Transcript KPIs and Accountability

HRMIS, KPIs and Accountability
Contents
• Introduction to Information System
• Information System and the HR Function
• What is an HR Management Information
System (HR MIS)?
• Why HR MIS?
• HR MIS & KPI
• Criteria for effective Performance Indicators
• Conclusion
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Introduction
• An information system is any combination of information technology and
people's activities that support operations, management and decision making.
• In a very broad sense, the term information system is frequently used to refer to
the interaction between people, processes, data and technology.
• In this sense, the term is used to refer not only to the information and
communication technology (ICT) that an organisation uses, but also to the way
in which people interact with this technology in support of business processes.
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Information Systems
Can be divided into 5 separate categories:
• Management Information System (MIS)
• Decision Support System (DSS)
• Executive Information System (EIS)
• Transaction Processing System (TPS)
• Enterprise Resource Planning (ERP)
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Information System
 MIS: used to analyse operational activities in the organisation. Most
management information systems specialise in particular aspects of the
enterprise, or management substructure
 DSS: are computer program applications used by middle management to
compile information from a wide range of sources to support problem solving
and decision making
 EIS: is a reporting tool that provides quick access to summarised reports
coming from all company levels and departments such as accounting, human
resources and operations.
 ERP: provide an organisation with integrated software modules and a unified
database which enable efficient planning, managing, and controlling of all core
business processes across multiple locations. Modules of ERP systems may
include finance, accounting, marketing, human resources, production, inventory
management and distribution
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What is HR MIS?
• HR MIS is the management of data and application system(s) whose
ultimate goal is to produce a check as well as store and provide
information of the employee population, either individually or collectively,
in part or in whole…
• … any system that supports any aspect of the HR function
• Put simply, it is the application of computers to employee-related record
keeping and reporting, and management decision making
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MIS & The HR Function
Human resources management systems encompass:
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Recruitment & Selection: e.g. Online application/recruiting
Employee Data Management & Administration (including Self-service)
Time and Attendance
Benefits Admin. e.g. Leave, loans and medicals
Performance Management (evaluation) & Performance Records
Compensation & Rewards
Capacity Development (L&D)
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Why HR MIS?
• Finding information from the bulk of files is a really painful task; HR
MIS will make your task easier and manageable
• Managing and using employee information is a tricky task, it is a good
idea to infuse latest software and IT tool to manage the task and
reduce the chances of error or redundancy
• Managing attendance of employees on a daily basis is cumbersome.
With a good HR MIS software it becomes a lot easier to track the
attendance record of the employees
• Analysing personnel usage within an organisation becomes easier
• It’s easy to track and manage training costs
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Top Calculations for HR MIS
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Health care cost per employee
Pay and benefits as a percentage of operating expense
Time to fill job vacancies
Cost per new hire/recruitment
Return on training
Comparisons e.g. trend analysis such as IGR against
number of revenue collectors over 5-10 years
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HR MIS in Action
• Citibank for instance (part of Citigroup) has a global database of
information on all employees including their compensation, a skills
inventory bank of more than 10,000 of its managers, and a
compensation and benefits practices database for each of the 98
countries in which the company has employees
• IBM (like many other organisations) has a paperless online
enrolment plan for all the employees and it saves 1.2 million per
year on paper and printing
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HR MIS in Action – Review
• What in your opinion is the present level of HR MIS in
the state civil service?
• What impact will the introduction of integrated HR MIS in
the state civil service have on the HR function and
governance in general?
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HR MIS and Key Performance Indicators
• The essence of an information system is to enable business
managers make faster and better decisions
• To pull into the lead in global competition, HR practitioners must
control labour costs, motivate employees to high quality, customer
oriented performance and continuously search out new and better
ways of achieving this, against the backdrop of culturally diverse
employees and generally shrinking head counts
• The ongoing drive for simplicity creates the need to have linked
systems that truly work together to create meaningful, usable data
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HR MIS and Key Performance Indicators
Scorecard – is a small collection of measures that capture
the most strategic elements needed to execute the unique
business strategy and achieve its short and long term goals
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HR MIS and Key Performance Indicators
• A performance indicator may be defined as “a particular
value or characteristic used to measure output or
outcome”
• Performance indicators could also be described as a
means whereby management can, on a regular basis,
oversee ongoing performance in a number of key areas
• KPIs are derived from the over-arching goals/ strategy of
the organisation/ business unit or department
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Criteria for Effective Performance Indicators
KPI must be….
