Definitions and six clarifying viewpoints

Various definitions of HRIS are available in the literature. First, the definition by Walker is offered (1982: 16): “The modern Human Resource Information System

may be defined as a computer-based method for collecting, storing, maintaining, retrieving, and validating certain data needed by an organization about its employees, applicants, and former employees.” Secondly, Kavanagh, Gueutal &

Tannenbaum (1990: 29) define that “a human resource information system is a

system used to acquire, store, manipulate, analyze, retrieve, and distribute

Information systems Agriculture Banking Architecture Economics Communications Accounting Marketing Psychology Other disciplines Computer science Engineering Other disciplines

pertinent information about an organization’s human resources”. Haines & Petit

(1997: 261) and Ball (2001: 679) have also used this definition. Thirdly, in their article Kossek, Young, Gash & Nichol (1994: 135) use Broderick & Boudreau’s (1992: 17) definition of HRIS, according to which human resource information system is “the composite of data bases, computer applications, and hardware and

software that are used to collect/record, store, manage, deliver, present, and manipulate data for Human Resources”. The fourth definition is adapted from

Walker (1982) and used by Kovach & Cathcart Jr. (1999: 275). It states that “a

Human Resource Information System is a systematic procedure for collecting, storing, maintaining, retrieving, and validating data needed by an organization about its human resources, personnel activities, and organization unit characteristics”.

In conclusion, the four definitions of HRIS emphasize the technical activities to process the data of human resources. In addition, the definitions are also affected by the application area. Thus, because HRIS are related to HRM, the definitions of HRM are shortly noticed and referred to. HRM is defined by using lists of different tasks associated with employees like: recruiting, training, promoting, record keeping and meeting various legal requirements. HRM is also defined as monitoring, facilitating and setting up processes that select, assess, and assign people to appropriate roles in an organization (Townley 1994, Hubbart, Forcht & Thomas 1998, Targowski & Deshpande 2001, Ball 2001). HRIS, earlier personnel systems, were mostly designed and implemented for those activities of HRM. It is easy to perceive that the definitions of HRIS supplement the definitions of HRM (see closer sub-section 2.2.2). Therefore, the concept of HRM is included in the thesis to see how the role of HRIS could be developed and diversified for the activities of good leadership.

Next the development of HRIS is introduced from six viewpoints to create a thorough and diverse picture of the subject. The viewpoints are: 1) history and background, 2) HRIS and data, 3) effects of HRIS on organizations, 4) HR and IS professionals and HRIS design, 5) use and exploitation of HRIS, and 6) HRIS and management work. Some HRIS issues are re-discussed in the viewpoints because the issues influence several areas. The re-discussions may seem tautophonous but when the viewpoint in question is taken into account, the meaning of the re- discussions will open up to the reader. In addition, the viewpoints bring out the connections between HRIS and the activities of HRM. However, in this thesis the purpose is to describe and develop the role of HRIS for the activities of good leadership rather than for the activities of HRM.

History and background

The history of HRIS begins from payroll systems in the late 1950s and continues into the 1960s when the first automated employee data was used (Kavanagh et al. 1990, Walker 1993, Martinsons 1997). Walker (1993: 11) presents how a “true” personnel system was defined in the late 1960s:

“A “true” personnel system (a system that is not just appended to payroll) has the following characteristics:

1. It is used to solve personnel’s needs, not just payroll’s. That is the system is developed primarily for the Personnel Department’s use, to solve personnel – not financial- problems.

2. It is multifunctional and in that it handles or addresses user needs in more than one personnel area. In other words, it is not limited to one function such as benefits, or employment, or wage and salary administration.

3. It utilizes the five basic concepts underlying human resource systems (These concepts are expanded upon in A. J. Walker (1982) HRIS Development – A Project Team Guide to Developing an Effective Personnel Information System. New York: Van Nostrand Reinhold.).

– a database with definitions specified for data elements – a method of data update and entry

– ad-hoc retrieval techniques

– a human resource information centre to assist with administration – a data quality focus.

