Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
Impact of Human Resources Information System (HRIS) on
the Performance of Firms: A Study on Some Selected
Bangladeshi Banks
Md Shahnur Azad Chowdhury*, Mohammad Yunus**, Faruk Bhuiyan***
and Mohammad Rokibul Kabir ****
While working in organizations in today's highly competitive & changing world
people come across situations where they are to take decision which forces
them either to stick to an existing practice system or to transform the practice
system by getting into a new practice. The same is in the case with technology
adoption. Organizations do have a filing system. Everyone has a filing system
no matter what whether it is organized or disorganized. With the development
of technology the filing procedure is often maintained by using software in PCs
(Personal Computers). Some people do it centrally whereas someone
decentralizes to maintain this. The local organizations in the
country(Bangladesh) have been somehow quite reluctant to use technology to
the fullest extent at the workplace. As a result of which the system of
management becomes a bit disorganized with old school practices. Filing
system & indexes are often used by many of the organizations but the
problem often occurs with retrieving or finding the files when necessary. If not
maintained systematically then there might be problems regarding its retention
& effective use. So studies are carried out and must be carried out to show
how important it is to have a filing system which is based on software that
ensures its retention, timeliness, economy, classification etc. Besides taking
the concept of filing one must take into consideration the HR practices of the
country. The concept of HRM is quite new in the country and the concept of
HRIS (Human Resources Information System) as well. HRIS is so new in our
country that only students having courses of HRM becomes aware of the
term. Many of the officials of an organization are still unaware with HRIS. The
study on HRIS needs to be carried out to show how the systematic
arrangement of HR practices help organizations to achieve their goals &
aligns itself to the business strategy that it pursues. HRIS –its knowledge,
adoption, usefulness & process needs to be conveyed to people so that they
utilize the benefits of HRIS to the optimum level. The aim of this study is the
practice of filing & its updating in some Bangladeshi companies. Besides it will
also suggest organizing its practices of HR into a sound and balanced HRIS
practices that will benefit the organization to reduce its paperwork & the
sensitive issue - privacy can be maintained to the department. Its accessibility
can also be ensured with the help of adoption of such type of system. So
basically such studies are needed to be carried out to inform the usefulness of
adopting technology at workplace & suggests how quickly it can be adopted
and transformed to a standard mode of practices.
Keywords: HRIS,Performance,Filing system,Technology.
________________________________________________
* Associate Professor, Department of Business Administration, International Islamic University Chittagong, Cell: +8801199201012 email:yunusiiuc48@gmail.com
** Associate Professor, Department of Business Administration, International Islamic University Chittagong.
***Assistant Professor, Department of Business Administration, International Islamic University Chittagong.
****Assistant Professor, Department of Business Administration, International Islamic University Chittagong, Cell:
+8801191555211, email: rakibais@yahoo.com
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
1. Introduction
Organizations in the twenty first century are under the pressure of reducing cost of
operations and the pressure of being responsive to the local customers’ demand. It is
more intense for service oriented organizations, like; university, telecommunication,
pharmaceutical, hotel, airline, bank, etc. The success of these organizations mostly
depends on the productivity and behavior of their employees. Moreover, satisfied
employees are a prerequisite to build satisfied customers (SinEiE, Poloπki, 2007). This
is more special in banking industry where employees interact with clients on daily basis.