• Clearly stated
• Relevant
• Observable
• Measurable
• Achievable and/or exceedable
• Consistent
• Within employee’s control
• Have traction, foot print or impact
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Criteria for Effective Performance Indicators
In addition KPIs must be:
• In compliance with the requirements of the overall strategic
goals set
• State the assumptions and estimates on which they are base.
• Based on adequate internal control systems to collect and
record information
• Derived from and calculated using information from the
records
• Published/reported to allow for comparisons
• Audited for accuracy (not materially misstated)
• Audited for completeness
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HR MIS and Key Performance Indicators
Performance indicators are not performance targets.
Management may of course wish to set performance targets but KPI is
the measurement of such targets. For example, meeting certain
deadlines is a good target. KPI may be able to monitor on how many
instances these targets were met.
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HR MIS and Key Performance Indicators
• The first consideration in setting measures and metrics to be analysed
for comparison to KPIs for the HR function should be the key people
issues from the organisation’s scorecard or from the plans guiding the
business
• The second consideration should be the HR measures – the key drivers
that HR guides or controls that directly influence the key people
measures described above. This includes key processes that HR
designs and/or delivers e.g.
• Recruiting & Selection
• Rewards & Recognition
• Performance Management
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Performance Management
• Performance management is a process by which an
organisation involves its employees, as individuals and
members of a group, in improving organisational
effectiveness in the accomplishment of its mission and goals
• Performance management is a continuous and flexible
process which involves managers and those whom they
manage acting as partners within a framework that sets
out how they can best work together to achieve the required
results
• Performance management is a collaborative development
process for the individuals and the organisation
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Why do we Manage Performance?
• Ensures that relative contributions of individual roles are
articulated to overall corporate goals (line of sight)
• Ensures awareness of individual job roles and functions
• Ensures that there is an understanding of the level and
nature of performance expectation
• Ensures timely and adequate feedback about performance
• Ensures that there are opportunities for formal and informal
training and development
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Why do we Manage Performance?
• Ensures consistently fair and objective performance assessment
• To entrench a performance oriented culture
• Competition in market place
• Developmental rather than punitive
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Performance Management Cycle
Step 1
Clarify the Employee’s
major responsibilities
(& what support from manager)
Step 4
Diagnose & Coach
employee performance
Step 5
Review overall
Performance
Step 3
Dialogue, Competence
& capability review
Give periodic
performance feedback
Step 2
Develop performance
standards
KPIs’ & Measures
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Online Performance Management
Major Attributes:
• Set and agree key performance indicators
• Input agreed indicators
• Periodic discussion and measurement of progress (feedback) on
KPIs
• Cumulative performance result
• Linked to improved personal and corporate goal attainment
• Linked to personal development, reward and career progression
• Strong system control on interference
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HR MIS and Key Performance Indicators
HR MIS is therefore a veritable source of information required to
measure HR performance against set KPIs that have been
established based on strategic business goals, and on how HR
performance affects overall business/firm performance.
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HRMIS and Key Performance Indicators
Your HRMIS should therefore have the capacity to provide the
information needed to compare KPI set standards against
your present state and thus enable strategic planning towards
goal attainment.
• Cost per employee
• Absenteeism ratio
• Timeline for recruitment into key positions
• Employee service level (Responsiveness)
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Conclusions
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As a company grows relying on manual HR systems to manage activities
like state-wide (worldwide) safety, benefits, administration, payroll and
succession planning becomes unwieldy
• As we have seen, more organisations are therefore automating and
integrating their HR system into human resources information systems (HR
MIS)
• Leading organisations, both public and private, use HR KPI to gain insight
into the effectiveness and efficiency of their programmes, processes and
people, and to make judgements about them
• These organisations decide on what indicators they will use to measure
their progress towards strategic goals and objectives, they gather and
analyse performance data, and then they use this data to improve their
organisations, successfully translating strategy into action
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