These concepts bring methodology to the development and operation of personnel systems. As objectives, they provide an approach and structure for the work, and they necessarily involve procedures, users, and systems professionals.”

Thus, the first personnel systems were made to store a tremendous amount of data for record keeping and reporting associated with personnel administration. In the course of time, the development of HR activities generated the design, development and the successful implementation of various computer-based HRIS (Martinsons 1997). Kavanagh et al. (1990) present their conception of the development of HRIS introducing the historical eras in HR from the pre-World

War II era to the 1980s and how the eras have affected the development of HRIS. Table 1 introduces the Exhibit 1.1 by Kavanagh et al. (1990: 7).

Table 1. “Historical eras in HR” (Kavanagh et al. 1990: 7).

Era Emphasis in HR

Pre-World War II Reactive, caretaker activity; not part of the mainstream of business; record

keeping and caretaker of employees.

Postwar: 1945–1960 Importance of employee morale; personnel is part of operating costs but not yet

in mainstream of operations; research and development (R&D) in selection of employees; payroll automation; early applications of mainframe computers for personnel are used in defence industry.

Social issues era: 1963– 1980

Social issues legislation changes HR; increased paperwork and reporting requirements; protector of employees; advent of MIS in computer world; introduction of IBM/360; HR now more in mainstream of operations. Cost-effectiveness era:

the 1980s

HR expected to cost justify activities; the increased government regulation of the 1980s increases HR role and paperwork; advent of microcomputers and HR software explosion; HRIS capabilities lower in cost, thus affordable by smaller firms; HR becomes part of the business strategy process; increased emphasis on R&D for HR, particularly utility analysis

In the 1990s there existed various expectations of how HRIS should have affected an organization’s HR activities and business planning. Studies about advantages of using HRIS and about users of HRIS were performed. An organization was considered efficient if it had technology and IS to support HR activities. Also, effectiveness of HRIS on work and development of HR departments and HR professionals were under discussion. (Tannenbaum 1990, Broderick & Boudreau 1991, 1992, Kossek et al. 1994, Atwater 1995, Groe, Pyle & Jamrog 1996, Townsend & Hendrickson 1996, Haines & Petit 1997, Axel 1998, Hubbard et al. 1998, Rodger, Pendharkar, Paper & Molnar 1998, Stroh, Grasshoff, Rudé & Carter 1998, Van der Linden & Parker 1998, Elliot & Tevavichulada 1999, Niederman 1999.)

In the new millennium electronic services such as e-learning, e-commerce and e-business became possible and common because of the invention of World- Wide-Web (WWW). Along with the development of HRIS the concept of electronic HRM (e-HRM) has also been launched as an internet invention and implementation of HRIS. Because of the different technical devices and realizations, there are terms which may have similar meanings to e-HRM, such as electronic HR (e-HR), virtual HR(M), HR internet, web-based HR, computer- based human resource information systems (CHRIS) and HR portals. Still,

according to the literature, various articles and web sites, e-HRM is the most commonly-used term.

The research community of e-HRM is in its early beginning. Therefore, there is not an explicit definition of e-HRM but following the available initial definitions, e-HRM is

– “a way of implementing HR strategies, policies, and practices in

organizations through a conscious and directed support of and/or with the full use of web-technology-based channels”, by Ruël, Bondarouk &

Looise (2004: 365)

– “the, as a rule, spatial segregated, both technically networked and

supported, shared and organized performing of HRM tasks through at least two actors”, by Strohmeier (2005: 2).

Ruël et al. (2004: 366) present that “the word ‘implementing’ in that context has a meaning, such as making something work, putting something into practice, or having something realized”. Strohmeier (2005: 2), for his part, explains that ‘spatial segregation’ means the situation where the actors and the HR application are in different places. ‘Technical network’ means that actors may work in the same room or on different continents and use the same application. ‘Technical support’ usually consists of the use of e-mail. ‘Shared organization’ and ‘at least two actors’ mean that the work is shared between several actors. ‘Performing of HRM tasks’ includes the basic work processes, such as recruiting, development and compensation. Based on the above it is possible to conclude that today the development of HRIS is still an on-going process both in practice and in science.

