Human Resource Information Systems (HRIS) have become one of the most important tools for many businesses. Even the small, twenty-person office needs to realize the benefits of using HRIS to be more efficient. Many firms do not realize how much time and money they are wasting on manual human resource management (HRM) tasks until they sit down and inventory their time. HRIS is advancing to become its own information technology (IT) field. It allows companies to cut costs and offer more information to employees in a faster and more efficient way. Especially in difficult economic times, it is critical for companies to become more efficient in every sector of their business; human resources (HR) is no exception.
In his 2008 book, The New Human Capital Strategy. Bradley Hall defines human resources management as watching over and growing human capital, one of the greatest aids businesses have in gaining competitive advantage. The modern human resource concept is based on four integrated parts: skills, structure, systems, and shared values. Skills are the abilities and knowledge that people bring to an organization. Structure refers to the communication channels within the human resource department, who manages and who is accountable. Systems are the tools used to make human resource decisions, the reviews and measures HR managers control. Shared values are the less tangible beliefs and cultural strengths an organization possesses. This four-part concept has been used since the 1960s and still functions as a basic understanding of human resources in the business world.
Although the basic components of the modern human resource system have stayed relatively unchanged since their inception, HR operations are still subject to flaws. According to a study cited by Hall, 75 percent of
studied companies attempt to bend prefabricated HR plans to their particular needs without considering a more integrated, top-down strategy. In many cases, lower-level managers were involved neither in creating the HR processes nor in implementing them. Others chose to focus more on assumed HR positions such as compensation director and staffing director, rather than overall business strategy. Few implemented third-party regular reports and accountability standards. There are, then, many opportunities available for companies to improve their existing HR systems.
ETHICS IN HUMAN RESOURCE MANAGEMENT
Ethical considerations are becoming increasingly important to HR departments in American industries. A tension often exists between a company's financial goals and strategies to improve profits, and ethical considerations with right-behavior concerns. Since human resources departments are often most focused on employees and employee behavior, it falls to them to define ethical behavior, communicate specialized ethical codes, and update or elaborate on existing right-behavior expectations. Human resource management systems are expected to communicate ethical values and so improve company performance.
In the absence of a fully separate ethics department, HR departments can struggle with this ethical burden. A 2008 study done by SHRM, the Society for Human Resource Management, showed that over 50 percent of employers did not make ethical considerations part of their employee evaluations. About half of employees did not think they had means to find ethical advice within their company, and even 19 percent of human resources professionals felt pressure to compromise their ethical standards, coming from multiple directions within their companies, though the HR department was the primary resource for ethical information in 80 percent of studied companies.
One of the ways the HR department can support ethics management for their company is through the maintenance of a code of ethics. Briefly, an ethical code for a business should help employees build trust with each other and their company, while clarifying any uncertain or gray areas that may exist in the company's ethical considerations. Instead of only supporting existing ethical standards, a proper code of ethics should seek to raise the standard and improve employee behavior. The code should show members of the company how to make judgment decisions and encourage such proper decision making, while at the same time providing enforcement protocols to prevent misconduct. When writing the code of ethics, an HR department should be sure to do the following:
- Create clear objectives for the code and other ethical endeavors to accomplish within the organization.
- Bring all levels of the organization into the process of creating the code, gaining support throughout the company.
- Check on all the latest legislation, both national and state, that may affect the company's ethical processes, expectations, and requirements, so that the ethical code can be as current as possible.
- Use the clearest language possible, making the code accessible and simple to understand.
- Willingly answer realistic problems and address real-life scenarios so that employees will have clear answers to their questions.
- List several resources for employees to seek continuing ethical education, from other reports by the HR department to helpful Web sites that can provide guidance.
- Keep in mind that the code of ethics is meant to be used, making sure that it is communicated to all levels of the organization and readily available to any employee who may need aid making judgment calls.
A code of ethics is only one part of the entire ethical system in an organization. The HR department should also make use of several other ethical tools to ensure employees are practicing right-behaviors and fully understand their ethical requirements.
MERGING AND HR
Whenever there is merger activity, the HR department often has a large responsibility to make sure that employee transitions go smoothly. When companies merge, some of the most significant changes occur in number and treatment of employees. If human resources can successfully deal with these important issues, they can have enormous impact on the success of the transition.
First, the HR department should ascertain the precise number of companies and company subsidiaries involved in the merger. This will give a clear idea of how many employees will be involved in the transition. Some of these employees may work in different businesses or on different products than the HR department has previous experience in, requiring new protocols. Employees across all companies involved will have a variety of reactions to the merger, raising both ethical and temperamental issues for the HR department to solve. To prepare for these issues, HR should pinpoint the managers involved in the
company integration, and gain their assistance throughout the merging of the business lines.
In certain mergers there will be an excess of employees, requiring multiple layoffs. The HR department should ascertain how many excess positions there are and how they will communicate the layoff information to employees and managers alike. Legal issues should also be dealt with; a legal consult with someone who has experience in mergers can be an excellent asset. If employees will
be terminated in the merger, it is also up to HR to find out how severance pay and extended benefits will be distributed. Will the company provide assistance for employees seeking new jobs? The HR department will be in charge of such out-placement assistance, and the protocols for who gets such assistance and what qualities (experience, position, etc.) extended benefits will be based on.
