HR

504 PART 5 Meeting Other HR Goals

L05 Discuss the role of HRM technology in high-performance work systems.

Compensation : Organizations can reinforce the impact of this kind of performance managernent by

tinf,ing compensation in part to performance measures. Chapter 12 depcribed a num'

ber oimethtd, fot doing this, including merit pay, gainsharing, and ,profit sharing' Lincoin Electric has for decades paid its production workers a piecework rate. Not

only does this motivare individual employees to look for the most efficient ways lo

do ih.it jobs, but because the company is known for this compensation method, it atrracts workers who value rvorking hard in order to earn more. In addition, Lincoln

has been paying all of irs employees a profit-sharil^g bonus "every year since 193+,"

in che words of Lincoin's CEO John M. Stropkl Jr.29 Compensation systems also can

help ro creare the conditions that contribute to high per{ormance, including team'

*ork, .-po*efment, and job satisfaction. For example, as discussed in Chapter 12, compensation can be linked to achievement of team objectives'

Organizations can increase empowerment and job satisfactiorrl by including

"*plo"y"", in decisions about compensation and by communicating the basis for deci-

sio.rs abo.,t pay. When the organization designs a pay structure, it can set up a task

force that inciudes employees with direct experience in various types of jobs' Some

organizations share financial information with their employees and invite them to

,"Jo*rr"rrd pay increases for themselves, based on th.it contributkins. Employees also may pu.li.ipur. in serting individual or group goals for which thiey can receive

bo.r,rr.r. R"r.u..h has found th"t .mploy"e participation in decisions about pay poli'

cies is linked to greater satisfaction with the pay and rhe job.rO And as pve discussed in

Chaprer 11, whln organizations expiain their pay structures to emplgyees,.the.cotn-

munication can er1hance employees' satisfaction and belief that the system is fair'

HRl Technology Human resource departments can improve their own and their organization's perfor'

*"'r.. by appropriately using r-r..' t"ch.tology (see the "HR Oops!" box). New tech- .roiogy r-,r"utiy i.r,rol,r", autJ-atian and. collaboranon-that is, using equipment and

information processing to per{orm activities that had been performed, by people and

faciiitating.l".tror-,i. Jommunication between people. Over thelast feq decades, auto-

,rrurio., hu", irrrprou"d HRM efficielcy by reducing the number of peopie needed to per-

form routine tasks. Using automation can free HRM experts to concentrate on ways to

determine how human resoufce managemenl can help the-organizatiorl meet its goals,

,o t.ch.,ology also can make this function more valuable'rl For example, information

technoiogy irovicles ways ro build and improve systems for knowledge;generation and

,t *i.rg, ir iurr of a iearning organization. Among the appiications are datab,ases or

".i*rt-f.i"g rites where

"*ploy""r can store and share their knowledge,'online directo-

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skills and experiences, and online libraries of learninglresources, such

as technical manuals and ernpioyees' reports from seminars and training programs'

HRM Applications i e, ror11p,rr.rs become evef more powerful, new technologies continue to be. intro- duced. In fact, so many HRM apphcations are developed for use on personal ,com' ;;;;; ,h", p,rtli."tior-,, serving ih. profe*ion (such as HR Masanne 32d

Workforce

ir[o*gr*rri) devote annual lssues to reviewing this software. Some of the technolo- gies ttat have been wideiy adopted are transaclion processing, decislon sllpport sys'

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We know that companies use per- formance management systems because they want employees to do the things that will help their company succeed. And we know that the business environment is constantly changing, so compa- nies need to be flexible in terms of their strategies and objectives. So logically, performance manage- ment systems should be flexible, too, ad.justing goals as economic. social, competitive, and techno- logical forces introduce risks an-d open up oppoftunities.

That may be logictl, but acco- rding to a recent survey, it isn't what companies are actually doi- ng. The Human Capital lnstitute recently found that 66 Percent of midsized companies said their performance management sys- tem isn't set up to adjust goals; rather, employees see Performa- nce appraisals and get new goals once or twice a year.

Constant adjusting o{ goals could be complicated and con. fusing, but HRM technologY exi' sts to make flexibility part of the system. For example, WorkscaPe Performance Manager is a Web- based HR application in which employees and their managers enter goals as the system prompts them through the Pro- cess. Then employees log into the system to see a list of their goals, indicating the Priorities, progress, and deadline for each, along with planned develoP' ment activities and tasks related to performance appraisal. Users of the system can look uP and alter details of the plans and their progress at any time.

Sou rces: "Aligning Employee Perfor- mance with Organizational Goals," F inancial Executive, November 2009, p. 13; and Workscape, "WorkscaPe Per- formance Managel" data sheet, www. workscape.com, accessed May 1 1, 2010.