HRIS and data

The commonly used interpretation is that the purpose of HRIS is to store, manipulate and provide data on employees. In addition, HRIS have been designed to accomplish most of the routine HR tasks that help to maintain necessary HR knowledge in databases. The data is important a) for management and b) to keep the HRM effective and in real-time order. Thus, HRIS are mostly constructed for knowledge management (KM) of HRM. The reason for that is the desire to control basic data of personnel, which creates better challenges to a profitable and effective organization. For example, strategic human resource development and planning (SHRDP) is focused on strategic management, organizational behavior

and HRM. It links business strategy and organizational strategy to the management skills. Strategic information systems planning (SISP), for its part, supports the process of SHRDP, and knowledge-based system (KBS) helps deliver HRM qualitative outputs as well as increases both employee and customer satisfaction. (Grundy 1997, Martinsons 1997, Basu, Hartono, Lederer & Sethi 2002.) Therefore, for SHRDP reliable data and knowledge are vital issues.

Mainly HRIS have been designed to store, manipulate and provide data of employees for the organizational use. Names, addresses, phone numbers, education, training, career development and documents of the personal development discussion are typical employee data in HRIS. Also different private or semi-private data could have been stored in the system. Herein it should be taken into account that because of the automation, data can be available in a different way than in manual systems and requires more concern of data security and sensitivity than earlier. Therefore, at least following questions should be asked when designing, implementing and maintaining HRIS: Who can have access to the system? What kind of data is available to different users? How are the system and data protected? What kind of security system has been implemented? What legal and ethical issues should be considered in data specifications? (Hubbard et al. 1998)

Effects of HRIS on organizations

Personnel, software and hardware can be regarded as both investments and costs for the organization. Top management and stakeholders expect the investments to benefit the organization. At the same time the costs should be kept in check. Thus costs and benefits are the subjects of conversations when employment and device investments are in question in an organization. Therefore the discussions of the costs and benefits of the employees and HRIS are highlighted.

In figure 3 a chronological development of personnel costs and computer costs are described. It imitates the same by Kavanagh et al. (1990: 14). The figure does not include specific HRIS costs but it concentrates on computer costs. In addition, the figure does not speak out the ranges between employee and computer costs directly, in other words it does not give exact numbers of either of the costs, but it indicates visually that in the 1960s employee costs were low whereas big computers were expensive investments for organizations. Only big enterprises could use personnel systems because they were able to invest in both computers and software. The development of technology influenced the prices of

big computers. In the 1970s new inventions such as microcomputers, databases and personal computers (PC) decreased the costs of computers. Now companies were also able to invest in different IS due to the decline in costs of technology. In addition, small companies became interested in automating their HR actions and making them more effective. (DeSanctis 1986; Kavanagh et al. 1990; Walker 1993.) Simultaneously, legislation of personnel functions as well as demands and needs of different administrative activities and reports developed significantly. Personnel costs started to increase resulting in careful consideration when investing in IS. Although technology was cheap, a company had to budget money for personnel expenses. Also, the design and implementation of other organizational IS needed more resources and increased prices of software, which had an effect on investments in HRIS. (Kavanagh et al. 1990: 11–13.)

Fig. 3. Chronological development of employee and computer costs adapted from Kavanagh et al. (1990: 14).

