Unit 5

EMERGING TRENDS IN HRM

 What is HRIS ?
HRIS stands for Human Resources Information System.

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 HRIS
 HRIS is a system that is used to collect and store data of
employees in softcopy format.
 In most cases, an HRIS encompasses the basic functionalities
needed for end-to-end Human Resources Management (HRM).
 It has a system for recruitment, performance management,
learning & development, and more. Basically it is a software
package owned by a company.
 The HRIS can either run on the company’s own technical
infrastructure, or, what’s more common nowadays, be cloud-
based.
 This means that the software is running outside of the company’s
premises, making it much easier to update.
 Other commonly used names are HRIS system or HRMS or
Human Resources Management system., or Human Capital
Management systems, or HCM. Dr.Anuradha Phadnis 3
 Need of HRIS
 The need for this kind of information has increased
in the last few years, especially in large and/or
diverse companies, where decision making has been
moved to lower levels.
 And large companies generally have the advantage
when it comes to HRIS‘s...the cost to develop an
HRIS for 200 people is usually close to that for
2000 people...so it is a better investment for large
companies...larger companies tend to have systems
that have a fair degree of customization.

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 Advantages of HRIS
 Record-keeping. An HRIS is a record-keeping system that keeps track of changes to
anything related to employees. The HRIS can be seen as the one source of truth when it
comes to personnel data.
 Compliance. Some data is collected and stored for compliance reasons. This includes
material for the identification for employees in case of theft, fraud, or other misbehaviors,
first contact information in case of accidents, citizens identification information for the tax
office, and expiration dates for mandatory certification.
 Efficiency. Having all this information in one place not only benefits accuracy but also
saves time.
 HR strategy. The HRIS enables the tracking of data required to advance the HR and
business strategy. Depending on the priorities of the organization, different data will be
essential to track.
 Self-Service HR. A final benefit is the ability to offer self-service HR to employees and
managers. This enables employees to manage their own affairs. When done right, the HRIS
can offer a good employee experience.
 Working with an HRIS has multiple benefits for the organization, HR, and the employee.
Using an HRIS becomes interesting when you have between 30 to 50 employees.
 Managing this basic information in Excel becomes cumbersome and simple procedures like
approving employee holidays need to be standardized.
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 Uses of HRIS
 Applicant Tracking System (ATS). This software handles all the
company’s recruiting needs. It tracks candidate information and resumes,
enables recruiters to match job openings to suitable candidates from
the company’s application pool, and helps in guiding the hiring process.
 Payroll. Payroll automates the pay process of employees. Contractual
data is often entered into this system – sometimes combined with time
& attendance data – and at the end of the month, payments orders are
created.
 Benefits. Another functionality of the HRIS is benefits management.
Employee benefits are an important aspect of compensation and are
also managed in this system. More advanced systems offer an employee
self-service model for employee benefits. In this case, employees can
select the benefits they are looking for themselves. One may want more
paternity leave, the other one a more expensive company car. This self-
service approach to benefits is also called a cafeteria model.

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 Uses of HRIS
 Time & Attendance. This module gathers time and attendance
data from employees. These are especially relevant for blue-collar
work where employees clock in and out.
 Training. Learning and development is a key element when it
comes to employee management. This module allows HR to track
qualification, certification, and skills of the employees, as well as an
outline of available courses for company employees. This module
is often referred to as an LMS, or Learning Management System,
when it’s a stand-alone. An LMS usually includes available e-
learning and other courses to be followed by employees.
 Performance management. Performance management is a
key part of managing people. Performance ratings are generated
once or multiple times a year by the direct manager or peers of
the employee.
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 Uses of HRIS
 Succession planning. Creating a talent pipeline and having
replacements available for key roles in the organization is another
key component of an HRIS.
 Employee self-service. Employee self-service was already
mentioned. Organizations are focusing increasingly on having
employees and their direct supervisors manage their own data.
Requests like holidays can be asked for by the employee
him/herself. After approval, these are then immediately saved into
the system (and registered to track for payroll and benefits
purposes).
 Reporting & Analytics. A much rarer module in HRIS systems
is reporting and analytics. Modern systems enable the creation of
automated HR reports on various topics like employee turnover,
absence, performance, and more. Analytics involves the analysis of
this data for better-informed decision making.
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HR Accounting

