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STRATEGIC PLANNING AND HRIS
After studying this chapter, students should be able to understand the following concepts:
Human Resource Information Systems (HRIS)
Relationship of HRIS with overall MIS
A. Strategic planning:
It is the process by which top management determines overall organizational purposes and objectives
and how they are to be achieved. The linking of HRM with strategic goals and objectives in order to
improve business performance and develop organizational cultures that foster innovation and flexibility.
The role of HR in the strategic planning process depends on the organization's view of HR. There are
three views detailed in the text which involve HR as an operational function, HR as a "fitting" function,
and HR as an equal partner in the strategic planning process. Obviously, it is our contention that the
latter is the appropriate view. In this view, HR's role would include environmental scanning,
competitive intelligence, internal strengths and weaknesses analysis, and the implementation of the
strategies. HR process involves following activities or steps.
I. HR Planning Process:
a. Determine the organizational mission:
It states Organization’s overall purpose and basic business scope and operations it provides
information like, why does our organization exist? What unique contributions can it make?
b. Scan the organizational environment.
This is also known as SWOT analysis through this process organizations identify different
opportunities available in the market and the threats that can be faced by the organization, and
the weaknesses and strengths possessed by organizations are also measured and identified
through this process.
c. Set strategic goals:
To achieve the overall mission or purpose of the organization it is required to set specific long-
term and short term objectives and goals. The goal can be defined as desired outcomes to
accomplish mission. Following are the characteristics of effective goals.
d. Formulate a strategic plan:
Courses of action is designed to meet strategic goals, also specifies functional or departmental
goals are selected at this step.
II. Strategic Planning and Strategic Trends
a. The Basics of Strategic Planning – A strategy is the company’s plan for how it will balance its
internal strengths and weaknesses with its external opportunities and threats and maintain a
competitive advantage. Managers engage in three levels of strategic planning: corporate-level
strategy, business-level competitive strategy, and functional strategies.
b. The Strategic Planning Process entails conducting a SWOT analysis to identify its strengths,
weaknesses, opportunities, and threats.
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c. Basic Strategic Trends
Globalization refers to the tendency of firms to extend their sales,
ownership, and/or manufacturing to new markets abroad. For businesses
everywhere, the rate of globalization in the past decade has been
enormous, and has several strategic implications for firms.
Technological Advances have been forcing, and enabling, firms to become
The Nature of Work is changing due to new technological demands.
The Workforce demographics are changing as well. It’s becoming more
diverse as women, minority-group members, and older workers enter the
d. Managerial Consequences of the Basic Trends – Managers have to craft strategies that balance
opportunities and threats (like those previously discussed) with their firm’s strengths and
weaknesses, such as global expansion and improved competitiveness strategies. These types of
strategies are driving other organizational changes.
III. HR’s Strategic Role
a. HR’s Evolving Role – It’s the firm’s workforce that provides the
competitive advantage for the firm. HR’s role is shifting from protector
and screener to strategic partner and change agent.
b. Strategic Human Resource Management refers to improving business
performance and developing an organizational culture that fosters
innovation and flexibility by linking HRM with the strategic goals and
objectives of the firm.
c. HR’s Role As a Strategic Partner can be seen as either adapting individual
HR practices to fit specific corporate and competitive strategies or as an
equal partner in the strategic planning process.
1. HR’s Role in Executing Strategy – Execution has been HR’s traditional strategic
2. HR and Value Chain Analysis – Strategy execution usually involves identifying and
reducing costs, and therefore value chain analysis.
3. HR’s Role in Formulating Strategy – HR management can play a role in
environmental scanning by assisting in identifying and analyzing external
opportunities and threats that may be crucial to the company’s success.
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B. Human Resource Information System
HRISs are systems used to collect, record,
and store, analyze, and retrieve data
concerning an organization's human
resources. The collection of information on
aspects of work life as diverse as salary and
payroll, compensation, leave, accidents,
superannuating and employee benefits has
always been part of the human resource
manager's function. In the early history of
personnel management, administrative
aspects, including data collection, took up a
great deal of time. Reviews of employee
salary and leave entitlements often
dominated the activities of earlier personnel
officers, reflecting both management
priorities and their own clerical backgrounds.
Such early information systems were manual, and were mainly used to notify employees of leave
entitlements, to ensure accurate salary and wage payments and to process workers' compensation and
superannuating claims. The data was seldom used to predict trends, identify problem areas and, or aid in
the longer-term staffing process.
