwarded to a carrier to update their system. Automation
----------------------
of the formats, schedules and delivery methods helps in eliminating the eligibility
and the billing issues. A proper recruitment and selection engine evaluates ----------------------
enrollment activities and puts necessary filters of rules, prompts, criteria and
other options designed to match the precise eligibility requirements, position- ----------------------
wise, as specified by the company.
----------------------
Any HR technology software is expected to integrate with the rest of existing
systems of the organisation. Information inputs required for payroll and benefits ----------------------
management are interdependent. The HR professionals find it convenient if the
----------------------
data and other employee information of one system could be shared with other
system. ----------------------
HR officials need to have a clear estimation of level of technical expertise ----------------------
required by the employees along with the time expected to complete such training.
The technology solution providers can provide insight in the areas and can develop ----------------------
a suitable system for organisation. HR can be in a position to identify the tasks,
which may be so complicated as to realistically impede successful completion ----------------------
or reduction of HR affectivity or HRIS return on investment. ----------------------
HRIS should be designed and created cautiously as whenever the company
feels like switching or transporting their data to any application server provider, ----------------------
they should be able to do it conveniently without being charged additionally by ----------------------
the carriers.
Security issues related with Human Resource Information Technology is ----------------------
also a major concern. If the software is available online, through an Application ----------------------
Service Provider, the vendor must offer daily backups, backup servers and
added protective layers. Additional systems and procedures should be in place ----------------------
to safeguard information from being lost or accessed by unauthorised personnel.
HR, with other managers, should decide about the access of HR information ----------------------
technology. ----------------------

Notes
----------------------
----------------------
1. E-recruitment is primarily:
---------------------- i. A tool to reduce paperwork
---------------------- ii. Used by recruitment agencies
iii. A technology-driven process
----------------------
iv. Used by large corporate
---------------------- 2. Social networking can assist recruitment as follows:
---------------------- i. It creates opportunities for idle people to socialise
ii. It has access to large networks
---------------------- iii. It creates access to global job opportunities and talent pools
---------------------- iv. It assists poor communities to have access to the internet
3. Internal factors impacting recruitment include:
----------------------
i. Corporate culture
---------------------- ii. Business strategy
---------------------- iii. Internal politics and structure
iv. Recruitment criteria
----------------------
---------------------- Activity 4
----------------------
Due to excessive use of technology, jobseekers are assessed online. Taking
---------------------- into consideration the demand of employee effectiveness in competitive
environment, do you think that online or computer-based testing can really
---------------------- assess the true talent of job applicants? Record your findings to justify the
---------------------- above discussion.
----------------------
Summary
----------------------
●● ocial networking sites and job portals are very much preferred by both
S
---------------------- the applicants and the employers.
●● -recruitment is best suited to the organisations having centralised HR
E
----------------------
department. This reduces cost and standardises the processes.
---------------------- ●● rganisations have access to the huge database of qualified and suitable
O
candidates, which helps in strategic decision and focus on return on
----------------------
investments.
---------------------- ●● ost organisations now use resume databases to help streamline their
M
selection process. Online testing and assessments are used to allow
----------------------
companies to assess a candidate’s skill and personality.
----------------------

Keywords Notes
----------------------
●● -Recruitment: The process of personnel recruitment using electronic
E
resources, in particular the internet. ----------------------
●● ecruiting yield pyramid: Used to make sure sufficient numbers of
R
potential employees from where the employees would be selected. ----------------------
●● J ob Portals: The idea of a portal is to collect information from different ----------------------

sources and create a single point of access to information. Job portals
allow users to search for open positions but require applicants to register. ----------------------
These are the sites posting jobs. ----------------------
----------------------
1. What HR objectives are being met through the use of online recruitment?
2. What are some of the advantages and disadvantages of using online ----------------------
recruitment and selection?
----------------------
3. Describe how the use of internet has helped the HR managers in shifting
their focus from transactional HR activities to transformational HR ----------------------
activities. ----------------------
4. What is the role of recruitment yield pyramid? Why do we need more
applicants for few vacancies? ----------------------
5. What are the implications of excessive dependence on technology for HR ----------------------

activities?
----------------------
1. During early industrialisation, recruitment was based on the apprenticeship
----------------------
system.
2. In decentralised recruitment, each branch or department enjoys autonomy ----------------------
and flexibility regarding recruitment.
----------------------
----------------------
1. True ----------------------
2. True ----------------------
3. False
----------------------
4. False
----------------------

----------------------
1. Some traditional ways of recruitment are
----------------------
i. Advertisements in Newspapers
---------------------- iii. Consultants
---------------------- iv. Employment Exchanges
---------------------- 2. Advantages of e-recruitment are

i. Scope for better match
----------------------
ii. Standardisation of formats
----------------------
iii. Gives clear idea of job profile
----------------------

1. Facebook, LinkedIn and Twitter are the examples of social media.
----------------------
2. Naukri, timesjobs and monster are the examples of job portal.
----------------------
3. Recruiting yield pyramid is used to make sure sufficient numbers of
---------------------- potential employees would be selected (recruitment ratio).
---------------------- 4. Internet based recruitment facilitates just-in-time hiring.
----------------------
----------------------
---------------------- 1. E-recruitment is primarily:
---------------------- i. A tool to reduce paperwork
---------------------- iii. A technology-driven process

2. Social networking can assist recruitment as follows:
----------------------
ii. It has access to large networks
----------------------
iii. It creates access to global job opportunities and talent pools
---------------------- 3. Internal factors impacting recruitment include:
---------------------- ii. Business strategy
---------------------- iii. Internal politics and structure
----------------------
----------------------
----------------------

Notes
Suggested Reading
----------------------
1. Tyagi, Aastha. “Effective Talent Acquisition Through E-Recruitment: A
Study”, Zenith International Journal of Multidisciplinary Research, Vol.2 ----------------------
Issue 3, March 2012. ISSN 2231 5780.
----------------------
2. http://renjinair.blogspot.in/2010/04/indian-e-recruitment-industry-trends.
html ----------------------
3. http://blog.smashfly.com/2012/01/10/3-important-recruiting-technology- ----------------------
trends-for-2012/
4. http://www.hreonline.com/pdfs/sample%20from%20Epicor.pdf ----------------------
5. http://www.ehow.com/about_5463606_technologies-used-recruitment- ----------------------
selection.html
----------------------
----------------------
----------------------
----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------
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----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
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----------------------
----------------------
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Training and Development in E-learning Organisations
UNIT
10
Structure:
10.1 Introduction
10.2 Role of E-Learning and E-Training
10.3 HRIS Application in Training
10.4 Learning Management System
10.4.2 Disadvantages of LMS
10.5 HRIS -T&D: Implementation Problems
Summary
Keywords
Suggested Reading
Training and Development in E-learning Organisations 153

Notes
Objectives
----------------------
----------------------
• Specify the role of e-learning and e-training
----------------------
• Identify the features and pros and cons of e-learning
---------------------- • Explain how HRIS applies in training
---------------------- • Elaborate on the concept of Learning Management System
---------------------- • Discuss e-learning and e-training implementation-related problems
----------------------
10.1 INTRODUCTION
----------------------
Training and Development (T&D) is one of the important elements of any
---------------------- organisation’s strategic plan so that they can be competitive enough to achieve or
---------------------- exceed their goals. Organisations are undergoing continuous changes in the way
they conduct their training programmes because of the changes and innovations
---------------------- in the Learning Technology. Today, most of the web architecture like Web 2.0
is all about participation (Gordon, 2006). The new learning methodologies that
---------------------- organisations are using at present are web blogs, RSS (Rich Site Summary/ Really
---------------------- Simple Syndication), podcasts, vodcasts, wikis, mobiles, etc. to name a few.
E-learning is the use of electronic media and Information and Communication
---------------------- Technologies (ICT) in education. E-learning includes all forms of educational
---------------------- technology in learning and teaching. E-learning is usually synonymous
with multimedia learning, Technology-Enhanced Learning (TEL), Computer-
---------------------- Based Instruction (CBI), Computer-Based Training (CBT), Computer-
Assisted Instruction or Computer-Aided Instruction (CAI), Internet-Based
---------------------- Training (IBT), Web-Based Training (WBT), online education, virtual
---------------------- education, Virtual Learning Environments (VLEs) (which are also called learning
platforms), m-learning and digital educational collaboration. All of the mentioned
---------------------- alternative names emphasise on a particular aspect, component or delivery
method.
----------------------
E-learning uses various types of media which delivers text, audio, images,
---------------------- animation and streaming video and includes technology applications and
processes such as audio or video tape, satellite TV, CD-ROM and computer-
----------------------
based learning as well as local intranet/extranet and web-based learning.
---------------------- E-learning can occur in or out of the classroom. It can be self-
paced, asynchronous learning or may be instructor-led synchronous learning.
----------------------
E-learning is suited to distance learning and flexible learning, but it can also be
---------------------- used in conjunction with face-to-face teaching, a form of blended learning.
New technologies generally make a big difference in education. Many
----------------------
proponents of e-learning believe that everyone must be equipped with basic
---------------------- knowledge of technology and how to use it so as to achieve the educational goals.

10.2 ROLE OF E-LEARNING AND E-TRAINING Notes
Information technology and globalisation has led the HRD practices to ----------------------
reallocate (shift away) from training towards learning. The concept of lifelong
learning, electronic learning and work-related learning are emerging in the ----------------------
growing HRD literature. The Internet has revolutionised the way organisations ----------------------
train their workforces. With e-learning methods, learning can take place on-
demand and trainees can be given greater control over their learning than ever ----------------------
before. This increased control of the trainees on their training has the potential
to improve training effectiveness. However, the failure of many e-learning ----------------------
programmes suggests that organisations need to frame the principles of e-learning ----------------------
on providing the control to the trainees, based on some research. One of the
expected key trends in Learning & Development in 2013 is that learning will ----------------------
continue to go mobile. Blended learning approaches that integrate the best of
Web 2.0 learning programmes and social media are accessible via both web and ----------------------
mobile devices and they will make development opportunities highly flexible ----------------------
options for end-users.
David Smith in his HBR blog post “How Employers Can Help Solve the ----------------------
Skills Gap”, argues that one of the best ways to bridge the skill gaps is to “Go ----------------------
digital with training”. Development and learning don’t have to consist of costly
processes with long lead times. Recent off-the-shelf digital innovations make it ----------------------
easier for employees to continuously acquire skills in the context of their everyday
jobs. ----------------------
One more example is of Hilton, where the service staff ranging from ----------------------
housekeepers to desk clerks to managers is expected to learn new technology skills
so they can help guests with basic computer questions. Although the company ----------------------
provides formal training through an e-learning facility, it relies primarily on ----------------------
consumer technologies for on-the-spot informal training. For example, shared
iPads allow employees with a problem to look up solutions used by other service ----------------------
workers that are posted on corporate versions of Facebook or YouTube. They
can also access short, bite-sized learning applications immediately relevant to ----------------------
their current need. ----------------------
Evolution of e-learning
----------------------
In this rapidly changing work world, organisations are investing more
money in training than ever before. At the same time, advancements are being ----------------------
made in training technology and research. One important advancement in training
----------------------
technology is e-learning. E-learning is defined in the American Society for
Training and Development’s e-learning glossary as “a wide set of applications ----------------------
and processes, such as Web-based learning, computer-based learning, virtual
classrooms, and digital collaboration”. Content is delivered via the Internet, ----------------------
intranet/extranet, audio or video tape, satellite TV, and CD-ROM.”
----------------------
E-learning can deliver information through such varied formats as graphics,
videos, audios, animations, models, simulations and visualisations. ----------------------
----------------------

Notes E-learning allows training to reach a diverse and geographically dispersed
workforce.
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
---------------------- Fig.10.1: The E-learning Continuum (Barron 2008)

---------------------- Recent trends in e-learning include Learning analytics, Game-based
Learning and Mobile Learning.
----------------------
----------------------
The shift towards e-learning is mainly because of the benefits it offers. Even
---------------------- though the trend is shifting towards e-learning and its innovations, computers
will never completely eliminate human instructors and other forms of educational
---------------------- delivery. What is important is to know exactly what e-learning advantages exist
---------------------- and when these outweigh the limitations of the medium.
Features unique to e-learning
----------------------
Like no other training method, e-learning promises to provide a single
---------------------- experience that involves the three distinct learning styles − auditory learners,
visual learners and kinesthetic learners. You can see some unique benefits because
---------------------- of the advent and development of e-learning like more efficient training of a
---------------------- globally dispersed audience and reduced publishing and distribution costs as
Web-based training becomes a standard.
----------------------
E-learning also offers individualised instruction which print media cannot
---------------------- provide and instructor-led courses provide at great cost. In conjunction with
assessing needs, e-learning can target specific needs. E-learning can locate and
---------------------- target individual learning preferences by using learning style tests.
---------------------- Additionally, synchronous e-learning is self-paced. Advanced learners are
allowed to speed through or bypass instruction that is redundant while novices
---------------------- slow their own progress. In these ways, e-learning is inclusive of a maximum
number of participants with a maximum range of learning styles, preferences
----------------------
and needs.
---------------------- Collaborative learning
---------------------- All collaborative learning theories assert that human interaction is a vital
ingredient to learning. One has to essentially consider this aspect when designing
---------------------- e-learning, realising the potential for the medium to isolate learners. With well-

delivered synchronous distance education and technology like message boards, Notes
chats, e-mail and teleconferencing, this potential drawback is reduced. However,
e-learning detractors still argue that the magical classroom bond between the ----------------------
teacher and the student and amongst the students themselves, cannot be replicated
through communications technology. ----------------------
Advantages of e-learning ----------------------

