HRISHR Accounting & Audit

Ms. Anubha RastogiAstt. Prof, Vidya School Of Business

2015-16

Human Resource Information Systems

(HRIS)

Virtually all HR management functions can be enhanced through the

use of an HRIS – any organized approach for obtaining relevant and

time information on which to base HR decisions

2

Human resource information systems (HRIS)

An integrated system of hardware, software, and databases designed to

provide information used in HR decision making.

Benefits of HRIS

Administrative and operational efficiency in compiling HR data

Availability of data for effective HR strategic planning

Uses of HRIS

Automation of payroll and benefit activities

EEO/affirmative action tracking (Equal Employment Opportunities)

HUMAN RESOURCE INFORMATION SYSTEM

Goal: Integrate Core Processes into Seamless System

*Certain data are available to employees at work or at home. Examples: supervisors might access just-

in-time training for conducting performance appraisal reviews. Operative employees might enter time

and labor data. All employees may be able to review 401(k) balances, transfer funds, make benefit

elections, set annual performance goals, update personnel data.

Input Data Types

Job Analysis

Recruitment

Selection/Job Posting/

Employee Referral

T&D

Performance Appraisal

Compensation

Benefits

Safety

Health

Labor Relations

Employee Relations

Output Data Uses*

Employee Tracking

Diversity Programs

Hiring Decisions

Training Programs/E-

learning/Management Succession

Compensation Programs

Benefit Programs (e.g.,

prescription drug programs)

Health Programs (e.g., Employee

Assistance Programs)

Bargaining Strategies

Employee Services

Organizational

Strategic

Plans

Human

Resource

Management

Plans

Contribute Toward Achievement of:

Human

Resource

Information

System

Typical Data Elements in a Human

Resources Information System

Employee personal data Salary administration

Benefits information Skills

Benefits plans Attendance

Employee benefits information Performance/Discipline

Dependents Health and Safety

Training and development PayrollEmployee work data

Salary

Performance review

Job information

Employment status information

Hire/Termination information

Work information

Uses of an HR

Information

System (HRIS)

Designing and Implementing

an HRIS

HRIS Design Issues

What information available and what is information

needed?

To what uses will the information be put?

What output format compatibility with other systems is

required?

Who will be allowed to access to the information?

When and how often will the information be needed?

Accessing the HRIS

Intranet

An organizational (internal) network that operates over the Internet.

Extranet

An Internet-linked network that allows employees access to information provided by external entities.

Web-based HRIS Uses

Bulletin boards

Data access

Employee self-service

Extended linkage

HR Accounting‘HRA is a process of identifying and measuring data about

human resources and communicating this information to

interested parties’.

It involves measuring the costs incurred by organizations to

recruit, select, hire, train, and develop human assets. It also

involves measuring the economic value of people to the

organization’.

Calculating HR Cost

Top Five Principal Reasons for the

Importance of Measuring Human

Resources

HR should be accountable (89.6%)

People skills and knowledge most important source of sustainedcompetitive advantage (84.7%)

Understanding the value of people focuses us on future human resourceneeds. (76.7%)

Measurement of human resources gives management needed informationto support business strategies (74.3%)

Enables management to make better informed decisions. (72.2%)

Top Five Reasons Why Organizations Do

Not Measure Human Resources

Current HR measures lack precision (58.8%)

Current HR measures are not widely accepted (50.56%)

Current HR measures lack reliability (40.4%)

Insufficient time to develop appropriate HR measures (40.1%)

Current HR measures lack validity (38.5%)

Objectives of HRA:

Providing cost value information about acquiring, developing,

allocating and maintaining human resources.

Enabling management to monitor the use of human resources.

Finding depreciation or appreciation among human resources.

Assisting in developing effective management practices.

Increasing managerial awareness of the value of human resources.

For better human resource planning.

For better decisions about people, based on improved information

system.

Assisting in effective utilization of manpower.

Assessing HR Effectiveness

HR Audit

A formal research effort that evaluates the current state

of HR management in an organization

Audit areas:

Legal compliance (e.g., EEO, OSHA, ERISA, and FMLA)

Current job specifications and descriptions

Valid recruiting and selection process

Formal wage and salary system • Benefits

Employee handbook

Absenteeism and turnover control

Grievance resolution process

Orientation program

Training and development

Performance management system

HRM Auditing Model

Strategic-Level HRM — determines the effectiveness of HRM functions in the

overall strategic plan of the organization

Managerial-Level HRM — determines effectiveness of HRM functions within

departments and units

Operational-Level HRM — determines the effectiveness of HRM functions

throughout the organization

When labour costs are large or the largest component of total product or

service costs

The personnel audit is used to justify the existence of budgets of staff and

programs

The personnel audit provides valuable feedback from employees and line

managers

The personnel audit may uncover problems such as unqualified HRM staff, lack

of HRM policy compliance, or low employee satisfaction

Reasons for Conducting HRM Audits

HR Performance and Benchmarking

Benchmarking

Comparing specific measures of performance against data on those measures

in other “best practice” organizations

Common Benchmarks

Total compensation as a percentage of net income before taxes

Percent of management positions filled internally

Dollar sales per employee

Benefits as a percentage of payroll cost

Return on Investment (ROI)

Calculation showing the value of expenditures for HR activities.

A = Operating costs for a new or enhance system for the time period

B = One-time cost of acquisition and implementation

C = Value of gains from productivity improvements for the time period

B A

C ROI