Training & Development and HRIS Applications
February 12, 2025
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Human Resource Information System (HRIS) often described as Human Resource Management System, in the present scenario can serve as a crucial tool in providing a competitive advantage to the organizations. It involves measurability, better management of data and information, equally provide scope for measurement of key HR practices and its outcomes on employee productivity as well as organizational performance. HRIS is usually adopted as well as implemented for attaining the following goals:
An evaluation of HR costs involves calculation of ROI (Return on Investment) on Human Capital, which generally encompasses an assessment of the benefits or the positive outcomes and also the costs or the negative outcomes of HR led initiatives/practices. The evaluation of costs and benefits of HRIS can be performed with the help of various techniques:
Methods for estimating the value of indirect benefits: These are typically estimated in dollars. It involves a calculation of the Average Employee Contributions (AEC). AEC is derived by calculating the difference between the net revenue of an organization and the cost of goods sold divided by the total number of employees. In short, AEC = (Net Revenues – Cost of Goods Sold)/number of employees.
AEC is the average employee contribution to the organization. This is a profitable technique for the organization. It helps the HR professionals to estimate their contribution towards the organization. It also contributes towards the assessment of employees individual differences and production rate.
The HRIS Cost Benefit Analysis process lot of times ignore an assessment of the HR policies and its influence on organizational effectiveness. Calculation of direct and indirect costs sometimes is confused, as a result of which direct costs are calculated as direct costs. Since more emphasis is given on time saving, decision makers fail to analyze the outcomes or the end results of the HR led initiatives.
The Cost Benefit Analysis is done by analyzing the overall organizational goals and the objectives which have been planned to be achieved over a period of time in measurable terms. Until and unless, a proper Cost Benefit Analysis is done, decision-makers will not be able to estimate the expenditures on investment. The process enhances the strategies for a firms effectiveness. Extensive analysis should be done by the decision-maker through proper identification of direct and indirect cost and benefits.
Variance Analysis: Variance Analysis is one of the methods for assessing the indirect benefits and can equally be used as a measure in the evaluation process. This involves an assessment of the financial and operational data for identifying and ascertaining the cause of the variance which is identified. In project management, this technique can be very useful for evaluating and review the progress in a project, maintaining budgetary control by assessing the planned as well as the actual costs incurred in a project.
According to the opinion of Kovach (2002), HRIS implementation has the following advantages:
Broadly HRIS Benefits can be classified into the following:
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