E-learning has definite benefits over traditional classroom training. The most ----------------------
obvious benefits are flexibility whereby the learners can learn at their own pace
and cost savings whereby the trainees/learners do not have to travel or spend ----------------------
excess time away from work.
----------------------
The objective of corporate e-learning is to supply the workforce with an
up-to-date and cost-effective programme that yields motivated, skilled, loyal and ----------------------
knowledgeable workers.
----------------------
For global organisations, live classroom-based training is becoming too
costly and cumbersome. Even if employees had the time to attend all the courses ----------------------
and seminars and to read all the books and reports, they have to remain up-to- ----------------------
date in their area of work. The cost of such learning would be expensive and
unreasonable. ----------------------
It’s time for the organisations to transform their learning methods to a more ----------------------
modern, efficient and flexible alternative, i.e., e-learning.
Advantages to the trainer or organisation ----------------------
Some of the most important advantages to the trainer or organisation are: ----------------------
●● educed overall cost is the single-most influential factor in adopting
R ----------------------
e-learning. The elimination of costs associated with instructor’s salaries,
meeting room rentals, travel, lodging and meals of the trainees are directly ----------------------
quantifiable. The trainees don’t have to spend much time away from their
----------------------
work; hence, they perform their day-to-day activities while learning.
●● educed learning times, an average of 40 to 60 per cent, as found by
R ----------------------
Brandon Hall (Web-based Training Cookbook, 1997, p. 108). E-learning
----------------------
deploys skills and competencies to your students through the Internet
anywhere at any time. E-learning is training that is delivered via the web. ----------------------
It is unarguably growing as the form of training delivery that is most
suited to individuals and organisations. Students can choose the length ----------------------
of time they are able to devote to their studies − a few minutes or several
----------------------
hours.
●● I ncreased retention and application to the job averages an increase of ----------------------
25 per cent over traditional methods, according to an independent study
----------------------
by J.D. Fletcher (Multimedia Review, Spring 1991, pp.33-42). It can
lead to increased retention and a stronger grasp on the subject. Many ----------------------
elements in e-learning, such as video, audio, quizzes, interactions, etc.
can be combined to reinforce the message. The trainees can also revisit or ----------------------
replay sections of the training programme that might not have been clear
----------------------
the first time around.

Notes ●● onsistent delivery of content is possible with asynchronous, self-paced
C
e-learning. E-learning eliminates the problems associated with different
---------------------- instructors teaching slightly different material on the same subject. Hence,
there is no consistency in instructor-based learning, which is very critical
---------------------- for company-based training.
---------------------- ●● Expert knowledge is communicated, but more importantly captured
with good e-learning and knowledge management systems which can be
---------------------- referred to by the trainees as and when they need it.
---------------------- ●● Proof of completion and certification, essential elements of training
initiatives, can be automated.
---------------------- ●● It moves faster, this is, partly because the individualised approach allows
learners to skip the material they already know and understand and move
----------------------
onto the issues they need training on.
---------------------- ●● It can work from any location and at any time. Trainees can go through
training sessions from anywhere and at any time.
----------------------
●● It can be updated easily and quickly. The updated material can easily be
---------------------- uploaded in the online learning sessions.
●● It can be easily managed for large group of trainees. It allows corporate
---------------------- training directors, HR managers and others to keep track of the course
---------------------- material, the schedule and accordingly assign training for employees and
track their progress and results. Managers can review a trainee’s score
---------------------- and identify any areas that need additional training.
Advantages to the learner
----------------------
Along with increased retention, reduced learning time and other
---------------------- aforementioned benefits to students, particular advantages of e-learning include:
●● On-demand availability enables students to complete training
----------------------
conveniently at off-hours or from home.
---------------------- ●● Self-pacing for slow or quick learners. It especially reduces stress and
increases satisfaction of the slow learners as they do not have to compare
---------------------- themselves with the quick learners.
---------------------- ●● Interactivity engages users, pushing them rather than pulling them
through training.
----------------------
●● Confidence that refresher or quick reference materials are available
---------------------- reduces burden of responsibility of mastery.
Disadvantages to the trainer or organisation
----------------------
E-learning is not the be all and end all to every training need. It also has
---------------------- limitations like:
●● Up-front investment required of an e-learning solution is larger due to
---------------------- development costs. Budgets and cash flows need to be negotiated.
---------------------- ●● Technology issues that play a factor include whether the existing
technology infrastructure can accomplish the training goals, whether
---------------------- additional technological expenditures can be justified and whether
compatibility of all software and hardware can be achieved.
----------------------

●● I nappropriate content for e-learning may exist to a limited extent Notes
according to some experts. Even the acquisition of skills that involve
complex physical/motor or emotional components (for example, juggling ----------------------
or mediation) can be improved with e-learning.
----------------------
●● Cultural acceptance is an issue in organisations where student
demographics and psychographics may predispose them against using ----------------------
computers at all, let alone for e-learning.
Disadvantages to the learner ----------------------
The ways in which e-learning may not excel over other training include: ----------------------
●● Technology issues of the learners are related to technophobia, whereby
----------------------
some trainees may not be comfortable with the technology being used and
unavailability of required technologies. ----------------------
●● Portability of training has become strength of e-learning with the
increase in the network linking points like notebook computers, PDAs, ----------------------
tablets and mobile phones, but still cannot compete with the printed
----------------------
workbooks or reference material.
●● Reduced social and cultural interaction can be a drawback. The ----------------------
impersonality, suppression of communication mechanisms such as body
language and elimination of peer-to-peer learning are part of this potential ----------------------
disadvantage that are increasing with advances in communications ----------------------
technologies.
Do the benefits outweigh the drawbacks? ----------------------
The pros and cons of e-learning vary depending on programme goals, target ----------------------
audience and organisational infrastructure and culture. But it is beyond doubt
that e-learning is rapidly growing as a form of training delivery and most are ----------------------
finding that the clear benefits of e-learning will be a part of the overall learning
strategy. ----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 10.2: E-learning Market Maturity Cycle
----------------------
Organisations at different stages require different type of e-learning support
and the type of the module also varies with the size and business strategy of the ----------------------
organisation.
----------------------
----------------------

Notes
----------------------
Fill in the blanks.
----------------------
1. New ___________ generally make a big difference in education.
---------------------- 2. Information Technology and globalisation has led the HRD practices
to reallocate (shift away) from training towards _________.
----------------------
3. ___________ engages users, pushing them rather than pulling them
---------------------- through training.
4. Consistent delivery of content is possible with __________, self-
----------------------
paced e-learning.
---------------------- 5. The __________ has revolutionised the way organisations train their
workforces.
----------------------
---------------------- Activity 1
----------------------
Write your ideas about e-training as an effective method in a regular training
---------------------- programme. Give reasons.
----------------------
10.3 HRIS APPLICATION IN TRAINING
----------------------
The Human Resource Information System, which is used exclusively by
---------------------- many states to manage their employee information, is a database and information
system which allows a business or employers to track applications, manage
----------------------
personnel files and company documents, manage benefits and enrollment and
---------------------- integrate payroll features. Training is a key feature in a comprehensive tracking
software program. Proper employee training and competency is always crucial,
---------------------- but again, in a difficult economic climate, it becomes more important than ever
to ensure that employees are not only trained and competent but they remain
---------------------- that way with proper certifications, updates in the field, coursework and more.
---------------------- Example:
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 10.3 : E-learning@Motorola
----------------------
Source: http://www.fm-kp.si/zalozba/ISBN/961-6486-71-3/059-075.pdf
●● Finance.mot.com Notes
n Finance policies
----------------------
n Department expenses
----------------------
n E-procurement
●● enet.mot.com ----------------------
n Employee information ----------------------
n Rewards planning
----------------------
n Organisational structure
----------------------
n Recruitment
●● my.mot.com ----------------------
n Biz/Tech news ----------------------

n Stock watch ----------------------
n Google search
----------------------
●● myhr.mot.com
----------------------
n Policies, benefits
n Career planning ----------------------
n Work-life balance ----------------------
●● pm.mot.com ----------------------
n Performance Management System
----------------------
n Employee goal tracking
----------------------
●● travel.mot.com
n Travel info and policies ----------------------
n Travel bookings ----------------------
●● mu.mot.com
----------------------
n Learning solutions
----------------------
n E-learning
n Learning Management System ----------------------

Main advantages of such software are many. Some of them are as below: ----------------------
1. Double-booking and black-out dates for instructors, facilities, etc. This ----------------------
allows you to coordinate trainings without double-booking and without
missing a crucial component of your training. ----------------------
2. Tracking the pre-requisites or prior coursework of employees to ensure ----------------------
they have proper trainings.
----------------------
3. Tracking costs − you’ll be able to determine precisely how much is
spent on instructors, facilities, materials and more related to the course or ----------------------

Notes class. This helps with funding and as importantly, conscientious funding
reductions.
----------------------
4. Tracking lost productivity − when your employees are training, they
---------------------- are not producing. While training is necessary, you need to know the
productivity loss. This, again, can help with cost reduction and funding.
----------------------
The four typical methods of HRIS application in training are:
---------------------- 1. Self-training
---------------------- 2. Online classes
---------------------- 3. Classroom training

4. Onsite training
----------------------
Following is the brief description of these four methods and respective
---------------------- advantages and disadvantages of each.
---------------------- Self-Training
---------------------- Advantages: It’s a good idea to try this approach first because, before trying
one of the other training options that might be available, at least you will have
---------------------- a basic knowledge before doing so. This form of training is very cost-effective.
---------------------- Disadvantages: Application vendors don’t offer detailed enough documentation

to make this option completely possible. Manuals are usually, at best, a starter’s
---------------------- guide as opposed to an in-depth manual covering all the capabilities of the HRIS
application system you will be using.
----------------------
Online Classes
----------------------
Advantages: It works best in shorter time frame classes, with training someone
---------------------- on specific capability and when the application is used for the class, it allows the
end-user to have keyboard and mouse control during the training. If you want to
---------------------- be trained on specific HRIS application features, this option is extremely effective.
It’s also, other than self-training, the most cost-effective of the three options.
----------------------
Disadvantages: This form of class doesn’t work well for someone who has little
---------------------- or no experience with HR Management Software applications.
---------------------- Classroom Training
---------------------- Advantages: It has more engaged participants and it gives an opportunity to

assess their progress in hand. It also provides an environment for peer learning
---------------------- and clarification of doubts on the spot. This form of training works best when
all learners are at almost same level. It is extremely important for you to review
---------------------- the system as much as possible before attending one of these classes.
---------------------- Disadvantages: Most HRIS application vendors offer some type of classroom
training. They may offer this at only their corporate location. The biggest
---------------------- challenge is to keep the class in-depth enough for the advanced users but basic
---------------------- enough for the beginners to grasp the concepts. The largest disadvantage of this
training method is that you won’t be training on your data.
----------------------

Onsite Training Notes
Advantages: You train on your data and usually in small groups or one to one.
----------------------
Disadvantages: This is likely to be the most expensive HRIS application training
option since you will have to pay the trainer’s travel cost and their daily consulting ----------------------
expense. The most important and possibly most difficult thing with this type of
----------------------
training is to limit the interruptions. People will have to leave the room, pick up
a call or respond to an email. ----------------------
----------------------
1. The typical methods of HRIS application in training are: ----------------------
i. Self-training ----------------------
ii. Online classes ----------------------
iii. Classroom training
----------------------
iv. On-the-job training
----------------------
----------------------
Activity 2
----------------------
Conduct a brief survey of the agencies conducting e-learning/e-training
programmes for organisations with the help of Internet related to the types ----------------------
of programmes conducted by them. ----------------------
----------------------
10.4 LEARNING MANAGEMENT SYSTEM
----------------------
Learning management system is a web-based software application that you
could use to interact with all elements of your companies without leaving your ----------------------
place. The manager could use this web-based software to train the new employee
about their company in the most interactive way, especially if the manager is ----------------------
separated thousand miles from the employee. ----------------------
Many institutions are offering e-learning for people today. E-learning is the
learning process that could be done in different places as long as you have an ----------------------
Internet connection. Some people develop this e-learning concept so that they ----------------------
can implement it into their business and create a good customer support for their
customers. This is the beginning of Learning Management System (LMS). ----------------------
A Learning Management System (LMS) is a software application for the ----------------------
administration, documentation, tracking, reporting and delivery of education
courses or training programmes. ----------------------
LMSs range from systems for managing training and educational records ----------------------
to software for distributing online or blended/hybrid college courses over the
Internet with features for online collaboration. Colleges and universities use ----------------------

Notes LMSs to deliver online courses and augment on-campus courses. Corporate
training departments use LMSs to deliver online training, as well as automate
---------------------- recordkeeping and employee registration.
----------------------
Company Strategic Goals
----------------------
---------------------- Online Catalogue

