With the increasing amount of Data and increasing use of information technology the Human resource information system is a crucial part of the organizational dynamics.Just like any other resource in the organisation, The HR costs are required to be audited. A combination of Human resource which is Intellectual, gives a Maximum ROI can be achieved by proper auditing and accounting from time to time.
Human Resource Information System, Accounting and Audit.
1. HRIS
HR Accounting & Audit
Ms. Anubha Rastogi
Astt. Prof, Vidya School Of Business
2015-16
2. Human Resource Information Systems
(HRIS)
Virtually all HR management functions can be enhanced through the
use of an HRIS – any organized approach for obtaining relevant and
time information on which to base HR decisions
2
Human resource information systems (HRIS)
An integrated system of hardware, software, and databases designed to
provide information used in HR decision making.
Benefits of HRIS
Administrative and operational efficiency in compiling HR data
Availability of data for effective HR strategic planning
Uses of HRIS
Automation of payroll and benefit activities
EEO/affirmative action tracking (Equal Employment Opportunities)
3. HUMAN RESOURCE INFORMATION SYSTEM
Goal: Integrate Core Processes into Seamless System
*Certain data are available to employees at work or at home. Examples: supervisors might access just-
in-time training for conducting performance appraisal reviews. Operative employees might enter time
and labor data. All employees may be able to review 401(k) balances, transfer funds, make benefit
elections, set annual performance goals, update personnel data.
Input Data Types
Job Analysis
Recruitment
Selection/Job Posting/
Employee Referral
T&D
Performance Appraisal
Compensation
Benefits
Safety
Health
Labor Relations
Employee Relations
Output Data Uses*
Employee Tracking
Diversity Programs
Hiring Decisions
Training Programs/E-
learning/Management Succession
Compensation Programs
Benefit Programs (e.g.,
prescription drug programs)
Health Programs (e.g., Employee
Assistance Programs)
Bargaining Strategies
Employee Services
Organizational
Strategic
Plans
Human
Resource
Management
Plans
Contribute Toward Achievement of:
Human
Resource
Information
System
4. Typical Data Elements in a Human
Resources Information System
Employee personal data Salary administration
Benefits information Skills
Benefits plans Attendance
Employee benefits information Performance/Discipline
Dependents Health and Safety
Training and development Payroll
Employee work data
Salary
Performance review
Job information
Employment status information
Hire/Termination information
Work information
6. Designing and Implementing
an HRIS
HRIS Design Issues
What information available and what is information
needed?
To what uses will the information be put?
What output format compatibility with other systems is
required?
Who will be allowed to access to the information?
When and how often will the information be needed?
7. Accessing the HRIS
Intranet
An organizational (internal) network that operates over
the Internet.
Extranet
An Internet-linked network that allows employees access
to information provided by external entities.
Web-based HRIS Uses
Bulletin boards
Data access
Employee self-service
Extended linkage
8. HR Accounting
‘HRA is a process of identifying and measuring data about
human resources and communicating this information to
interested parties’.
It involves measuring the costs incurred by organizations to
recruit, select, hire, train, and develop human assets. It also
involves measuring the economic value of people to the
organization’.
Calculating HR Cost
9. Top Five Principal Reasons for the
Importance of Measuring Human
Resources
HR should be accountable (89.6%)
People skills and knowledge most important source of sustained
competitive advantage (84.7%)
Understanding the value of people focuses us on future human resource
needs. (76.7%)
Measurement of human resources gives management needed information
to support business strategies (74.3%)
Enables management to make better informed decisions. (72.2%)
10. Top Five Reasons Why Organizations Do
Not Measure Human Resources
Current HR measures lack precision (58.8%)
Current HR measures are not widely accepted (50.56%)
Current HR measures lack reliability (40.4%)
Insufficient time to develop appropriate HR measures (40.1%)
Current HR measures lack validity (38.5%)
11. Objectives of HRA:
Providing cost value information about acquiring, developing,
allocating and maintaining human resources.
Enabling management to monitor the use of human resources.
Finding depreciation or appreciation among human resources.
Assisting in developing effective management practices.
Increasing managerial awareness of the value of human resources.
For better human resource planning.
For better decisions about people, based on improved information
system.
Assisting in effective utilization of manpower.
12. Assessing HR Effectiveness
HR Audit
A formal research effort that evaluates the current state
of HR management in an organization
Audit areas:
Legal compliance (e.g., EEO, OSHA, ERISA, and FMLA)
Current job specifications and descriptions
Valid recruiting and selection process
Formal wage and salary system • Benefits
Employee handbook
Absenteeism and turnover control
Grievance resolution process
Orientation program
Training and development
Performance management system
13. HRM Auditing Model
Strategic-Level HRM — determines the effectiveness of HRM functions in the
overall strategic plan of the organization
Managerial-Level HRM — determines effectiveness of HRM functions within
departments and units
Operational-Level HRM — determines the effectiveness of HRM functions
throughout the organization
When labour costs are large or the largest component of total product or
service costs
The personnel audit is used to justify the existence of budgets of staff and
programs
The personnel audit provides valuable feedback from employees and line
managers
The personnel audit may uncover problems such as unqualified HRM staff, lack
of HRM policy compliance, or low employee satisfaction
Reasons for Conducting HRM Audits
14. HR Performance and Benchmarking
Benchmarking
Comparing specific measures of performance against data on those measures
in other “best practice” organizations
Common Benchmarks
Total compensation as a percentage of net income before taxes
Percent of management positions filled internally
Dollar sales per employee
Benefits as a percentage of payroll cost
Return on Investment (ROI)
Calculation showing the value of expenditures for HR
activities.
A = Operating costs for a new or enhance system for the time period
B = One-time cost of acquisition and implementation
C = Value of gains from productivity improvements for the time period
BA
C
ROI
