HR Transformation Technology

Delivering Systems to Support the New HR Model

Allan Boroughs, Les Palmer

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9780566088339
• eBook ISBN: 9781317120575
• Topic: Business
• Subtopic: Business generale
• Index: Business

HR Transformation Technology is a complete, business-orientated guide to the planning, design and delivery of HR information systems. It spells out the full scope of the applications required to support HR shared services, centres of excellence and business partner roles and goes on to set out the step-by-step process for managing the delivery of a major HR information system project, and ensure it remains on schedule and on budget. HR Transformation Technology provides: ¢ An understanding of the role of IT in HR and the way in which it supports key elements such as the HR shared service centre and HR Business Partners; ¢ A clear picture of the features and benefits of the main types of HR IT application and an overview of what can commonly go wrong; ¢ The knowledge to build and communicate a definitive business case for the project; ¢ Details of the processes to be followed when defining what you need and selecting the partners who can deliver it. The book also provides up to date, practical examples of what other major organizations have achieved along with an invaluable top ten list of dos and don'ts for the HR systems project manager. This book is indispensable for anyone with responsibility for delivering HR systems.

PART I The Role of Technology in the HR function

DOI: 10.4324/9781315587257-8

CHAPTER 1 How the HR Function has Evolved

DOI: 10.4324/9781315587257-1

The Complexity of the IT Challenge

The development of human resources is bound inextricably to the technology that serves it. The HR function has faced a succession of demands for changes to the way in which it delivers transactional services ranging from the development of more effective, integrated end-to-end processes through to the development of knowledge-based centres of excellence.

In the end, however, the ability of the HR function to deliver step changes in performance is dependent on its capability to manage administrative tasks, which in turn demands a firm grasp and control of HR processes and data.

The exasperated phrase ‘we can’t produce a simple headcount figure’ has frequently been heard in many organizations unable to get to grips with the complexity of fast-moving HR information, even after they may have invested considerable sums of money in systems to try to raise the capabilities of the HR function.

The clue to the problem lies in the phrase itself: an employee headcount is rarely a ‘simple figure’. For example, producing an accurate headcount often demands a clear definition of parameters:

• Does the figure include staff on maternity leave or career breaks?
• Does it count individual people or full-time equivalents (FTEs)?
• Does it include contractors, temporary and agency staff (regardless of how much of a permanent fixture they may be)?
• Given the fact that resourcing is a highly dynamic process, what day of the month is this figure taken from?

Once these questions are considered, it becomes apparent that seemingly simple data such as headcount in fact define a process for tracking an employee population.

Further complications may arise when the headcount data are compared to similar figures produced by other systems. How often have HR staff wrestled to reconcile their headcount figures with those of payroll or pensions, who may be using subtle variations on the parameters selected by HR? Similarly, finance operations may confound the issue further by carving the organization differently from HR. Clearly when cost centres don’t line up in an obvious way with organization structures, then aligning headcount with staff costs becomes a nightmarish task. Small wonder that many organizations have wondered aloud where the promised efficiency savings were coming from.

The situation is no simpler around the management of integrated HR processes. For example, the benefits of an integrated HR and payroll operation, whilst well documented, are still frequently unrealised. A lack of integration around legacy systems frequently shows up in HR as separate HR and payroll systems.

Consequently the organization and delivery of HR and payroll services is defined not by what works best for the customer/employee, but by where the boundaries of the software lie.

Interfaces between systems too often define the divisions between departments, for example where HR data on employee movements are passed clumsily across to payroll, causing the process to stutter and requiring manual intervention, recalculation and double entry of data.

Such data and process management problems and resultant inferior service quality have been a recurring historical problem in HR that has, arguably, been a contributing factor in the inability of the function to participate fully in the strategic agenda.

Against this background of struggling to make technology deliver, HR is now facing a new challenge in terms of the way its services are organized and delivered. The separation of administrative/operational activity into shared service centres, together with the development of the role of the HR business partner to deliver strategic advice and support directly to the business, have set new standards of process and data management for HR to achieve.

However, there is unlikely to be much tolerance for HR failing to deliver benefits from the new HR model and blaming the historic problems on poor technology. Many organizations are pushing the operational effectiveness agenda hard, motivated by clear success stories around shared services in different organizations. In some sectors, such as government, the objectives have been formalized – for example, as in the Gershon report, demanding fixed levels of operational improvement in a given timescale.

The move to more effective HR operations and technology is not simply aspirational; it is a clear demand from the business. This demand is given added edge as, for many organizations, the development of HR shared services is simply one option, with the other being to source such services from commercial external providers.

In our own experience, we have seen an increasing number of organizations approach the transformation of HR operations with an open mind as to whether the solution should be ‘built’ or ‘bought’. The implications for HR are clear: delivery of HR services needs to make a step change in performance to keep pace with demand from regulators and shareholders, or be considered a prime target for outsourcing. Against this background, reliance on legacy technologies with their inherent problems and high cost is simply not going to cut it!