Online Registration
----------------------
Curriculum Manager
---------------------- Individual Training Path
---------------------- Resource Manager
Results Tracking
----------------------
Auto Reminders
----------------------
Fig.10.3: Learning Management System
---------------------- The key to understanding the difference between LMS and other
---------------------- computer education terms is to understand the systemic nature of LMS. LMS
is the framework that handles all aspects of the learning process. An LMS is
---------------------- the infrastructure that delivers and manages instructional content, identifies
and assesses individual and organisational learning or training goals, tracks
---------------------- the progress towards meeting those goals and collects and presents data for
---------------------- supervising the learning process of organisation as a whole. An LMS delivers
content but also handles registering for courses, course administration, skills gap
---------------------- analysis, tracking and reporting. Following are the two types of LMS:
---------------------- ●● irtual learning: Virtual learning is a significant web-based tool that

V
enables effective online education and training across boundaries. The
---------------------- e-learning process is designed in a very engaging and enriching format.
---------------------- ●● ollaboration module: Collaboration module is knowledge based,
C
designed for the students/learners, as it develops the ability to reason
---------------------- out and solve queries/doubts, encouraging the practice of learning with
evolved understanding.
----------------------
---------------------- The advantages are:
---------------------- 1. Streamlines and saves time: The data collection features of an LMS can
free up the time and concentration of trainers, allowing them to spend
----------------------
more time helping trainees individually.
---------------------- 2. Centralised learning: LMS makes all types of training content,
developmental content and performance content available to individuals
----------------------
24/7 from any location with web access. Multiple users can access
---------------------- the LMS at any given point in time. The LMS ensures consistency in
delivery and evaluation since each user sees the same material in the
---------------------- exact manner and can be evaluated through common pre-testing and/or

post-testing methods. An LMS allows users to easily design and deploy Notes
customised training modules. This feature is especially important when
new equipment is introduced, existing equipment is updated or standard ----------------------
operating procedures are significantly modified.
----------------------
3. Tracking and reporting for enhanced performance: The LMS allows
organisational users to view a required learning path, track progress ----------------------
against the learning path, review records of success and register for
----------------------
additional courses. Employers can offer these courses through various
media including instructor-led training, web-based training or webinars. ----------------------
Management can access the same records of success and can also analyse
the records data to determine areas of success and areas for needed ----------------------
improvement. Learning strategies can be managed easily according to
----------------------
one’s unique learning needs. The learner can put in more efforts in the
area which he considers difficult, because LMS gives an individual the ----------------------
authority to manage his learning pace.
----------------------
4. Immediate capabilities evaluation: The LMS allows users to be
evaluated before taking up a course, while participating in the course and ----------------------
upon course completion. Employers can evaluate retention by periodically
administering scheduled assessments via the LMS. They can review ----------------------
the records of results to determine success levels and actual time taken
----------------------
to complete each course and its components. Similarly, in educational
institutes, students can review their performance based on the tests and ----------------------
quizzes conducted by the professors.
----------------------
5. Easy up-gradation of content, product information to maintain
the flow of e-learning in corporate organisations and educational ----------------------
institutes: The LMS provides a central point for organisations to change
product descriptions, specifications, requirements, forms and allows ----------------------
easy uploading of new product or service information. Users access
----------------------
the same training courses and the same evaluation materials. Users
set predetermined course completion dates and monitor the number of ----------------------
participants completing the course at any given point in time. An LMS
also allows employers to administer updates and evaluations online and ----------------------
assess knowledge levels and abilities. In institutions, professors can keep
----------------------
upgrading new content on the LMS for students to read, understand and
proceed while learning. ----------------------
6. Simplifies learning processes: LMS is easy to use and is instructed very ----------------------
well, a new user is able to use it easily. LMS accommodates various
features − documentation and administration, recording and tracking ----------------------
events and programs, classroom learning, to name a few. LMS is therefore
an affordable alternative for many learners because of its pragmatic ----------------------
and persuasive approach. Some of the Learning Management Systems ----------------------
like the E-Three Learning Platform gives a completely personalised
conceptualisation to the platform with its scalable and resourceful LMS ----------------------
that delivers an integrated and enriching learning experience.
----------------------

Notes 7. Cost reduction: The costs of purchasing and using an LMS can soon be
recovered. Savings can be incurred on:
----------------------
●● hysical space in which to hold trainings, printed materials, the
P
---------------------- time of the trainer and trainees and collecting data.
●● he administrative costs associated with scheduling classes or
T
---------------------- training session.
---------------------- ●● roductivity does not need to be lost because workers need to be
P
scheduled for training as usually learners participate in training on
---------------------- their own scheduled time.
---------------------- 10.4.2 Disadvantages of LMS
---------------------- The disadvantages are:

1. Online vs. in-person training: The biggest drawback of using an LMS is
----------------------
that many aspects of training and many things that need to be learned do
---------------------- not lend themselves to online learning. Many jobs require the acquisition
of a physical skill, which cannot be easily learned or tested online.
----------------------
2. The tunnel effect: Another drawback to using an LMS is that it may
---------------------- give trainees tunnel vision. They may not consider learning opportunities
outside of the LMS. If they are taking their training online at home, they
---------------------- may not realise that they can learn a great deal in the break room or in
the corridor simply by talking to co-workers or asking questions to senior
----------------------
managers.
---------------------- Top 6 Open Source Learning Management System
---------------------- 1. Moodle
---------------------- 2. .LRN
3. eFront
----------------------
4. Dokeos
----------------------
5. Sakai
---------------------- 6. ATutor
---------------------- Note: The highest market share is that of Blackboard which is not an open
source. Just behind it is Moodle with 19% of the market share. The $1.9
---------------------- billion LMS market is too diverse, encompassing in-house systems, open source
---------------------- options and out-of-the-box setups. Sakai’s market share is 7%.
----------------------
----------------------
----------------------
----------------------
----------------------

Notes
----------------------
----------------------
1. The LMS allows users to be evaluated before taking up a course,
while participating in the course and upon course completion. ----------------------
2. The costs of purchasing and using an LMS can soon be recovered. ----------------------
3. LMS is very difficult to use, a new user is not able to use it easily. ----------------------
4. E-learning is the learning process that cannot be done in different
places even if you have an Internet connection. ----------------------
5. Trainees can also consider learning opportunities outside the LMS. ----------------------
----------------------
10.5 HRIS -T&D: IMPLEMENTATION PROBLEMS ----------------------
The implementation of the training and learning in e-mode may have certain ----------------------
problems like the following:
----------------------
●● Preparing employees for the change
●● Lack of hardware ----------------------
●● Space issues ----------------------
●● Scaling issues
----------------------
●● Lack of e-learning expertise
●● Lack of time ----------------------
●● Lack of resources ----------------------
●● Lack of trust ----------------------
●● Difficulty in determining the full cost of e-learning
----------------------
●● R department lacks knowledge about HRIS and hence is not able to
H
clearly elucidate the requirements of the system. ----------------------
●● ack of importance given to the HR department and activities in few
L
----------------------
organisations.
●● ery high dependence is placed on the vendors without having a clear
V ----------------------
idea about how to select vendors or a proper process or contract to ensure
----------------------
vendors’ accountability.
●● evel of cooperation needed across various functions and divisions of the
L ----------------------
organisation for proper implementation of HRIS is also lacking.
----------------------
●● inimal user involvement in the implementation project and the
M
implemented package is not user-friendly. ----------------------
●● ometimes learners may lack basic computer skills and they may not have
S ----------------------
the confidence to adapt to new technology. They may have a negative
----------------------

Notes perception towards e-learning and might make the efforts to willingly
accept the change. The attitudes of the learners could also be a challenge
---------------------- while implementing HRIS T&D in an organisation.
---------------------- ●● Differences in terminology/language

---------------------- 1. The problems which one can face while implementing HRIS training
and development are:
----------------------
i. Preparing employees for the change
----------------------
ii. Lack of hardware
---------------------- iii. Lack of e-learning expertise
---------------------- iv. Availability of time
----------------------
----------------------
Activity 3
---------------------- Visit any organisation using the Learning Management System software and
find out whether the employees are finding it beneficial or not.
----------------------
----------------------
Summary
----------------------
●● raining and Development (T&D) is one of the important elements of
T
---------------------- any organisation’s strategic plan so that they can be competitive enough
to achieve or exceed their goals.
----------------------
●● rganisations are undergoing continuous changes in the way they conduct
O
---------------------- their training programmes because of the changes and innovations in the
Learning Technology.
----------------------
●● I nformation Technology and globalisation has led the HRD practices to
---------------------- reallocate (shift away) from training towards learning.
●● -learning is the use of electronic media and information and
E
----------------------
communication technologies (ICT) in education.
---------------------- ●● E-learning uses various types of media which delivers text, audio, images,
animation and streaming video and includes technology applications and
----------------------
processes such as audio or video tape, satellite TV, CD-ROM and computer-
---------------------- based learning, as well as local intranet/extranet and web-based learning.
●● -learning can occur in or out of the classroom. It can be self-
E
---------------------- paced, asynchronous learning or may be instructor-led, synchronous
---------------------- learning. E-learning is suited to distance learning and flexible learning,
but it can also be used in conjunction with face-to-face teaching, a form
---------------------- of blended learning.

●● ike no other training method, e-learning promises to provide a single
L Notes
experience that involves the three distinct learning styles − auditory
learners, visual learners and kinesthetic learners. ----------------------
●● ynchronous e-learning is self-paced. Advanced learners are allowed to
S ----------------------
speed through or bypass instruction that is redundant while novices slow
their own progress. ----------------------
●● he benefits of e-learning are flexibility whereby the learners can learn at
T ----------------------
their own pace and cost savings whereby the trainees/learners do not have
to travel or spend excess time away from work. ----------------------
●● he objective of corporate e-learning is to supply the workforce with an
T ----------------------
up-to-date and cost-effective programme that yields motivated, skilled,
loyal and knowledgeable workers. ----------------------
●● ome of the advantages to the trainer or organisation are reduced cost of
S
----------------------
training, reduced learning time, increased retention, consistent delivery of
content, expert knowledge, automated certification, updated knowledge, ----------------------
etc.
----------------------
●● ome of the disadvantages to the trainer or organisation are up-front
S
investment, technology issues and inappropriate content and cultural ----------------------
issues.
----------------------
●● ome of the advantages to the learner are on-demand availability, self-
S
pacing, interactivity and confidence that reference material will be ----------------------
available always as and when required.
----------------------
●● ome of the disadvantages to the learner are technology issues, absence
S
of workbooks and reference material and reduced social and cultural ----------------------
interaction.
●● I t is beyond doubt that e-learning is rapidly growing as a form of training ----------------------
delivery and most are finding that the clear benefits of e-learning will be ----------------------
a part of their overall learning strategy.
●● he four typical methods of HRIS application training are self- training,
T ----------------------
online classes, classroom training and onsite training. ----------------------
●● earning management system is a web-based software application that
L
you could use to interact with all elements of your companies without ----------------------
leaving your place like administration, documentation, tracking, reporting ----------------------
and delivery of education or training programmes.
●● he management can track the progress of the employees in e-learning/
T ----------------------
LMS and can also view the scores and can also decide on any further ----------------------
training needs of the employees and plan accordingly.
----------------------
----------------------
----------------------
----------------------

Notes Keywords
----------------------
●● -learning: A wide set of applications and processes such as Web-
E
---------------------- based learning, computer-based learning, virtual classrooms and digital
collaboration.
---------------------- ●● earning management system: A web-based software application that
L
---------------------- is used to interact with all elements of an organisation without leaving
one’s place.
---------------------- ●● irtual learning: A web-based tool that enables effective online education
V
---------------------- and training across boundaries.
---------------------- Self-Assessment Questions

----------------------
1. What do you understand by e-learning? What are the benefits and
---------------------- drawbacks of e-learning?
2. Mention some advantages and disadvantages of e-learning to the trainer
----------------------
or organisation?
---------------------- 3. Mention some of the advantages and disadvantages of e-learning to the
---------------------- learners.
4. Discuss the four method of HRIS application in training.
----------------------
5. What do you understand by Learning Management System? Specify the
---------------------- advantages and disadvantages of the Learning Management System.
---------------------- 6. What are the problems that one can face while implementing HRIS
Ttraining and Development?
----------------------

Fill in the blanks.
----------------------
1. New technologies generally make a big difference in education.
----------------------
2. Information Technology and globalisation has led the HRD practices to
---------------------- reallocate (shift away) from training towards learning.
---------------------- 3. Interactivity engages users, pushing them rather than pulling them through
training.
---------------------- 4. Consistent delivery of content is possible with asynchronous, self-paced
---------------------- e-learning.
5. The Internet has revolutionised the way organisations train their
---------------------- workforces.
----------------------
----------------------