While layoff deadlines are being established and employee benefits managed, the HR department should also perform a careful internal audit. The companies merging will have differing employee handbooks offering two sets of employee instructions regarding training and expected behavior. Most will also have different instructions for managers and their treatment of personnel, including chains of communication and conflict resolution. The HR department should be sure to review these separate manuals and create one unifying handbook for the merged procedures. Other plans requiring combination by HR include compensation plans, employee benefits, and ethical standards.
EMPLOYEE SEPARATION AND TURNOVER
One of the most important functions of HRM is to oversee smooth and successful employee separations and turnover. There is always a certain amount of employee turnover at any company, with people voluntarily quitting their jobs for a host of different reasons. These employee separations differ from normal personnel losses resulting from acquisitions, in which employees are laid off and not replaced. For every separation, HR must use recruitment strategies to find a new employee and make sure that the company workforce does not suffer through less skilled workers or workers who are more likely to quit.
There are three types of external employee movement that concern HR departments. The first consists of pure growth, or acquisitions where the company only gains employees without having an excess to lay off, usually involving the annexation of a department or production line. The second type is pure reduction, or movement that only loses employees, such as a series of layoffs to cut costs. Third is all the possible combinations of the first two.
When HR needs to manage such employee separation (and the collective efforts to replace them with other talented workers), separation is divided into three different components, from which policies toward the change can be formed. The first component is quantity: how many employees are leaving the company? These leaving employees, once quantified, are sometimes separated further into categories based on company branches or position. The second component is the quality of employees leaving the organizations. This can refer to the positions they held, the particular talents they possessed (which may be hard to replace), and how they fit into the company's strategies. The third component consists of the costs to the company (costs involved in losing employees, recruiting new ones, and/or training those acquired during a merger).
Succession Planning. Succession planning is another vital part of the HR planning process. It refers to the way in which a company forms policies for replacing key members of its organization, shifting transfer of authority and responsibility carefully from a leaving member to a new member. Often, this means making sure that an arriving employee has the necessary training and experience to fulfill their functions.
RECORDKEEPING IN HR
Another major concern of the HR department are employee personnel records. These records are filed, maintained, and updated through HRM processes. A good HRM system will allow access to files both by the employee they belong to and the managers who require them. Among the informational data kept in employee files, HR should make sure the files include names, addresses, telephone numbers, marital status, dependents, and beneficiaries.
Most HRM strategies have policies established regarding treatment of personnel information. Companies usually collect information that is required only for legal reasons, or reasons necessary to that business. Employees are given chances to read and correct their files, and files are kept strictly by the company, with rules in place for viewing, maintenance, and outside transfer.
Certain pieces of legislation passed affect the storage and retrieval of personnel records. The Sarbanes-Oxley Act requires that every company has some confidential system in place for the communication of fraud-related activities and malfeasance. The Securities and Exchange Commission (SEC) has recently begun to penalize brokers who do not keep complete and detailed records of all their transactions, and the Health Insurance Portability and Accountability Act (HIPAA) requires that all
electronic records concerning patients be put into an easy-transfer format.
HR departments also manage background checks for potential employees, an increasingly important job as the risk of hiring a misrepresenting employee rises. USA Fact, a provider of screening services for recruiting departments, recently conducted a survey of over 300,000 background checks, and found that among the potential employees, 5 percent had criminal histories, more than a third had motor vehicle violations, 18 percent had employment histories that could not be verified, and approximately 11 percent had been falsifying their education experience. By catching fraudulent records such as these, human resources departments can significantly reduce employee theft, turnover, and even workplace violence.
The sorts of background checks companies can perform include criminal background reviews, Social Security number verification, employment history and education verifications, professional license verification, credit history reviews, and motor vehicle record checks.
There are several guidelines that can be used when HR departments form policies on conducting background checks. First, all inquiries should be strictly related to the position HR is trying to fulfill. Second, all background checks should first be agreed upon by the employee — formal consent in writing is the best way. This gives employees a chance to rethink their applications, especially if they realize a background check would disqualify them for the position. Third, employers should be reasonable. If background checks become over-extensive, they could cost the company too much money and the organization could risk invasion of privacy charges.
HUMAN RESOURCE PLANNING
HR planning attempts to connect employees to the vision, needs, and strategic plans of the company, including management of all aspects of human resources. Essentially, good HR planning will ensure that the best possible employees (with the right talents, ambitions, and personalities) will find the best possible positions within the organization. HR planning can be done in both the short and long term, although long-term strategies are the most common for HR planning purposes.
When HR planning, the company should tie in all of its HR processes to the company's goal and objectives. If HR planning does not exist to further specific objectives of the country, it is not fulfilling its purpose. This can lead to very wide parameters in HR planning, which can include most activities involving connections between employees and the structure of the business itself. There