In this book we will explore the HR technology architectures that underpin the new HR model and illustrate how organizations can best leverage technology to serve the process of HR change.

We will look at the implications of the new HR model in terms of new users’ roles and their needs. We will see how the HR infrastructure has evolved to accommodate the needs of HR business partners, centres of excellence and HR shared service centres and we will follow the process for defining and delivering a working architecture, appropriately scaled to the organization that supports the HR transformation process.

Development of the Traditional HR Model

For most organizations there was little significant development of the HR or as, it was then more commonly known, the ‘Personnel’ function prior to the 1960s, and the focus sat mainly with the administration of core activities such as payroll or timesheets.

Rapid changes in the industrial relations landscape in the 1960s and 1970s put HR in a new role of police officer to the labour relations process. It was not until the early 1980s that new approaches to the function gave rise to the concept of human resource management (HRM), which drew on two themes in the 1980s, both of which carry relevance today.

The first was an early attempt to link HR activity with business outcomes through the work of Charles Fombrum, Noel Tichy and Mary Anne Devanna¹, who developed a model of the HR cycle to show how key HR policies and activities could be linked to the delivery of business strategy. Although relatively unsophisticated by today’s standards, the approach demonstrated that HR could have a direct influence on employee performance in support of organizational strategy.

1 See for example, The Transformational Leader, Tichy, N. and Devanna, M.A. (1997) (Wiley)

The second view to emerge was the Harvard model, led by the work of Professor Michael Beer ² , which shifted the focus towards the consideration of the employee as a ‘human resource’, where the focus was shifted away from HR processes and systems and towards a model that sought to manage through developing high commitment amongst employees. This approach sought to align employee commitment at an individual level with the goals and strategies of the organization.

2 See Managing Human Resources, Beer, M. (1984) (Boston: Harvard University Press)

The implication of both approaches was that HR had the means to improve organizational performance, which, in turn, extended the range of activities that HR might legitimately become involved in and the information they demanded to manage such processes effectively.

From the systems and data perspective the emphasis moved, for the first time, away from payroll processing and manpower modelling towards consideration of the employee performance cycle and how that supported the delivery of organizational objectives. This period gradually saw the emergence of a lifecycle of activity against which HR could start to pin demands for data and system functionality to support new ways of working (see Figure 1.1).

The development of HR ‘levers’ to manage employee behaviours in support of organizational objectives highlighted a need for much improved management information and supporting processes in several areas.

Figure 1.1 The performance cycle and demands on HR systems

Managing the organization: The human resource management vision first demanded knowledge of what the organization needed to fulfil its objectives. This gave rise to an increased focus on the organizational structure and the demands of specific roles within it; job evaluation gave more information about the job content of specific roles, whilst competency profiles could set out the precise behavioural demands of a successful employee in the role.

From a systems perspective, this demanded a significant new set of information to be held in an organizational record, distinct from that of the employee. This in turn could be used to drive several processes in HR as well as inform related processes outside HR (for example, the sharing of organizational hierarchy data could be used to inform both financial planning and procurement processes).

Resourcing the organization: The rise of HRM also gave focus to the resourcing process. Whilst, historically, HR held responsibility for the mechanics of recruitment, the discipline of resourcing demanded knowledge of how the requirements of the organization were made up and where those demands could best be sourced.

Thus organizations started to focus on their own resource pools and, from a systems perspective, saw the emergence of requirements to match employee capability to demands in the organization; specifically to focus on the ‘gaps’ between an employee’s personal competency profile and the demands of a specific role.

At the same time, the recruitment function started to develop administrative systems that could support the manually intensive mechanics of the process, such as producing correspondence, processing CVs and assessing the effectiveness of different providers in the process, as well as the ever growing statutory demands around the monitoring and recording of workforce composition statistics.

Developing the employee: The process of highlighting where employees performance currently lay in relation to their roles and addressing any gaps then became a primary occupation for HR. Performance appraisal, performance management and training and development activity to bring employees to the levels of competence required for their roles became the principal levers for aligning employee performance with the objectives of the business.

This in turn created new demands on systems to hold data on the employee development process. As well as maintaining a competency profile, systems were needed to cope with the process of measuring employee performance. The appraisal process grew more formalized and time critical as it became imperative to complete the appraisal cycle to meet other development goals in the HR calendar.

At the same time, as with recruitment, managing administration of the process became burdensome unless systems could be developed to support the distribution of forms and correspondence and to collate and analyze results.

Rewarding the employee: Whilst not exclusively so, the performance lifecycle was frequently tied to reward management as the link between performance aligned with business objectives and the contents of the employee’s pay packet.

O&M related payments had been common since the beginning of the century and hence provided little technical challenge to payroll systems. However, the need to extend this approach to a new generation of clerical/managerial activities highlighted the need for HR systems that operated in a fully integrated manner to support the performan...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Acknowledgements
• Part I The Role of Technology in the HR function
• Part II Core HR Technologies for the New Model
• Part III Managing the Transition
• Part IV Building on Experience
• Glossary of Terms and Abbreviations
• Index