----------------------
1. The typical methods of HRIS application in training are:
----------------------
i. Self-training
ii. Online classes ----------------------
iii. Classroom training ----------------------
----------------------
----------------------
----------------------
1. True
2. True ----------------------
3. False ----------------------
4. False ----------------------
5. False
----------------------
----------------------
Multiple Choice Multiple Response. ----------------------
1. The problems which one can face while implementing HRIS training and ----------------------
development are:
----------------------
i. Preparing employees for the change
----------------------
ii. Lack of hardware
iii. Lack of e-learning expertise ----------------------
----------------------
Suggested Reading
----------------------
1. http://www.comparehris.com/Best-HRIS-Application-training/
----------------------
2. http://www.people-trak.com/advice-for-training-employees-using-hris.
asp ----------------------
3. Learning Management System Technologies and Software Solutions for ----------------------
Online Teaching: Tools and Applications, edited by Kats, Yefim
----------------------
4. Learning, Training, and Development in Organizations, edited by Steve
W.J. Kozlowski, Eduardo Salas ----------------------
5. Human Resource Development: Learning & Training for Individuals & ----------------------
Organizations, By John P. Wilson
----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

Performance Management System and Compensation
UNIT
11
Structure:
11.1 Introduction
11.2 Performance Management System
11.3 Compensation
11.4 Compensation Policies and Objectives
11.4.1 Essentials of an Equitable and Ideal Compensation and Rewards
Systems
11.4.2 Compensation and Benefits in Perspective
11.5 Compensation Structure
11.5.1 Compensation and Benefits: A Tool to attract Talent
11.6 Wage and Salary Determination
11.6.1 The Wage Determination Process
11.7 Possible Inputs to the Payroll Process
11.8 Preparation of Payroll/Wage Sheet
Summary
Keywords
Suggested Reading
Performance Management System and Compensation 173

Notes
Objectives
----------------------
----------------------
• Discuss Performance Management System
----------------------
• Explain the wage and salary determination process
---------------------- • Identify possible inputs to and outputs from the payroll process
---------------------- • Prepare the payroll / wage sheet
----------------------
11.1 INTRODUCTION
----------------------
Performance, rewards and payroll systems are the basic exchange between
---------------------- employees and employers. Employees provide performance and in exchange,
---------------------- employers provide rewards, which are distributed via payroll systems.
Performance management systems are entirely internal to the organisation,
---------------------- but data must be linked to several other systems including rewards, staffing,
---------------------- training and development and career development.
In the case of payroll systems, flawless data integrity and even more flawless
---------------------- execution are critical. Anyone who has ever received an inaccurate paycheck
---------------------- will understand the frustration and anger that occur; a payroll system that is not
flawless is an administrator’s nightmare. The use of HRIS in payroll should
---------------------- focus on data inputs, typical reports generated, data outflows to other systems
and ways that the IT system can provide decision support to organisations and
---------------------- managers in the area of performance management, rewards and payroll.
----------------------
11.2 PERFORMANCE MANAGEMENT SYSTEM
----------------------
Performance refers to the work output of an employee at work. On an
---------------------- average, all employees spend 8 hours at work everyday. However, the output
---------------------- of each employee differs. Some may have a better output than others, whereas
some may not have any output worth mentioning. The cumulative output
---------------------- achieved by an employee during working hours is called performance.
---------------------- The purpose of talent acquisition is to achieve an organisation’s goals

to remain competitive in the market. This can be done through the effective
---------------------- management of its human resources. This is where performance management
comes into play.
----------------------
What is performance management?
----------------------
Performance Management (PM) is the management of the performance of
---------------------- employees.
Performance management includes activities to ensure that goals are
----------------------
consistently being met in an effective and efficient manner (Wikipedia).
----------------------

Performance Management is the process of motivating employees through Notes
setting goals, measuring progress, giving feedback, coaching for improved
performance and rewarding achievements. ----------------------
Performance management is the process of creating a work environment ----------------------
or setting in which people are enabled to perform to the best of their abilities.
Performance management is a whole work system that begins when a job is ----------------------
defined as needed. It ends when an employee leaves your organisation.
----------------------
Fully realised, performance management is a holistic process bringing
together many of the elements that make up the successful practice of people ----------------------
management including, in particular, learning and development. But for this very
----------------------
reason, it is complex and capable of being misunderstood.
Armstrong and Baron define performance management as ‘a process, ----------------------
which contributes to the effective management of individuals and teams in order
----------------------
to achieve high levels of organisational performance. As such, it establishes
shared understanding about what is to be achieved and an approach to leading ----------------------
and developing people, which will ensure that it is achieved.’ They stress that
performance management is ‘a strategy, which relates to every activity of the ----------------------
organisation set in the context of its human resource policies, culture, style and
----------------------
communication systems. The nature of the strategy depends on the organisational
context and can vary from organisation to organisation.’ ----------------------
In other words, performance management should be: ----------------------
●● Strategic: It is about broad issues and long-term goals.
----------------------
●● I ntegrated: It should link various aspects of the business, people
management, individuals and teams. ----------------------
Performance management should incorporate: ----------------------
●● erformance improvement: Throughout the organisation, in respect of
P
individual, team and organisational effectiveness. ----------------------
●● evelopment: Unless there is continuous development of individuals
D ----------------------
and teams, performance will not improve.
----------------------
●● anaging behaviour: Ensuring that individuals are encouraged to
M
behave in a way that allows and fosters better working relationships. ----------------------
Performance management is an ongoing, continuous process of
----------------------
communicating and clarifying job responsibilities, priorities and performance
expectations in order to ensure mutual understanding between supervisor and ----------------------
employee. It is a philosophy, which values and encourages employee development
through a style of management that provides frequent feedback and fosters ----------------------
teamwork. It emphasises communication and focuses on adding value to the
----------------------
organisation by promoting improved job performance and encouraging skill
development. Performance Management involves clarifying the job duties, ----------------------
defining performance standards and documenting, evaluating and discussing
performance with each employee. ----------------------
----------------------

Notes
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
Fig. 11.1 : Performance Management Cycle
---------------------- Objectives
---------------------- The objectives of Performance Management are to:
---------------------- 1. Increase two-way communication between supervisors and employees
2. Clarify mission, goals, responsibilities, priorities and expectations
----------------------
3. Identify and resolve performance problems
----------------------
4. Recognise quality performance
----------------------
5. Provide a basis for administrative decisions such as promotions, rewards
---------------------- and benefits
Performance Management is now considered within the framework of ‘talent
----------------------
management’, which encompasses all areas of HR that have to do with on-
---------------------- boarding, developing, evaluating and managing the workforce through all the
normal cycles.
----------------------
---------------------- 11.3 COMPENSATION
---------------------- The main problem facing any organisation is the laying down of a fair and
equitable compensation system. While the objective is simple, the process is
---------------------- complex. For instance, the employer will be concerned primarily with productivity.
The employee’s emphasis may be on higher compensation to offset their increased
----------------------
cost of living and perhaps the price his skill will fetch in a competitive job market.
---------------------- The compensation issues commanding most interest today and likely to continue in
future will centre on questions of compensation levels and compensation structures.
---------------------- Obviously, this will raise questions concerning the level of compensation rates in
the plant or firm, industry, region or nation.
----------------------
Compensation
----------------------
Compensation may be defined as the money received for performance of
---------------------- work, plus the many kinds of benefits and services that organisations provide

to their employees. ‘Money’ is included under direct compensation (popularly Notes
known as wages, i.e. gross pay), while benefits come under indirect compensation
and may consist of life, accident and health insurance, the employer’s contribution ----------------------
to retirement, pay for vacation or illness and the employer’s required payments for
employee welfare as social security. The literal meaning of the word compensation ----------------------
is to compensate, i.e. to pay for. Compensation can be a payment made in ----------------------
exchange of effort/s, a service rendered or a task done. It can be regarded as the
fruit for the efforts put in. In some other context, it is also described as a return, ----------------------
refund or payment made for the damage done or destruction or injury caused.
----------------------
Compensation/reward means the return an employee expects from the
business process since employee participates and puts in his efforts to achieve ----------------------
the organisational goals.
----------------------
Thus, not only the wages/salary paid to the employee but the direct as well
as indirect benefits provided to the employee as his fair share in the prosperity ----------------------
of the business, is also regarded as Compensation.
----------------------
It may also mean remuneration or any kind of payment to a person,
whether in a monetary or non-monetary form, i.e. in kind for the work, efforts or ----------------------
services rendered by a person. Thus, compensation is not confined to wages or
----------------------
salary. It is a comprehensive term and includes in addition to salary and wages,
fees, allowances, extra amenities or facilities and incentive payments. The ----------------------
compensation levels vary from industry to industry and unit to unit or company
to company. The levels of compensation are also known as the wage level of ----------------------
that industry.
----------------------
1. Unless there is continuous development of ______________ and ----------------------

teams, performance will not improve.
----------------------
----------------------
Activity 1
----------------------
Write a process, which contributes to the effective management of individuals
in your organisation. ----------------------
----------------------
11.4 COMPENSATION POLICIES AND OBJECTIVES ----------------------
The objectives of any compensation system are numerous and might include ----------------------
the following:
----------------------
1. To enable the employee to earn a good and reasonable salary or wage.
----------------------
2. To pay equitable sums to different individuals, avoiding anomalies.
3. To reward and encourage high quality work and output. ----------------------

Notes 4. To encourage employees to develop better methods of working and their
acceptance.
----------------------
5. To discourage wastage of materials or equipment.
---------------------- 6. To encourage employees to use their initiative and discretion.
---------------------- 7. To discourage overtime working unless it is very essential.
---------------------- 11.4.1 Essentials of an Equitable and Ideal Compensation and Rewards

Systems
---------------------- In order to understand the essentials of an equitable and ideal compensation
---------------------- system, it is necessary to consider the following factors, on which the ideal
compensation system shall heavily depend:
---------------------- 1. Demand and Supply Position: Each job demands certain skills, personal
---------------------- qualities and technical education and experience to perform the job. If the
demand is more and supply less, then naturally the compensation payable
---------------------- will be high and vice-versa. For example, if steno-typists were scarce in
number, the compensation offered would be higher. The same thing can
---------------------- be said about Trained Nurses and the demand for such trained nurses in
---------------------- countries like USA, Canada and Australia. The compensation offered for
such jobs is definitely very high.
----------------------
2. Nature of Business: If the product or service is of the nature of yielding
---------------------- high profits, naturally the compensation paid is relatively higher than
what is paid for in other low profit yielding businesses. For example,
---------------------- compensation paid to employees in companies like Reliance Industries
Ltd., Bajaj Auto Limited, Maruti Udyog Ltd. would be definitely high as
----------------------
compared to other industries since these are supposed to be high profit
---------------------- earning industries and as such capable of paying a high and handsome
compensation.
----------------------
3. Size of Business: Large organisations like multinational companies pay
---------------------- higher compensation than small industries.
---------------------- 4. Government Rules: In India, there are state and central acts for
minimising the disparity in wages and levels, for example, the Minimum
---------------------- Wages Act. Similarly, for providing Social Security benefits, payment
of Gratuity, Provident Fund, etc. are mandatory for the employer falling
---------------------- under that category. For better working conditions, the Factories Act lays
---------------------- down many provisions. Various laws are available to protect the interest
of workers and to enforce minimum levels and uniformity for employees.
---------------------- 5. Current State of Industry: Units that produce a similar product form
---------------------- an industry. It is an unwritten rule that different units falling under the
industry follow the current wage level in the industry. Similarly, the
---------------------- pattern of payment, i.e. components of the pay package, is almost similar
with little variation among these units.
----------------------
6. Management Thinking: Every management (the people who run the
---------------------- organisation) has its own philosophy (i.e. the way of thinking). Every

organisation has its own values and beliefs. Some organisations have Notes
great concern about the employees and show a high sense of social
responsibility. They liberally provide non-statutory welfare benefits to ----------------------
their employees. Although the number is small, the compensation to
employees is better, irrespective of the foregoing factors. ----------------------
7. Disagreeability of the Job: Certain jobs are disagreeable in comparison ----------------------

to others, for example, teachers, nurses, social workers, doctors, cleaners,
----------------------
fire brigade, etc. These jobs have many different kinds of working
environment. Various skills and ability of facing stress, high pressure, ----------------------
long hours of work, continuous alertness and monotony are demanded
by these jobs. Therefore, the availability of persons for such work is ----------------------
less and therefore the preference is second or third. For such work, the
----------------------
compensation has to be attractive.
11.4.2 Compensation and Benefits in Perspective ----------------------
Compensation put into perspective is nothing more than a reinforcement ----------------------
of management techniques and a reflection of the company’s values. A good
compensation package will fail to be effective unless backed by suitable ----------------------
managerial input. Factors like job content, career growth prospects, organisational
----------------------
climate, empowerment and autonomy, learning opportunities and the employee’s
realisation of his/her self-perceived potential areas are important, if not greater ----------------------
determinants of an employee’s satisfaction and morale. The companies today, in
order to compete, have to strike a fine balance between bottom line orientation and ----------------------
a genuine concern for the employee. To keep an employee happy and productive
----------------------
and to constantly provide avenues for him to hone and make optimum use of his
skills and competencies is a challenge that compensation managers will constantly ----------------------
have to deal with.
----------------------
Compensation at the end of the day is seen as a hygiene factor - low
salaries will not fetch world-class talent but neither will it pay top dollar - unless ----------------------
compensation practices are seamlessly aligned to managerial intent. HR leaders
feel that how much you pay is not as important as how you pay and what you ----------------------
pay for. ----------------------
11.5 COMPENSATION STRUCTURE ----------------------
A sound compensation structure must be based on job evaluation programme ----------------------

in order to establish fair differentials in payments depending upon differences
----------------------
in job contents. Besides the basic factors provided by a job description and
job evaluation, those that are usually taken into consideration for determining ----------------------
compensation structure are:
----------------------
●● The organisation’s ability to pay
●● Supply and demand for labour ----------------------
●● The prevailing market rate ----------------------
●● The cost of living
----------------------