I. The development of human resource information systems (HRIS)
In the early development of human resource management, information systems, although often accurate
and comprehensive, were mainly used for administrative and operational purposes. Forms were used to
collect leave requests, workers compensation and accident data, and salary variation and superannuation
entitlements. During the 1970s and 1980s, several factors radically changed attitudes towards human
resource information systems. The increasing complexity of payroll systems in this period demanded
more flexibility in, and access to information system. These needs happily coincided' with the
development of increasingly sophisticated computer hardware and software systems. In large
organizations, centralized payroll processing sections began to be separated from other human resource
functions. Some organizations contracted their payroll responsibilities to external payroll bureaus with
greater technological expertise, and for reduced costs.
II. Nature and benefits of HRIS
Modern human resource information systems are comprehensive, accurate and accessible systems for
recording employee and work data relevant to HRM, HR and organizational planning.
An HRIS is:
The system used to acquire, store. Manipulate, analyze, retrieve and distribute pertinent information
regarding an organization’s human resources. Its purpose is to facilitate, or support, straight, tactical and
operational decision making, to avoid litigation, to evaluate programs, policies, or practice and daily
Specific benefits of such systems include:
i. Improved planning and program development using decision support software. Faster
information processing and improved response times
ii. Decreased administrative and HR costs
iii. Accuracy of information
iv. Enhanced Communication at all levels.
Not all systems fulfill all these requirements, nor is such a complete system suitable for all organizations.
Essentially however all HRIS contain information on:
• Jobs and work conditions
• HR events (e.g. recruitment. training and development, performance appraisals, and
Management decisions and communication
Management Information System
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III. Uses of HRIS
Comprehensive and integrated information systems can be used widely -in administrative, operational and
strategic fields by HR and other managers. On the operational level HRIS data can be used to identify potential
internal applicants for job vacancies, saying external recruitment costs and assuring employees of career
opportunities. Strategically, such information may be used to gauge the effectiveness of current recruitment or
promotional systems, their costs and/ or benefits, and enable subsequent changes of direction in line with
proposed organizational strategies.
IV. Strategic HR planning and HR information systems
Proactive HR managers ensure that their HRIS contributes to organizational performance. A recent
development in the uses of HRIS in many has been the linking of 'benchmarking' practices to the design, choice
and implementation of such systems as a directly strategic initiative. Integration with organizational strategic
objectives is achieved by the subsequent establishment of performance targets and quantitative measures. As a
strategic 'tool', HRIS can be used to contribute to the development and modification of HR plans, on both
quantitative and qualitative bases, and to feed into specific HRM functions. HR data, if collected effectively and
contained within computerized, accessible systems, can both compare organizational HR 'bottom line' outcomes
by HRM function, between functions and with national or international performance benchmark
V. HRIS Applications
A computerized HRIS contains hardware and software applications that work together to help managers make
HR decisions. HRIS software applications currently available to business include those for employee
information, applicant tracking, skills inventory, payroll, and benefits administration.
VI. HRIS Security and Privacy
The HR department must develop policies and guidelines to protect the integrity and security of the HRIS so
that private employee information does not fall into the wrong hands. To maintain the security and privacy of
HRIS records, companies should control access, develop policies and guidelines that govern the utilization of
information, and allow employees to check their records.
VII. Purposes of HRIS
All organizations and their HR mangers need to consider whether their HRIS will be primarily used for
collecting, analyzing, interpreting or reporting employee information. The nature of the system chosen should
reflect this primary purpose, based upon a realistic analysis of needs prior to its introduction.
Small organizations with stable workforces and secure markets do not require complicated data analysis, but can
benefit from comprehensive and accurate databases for reporting purposes. On the other hand, large
organizations in competitive and dynamic industries demand strategic HRIS. Every organization needs to assess
its particular needs and identify the most appropriate information system for its chosen purposes.
VIII. Common HRIS Functions
Mainly following functions are performed by the HRIS in different organizations.
• Job analysis information can be placed in the HRIS.
• The program can write job descriptions and job specifications.
• Constant monitoring of compliance with EEO legislation.
• Maintain records of rejected applicants.
• Saves money and time in compiling reports.
• Ensure that women and minorities or not be adversely affected.
• Track minority hiring, recruitment, and advancement.
• Forecast supply and demand of labor from both the internal and external labor markets.
• Useful for internal recruiting.
• Can post job opening for employees to access.
• Can search for match between job specifications and applicant qualification.
• Applicant tracking system.
• Administering and scoring ability tests.
• Scanning resumes submitted online (web based or e-mail) or in person (or mail).
• Structured interviews.
• Matching qualifications with open positions (finding a good fit).