In addition to costs and benefits, the automation and computerization of HR activities and tasks have other influences as well. First, a well-designed, workable and effective HR information system provides a company with a significant competitive advantage (Broderick & Boudreau 1992). Developed and sophisticated HRIS do not only reduce overall HR costs but also help to simplify the way the customers, managers and employees access and use HRIS both locally and globally. Secondly, globalization gives an extra challenge to HRIS. An organization must be aware which parts of the HR information system is similar in every unit regardless of the country. Simultaneously the organization must be familiar with cultural differences which should be taken into account in designing

Computer storage and retrieval costs

Employee salary and benefits costs

1950 1960 1970 1980 1990 2000

the HR information system. (Stroh et al. 1998.) Thirdly, the automation and computerization of HR activities and tasks have on influence on the implementation of new HR technology and the HR information system in an organization. The process should be started step by step, and necessary resources, i.e. devices and workforce, should be allocated for the process sufficiently. At the same time, it is important to inform personnel in detail about the implementation and the reformation of the system as well as to organize training to all levels to confirm capability to use the system. Herein, the collaboration between HR and IT experts keeps the users’ ideas in practical shape and help all of them in problematic situations. (Axel, 1998.) Still, regardless of all the notions and advice concerning the HRIS use, in the 2000s the implementations of HRIS are still under consideration. Cost and benefits are constantly the matters involved when measuring the meaning of HRIS. A positive finding is that some studies have already been made to investigate and highlight the barriers behind the implementation of HRIS in organizations. (Ngai & Wat 2006.)

As IS in other organizational application areas, HRIS usually bring about changes in the activities of HRM. Changes affect not only everyday processes but also the skills of managers, leaders and HR professionals. It is important that HR people understand what an information system is about and what it takes to design, accomplish and to implement HRIS. The skills to understand database management help HR professionals to understand what data is stored and how it is stored as well as why and how that data can be manipulated, for example, how to produce reports for decision-making. It would be a great advantage if managers, leaders and HR professionals were aware of how to specify data technically and what the changes to the old system are. If technological development and changes are not taken into account, an organization will lose a lot of money and resources.

HR and IS professionals and HRIS design

Due to the novelty of HRIS research, some significant areas are not yet studied thoroughly. Relevant research papers to be referenced are so far few in numbers. One of the discussed research areas is the relationship between HR and IS professionals and HRIS design. An overview is made using the referenced scientific publications of HRIS, different internet pages of HRIS as well as papers of practical and semi-scientific studies of HRIS after the year 2000. When exploring and summarizing the published issues, some discussions on designing

HRIS as well as on HR and IS professionalism are found. According to the summation, HRIS transform both the information process and the role of human resources. They change processes, job specifications and collaboration with employees. When thinking about demands on HR and IS in an organization, HR professionals are concerned for effectiveness of HR processes and, on the other hand, how an information system aims at making an organizational process more efficient. Those who are constructing HRIS should understand both. Typically, HRIS projects in an organization are run by cross-functional teams and the implementation of a system can be regarded as a process. Haines & Petit (1997) studied the presence of IT department and IT professionals during a design process. They concluded that the presence increased and strengthened both the system itself and the user satisfaction. When the organization, tasks and the system were in balance, people used HRIS and were satisfied. Users knew they could get help if needed. In addition, stakeholders’ opinions were relevant for the development of HRIS services. However, Haines & Petit (1997) emphasized that the external user support, i.e. the analysis of needs and the ease of use and usefulness, should be studied more.

When managers and HR professionals consider designing and implementing HRIS in an organization, they focus on administrative tasks and costs as well as on business and competitive goals. HR people have their own conception who should use the system, what activities should be supported and what data collected. Accessibility of the system is an important issue. Herein some questions can be asked: Who will use the system? How can a user access the system? How will the data be updated? A technical design is necessary when software systems are designed, tested and implemented. Also ethical and legal issues should be taken into account, and the data in HRIS has to be valid, reliable and useful. (Hubbart et al. 1998, Kovach & Cathcart Jr. 1999.) When the system is in use, the relevant question is who is in charge of HRIS. Should HR department be responsible for the structure, table maintenance, security systems and data itself because HRM is the application area where IT delivers productive and suitable tools to get the job done? Or should IT department be in charge of the structure, maintenance, security and data because it provides the needed technology and software? These questions should be discussed at the beginning of an acquisition process.

According to Niederman (1999), even though technologies and systems have been part of HRM over forty years, there is not enough training for HRM students