Notes ●● Productivity
●● Trade union’s bargaining power
----------------------
●● Job requirements
---------------------- ●● Managerial attitudes
---------------------- ●● Psychological and sociological factors
The compensation structure must be linked to what the company is trying
----------------------
to achieve. It is not unusual to find a company with a wage structure in direct
---------------------- conflict with the company’s overall objectives. For example, a company may
plan to produce a high quality product, while at the same time, it may have a
---------------------- direct incentive geared to quality.
---------------------- An attitude survey should be made to ascertain what needs have to be
satisfied through a compensation structure. What are the employees’ attitudes
---------------------- towards the current pay structure and what are their deeper expectations? The
pay structure, to a large extent, determines and reinforces attitudes. Two of the
----------------------
areas a survey ought to highlight are the reasons employees work for a particular
---------------------- company and their motivational factors.
---------------------- 11.5.1 Compensation and Benefits: A Tool to attract Talent

Talented people are the key resources for any organisation in any sector.
---------------------- Given the upswing in the economy, the plethora of career alternatives and
---------------------- employment opportunities, attracting the right talent has emerged as one of the
big challenges for HR managers of today. How are employers addressing this
---------------------- challenge? What do HR managers perceive as being important to employees?
What factors do they emphasise while ‘selling’ positions to potential employees?
----------------------
----------------------
It is evident from the above that HR managers have their finger on the
---------------------- pulse when it comes to the key factors behind attracting talent, i.e. Career
Growth and Learning opportunities followed by brand equity of the organisation;
---------------------- compensation and benefits comes in a distant but significant third. The message
is clear and well understood - all value money matters but not at the cost of
----------------------
growth. Factors like a professional working environment and a caring employer
---------------------- matter more than a fat pay cheque when a prospective employee looks at options.
The good news is that HR managers of India’s leading companies are aware
---------------------- of this sentiment. Surprisingly, job content does not seem to figure as a factor
for employees when choosing a career. One line of thought regarding this, as
----------------------
expressed by an HR head, “Job content has today become a hygiene factor.
---------------------- Everyone in an organisation - Top Management, Line, HR, is only too aware of
the need for enrichment. Look at the Telecom industry - is it anybody’s case that
---------------------- say, a training role in company X is different from a training role in company
Y? Employees today carve out their own roles in an organisation.”
----------------------
However, in the pharmaceutical and financial sector and across brand
---------------------- management and production, employees rank compensation and benefits in
second position and brand. Compensation is also relatively more important to
----------------------

employees in functions like customer relationship and HR. Policymakers would Notes
be interested to know that employees in the pharmaceutical sector (especially
entry level employees) attribute significantly lower importance to Brand Equity ----------------------
(10%) while employees in Telecom (especially entry and junior management
level employees) attribute significantly higher importance to Brand equity of ----------------------
the organisation (18%). The writing on the wall for HR managers to see is that ----------------------
compensation may be important; but if one wants to attract the best talent, the
organisation needs to package itself as an attractive destination where employees ----------------------
have opportunities to acquire new skills, hone existing ones and work in an
environment that is professional and conducive. ----------------------
----------------------
11.6 WAGE AND SALARY DETERMINATION
----------------------
Wage and salary are the two terms used to describe the compensation payable
to the workmen and staff respectively. The amounts payable are determined on the ----------------------
basis of the job description, job specification and the performance of the individual ----------------------
performing such jobs. Not everyone is paid at equal rates. There are factors
like skill, qualification, performance, experience of the employee / workmen ----------------------
concerned, organisation’s ability to pay and willingness to pay. However, it will
be worthwhile if we first look into what is “wage” and “salary” respectively. ----------------------
●● age: A ‘wage’ (or pay) is the remuneration paid for the service of labour
W ----------------------
in production, periodically to an employee/worker. “Wages” usually refer
to the hourly rate paid to such groups as production and maintenance ----------------------
employees (“blue-collar workers”). ----------------------
●● S alary: On the other hand, ‘Salary’ normally refers to the weekly or
monthly rates paid to clerical, administrative and professional employees ----------------------
(“white collar workers”). The wage levels represent the money an average ----------------------
worker makes in a geographic area or in his organisation. It is only an
average, specific markets or firms and individual wages can vary widely ----------------------
from the average.
----------------------
The term ‘wage structure’ is used to describe wage/salary relationships
within a particular grouping. The grouping can be according to occupation ----------------------
or organisation, e.g. wage structure for craftsman (carpenters, mechanics,
bricklayers, etc.). ----------------------
The wage structure or ‘grade’ comprises jobs of approximately equal ----------------------

difficulty or importance as determined by job evaluation. If the ‘point’ method
of job evaluation is used, the ‘paygrade’ consists of jobs falling within a range ----------------------
of points. If the ‘factor comparison’ plan is used, the grade consists of a range ----------------------
of evaluated wage rates (or points, if the wage rate is converted to points). If the
‘ranking’ plan is used, the grade consists of a specific number of ranks. If the ----------------------
‘classification’ system is used, the jobs are already categorised into ‘class’ or
‘grades’. ----------------------
----------------------
----------------------

Notes 11.6.1 The Wage Determination Process
The steps involved in determining wage rates are:
----------------------
1) Job analysis
----------------------
2) Wage surveys
---------------------- 3) Analysis of relevant organisational problems forming the wage structure
---------------------- 4) Framing rules of wage administration, explaining these to the employees
---------------------- 5) Assigning grades

6) Assigning a price to each job and paying the guaranteed wage
----------------------
----------------------
These deductions can be normally divided into two broad categories:
---------------------- ●● Statutory Deductions
---------------------- ●● Other Deductions
1. Statutory Deductions: These deductions are to be made from the salary/
----------------------
wage of the employee/workmen since these are statutorily compulsory
---------------------- to be made. The relevant enactment prescribes the rates at which such
deductions are to be made. These deductions include deductions like the
---------------------- following:
---------------------- a. Provident Fund: This is normally deducted at 12% of basic or
basic plus Dearness Allowance, if any. Employees’ Provident Fund
---------------------- and Miscellaneous Provisions Act, 1952 govern these deductions.
---------------------- b. Profession Tax: This tax is to be deducted as per the enactment
applicable to the respective state since it depends upon the State
---------------------- Government and its concerned enactment and rate at which such a
---------------------- deduction is to be made. For example, for Maharashtra, a minimum
of Rs.30/- is deducted and a maximum of Rs.200/- is to be deducted
---------------------- depending upon the gross salary/wage earned by such employees /
workmen. There are various slabs of gross salary payable, against
---------------------- which specific amounts deductible are mentioned to be deducted.
---------------------- c. Income Tax: The income tax is to be deducted from the salary/
wage of the employee depending upon the gross income he/she is
---------------------- likely to earn in the relevant financial year. The slabs and rate at
---------------------- which such tax is to be deducted is specified in the finance bill of
the country every year. Else, it is to be deducted on the basis of
---------------------- provisions of Income Tax Act, 1961.
---------------------- d. Labour Welfare Fund: These deductions are made twice in the
year. An amount equal to Rs.5/- is to be deducted and contributed
---------------------- to the Labour Welfare Fund constituted under the respective State
Government if applicable. Such deductions are normally made in
----------------------
July and December every year.
----------------------

e. ESI Contribution: It is a contribution under the Employees’ State Notes
Insurance (ESI) Scheme. Employees’ State Insurance is a self-
financing social security and health insurance scheme for Indian ----------------------
workers. For all employees earning Rs. 25000 (US$380) or less per
month as wages, the employer contributes 4.75 % and employee ----------------------
contributes 1.75 %, total share 6.5 %. ----------------------
2. Other Deductions: Such deductions can be made only if the employee/
----------------------
workman authorises the employer to do so. Such deductions include:
a. Salary Advance: In case any salary advance is granted to any ----------------------
employee / workman to meet any of his/her urgent/genuine needs
----------------------
and such application has been made to the employer and employer
has been authorised to deduct such advance paid from the subsequent ----------------------
month’s salary/wage, such deduction can be made from the salary/
wage of such employee/workman. ----------------------
b. Festival Advance: Many a times, the employer allows the employee ----------------------
/ workman to avail what is called as Festival Advance. Such advances
are granted typically during Diwali, Durga Pooja, Ganpati Festival ----------------------
or Christmas occasions. The employee / workman has to apply for
----------------------
such advance and also has to authorise in writing for the deductions
such advance from the salary / wage of the subsequent month/s. ----------------------
Such as advance paid can be deducted from employee / workman’s
salary / wage in as many installments as mutually agreed. ----------------------
c. Housing Loan: Now-a-days, it has become quite common that ----------------------
the employee / workman apply for housing loans from financial
institutions like HDFC, ICICI, LIC Housing Finance Ltd. etc. After ----------------------
such loans are sanctioned and granted, the amounts of installments ----------------------
become payable to such institutions. Therefore, such amounts of
installment payable to such institutions can be deducted from salary ----------------------
/ wage and remitted to such institutions on behalf of such employee
/ workman if such deduction is authorised by the concerned ----------------------
employee / workman in writing. ----------------------
d. Insurance Premium payable to the Life Insurance Corporation of
India: The premium payable to LIC can be deducted and remitted ----------------------
to LIC on behalf of such employee / workman who authorises the ----------------------
employer to deduct such a sum and remit such a sum on his / her
behalf. ----------------------
e. Company Loan given for vehicle / car/housing / other purposes: ----------------------
The employer grants a loan from his resources for two wheeler /
car / a flat or house / some other purpose. The loan granted is to be ----------------------
recovered in installments and such deductions can also be effected
from the salary / wage, if authorised by such workman in writing. ----------------------
f. Deduction due to absence from duty and such leave being leave ----------------------
without pay: This typically happens in the case of the employee /
----------------------
workman who is a habitual absentee and avails more leaves than

Notes are available to him/her. In such circumstances, having regard to the
service rules prevailing in such employment, an employer is authorised
---------------------- to deduct the salary / wage for such employee / workman for the days
for which the employee / workman is not authorised to receive salary /
---------------------- wage.
---------------------- g. Canteen recovery if authorised: The employer provides canteen
facility to the workmen / employees. But the food provided as such
----------------------
could be costlier than the subsidy provided by such an employer.
---------------------- Therefore, in such circumstances, the employee / workman will have
to bear the extra amount spent by the employer on the food offered in
---------------------- such a canteen. The recovery therefore can be made from the salary /
wage of the employee / workman if so authorised.
----------------------
h. Transportation charges/bus fare if authorised: Sometimes the
---------------------- employer provides the transport facility himself even though he is not
bound by any law to do so. Under such circumstances, he may ask the
----------------------
employee / workman to share the burden of the expenditure incurred
---------------------- by him. And as such may require the employee / workman to authorise
him to deduct the amount of the transportation charges, for example,
---------------------- bus fare for local transport to and fro office/work and home.
---------------------- i. Fine if any for damages caused to the company’s property: If any
employee / workman willfully damages the property of the company,
---------------------- the employer may require such employee / workmen to make good the
damages sustained to company’s property. The deduction can therefore
----------------------
be made from the employee / workman’s salary/wage.
---------------------- j. Any loss sustained due to over / under invoicing, acceptance of
---------------------- counterfeit coins in case of cashier in Railway Administration/Bank
etc.: There could be some occupational consequences, which may result
---------------------- in any loss to the organisation, for example, over / under invoicing,
acceptance of counterfeit coins or notes by the cashier may result in
---------------------- loss to the organisation. In such a case, the employer can deduct such
---------------------- loss sustained from the wage / salary of such an employee / workman.