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 HR Accounting: Concept
 The concept of human resource accounting has been
defined by the committee on Human Resource Accounting
of the American Accounting Association as “the process of
identifying and measuring data about human resources and
communication this information to interested parties.”
 The American Accounting Society Committee on Human
Resource Accounting defines it as follows –“Human
Resource Accounting is the process of identifying and
measuring data about human resources and communicating
this information to interested parties.”
 In simple terms, it is an extension of the accounting
principles of matching costs and revenues and of organizing
data to communicate relevant information in financial terms.
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 HR Accounting: Objectives
 HRA facilitates managing the people as one of the
resources of the organization.
 To help the management for making decision about
acquiring, allocating, developing and maintaining human
resources in order to keep control on human resource
cost as one of the organizational objective.
 To provide information to the management regarding
human resource cost and value.
 To see whether the human resources are effectively
utilized or not.
 To see whether the human resources are producing a
return on investment of the persons interested in the
organization or not.
 Provide human resources accounting detail to outsiders
like financers such as bankers, financial institutions and
creditors etc. Dr.Anuradha Phadnis 11
 HR Accounting: Advantages
 It helps the management in the employment, locating and utilisation of human resources.
 It helps in deciding the transfers, promotion, training and retrenchment of human
resources.
 It provides a basis for planning of physical assets vis-a-vis human resources.
 It assists in evaluating the expenditure incurred for imparting further education and
training in employees in terms of the benefits derived by the firm.
 It helps to identify the causes of high labour turnover at various levels and taking
preventive measures to contain it.
 It helps in locating the real cause for low return on investment, like improper or under-
utilisation of physical assets or human resource or both.
 It helps in understanding and assessing the inner strength of an organisation and helps the
management to steer the company well through most adverse and unfavourable
circumstances.
 It provides valuable information for persons interested in making long term investment in
the firm.
 It helps employees in improving their performance and bargaining power. It makes each of
them to understand his contribution towards the betterment of the firm vis-a-vis the
expenditure incurred by the firm on him.
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 HR Accounting: Limitations
 The valuation of human assets is based on the assumption that the employees are going to remain with
the organisation for a specified period. However, this assumption is wrong because employee mobility is
very high.
 The human resource accounting may lead to the dehumanization in the organisation. If the valuation is
not done correctly or the results of the valuation are not used properly.
 In the case of financial accounting, there are certain specified accounting standards which every
organisation must follow. However, there are no standards for HRA. Each organisation has its own
standards for it. So, there are no uniform standards for it. Therefore, the HRA of two organisations
cannot be compared.
 There are no specific and clear cut guidelines for ‘cost’ and ‘value’ of human resources of an
organisation.The present valuation systems have many limitations.
 The life of a human being is uncertain. So its value is also uncertain.
 Calculation the value of human resources is not so easy because it is most difficult to calculate the value
of the quality of any person. What worth will be of honesty, morality, benevolence and generosity? But
these moral values are so important for developing any company from bottom point.
 Jealousy to see the high value of other employee can decrease the efficiency of any employee because
he can think why my price is sow low and other employee’s price is so high.
 From human resource accounting, we cannot get short period benefits like general historical accounting
system.
 Indian company law 1956, Indian Income tax law 1961 and other legal laws are no rule for showing
human resource assets in the balance sheet.
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 HR Accounting: Methods
 1. Historical Cost Approach:
 This approach was developed by William C. Pyle, which is based
on the concept that there are certain cost incurred by the
organisation with regard to human resources. Cost is a sacrifice
aspect incurred to obtain some anticipated benefits or services.
 In this approach the actual cost incurred on recruiting, selecting,
hiring, training and development of human resources, of the
organisation is maintained and a proportion of it is written off to
the income of the next and expected useful life of human
resources.
 The approach of the cost of human resources is very similar to
the book value of the other physical assets. This method is simple
to understand and easy to work out. It is based on traditional
accounting concept of matching cost with revenue.
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 HR Accounting: Methods
 2. Replacement Cost Approach:
 This approach was first opined by Rensis Likert and was developed by Eric G.
Flamholth. Human resource of an organisation are to be values on the
assumption that a new similar organisation has to be created from cut down
and what would be the cost to the firm if the existing resources were
required to be replaced with other persons of equivalent talents and
experience.
 According to this model the value of employee is estimated as the cost of
replacement with a new employee of equivalent ability and efficiency. There are
two costs, individual replacement cost and positional replacement cost. The
cost of recruiting, selecting, training and development and familiarisation cost
are account in individual replacement cost.
 When an employee change the present position to another or leave the
organisation then the cost of moving, vacancy, carrying and other relevant
costs reflect in individual replacement cost. Positional replacement cost refers
to the cost of filling different position in an organisation.

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 HR Accounting: Methods
 3. Opportunity Cost Approach:
 This approach analyse the alternative earning sources from the
productive capacity of human resources by putting some alternative use.
Opportunity cost is the value of an asset (HR) when there is an
alternative use of it. The perspective chances of opportunity cost are
declined for those employees that are not scarce.
 Here, only the scarce people may be comprised the value of human
resources. But the alternative use of HR within the organisation is
restricted and at the same moment, the use of HR with finding out
their alternative cost may not be incorporated properly.