So, to improve the efficiency of bank employees, human resource (HR) department
needs to build an integrated information technology-enabled human resource
management system. Human Resource Information System (HRIS) is used to gather
and maintain the data that describe human resources, transforming data into
information and then reporting the information to users (Ngai et al, 2008). HRIS
accelerates the effective formulation and implementation of HRM activities. So, the
areas that an integrated HRIS cover HRIS is in personnel administration, salary
administration, leave/absence recording, skill inventory, medical history, performance
appraisal, training and development, HR planning, recruitment, career planning,
negotiations etc. (Singh et al., 2011). There are few research paper topics for HRIS in
Croatia: HRIS practice in large Croatian companies (Markic et al., 2011), HRIS
development at universities (Bambir et al., 2010) and HRIS in hotels at the Adriatic
coast (ArneriE et al., 2007). Panayotopoulou et al. (2007) mentioned the several effects
of technology on six key HR processes, namely: HR planning; acquiring HR
(recruitment and selection); HR evaluation (performance appraisal); communication;
rewarding HR (performance appraisal, compensation and benefits); and developing HR
(training and development, career management). Further, Beckers and Bsat (2002)
identified at least five reasons about the use HRIS by companies, these are: increase
competitiveness by improving HR operations; produce a greater number and variety of
HR-related reports; shift the focus of HR from the processing of transactions to strategic
HRM; make the employees’ part of HRIS; and reengineer the entire HR function of
companies. In spite of having several benefits of HRIS- enabled companies, they are
failed to enjoy the full benefits of it. A survey conducted by the Institute of Management
and Administration in the year 2002 indicated that the biggest problems in managing
HRIS include: lack of staff, lack of budget, problems with time management, need to
work with other departments and lack of information technology support (Ngai and Wat,
2006). Since these are rather general obstacles that can relate to any information
system, a list of more specific obstacles, when implementing and managing HRIS,
would include: unclear about the key persons responsible for basic HRIS design,
several national laws and may create complexity in formulating HR policies, threat of
losing personal data that HRIS encompasses, and difficult to measure the return on
investment (ROI) of HRIS due to its intangibility of ROI of HRIS. In this research, we
have tried to explore the areas of HRIS application in banking industry in section 4.1,
and mention the benefits of IT-enabled HRM in section 4.2. We have also tried to
identify the reasons of being failure to exploit the full benefits of computer based human
resource management in section 4.3.
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
2. Objectives of the Study
1. To discover the scope of HRIS in banking Industry of Bangladesh
2. To investigate the bankers’ perception about the benefits of HRIs in banks.
3. To pinpoint the inconvenient issues are being faced by the sample banks during the
applications of HRIS.
3. Methodology
Demographic Characteristics in Methodology
Test of data validity:
C. Value
Standard
Status
0.929
Acceptable
0.60
Frequency Table regarding HR people having specialized knowledge in the field of
HRM:
Title
No. of HR specialist
Percentage
Have HR knowledge
Don’t have
knowledge
sound
27
77
HR 08
23
Total
35
100
3. Literature Review:
Over the last few decades there has been a considerable expansion in the number of
organizations collecting, storing, monitoring, and analyzing information regarding their
human talents with the use of Human Resource Information Systems (HRIS) software
or other types of software which include HRIS functionality (Ball, 2001; Barron,
Chhabra, Hanscome, & Henson, 2004; Hussain, Wallace, & Cornelius, 2007). HRIS
refers to a systematic procedure for gathering, storing, maintaining, and recovering data
required by an organization about their human resources, personnel activities and
organizational characteristics (Kovach, Hughes, Fagan and Maggitti, 2002). An
integrated HRIS may have a wide range of usages from simple spread sheets to
complex calculations performed easily (Parry 2010). The significance for the execution
of HRIS varies among organizations. Some use it to reduce costs, others to accelerate
better communication, and some use it to re-orient HR activities to increase the
department’s strategic contribution (Parry, Tyson, Selbie, & Leighton 2007). Ngai and
Wat (2006) conducted a survey of the implementation of HRIS in Hong Kong
organizations. They found that the greatest benefits of the implementation of HRIS were
the quick response and access to information that it brought. Moreover, the application
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
of an HRIS would minimize HR related costs by automating information and reducing
the number of HR employees; by facilitating employees to monitor & control their own
personal information; and by permitting managers to access relevant information and
data, conducts analyses, make decisions, and communicate with others without
consulting an HR professional (Awazu & Desouza, 2003). With the undoubted benefits
of HRIS, organizations than any time before are more aggressive to use HRIS. But they
are not in the position to enjoy it due to some barriers. The study of Krishnan and Singh
(2006) explored the issues and barriers faced by nine Indian organizations in
implementing and managing HRIS and the findings of the study were lack of knowledge
of HR department about HRIS and lack of importance given to HR department in these
organizations.