----------------------
---------------------- 1. The steps involved in determining wage rates are:
---------------------- i. Job analysis
---------------------- ii. Wage survey

iii. Compensation survey
----------------------
iv. Job survey
----------------------
----------------------

Notes
Activity 2
----------------------
Explain critical factors for attracting talent used in your organisation.
----------------------
----------------------
11.7 POSSIBLE INPUTS TO THE PAYROLL PROCESS
----------------------
The payroll process is an important function of any business organisation.
This function is handled either by the Human Resources Department or the Finance ----------------------
Department. If the organisation is large in size, this function is independently
----------------------
handled and really speaking, it has the flavour of both the departmental activities.
The Payroll Department is in fiduciary position to the HR and Finance department ----------------------
respectively.
----------------------
Major inputs received by the Payroll Department, hereinafter called “The
Payroll Process”, from the Human Resources/Personnel Department are as ----------------------
follows:
----------------------
●● ttendance of every employee for whom the payroll is to be processed
A
for the month. ----------------------
●● New Employee Input, viz. Employee No, Name, Date of Joining, Date ----------------------
of Birth, Basic Rate of Pay, Allowances payable, His/Her Bank Account
No., where his/her salary/wage is to be sent, his/her other entitlements/ ----------------------
eligibilities, annual/monthly entitlements for any part of compensation
administered outside the payroll process or flexible pay packet like medical ----------------------
reimbursements, Leave Travel Assistance/Leave Fare Assistance, etc. ----------------------
●● Promotion/Increment/Revisions: Inputs for promotions, increments or
revisions is also to be provided to the payroll department. Arrears if any ----------------------
will have to calculated and paid in the month under process. The input ----------------------
will include Employee No, Name, Effective Date of such Promotion/
Increment/Promotion, Old Designation, New Designation if applicable, ----------------------
Old Basic, New Basic, Old Allowances, New Allowances, etc.
----------------------
●● Details of perquisites payable to such promotees, new entrants, etc.
●● ny recovery to be made on account of loss/damage to the property,
A ----------------------
any recoveries to be made for any training programs that were chargeable
----------------------
from each such participant etc.
●● etails of employees/workmen left during the period, his/her last salary/
D ----------------------
wage payable, period for which he/she is payable, his/her last date, i.e.
----------------------
date of leaving/relieving etc., any dues payable to him/her like part of
entitlements, leave balance, leave encashment payable, any advice related ----------------------
to Gratuity payable, etc.
----------------------
●● ny other payments like Additional Bonus, Special Incentives; Cash
A
Prizes payable through payroll is to be sent through the inputs from the ----------------------
HR department.
----------------------

Notes ●● Every input sent from HR department must have Employee No. as
a unique code allotted to each and every employee and the inputs must
---------------------- necessarily have the Employee No., without which the input shall be
incomplete.
----------------------
●● R department can also send directives about the policies designed for
H
---------------------- various promotions, transfers, perquisites and such compensation related
matters.
----------------------
●● R department also has to send important communications received
H
---------------------- with reference to any changes in legal provisions of any enactments
to which the payroll process is directly or indirectly connected. For
---------------------- example, changes in the slab rate of Profession Tax if such change takes
---------------------- place in the relevant enactment applicable to the State. Similarly, changes
in various enactments like Payment of Gratuity Act, Payment of Bonus
---------------------- Act, Employees’ Provident Fund and Miscellaneous Provisions Act, etc.
are also to be notified to the payroll department so that necessary changes
---------------------- will be carried out while calculating the wage / salary for the relevant
---------------------- period.
●● I t must send communication regarding change in the Cost of Living
---------------------- Index to enable the payroll process to calculate the Dearness Allowance
---------------------- correctly if applicable and implement the same in the salary payable for
the month.
---------------------- ●● ow-a-days, the HR department has also to communicate and coordinate
N
closely with the Payroll Department with special reference to Voluntary
----------------------
Retirement Schemes, the compensation payable, Tax deductible and the
---------------------- advice to be made to employees concerned as well as to the management
are to be coordinated with the help of the payroll Department.
----------------------
Possible Outputs from the Payroll Process
---------------------- ●● Pay-slips: The most important output from the payroll process is the pay-
slip. The employee / workman eagerly waits for this basic output from the
----------------------
payroll process. The pay slip depicts amounts of Earnings and Deductions
---------------------- in case of the employee / workman as well as depicting the Net Amount
Payable, which is normally credited to his / her bank Account. The pay-
---------------------- slip is a statement of earnings and deductions. It shows the number of
days the employee / workman has worked, the rate of pay, basic and
----------------------
allowances as applicable, bonus if any, overtime payment if any, incentive,
---------------------- etc. Similarly, it shows the amounts deducted on account of PF, Income
Tax and Profession Tax. This statement also shows the leave balance and
---------------------- loan balance, if any. Thus, it can be treated as one of the most informative
statements for every employee / workman, which is distributed to each
----------------------
of them on a monthly basis. It is treated as the conclusive evidence of
---------------------- wage/salary payment made by the organisation. It is one of the documents
proving the monthly earning of an employee / workman. It is the basis
---------------------- on which he / she can apply for loans. This helps him / her in proving
his / her employment. The pay slips are generally prepared in duplicate.
----------------------

The second copy serves as a record for the employer. It is also one of the Notes
requirements of The Shops and Establishments Act, the Factory Act, etc.
It is a proof for the employer of the payment of the wage / salary made ----------------------
for the month.
----------------------
●● Earnings and Deduction Statement: It is a summary of the pay slips for the
month. It shows both the earnings and the deductions of all the employees ----------------------
or workmen in the organisation. The statement is the requirement of the
Accounts Department as well, being statutorily required to be preserved ----------------------
for inspections of various authorities such as Provident Fund Inspector, ----------------------
Factory Inspector and Profession Tax Inspector. The statement also forms
the basis for the Journal Entry required to be passed on a monthly basis to ----------------------
account for the payment made for that month.
----------------------
●● ecovery Statements: Recovery statements like the Provident Fund
R
Statement, Income Tax recovery Statement; Profession Tax Deducted ----------------------
Statement showing the various slabs and the number of employees for
each slab tallying with the total amount of recovery made, statement ----------------------
of recovery of E.S.I., company loan deducted, festival advance, ----------------------
salary advance, miscellaneous recoveries, canteen recoveries, society
contributions, Society Loans, HDFC loan deducted, LIC Housing Finance ----------------------
Loan deducted, LIC premium recovered, etc.
----------------------
●● J ournal Entry: A journal entry, which is required to be passed through
the Accounting System, is to be generated out of such a payroll processing ----------------------
system. The entry shows the amounts of debits and credits. The balance
is shown as the Net Salary payable. This is treated as control entry to ----------------------
book expenses for the month on account of payroll as well as to book ----------------------
deductions effected during the month. Such deductions are effected as
credited to respective accounts in the ledger and subsequently, as per ----------------------
the due dates, such remittances are made to the respective authorities by
debiting the respective ledger accounts. Such remittances are to be made ----------------------
along with the challans of the respective authorities. This is the statutory ----------------------
requirement to be fulfilled by the payroll processing system.
●● ax deductible statement for each employee or Taxable Income
T ----------------------
Estimates are required to be generated periodically to be able to track the
----------------------
Income Tax deductible from each of the employees.
●● nnual reports include the Salary Certificate in Form 16 required
A ----------------------
to be filed with Income Tax Department as well as Form No.24
----------------------
showing the summary of each employee employed during the year
and the amounts of salary income paid during the year, the tax deducted ----------------------
and remitted to Income Tax authorities. Both the reports are a crucial
requirement of Income Tax Compliance on the part of the employer. ----------------------
Form No.16 is required to be prepared in quadruplicate. First two copies
----------------------
will have to be handed over to the employees concerned. The employer
along with the Form No.24 should submit a third copy, duly signed to the ----------------------
Income Tax department, before 30th April every year.
----------------------

Notes ●● ummary of Salaries paid during the year is also prepared in the form
S
of the Pay Register. This constitutes the record for the employer. This
---------------------- normally serves as historical record of the payroll for the year. Such a
record is maintained year after year.
----------------------
●● ny other reports, which are a part of the validation procedures, are
A
---------------------- also preserved for future reference. Periodical review of the employee
muster is taken and any time barred and old records would be moved to a
---------------------- separate muster for future reference.
---------------------- ●● he HR department and Finance Department may require some
T
more reports from the payroll processing, for example, strength report
---------------------- for which the payroll processed for the month. Revision/up-gradation/
---------------------- promotion, etc. also require certain reports to be generated for the HR
department.
----------------------
----------------------
---------------------- State True or False.
1. The pay-slip is a statement of earnings and deductions. It shows the
---------------------- number of days the employee / workman has worked, the rate of pay,
---------------------- basic and allowances as applicable, bonus if any, overtime payment if
any, incentive etc.
----------------------
---------------------- Activity 3
----------------------
If you were establishing your own business, which benefits would you be
---------------------- statutorily required to pay and which you would offer voluntarily?
----------------------
11.8 PREPARATION OF PAYROLL/WAGE SHEET
----------------------
The source documents for the preparation of such sheets are Daily Time
----------------------
Sheet or Weekly Time Sheet or Attendance Register.
---------------------- A payroll may be defined as a statement wherein the Gross Earnings, Total
---------------------- Deductions and Net amount payable as Wage or Salary is shown against the
name or token number or code number of an employee for the period, generally
---------------------- a month in case of salaried employees and a week in the case of workers.
---------------------- Computation of earnings

Net Earnings = Gross Earnings – Deductions
----------------------
A) The components of Gross Earnings are as follows:
----------------------
Basic salary
---------------------- Dearness allowance
----------------------

Other allowances, e.g. House rent allowance, Medical allowance, Notes
Overtime
----------------------
Ex gratia
Bonus ----------------------
Incentives ----------------------
Other occasional incomes like cash rewards ----------------------
Leave encashment, leave travel allowances etc.
----------------------
B) Components of Deductions
----------------------
Profession Tax
Income Tax ----------------------
E.S.I. contribution of Employee ----------------------
Fine, Leave without Pay ----------------------
Charges for services provided by the organisation, for example, transport,
canteen, housing, furniture, gas, electricity etc. ----------------------
Premium of Life Insurance Corporation ----------------------

Union membership contribution ----------------------
Housing loan installments
----------------------
Credit society installments
----------------------
Other bank loan installments
C) Net Earnings, which is popularly known as take-home salary is worked ----------------------
out as ----------------------
Net Earnings = Gross Earnings – Gross Deduction.
----------------------
In case of piece workers, the remuneration is the product of the number
of pieces or units completed and the rate for each piece. This is also called as ----------------------
payment by results. In case of time paid workers, the remuneration is the product
----------------------
of time spent in terms of hours and an hourly rate. For overtime work, the rate
is higher than the normal rate. ----------------------
Disbursement and Internal Checks ----------------------
It needs a considerable amount of effort to deliver payments physically to
the workers. For a company like Telco, Pune, having the strength of 40,000 plus ----------------------
employees, management of actual payments to the employees is a complex task, ----------------------
for example.
Now-a-days, the most convenient way evolved is payment through a bank. ----------------------
However, in the business where manual work assumes very high proportion ----------------------
and the payments are on a weekly basis, an internal check is very important.
Examples of such business are Construction work, Transportation, Film making, ----------------------
Bidi rolling, Packing industry, Processed food industry, Agro products etc. This
is because majority of the workers are illiterate. Many times they do not know ----------------------

Notes how much they will be paid; they do not know how the amounts are calculated;
there might be a language problem involved because English is not understood
---------------------- by most of them. They know only the local language. In such circumstances, the
scope for fraudulent practices and cheating of such workers is large.
----------------------
Therefore, internal check is as important as the preparation of a pay roll.
---------------------- For an adequate and effective internal check on disbursement of wages, the
following factors are important.
----------------------
1. Time recording should be supervised properly.
----------------------
2. Normal time, overtime and other records should be certified by the
---------------------- responsible authority who is not involved in timekeeping activities.
---------------------- 3. In case of piece workers, the accepted pieces or units should be certified
by two individuals, i.e. the foreman and the production in charge.
---------------------- 4. The details of time and output should be crosschecked from the entries
---------------------- made in the documents used for the purpose.
5. Pre-sanction of overtime work should be made necessary with the
---------------------- Justification thereof.
---------------------- 6. Terms of remuneration and incentive schemes should be well defined.
---------------------- 7. It should be ensured that every worker understand the terms and method
of payment.
----------------------
8. Calculations of wages and salary should be prepared by one person, which
---------------------- should be at least test checked by another person.
---------------------- 9. Cashier or the person responsible for the actual payment should not be
involved in the preparation of a payroll or wage sheet.
---------------------- 10. There should be a surprise check on calculations and payments.
---------------------- 11. Identity cards should be given to ensure that the remuneration is paid to
the worker who has worked.
----------------------
12. For the workers who are not present at the time of payment, their
---------------------- undisbursed wages should be entered in ‘undisbursed wage register’ and
accounted for.
----------------------
Wage Analysis
----------------------
Before analysing wages, the documents useful for the purpose are as follows:
---------------------- 1. Cards – clock, job and idle time
---------------------- 2. Wage sheet
---------------------- 3. Payroll
4. Wage Analysis Book
----------------------
5. Wage Abstracts
----------------------
6. Accounting Registers – Journal and Ledger
----------------------

Summary Notes
●● he goals of compensation administration are to design the lowest cost

T ----------------------
pay structure that will attract, motivate and retain competent employees.
----------------------
It consists of organisation’s policies, procedures and rules determining
the compensation system. ----------------------
●● ompensation is usually composed of the basic wage or salary, allowances,
C
----------------------
incentive or bonuses and benefits. Job evaluation serves as the foundation
of most wage and salary systems. ----------------------
●● The question of fair pay involves both internal and external equity.
----------------------
●● ow employees are paid has important consequences for individual,
H
group and organisational performance. Top executives, particularly ----------------------
receive special attention in the compensation literature because of their
potential influence on organisational success. ----------------------
----------------------
Keywords
----------------------
●● alary: ‘Salary’ normally refers to the weekly or monthly rates paid
S
----------------------
to clerical, administrative and professional employees (“white collar
workers”). ----------------------
●● age: A ‘wage’ (or pay) is the remuneration paid, for the service of
W
----------------------
labour in production, periodically to an employee/worker (“blue-collar
workers”). ----------------------
●● age levels: It represent the money an average worker makes in a
W
geographic area or in his organisation. It is only an average; specific ----------------------
markets or firms and individual wages can vary widely from the average. ----------------------
●● age Structure: The term ‘wage structure’ is used to describe wage/
W
salary relationships within a particular grouping. The grouping can be ----------------------
according to occupation or organisation, e.g. the wage structure for the ----------------------
craftsman (carpenters, mechanics, bricklayers etc.).
----------------------
1. What are the possible deductions that can take place from the Wage/Salary? ----------------------
2. Explain possible inputs to the payroll process.
----------------------
3. What are the possible outputs from the payroll process?
----------------------
4. Explain how the earnings are computed.
5. Analyse the future trend of employee compensation in India. ----------------------
6. Briefly explain the major components of industrial wage structure of India. ----------------------
----------------------
----------------------

Notes Answers to Check your Progress

1. Unless there is continuous development of individuals and teams,
---------------------- performance will not improve.
----------------------

----------------------
1. The steps involved in determining wage rates are:
----------------------
i. Job analysis
---------------------- ii. Wage survey
---------------------- iii. Compensation survey
----------------------
----------------------
----------------------
1. True
----------------------
----------------------
----------------------
Suggested Reading
---------------------- 1. Backman J. 1959. Wage Administration: An Analysis of Wage Criteria.