 4. Standard Cost Approach:

 This approach is based on the line and staff as well as functional
relationship of employees in an organisation. The employees of an
organisation are categorised and divided into different groups with
hierarchical levels or positions. Standard cost is fixed for each category
of employees and their worthwhile role may be calculated. Due to
some of the static position of employees on account of their status and
position, it does not take any differences of them put in the same group.
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HR Audit

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 HR Audit: Concept
 Human Resource Audit is a comprehensive
method of objective and systematic verification
of current practices, documentation, policies
and procedures prevalent in the HR system of
the organization.
 An effective HR audit helps in identifying the need for
improvement and enhancement of the HR function.
 It also guides the organization in maintaining
compliance with ever-changing rules and regulations.
 HR audit, thus, helps in analyzing the gap between ‘what
is the current HR function’ and ‘what should be/could
be the best possible HR function’ in the organization.
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 HR Audit: Objectives
 To review every aspect of management of HR to
determine the effectiveness of each programmes
in an organisation.
 To seek explanation and information in respect
of failure and success of HR.
 To evaluate implementation of policies.
 To evaluate the performance of personnel staff
and employees.
 To seek priorities, values and goals of
management philosophy.
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 HR Audit: Scope
HR strategies and
HRM functions HR compliance HR climate
policies
• i. Consistency • i. The type of • i. line personnel • i. Degree of
with the HRM functions adhere to employee
organizational performed; various HR turnover,
objectives, • ii. The degree to policies • ii. Degree of
strategies, and which these • ii. compliance employee
policies; functions are with the legal absenteeism,
• ii. Consistency related to HRM requirements as • iii. Degree of
with the objectives; and provided under accidents,
environment; • iii. The degree to various legal • iv. Status of
• iii. which these Acts relevant for grievances and
Appropriateness functions are management of disciplinary
in the light of performed human actions, and
organizational effectively. resources.
• v. Findings of
resources; attitude and
• iv. morale surveys.
Appropriateness
in the light of
time horizon;
and
• v. Workability.
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 HR Audit: Process
1. Determining
6. Develop
the Scope and
Action Plans:
Type of Audit

2. Determining 5. Feedback
the Audit about the
Method: Results:

3. Data 4. Setting the

Collection: Standards:
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HR Shared Services

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 HR Shared Services: Concept
 Organisations use shared services as a way of organising their HR
activities, typically concentrating administrative activities into a
centralised and commonly shared function.
 Large organizations with complex human resources departments
outsource HR processes, reporting, and software solutions to
companies that are positioned to handle these very specific and
often difficult tasks. This third-party management is often referred
to as HR shared services or HR Service Delivery (HRSD).
 Examples of HR Shared Services include recruiting, talent
management, data analysis, employee sentiment prediction
software, payroll, and overall human capital management (HCM).
 The shared service model can help businesses reduce costs, avoid
duplication of effort, and allow a greater focus on HR strategy.

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 HR Shared Services: Objectives
 Consolidate HR tasks and software
 Optimize HR operational efficiency
 Continuity
 Internal resources can focus on strategic tasks
 The development and retention of the talent pool
 Increases employee experience
 Saves money
 In summation: Not all companies will choose an HR shared
services strategy. To be quite honest, it doesn’t work for
everyone. That’s neither a good thing nor a bad thing. It’s just
reality. That said, HR has a real responsibility to their employees
and their companies to find the most strategic, efficient, and cost-
effective way to function. An HRSS strategy offers a great deal of
opportunities to succeed on these attainable goals.
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 HR Shared Services: Benefits
 Automated HR processes allow the internal human resources
team to focus on company related goals.
 All HR data and analytics are centralized— creating one single
location for all data.
 Shared case management is more cost effective than increasing
the size of the HR department, plus current HR staff is
positioned for career development.
 All data will be consistent and centralized. Once all your
information is in one place within your HR Service Delivery
platform, there won• t be any discrepancies when information is
updated.
 Increased employee and customer satisfaction.
 Streamlined problem solving.
 Top talent can be developed and retained through employee
sentiment prediction software. Dr.Anuradha Phadnis 25
 Issues in creating HR Shared Services
 Ensuring the role of HR as the strategic implementer in both
words and deed.
 Balance of HR aligning itself with the business interests of the
owner’s vis a vis fulfilling its distinctive function as a champion for
employees.
 Deciding which is more critical: efficient use of resources or
satisfying the customers’ needs.
 Preparing for the possibility that staff from the lower position
cannot cope up with the capabilities that will make them quality
for senior positions.
 Identifying the risks of focusing too much on selling the products
rather than giving sufficient consideration to the content.
 Avoiding depersonalized services because of the complete loss of
face to face contact.
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Thank You !!!

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