4. Discussions:
4.1 Scope of HRIS Applications in Banks:
The scope of HRIS in Banks can be discussed under different sub systems as follows:
i. HR planning Subsystem: This subsystem has the role of conducting special studies
to provide data on the firm’s human resources. Such system consists of two steps:
assessing current human resources and meeting future human resource needs. It helps
HR managers to ensure that they have the right number and kinds of capable people in
the right places and at the right.
ii. Recruiting and Selection SS: This subsystem records details of recruitment and
selection activities, like; cost and method of recruitment and selection and time to fill the
position, and provide necessary information timely to the users.
iii. Leave and Absence Management SS: It keeps and provides information relating to
HR leave and absence issues. It enables to provide comprehensive method of
controlling leave and absences.
iv. Skill Inventory SS: It is used to store and disseminate information relating to
acquire skills and monitor the skill database both employee and organizational level to
the HRIS users.
v. Learning Management SS: This system provides a system for organizations to
administer and track employee training and development efforts. Sophisticated
Learning management systems allow managers to approve training, budgets, and
cale4nders alongside performance management and appraisal metrics.
vi. Performance Appraisal SS: It provides data on individual employee performance
appraisal data, like; due date of appraisal, scores etc.
vii: Payroll SS: This subsystem automates the pay process by gathering data on
employee time and attendance, calculating various deductions and taxes, and
generating periodic pay cheques and employee tax reports. It can encompass all
employee related transactions as well as integrate with existing financial management
system.
viii. Benefits Administration SS: It provides a system for organizations to administer
and track employee participation in benefits programs. These typically encompass
insurance, profit sharing, retirement benefits, stock purchase option and flexible benefits
etc.
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
ix. Employee Self Service SS: It allows employees to query HR related data and
perform some HR transactions over the system. Employees may query their attendance
record from the system without asking the information from HR personnel.
x. Collective Bargaining SS: A computer terminal can be positioned in the conference
room linked to database. This will expedite negotiations by readily providing up to date
data based on facts and figures and not feelings and fictions.
xi. Environmental Reporting SS: It provides information about whether organization
involves fair HR practices by addressing environmental issues, such; EEO records,
EEO analysis, health records, toxic substance, grievances and union increases.
4.2 Respondents’ Perceptions
4.2.1 Opinion about Opportunity
Table-3: HRIS enabled organizations offer more opportunity to be informed regarding
HR related issues by ensuring open accessibility for all
Type
of HR issues
Strongly
Disagree No
Agree Strongly
Stake
Disagree
comment
Agree
Holders
Employees
Fair treatment
2
8
4
7
14
Employers
Ensuring
right 0
appointment
3
0
20
12
Customers
Selection
of 5
better
service
provider
7
8
9
6
Recruiting
Agencies
Bridging between 0
HR demand and
supply
0
4
15
16
Govt.
Ensuring fair HR 0
practices
6
9
14
6
To find whether the respondents believe that HRIS enabled organizations offer more
opportunity to be informed regarding HR related issues by ensuring open accessibility
for all the above question has been asked.
Out of 35 respondents 21(60%) believe that the use of HRIS provides additional benefit
in fair treatment by the employer while 10 respondents (28.5%) think it has no effective
role to play in fair treatment.
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
About 92% (32) of the respondents agreed that HRIS enabled organizations have
advantages of selecting right candidates for them over the traditional organizations.
The respondents’ opinion about its applicability for customers to select the right service
provider is not very convincing as only 15 respondents (42.85%) believe it has
application while 12 respondents have opinion against it. 8 respondents made no
comment on it.
Almost all the respondents have given their opinion in favour of its wide scope in
recruiting agencies to bridge between the HR demand of different organizations and
supply of right candidates best fitted for each individual organization.
20 respondents (57%) feel that the government can ensure fair treatment of employees
by different organizations through strict monitoring by using the information provided
through HRIS.
4.2.2 Opinion about Scope
Area
To what extent HRIS is being practiced in HR activities
Frequency
Percentage
Recruitment & Selection
28
80
Training & Development
14
40
Payroll
26
74
HRIS is being practiced in banks in three different areas called i) Recruitment &
Selection ii) Training & Development and iii) Payroll. 80% of the sample banks use
HRIS in Recruitment & Selection process while 40% banks uses HRIS in Training &
Development and 74% of the sample banks applies it in preparing payrolls of their
employees.
4.2.3 Opinion about Benefits of HRIS
Respondents’ perceptions about the benefit of HRIS applications in HRM process have
been sought and the following results have been revealed.
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
4.2.3.1 Use of HRIS in HRM Process
Use of HRIS in HRM Process
Not
Not
that Neutral
Important
important at important
all
Very
important
0
0
2
5
28
Training
& 0
Development
4
7
9
15
Payroll
4
2
7
22
Area
Recruitment
& Selection
0
Among different areas of applications of HRIS in HRM process respondents have given
the highest importance on recruitment and selection process as it is found from the
study that about 94.28% (33 out of 35 ) believe it provides more benefits than traditional
systems. The second area of HRIS application that provide more benefit than traditional
system as described by them is payroll with 82.86% respondents view while training
and development is in the last position that derives benefit for the sample organizations
among the above mentioned three areas.