New York: D. Van Nostrand Co. Ltd.
---------------------- 1. Beach, D.S. 1980. The Management of People at Work. New York:
---------------------- Macmillan.
2. Bowey A.M. 1975. Handbook of Salary and Wage Systems. Gower Press.
----------------------
3. Cascio, Wayne F. Werther W.W., Davis K., and Elios M. Awa. 1993.
---------------------- Human Resources and Personnel Management. New York: McGraw-
Hill.
----------------------
4. Dayal S. 1980. Industrial Relations System in India: A Study of Vital
---------------------- Issues. New Delhi: Sterling Publishers Pvt. Ltd.
---------------------- 5. Laxmi Narain. 1973. Managerial Compensation and Motivation in Public
Enterprises. New Delhi: Oxford and IBH Publishing Co.
----------------------
6. Mathur A.N. 1986. Dynamics of Wages.Bombay: Popular Prakashan (P)
---------------------- Ltd.
----------------------
----------------------

International HRM and HRIS
UNIT
12
Structure:
12.1 Introduction
12.2 Definitions
12.3 Classification of International Business
12.4 Global Diversity in HRM
12.5 International Staffing
12.6 Dealing with Expatriates
12.7 Challenges before HRIS
Summary
Keywords
Suggested Reading
International HRM and HRIS 193

Notes
Objectives
----------------------
----------------------
• Classify international business
----------------------
• Define global diversity in HRM
---------------------- • Discuss international staffing
---------------------- • Deal with expatriates
---------------------- • Describe the challenges before HRIS
----------------------
12.1 INTRODUCTION
----------------------
As you all know, international business consists of transactions that are
---------------------- devised and carried out across national borders to satisfy the objectives of
individuals, companies and organisations. To run a business internationally,
---------------------- organisations need to execute all its management functions accordingly. For
---------------------- example, Market will get spread across the globe so promotions have to happen
accordingly to stand in the global competition. HR practices needs to be in place
---------------------- according to the international standards; compensation and benefits need to be
set accordingly. We will discuss HRM practices in detail in further sections from
---------------------- international business perspective.
---------------------- Human Resource Management (HRM) is an umbrella of different people
management functions, which primarily include need identification and planning,
---------------------- hiring, training and development, compensation and benefits, performance
---------------------- evaluation, separation etc. These functions, when dealing with an organisation
that has offices only in one country, will not have more challenges, but when an
---------------------- organisation has multinational existence, where business and offices are spread
across the globe and human resources also need their presence in those offices
---------------------- for executing the business globally, HRM becomes rather challenging, as the
---------------------- above-mentioned functions need their operations accordingly set up. The HRM
scenario explained above for multinational organisations is generally termed as
---------------------- international HRM.
---------------------- The primary HR functions operate in similar way but the scope of work
is not limited to the geography in International HRM. Scope gets extended to
---------------------- globe, hence it also known as Global HRM.
---------------------- In international HRM, the focus is more on planning HR needs of global
organisation; staffing them internationally; dealing with expatriates while
---------------------- recruiting them; developing them to map their skills to the needs of the business,
which also includes cultural development, behavioral development along with
----------------------
technical and managerial skill development and setting the compensation and
---------------------- benefits according to the cost of living of the geography or country etc.
HRIS works as an appropriate solution for such types of scenarios where
----------------------

an organisation operates globally and employees keep relocating and migrating Notes
across the globe for their work or projects. HRIS, as mentioned in earlier chapters,
is a software tool where employees can work on all these HR related functions ----------------------
irrespective of their geography or work locations. This software tool is web-
enabled (E-HRIS) so as to make it easy for all to log in and operate it according ----------------------
to their need, posting requests, approvals, rejections etc. According to the HRIS ----------------------
architecture, a central database server gets all data stored and processed further.
In all these scenarios, physical location of an employee does not become an issue, ----------------------
as it primarily uses secured internet support.
----------------------
Still, lot of challenges are being faced by the HR management of such
international organisations, as some people management functions such as ----------------------
staffing, performance management, separation etc. become very critical and
----------------------
organisations will have to compromise on certain performance needs.
Therefore, lot of software vendors have come up with strong and effective ----------------------
HRIS solutions through ERP products, which these organisations get customised
----------------------
and implemented with appropriate system architecture and environment.
----------------------
12.2 DEFINITIONS
----------------------
●● I nternational business: The business consists of transactions that are
----------------------
devised and carried out across national borders to satisfy the objectives of
individuals, companies and organisations. ----------------------
●● xpatriates – The employees of an organisation, which are getting
E
immigrated for work purpose across the globe. ----------------------
●● eb-Enabled software – The software, which gets operated through

W ----------------------
internet support without geographical constraints
----------------------
●● E-HRIS – Web Enabled HRIS (with web support)
----------------------
12.3 CLASSIFICATION OF INTERNATIONAL BUSINESS
----------------------
As mentioned above, International business consists of transactions that
----------------------
are devised and carried out across national borders to satisfy the objec tives
of individuals, companies and organisations. There are a number of ways for ----------------------
developing the business across the globe, called globalisation in general. These
are referred as foreign market entry strategies. Each of these ways has certain ----------------------
advantages and disadvantages. One strategy for a particular business may not
----------------------
be very suitable for another business with different environment. Therefore, it is
quite common that a company employs different strategies for different markets. ----------------------
HR strategies are also not an exception to this.
----------------------
International business is the business done with global spread. The business
is done through multiple customers and vendors from multiple countries across ----------------------
the globe. The market for such an organisation is an international market where
there would be a huge demand of the products or/and services of the organisation ----------------------
from other countries where export/import transactions will happen according to
----------------------
the need of the business.

Notes Let us see how this international business gets classified into different
categories.
----------------------
1. Import-export Trade
---------------------- 2. Foreign Direct Investment
---------------------- 3. Licensing
---------------------- 4. Strategic Alliance or Joint Venture

5. Management Contracts
----------------------
Businesses can choose among these types/activities while expanding their
---------------------- operations to international markets or face these activities of foreign companies
in local markets. Let us see each of them with some brief details.
----------------------
1. Importing or exporting or both is the most fundamental and largest
---------------------- international business activity. It is the easiest way of entering a market
with a small outlay of capital. Exporting is making a product at the
----------------------
company’s domestic location and selling it in another country. Importing
---------------------- is bringing goods, services and capital into the home country from abroad.
For example, automotive companies- GM, Toyota and Volkswagen- export
---------------------- cars to all countries around the world. Food retailers import international
products and sell them in local stores.
----------------------
2. Foreign direct investment is a company’s physical investment into building
---------------------- a plant in another country or acquisition of a foreign firm or subsidiary.
Direct investments allow companies to access foreign markets and act
----------------------
as domestic businesses in that market with a full scale of activities, from
---------------------- manufacturing to selling. Not only can the investing companies benefit,
but also the hosting countries through getting to know new products,
---------------------- services, technologies and managerial skills. For example, Volkswagen
has built a factory in Tennessee to sell cars in the U.S. market; it also
----------------------
contributes to development of new technologies at the local university.
---------------------- 3. Licensing is an arrangement between companies of different countries;
---------------------- a company allows another one to use its brand name, copyright, patent,
technology, trademark or other assets in exchange for an amount (royalty)
---------------------- based on sales. Companies may choose to manufacture or sell their
products under licensing when transportation or domestic production
---------------------- costs are too high, government regulations restrict business activities of
---------------------- foreign companies (usually in developing countries) or the company wants
to simply produce and sell the same quality everywhere. For example,
---------------------- Starbucks all over the world sell its same-quality beverages in the same-
looking stores under licensing contracts.
----------------------
4. A strategic alliance is a cooperation of two or more companies for mutual
---------------------- gain. A special type of this is a joint venture when the partners mutually
found a new company. This cooperation allows companies to share
---------------------- development and production costs, technologies and sales networks. For
---------------------- example, Motorola and Toshiba formed a strategic alliance to develop

manufacturing processes for microprocessors. General Mills and Nestle Notes
formed a new company, Cereal Partners Worldwide, to produce and sell
cereals. ----------------------
5. Management contracts are the business process outsourcing (BPO) ----------------------
contracts given to appropriate companies from different countries. For
example, Sony outsources the call centers and customer supporting ----------------------
activities.
----------------------
12.4 GLOBAL DIVERSITY IN HRM ----------------------
HRM, when dealt with international business, has got following major differences ----------------------
as compared to domestic businesses.
----------------------
●● Greater number of services
●● Special services to unique groups ----------------------
●● Compensation complexity ----------------------

●● Foreign exchange rates attention ----------------------
●● Languages and cultural differences
----------------------
●● Local laws and regulations
These differences must be addressed while setting the HRM processes ----------------------
in place in such international businesses to retain the business in international
----------------------
competition. However, Global HR practices have been increasing in importance
globally because of major reasons like global competition, international mergers ----------------------
and acquisitions, market access opportunities and foreign human resources.
Let us see some key issues in practicing HRM in such international businesses. ----------------------
1. World-wide HR planning: As business is distributed across the globe, ----------------------
human resources also need to be distributed accordingly. The organisation
will have HR teams identified across the locations to look after local ----------------------
establishment; we will call them local HR teams. But at the same time, ----------------------
these local teams have to be always in sync with global HR teams, other
local HR teams and centralised corporate HR teams. HR Planning has ----------------------
to happen with constant collaboration and cohesion. Central HR leads
might collect this information from all the locations from local HR teams; ----------------------
hiring needs will be consolidated and recruitment will be planned and ----------------------
scheduled accordingly. The candidates will be selected from different
locations and on-boarding or joining will happen to different locations ----------------------
according to the plan of recruitment. The candidates joining from other
countries are referred as expatriates or immigrants. Their repatriation ----------------------
should also be considered and executed accordingly. These expatriates ----------------------
need to be oriented and trained for cultural differences, local employee
practices, access neutralisation etc. Performance appraisal is one of most ----------------------
important practices, which might need appropriate and different focus
in such organisations because of these diversified employees. Proper ----------------------
balance needs be in place while promoting these employees within the ----------------------
global organisational hierarchy of the organisation.

