All HR process or activities are dependent upon the managers' efforts to formulate and implement the organizational strategy (Wei and Lau, 2005).
Human resource process also include the practices that enhance the knowledge, skills, ability and motivation of employees would have a greater impact on performance if the organization is using a strategy that requires highly skilled and motivated employees (Neal, West and Paterson, 2005).
Human resource can provide a competitive advantage due to the fact that it is valuable, rare, imperfectly imitable and has no substitutes. Competitors can duplicate competitive advantage obtained via better technology and products but it is difficult to duplicate competitive advantage that is created through improved management of people (Khandekar and Sharma, 2005). Khandekar and Sharma (2005) also believe that if companies are to survive and thrive in the global economy they require world class human resource competencies and processes for managing them. A critical mass of employee needs to be developed who are knowledgeable or skilled in a particular technology. This can provide source of competitive advantage.
Human resource contributes to create high performance work systems by linking various employees in different departments in the same organization (Brewster, 2007). Organisations use the effectual Human Resource system to increase their competitiveness by investing in employee development (Sutiyono, 2007).
EFFECT ON DECISION MAKING
Decision Making is an act of narrowing down the possibilities, choosing a course of action and determining the problem's potential consequences (Harsh Takkar, 2011). Human resource decision making entails finding the most effective ways of investing in people. It involves determining where to use money and resources in order to enhance business and employee performance. In international business operations, HR managers have to contend with the ever-changing global business environment. Deliberately engaging in the process of human resources decision making can have a positive impact on the local and overseas operations of a business (Diana Wicks, 2011)
HR decision making process may require human determinants, computers, information systems, and communication technology in addition to the soft data, especially in collaborative decision making where anonymity may play a key role. Data generated and/or collected from these sources for the decision making are more facilitating and decisive, thus making them the more vigorous, powerful and hard-earned data in HR decision making process (James Yao, 2010).
According Byun (2003), many quantitative or qualitative techniques have been developed to support human resource management (HRM) activities, classified as management sciences/operations research, multi attribute utility theory, multi-criteria decision making, ad hoc approaches, and human resource information systems (HRIS). More importantly, HRIS can include the three systems of expert systems (ES), decision support systems, and executive information systems (EIS), decision support systems, and executive information systems (EIS) in a addition to transaction processing systems and management information systems (MIS) which are conventionally accepted as an HRIS. As decision support systems, GSS is able to facilitate HR groups to gauge users' opinions, readiness, satisfaction, etc., increase their HRM activity quality, and generate better group collaborations and decision makings with current or planned HRIS services.
Further, various studies had offered a conclusive evidence to affirm the role HRIS plays in support of strategic decision-making. There has been a dramatic increase in HRIS's usage. For example, Lawler and Mohrman (2003) in Agyenim Boateng (2007) and in Hussain et. al, (2006) established that the use of HRIS had consistently increased over the previous years, irrespective of the degree of strategic partnership held by the HR function. It helps to reduce HR costs by automating information and reducing the need for large numbers of HR employees by helping employees to control their own personal information and by allowing managers to access relevant information and data, conduct analysis, make decisions and communicate with others without consulting an HR professional (Awazu Desouza, 2003; Ball, 2001).
Strategic HRIS consists of tools that assist in decision making. For example strategic decisions may include those associated with recruitment and retaining employees. Much, if not all, of the administrative information held by HRIS can be used to analyze an organization and formulate strategies to increase the value of an HRIS. Some experts also believe that easy access to vital information will become an integrated part of many strategic decision-making processes (Kovach, et. al, 2002)
Strategic value can be derived using HRIS tools that assist decision making concerning vital HR functions (Farndale et. al, 2010; Troshani et. al, 2011). For example HRIS can be considered as a tool that provides strategic planners with the needed information enabling them to forecast future workforce demand and supply requirements. Moreover, it can be considered as a tool that helps employers in retaining the right employees. This can be done by paying them competitive salaries compared to the market, and retaining them to develop their skills and abilities to carry out their existing and future jobs.
EFFECT ON INFORMATION EFFECTS
Information can be defined as meaningful organized data (N. Upadhyay, 1992). Human Resource Information System is a concept which utilized the development of Information Technology (IT) for effective management of the Human Resource (HR) functions and applications. HRIS enables systematic procedure for collecting, storing, maintaining, and recovering data required by the organizations about their human resources, personnel activities and organizational characteristics (Kovach K.A, et al, 2002). It acquires stores, manipulates, analyzes, retrieves and distributes information about an organization's human resources (Tannenbaum S.I., 1990).
The importance of system quality, information quality and system success has been recognized by many researchers as key ingredients in developing a competitive advantage. New scales and measures, along with continued research into organizational effectiveness and user satisfaction are needed (DeLone and McLean, 2003).
Initial efforts to manage information about personnel were frequently limited to employee names and addresses, and perhaps some employment history often scribbled on 3x5 note cards (Kavanaugh, Gueutal and Tannenbaum, 1990). HRIS provides management with strategic data not only in recruitment and retention strategies, but also in merging HRIS data into large-scale corporate strategy. The data collected from HRIS provides management with decision-making tool. An HRIS can have a wide range of usage from simple spread sheets to complex calculations performed easily (Parry, 2010).
HRIS helps organizations in managing all HR information. It helps in recording and analyzing employees and organizational information and documents, such as employee handbooks, emergency evacuation and safety procedures (Fletcher P, 2005 & Lee A., 2008).
A competitive advantage in the marketplace requires timely and accurate information on current employees and potential employees in the labor market. With the evolution of computer technology, meeting this information requirement has been greatly enhanced through the creation of HRIS. A basic assumption behind this book is that the management of employee's information will be the critical process that helps a firm maximize the use of its human resources and maintain competitiveness in its market (Mohan. T & Michael J. K,2010).
With an appropriate HRIS, Human Resources staff enables employees to do their own benefits updates and address changes, thus freeing HR staff for more strategic functions. Additionally, data necessary for employee management, knowledge development, career growth and development, and equal treatment is facilitated. Managers can access the information they need to legally, ethically, and effectively support the success of their reporting employees (Susan, 2010).
One area in which the HRIS apparently has had strong positive effects involves information. Kovach, Hughes, Fagan, and Maggitti (2002) suggest that the HRIS will become the mechanism for sharing information across the functional area of an organization. Administrative HRIS is used in day-to-day operations and it is usually in the form of records that hold employee information. Administrative HR is much more efficient when it is used with IT because HR professionals are better able to handle large amounts of information efficiently (Kim Johns, 2005).