4.2.3.2 Role of HRIS in saving time on HR functions
Role of HRIS in saving time on HR functions:
Title
Frequency
Percentage
Yes
No
Yes
No
Role
of 20
HRIS in HR
process
15
57.1
44.9
Time saving 23
in
HR
planning
12
65.71
34.29
Time saving 19
in
Recruitment
& Selection
16
54.28
45.71
Time saving 15
15
50
50
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
in Training
Time saving 17
in Record
keeping
13
56.7
43.3
Time saving 17
in Sharing
information
13
56.7
43.3
Time saving 19
in Strategic
HR
11
63.3
36.7
The respondents have given the opinion on the role of HRIS in HR Process for saving
time. The results show a mixed response as about its role in saving time having almost
equal response for both of yes and no. Still among the respondents, highest 65.71% of
the respondent think it saves time in HR planning while 63.3% believe it has role in
saving time in Strategic HR. On the other hand about 50% of the respondents think
HRIS has no role to play in saving time in training.
4.2.3.2 Role of HRIS in saving cost on HR functions
Particulars
Frequency
Yes
Role of HRIS in saving cost:
Mean
No
Standard
Deviation
Cost saving in 15
Recruitment &
Selection
15
50
0.50855
Cost saving in 20
Training
10
66.7
0.47946
Cost saving in 26
Record keeping
04
86.7
0.34575
Cost saving in 23
Information
sharing
07
76.7
0.43018
Cost saving in 22
Documentation
08
73.3
0.44978
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
A shown in the graph the findings of the survey reveals that HRIS has very important
role to play in saving cost for record keeping as about 86.7% of the respondents have
their opinion in favour of its role in saving time. Similarly respondents believe that it
plays role for saving cost for all the areas of training, information sharing and
documentations. The least number of respondents
4.3. Barriers in HRIS Applications
Type
Barriers
of Strongly
Disagree
No comment
Agree
Strongly
Disagree
Freq
Agree
%
Frequ
%
ency
Uenc
y
Freque
%
ncy
Freq
u
%
ency
Freq
u
%
ency
Threat
of 2
unemploymen
t
5.71
8
22.85
4
11.42
7
20
14
40
Privacy
problem
0
3
8.57
0
0
20
57.14
12
34.28
Security risk 5
(individual and
org., )
14.28
7
20
8
22.85
9
25.71
6
17.14
Nepotism,
0
0
0
0
4
11.42
15
42.85
16
45.71
lack
of 0
institutional
knowledge
0
6
17.14
9
25.71
14
40
6
17.14
0
As shown in table: 4.3 the main the barriers against the application of HRIS are ability
of HRIS to check of Nepotism, Threat of unemployment and privacy problem . Among
the above causes the highest priority has been given on check of Nepotism as 45% of
the respondents think that if HRIS is implemented in the firms then the chance of
Nepotism would be minimized. 40% thinks that it introduction of HRIS would create
unemployment problem. 34.28% respondents thinks about the Lack of privacy. Only
17.14% of the total respondents consider the security risk and lack of institutional
knowledge as some of the reasons against the tendency of the firm to introduce HRIS.
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
5. Summary of Findings:
It is found that HRIS is being used in Banks in three different areas as of a)Recruitment
and selection b) Training and Development c)Payroll. Among different areas of
applications of HRIS in HRM process respondents have given the highest importance
on recruitment and selection which is 98.28% (33 out of 35) and the second area of
HRIS which is benefiting the firm is payroll with 82.86%.The result of the roles of HRIS
in saving time showed a mixed response. The survey reveals that HRIS has very
important role to play in saving cost for record keeping as about 86.7%.3 the main the
barriers against the application of HRIS are ability of HRIS to check of Nepotism,
Threat of unemployment and privacy problem.
6. Conclusion
This research has provided valuable knowledge and information to banking authorities
about the importance of HRIS is saving time and cost in the HRM process like
Recruitment and selection, training and development, payroll processing etc.It can be
concluded that the banks which will install HRIS will be able to reduce the cost and time
in HRM process in a considerable amount
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Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
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