O.uesiions

1. What would hold be* e,* emPloYer from using f-{E*# technologY that was liker'i'm i m prove Perf or m a nee? W'itr:ef' of these obstacles, if a*Y. arc reasonable barriers to usitlg HRM technologY, and whicit should HR managers try to overcome?

2. Suppose you are an HR manager who wants to encourage your organization to begin using WorkscaPe Performance Manager or a similar system. How would you measure whether this system is a wise investment for your organization?

Transastion Processing Computations and

calculations involved

in reviewing and documenting HRM decisions and pra ctices.

Decision Suppcrt

Systems Computer software systems designed to help managers solve problems by showing

how results vary when the manager alters assumptions or data.

Transaction processing refers to computations and calculations involved in revieu'ing and documenting HRM decisions and practices. It includes documenting decisions and actions associated with employee relocation, training expenses' and enrollments in courses and benefit plans. Tiansaction processing also inciudes the activities required to meet government reporting requirements, such as filling out EEO-1 reports, on which employers report information about employees' race and gender by job caregory. Computers enable companies to perforrn these tasks more efficiently. Employers can fili our computerized forrns and store HRM information in databases(data stored eiectronicaliy in user-specified categories), so that it is easier to find, sort, and report.

Decision support systems are conputer software systems designed to help managers solve problems. They usually include a "what ifl" feature that managers can use to enrer different assumptions or data and see horv the likely outcomes wili change. This type of system can help managers make decisions for human resource planning. The manager can, for example, try out different assumptions about turn- over rares ro see how those assumptions affect the number of new empioyees needed. Or the manager can test a range of assumptions about the availability of a certain skill in the labor market, looking at the impact of the assumptions on the success

505

506 PART 5 Meeting Other HR Goals

Expert Systems Computer systems that support decision making by incorporating the decision rules used by people who are consldered to have expertise in a certain area.

of different recruiting plans. Possible appiications for a decision support system include forecasting (discussed in Chapter 5) and succession planning (discussed in Chapter 9).

Expert systems are compLlrer systems that incorporate the decision rules used by people who are considered to have expertise in a certain area. The systems help users make decisions by recomrnending actions based on the decision rules and the information provided by the users. An expert system is designed to recommend the same actions that a human expert would in a similar situation. For exarnple, an expert system could guide an interviewer during the selection process. Sorne organizations use expert systems to heip ernployees decide how to allocate their money for benefits (as in a cafeteria plan) and help managers schedule the labor needed to complete projects. Expert systems can deliver both hlgh quality and lower costs. By using the decision pfocesses of experts, an expert system helps rnany people to arrive at deci' sions that re{lect the expert's knowledge. An expert system heips avoid the errors that can result from fatigue and decision-making biases, such as biases in appraisiirg ernployee performance, described in Chapter B. An expert system can increase effi- ciency by enabling fewer or less-skilled employees to do work that otherwise would require many highly skilled employees.

In modern HR departrnents, transac[ion processing, decision support systerns, and expert systems often are part of a huinan resource information system. Also, these technologies may be linked to employees through a network such as an intranel. Information systems and networks have been evoiving rapidly; the foliowing descrip- tions provide a basic introduction.

Human Resource lnformation Systems A standard feature of a rnodern HRIS is the use of relational databases, which store data in separate files that can be linked by common elements. These common ele- ments are fields identifying the rype of data. Commoniy used fields for an HR data- base include name, Social Security number, job status (full- or part'time), hiring date, position, title, rate of pay, citizenship statlls, job history job iocation, mailing address, birth date, and emergency contacts. A relational database lets a user sort the data by any of the fields. For exarnple, depending on horv the database is set up' the user might be able to look up tables listing ernployees by location, rates of pay for various jobs, or employees who have completed certain training courses. This system is far more sophisticared than the old-fashioned method of filing employee data by llame, with one file per employee.

The ability to locate and combine many categories of data has a multitude of uses in human resource rnanagement. Databases have been developed lo track employee benefit costs, training courses, and compensation. The system can meet the needs of line managers as well as the HR department. On an oil rig, for example, manage- ment might look up data listir-rg employee names along with safety equiprnent issued and appropriate skili certification. HR managers at headquarters might look up data on tl-ie same employees to gather information about wage rates or training programs needed. Another popular use of an HRIS is applicant tracking, or maintaining and rerrieving records of job applicants. This is much faster and easier than trying to sort t}rrough stacks of r6sum6s.

'S7ith relational databases, HR staff can retriet'e informa- rion abo.rt specific applicants or obtain lists of applicants rvith specific skills, career goals, rvork history, and employment background. Such information is usefr-rl for HR planning, recruitment, succession planning, and career deveiopment. Taking the

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