Notes 2. Compensation and Benefits: The function of giving appropriate
compensation and benefits in international organisations depends on
---------------------- local inflation, foreign exchange rates and their expected fluctuations.
Sufficient pay needs to be given to retain these employees within the
---------------------- organisation. If they leave just because of these reasons, then getting new
---------------------- hires will be very difficult so balance needs to be managed accordingly.
Questions such as hardship allowance to be given to employees need
---------------------- to be addressed to retain these employees in such cases, so that these
employees are satisfied with the cost of living of appropriate nations.
---------------------- Developing equity among employees for the benefits is also important
---------------------- and mandated for international organisations. Several plans are necessary
for different categories of personnel.
----------------------
3. Housing and accommodation issues: There are some common problems
---------------------- occurring for housing and their permanent address of overseas when
expatriates join the organisation.
----------------------
4. Taxation: Proliferation of new laws according to the global and local
---------------------- rules and regulations.
5. Communication of HR policies and program world-wide: HR teams
----------------------
need to practice team communication as a continuous process. It is very
---------------------- difficult to keep personal contacts in such scenarios, but organisations
need to practice them as far as possible. Policy manuals have be brief,
---------------------- simple and well communicated. HR Teams have to be very sensitive to the
needs of receiver. Teams have to send regular and written communication
----------------------
for changes in the policies. Periodic rotations of overseas HR managers
---------------------- are desirable in such scenarios and finally security is also an important
aspect in such global business scenarios.
----------------------

---------------------- 1. _____________ software gets operated through internet support
without geographical constraints.
----------------------
---------------------- Activity 1
----------------------
In your organisation, analyse existing records, reports and forms to determine
---------------------- the adequacy and requirements for data in the Human Resource Information
System.
----------------------
----------------------
----------------------
----------------------

12.5 INTERNATIONAL STAFFING Notes
International staffing is the hiring the appropriate resources across the ----------------------
globe. For companies that venture into the global marketplace, it is imperative
to evaluate and implement an appropriate staffing program. ----------------------
Typically, three international staffing approaches are recognised: ----------------------
1. Ethnocentric ----------------------
2. Polycentric
----------------------
3. Geocentric
----------------------
1. An ethnocentric staffing approach uses parent-country nationals to
fill all management positions. A firm might consider this approach due ----------------------
to a perceived lack of qualified individuals in the host country or a
desire to maintain a cohesive corporate culture through parent-country ----------------------
employees who have years of experience. Additionally, a company’s core
----------------------
competencies are more easily translated by employees who have firsthand
knowledge of them. Firms that employ this type of strategy are typically ----------------------
those that highly value their corporate cultures. Many companies have
done away with the ethnocentric approach to staffing, as the policy makes ----------------------
it difficult for host-country employees to advance within an organisation,
----------------------
which can lead to higher turnover and decreased productivity, not to
mention feelings of bitterness on the part of host-country nationals. An ----------------------
additional reason the approach has fallen out of favor is that it does not
allow for deep understanding of the host country’s cultural differences ----------------------
and how different marketing and management approaches are required
----------------------
from those utilised in the parent country.
2. A polycentric approach uses host-country nationals to manage company ----------------------
operations outside of the parent country and parent-country nationals ----------------------
to staff management positions at parent-country operations, including
headquarters positions. This policy permits greater cultural understanding ----------------------
than an ethnocentric approach and is often less costly to establish than
other staffing strategies. Similar to the ethnocentric approach, a drawback ----------------------
of the polycentric policy is that it provides limited chances for host- ----------------------
country personnel to advance beyond senior positions within their home
countries. Additionally, there is a good chance that communication and ----------------------
cultural breaches will arise over time, leading to isolated office groups.
One reason a company may consider this approach is if it is looking to ----------------------
avoid paying high salaries of parent-country managers. ----------------------
3. A geocentric approach looks for the most qualified individual for each
management position, regardless of that individual’s location. This strategy ----------------------
has numerous benefits and is viewed as the most desirable international ----------------------
staffing setup, if it is possible for a firm to employ it. The approach creates
a large group of company managers that are both familiar and comfortable ----------------------
with multiple countries and cultures, constructing a strong and united
multicultural organisation with an informal management network. This ----------------------

Notes strategy is often the most costly to implement, due to high training and
relocation costs and the use of a consistent base pay level among countries.
---------------------- Additionally, immigration policies can make it difficult to implement this
staffing strategy, as many countries require international firms to provide
---------------------- in-depth documentation if they wish to hire an individual from outside the
---------------------- host country.

----------------------
---------------------- 1. Which approach uses host-country nationals to manage company
---------------------- operations outside of the parent country and parent-country nationals
---------------------- headquarters positions?
---------------------- i. Polycentric
ii. Geocentric
----------------------
iii. Ethnocentric
----------------------
iv. Egocentric
----------------------
---------------------- Activity 2
---------------------- As a personnel manager, you are required to prepare a note setting out
---------------------- several uses and applications of computerised personnel records system to
be used for the purposes of staff orientation in Human Resource Information
---------------------- System Concepts
----------------------
12.6 DEALING WITH EXPATRIATES
----------------------
An expatriate is a person who temporarily or permanently resides in a
----------------------
country with its respective culture other than that of the person’s enculturation or
---------------------- legal residence. Expatriate is the term often used in the context of professionals
stationed abroad by their companies, as opposed to locally hired staff.
----------------------
When dealing with expatriates, an international company discerns the value
---------------------- of them and therefore sends out the most experienced members of the staff to
deal with them and often has a company-wide policy and coaching system that
---------------------- includes spouses at an earlier stage in the decision-making process, giving spouses
an official voice. However, it is rare that companies provide any compensation
----------------------
for loss of income of expatriate spouses, although they often do render to them
---------------------- other benefits and assistance.
There are some special considerations while dealing with expatriates:
----------------------
1. Career development risk
----------------------
2. Re-entry problems
3. Managing their family life Notes
4. Terrorism
----------------------
5. Government rules and regulations
----------------------
6. Work permits universally required
7. Recruitment of locals varies from place to place ----------------------
8. Guest workers ----------------------

9. Role of Church, family politics etc ----------------------
10. Merit versus best family
----------------------
11. Social standing
----------------------
12. Industrialised Vs. less developed resources
13. Local sources ----------------------
14. Less technical capabilities ----------------------

15. Apprenticeship strengths in Europe ----------------------
16. Management development (US ladder)
----------------------
17. Language (English need)
----------------------
18. Compensation needs, laws and regulations etc
All these issues need to be focused while dealing with expatriates joining the ----------------------
organisation. HR department has to take care of this and follow the appropriate ----------------------
practices in place.
Example: For compensation and benefits, expatriates have to be considered ----------------------
with following major pay elements: ----------------------
Programs used by most U.S. based MNCs have four elements:
----------------------
●● ase pay: Equal to pay of domestic counterparts in comparably evaluated
B
jobs. ----------------------
●● ifferentials: To offset the higher costs of overseas goods, services and
D ----------------------
housing.
----------------------
●● Incentives: To compensate the person for separation from family, friends
and domestic support systems. ----------------------
●● Company assistance programs: To cover added costs such as moving and
storage costs, automobile and education expenses. ----------------------
----------------------
12.7 CHALLENGES BEFORE HRIS
----------------------
HRIS implementation will have be one of the feasible solutions to deal with
such international organisations. There are three different strategic needs that ----------------------
drive organisations in selecting HRIS model from global organisation perspective: ----------------------
1. Need for responsiveness through local differentiation
----------------------

Notes 2. Need for efficiency through global integration
3. Need for learning through leveraging worldwide innovation and
----------------------
knowledge sharing
---------------------- Let us see how these needs are adapted to various types of HRIS.
---------------------- Multinational: A multinational HRIS is one that takes a responsive approach
to implementing and managing HRIS by being sensitive to local and regional
---------------------- differences. In essence, a multinational HRIS is one that manages a portfolio of
multiple, national HR systems, allowing local operations a significant amount
----------------------
of freedom and organisational autonomy. The disadvantage is that things differ
---------------------- in HRIS to the point that countries bear almost no resemblance to one another,
making difficult even the creation of the traditional headcount report for
---------------------- headquarters.
---------------------- Global: A global HRIS is one that takes an efficiency approach to implementing
and managing HRIS by building a single, standardised, centralised system. Such
---------------------- organisations see a uniform global operating environment as the driving force and
---------------------- attempt to minimise national and local needs. One sanitary solution is devised,
based primarily on the mother company’s requirements and each international
---------------------- subsidiary is expected to get on board and do things the same way.
---------------------- The disadvantage is that it forces a single view of HRIS on the organisation to
the point that local needs are generally not adequately met.
---------------------- International: An international HRIS is one that takes a “learning and sharing”
---------------------- approach to implementing and managing HRIS by transferring and adapting
knowledge and expertise to local organisations, while continuing to retain
---------------------- considerable influence and control over the local organisations. It allows for the
exploitation of the parent company’s core competencies through the adaptation
---------------------- of technologies, business practices, products, services, knowledge and expertise
---------------------- to the local environment, while building on the strengths and core competencies
of the local entities. At the same time, the disadvantage is that it either calls for
---------------------- heavy modifications to the system to the point that maintenance is a problem or
it creates a situation where neither corporate nor local needs are adequately met.
----------------------
---------------------- Summary
---------------------- ●● ach of these models has its advantages and disadvantages and each is
E
effective at exploiting a particular strategic capability — responsiveness,
---------------------- efficiency or learning/innovation.
---------------------- ●● I ndeed, many organisations have built successful HR systems based on each
of these approaches. But, what happens when the business environment
---------------------- changes? How easy is it to change an HRIS built for efficiency to one
---------------------- focused on local responsiveness? Alternatively, how easy is it to modify
a heavily customised HRIS to create one that achieves targeted operating
---------------------- efficiencies?
----------------------

●● e have seen organisations (that traditionally have been strong) that
W Notes
abandon their global capabilities in the search for local responsiveness.
Likewise, effective local organisations that have wanted to become ----------------------
more global have abandoned their local strengths in search for global
efficiencies. ----------------------
●● he answer is that we need to be good at both — locally responsive

T ----------------------
and globally efficient — at the same time. The international business
environment has changed to the point that the companies now need ----------------------
to build their worldwide HRIS based on all three strategies — global ----------------------
competitiveness, multinational flexibility and worldwide learning
capability — simultaneously. ----------------------
----------------------
Keywords
----------------------
●● Risks: It is potential of losing something of value. Values can be gained
or lost when taking risk resulting from a given action, activity and/or ----------------------
inaction, foreseen or unforeseen.
----------------------
●● Web-based Software: It is a software that runs on a server (computer
connected to the Internet), while users connect to it from their computers ----------------------
using an Internet browser.
----------------------
1. Explain the significance of Information System in Human Resource ----------------------

Management.
----------------------
2. What are the factors that changed the primary role of HRM from a
caretaker of records to a strategic partner? ----------------------
----------------------
----------------------
----------------------
Fill in the blanks.
1. Web-Enabled software gets operated through internet support without ----------------------
geographical constraints.
----------------------
----------------------
----------------------
1. Which approach uses host-country nationals to manage company
operations outside of the parent country and parent-country nationals ----------------------
headquarters positions? ----------------------
i. Polycentric ----------------------
----------------------

Notes
Suggested Reading
----------------------
1. http://www.emerald-library.com
---------------------- 2. Ball, Kirstie S. 2003. The use of human resource information systems: a
survey.
----------------------
3. Cohen, S. 1998. “Knowledge Management’s Killer Application’’,
---------------------- Training and Development, Vol. 52 No. 1.
---------------------- 4. Davenport, T.H. 1998. “Putting the Enterprise into the Enterprise System”
Harvard Business Review, July/August.
----------------------
5. Davenport, T.H. and Short, J.E. 1990. “The New Industrial Engineering:
---------------------- Information Technology and Business Process Redesign” Sloan
Management Review. Vol. 31 No. 4.
----------------------
6. HRFocus- May 2002: What’s in store for HR information systems?
----------------------
7. HRFocus- May 2003: What Are the Top HRIS Issues in 2003?
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------
----------------------

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What are the factors that changed the primary role of HRM from a caretaker of records to a strategic partner?

What are the factors that changed the primary role of HRM from a caretaker of records to a strategic partner?

What are the three approaches to building worldwide HRIS?

What are the three approaches to building worldwide HRIS?

HUMAN RESOURCE

(FOR PRIVATE CIRCULATION ONLY)

COURSE DESIGN AND REVIEW COMMITTEE

Published by Symbiosis Centre for Distance Learning (SCDL), Pune

Copyright © 2019 Symbiosis Open Education Society

Dr. Asha Nagendra

Unit No. Title Page No.

Evolution of Human Resource Information System 1

---------------------- 1.1 INTRODUCTION

---------------------- The function of Human Resources (HR) departments is generally

2 Human Resource Information System

Evolution of Human Resource Information System 3

4 Human Resource Information System

The HR department has emerged as a strategic partner due to various ----------------------

Check your Progress 1 ----------------------

Fill in the blanks. ----------------------

1. Organisational resources can be categorised as physical, organisational ----------------------

Evolution of Human Resource Information System 5

---------------------- Fig 1.1: Cost of HR vs. Value Addition by HR

6 Human Resource Information System

State True or False. ----------------------

Evolution of Human Resource Information System 7

8 Human Resource Information System

●● Produce pay cheques and payroll reports ----------------------

●● Recruiting through company-facing listings ----------------------

Evolution of Human Resource Information System 9

10 Human Resource Information System

●● RIS provides comprehensive information which enables organisations

Evolution of Human Resource Information System 11

---------------------- Check your Progress 3

---------------------- Multiple Choice Multiple Response.

---------------------- 1. HR activities can be categorised as:

---------------------- i. The amount of top management support and commitment

---------------------- 1.7 TYPES OF HRIS

---------------------- 3. Decision Support Systems (DSS)

12 Human Resource Information System

Evolution of Human Resource Information System 13

---------------------- Check your Progress 4

14 Human Resource Information System

Evolution of Human Resource Information System 15

---------------------- ●● lectronic data processing: The use of automated methods to process

16 Human Resource Information System

ii. Traditional ----------------------

Check your Progress 4 ----------------------

Evolution of Human Resource Information System 17

18 Human Resource Information System

Introduction to Database Management System 19

---------------------- • Elaborate on Information Security and Cyber laws

20 Human Resource Information System

2.2 DEFINITIONS ----------------------

●● Data: Facts and figures about an object or set of objects. ----------------------

Introduction to Database Management System 21

---------------------- Check your Progress 1

---------------------- Multiple Choice Single Response.

---------------------- 1. It is an ability of Databases to allow multiple authorised users to