Human Resources Chapter 6 Homework HR department Through The Implementation Employee Self service Creating Employee portals See And Allows

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Johnson, Human Resource Information Systems, 5e

SAGE Publishing, 2021

Answers to Questions in the Text

Chapter 6: Cost-Justifying HRIS Investments

1. How has the use of HRIS evolved over the past 10 years in organizations, and how

might this influence an organization’s evaluations of additional or updated investments

in HRIS?

Ten years ago (1990s), the use of an HRIS was primarily focused on cost

savings (e.g., reducing transaction time and costs) and risk avoidance (e.g.,

having accurate data to generate reports in EEO litigation). In recent years, the

use of an HRIS has been focused on providing support and contributing to the

2. Why is it important to estimate the benefits to be derived from new HRIS

functionality before you estimate the costs? If costs were estimated first, how might this

change the analysis?

Estimating benefits first provides a critical aspect of the business plan for the

3. Develop an argument for the implementation of an HRIS using a risk reduction

strategy and an organizational enhancement strategy.

Risk avoidance strategies are used when investments are believed to eliminate

or mitigate significant future risks faced by the organization (e.g., generating

reports of the gender and racial diversity of employees). The potential

Johnson, Human Resource Information Systems, 5e

SAGE Publishing, 2021

4. Organizations have traditionally used employee time saved as the primary source of

benefits in justification of HRIS and other types of information system investments.

Why can this be problematic? Give several reasons, and relate them to conducting a

CBA.

Frequently, organizations measure employee time saved by estimating an

employee’s value as equal to his or her cost to the organization. In nearly all

cases, employee cost dramatically underestimates the average employee’s

5. How might an organization estimate the direct and indirect benefits of a new HRIS

that decreases the time required by employees to complete transactions of the HR

department through the implementation of employee self-service by creating employee

portals (see Chapter 9) and allows HR employees to work on other projects such as

talent management or online recruiting?

Referring to Figure 6.1, the direct benefit would be that the other projects would

be available sooner than expected and the project quality should improve. The

indirect benefit would be the increased potential for more effective usage of

projects like talent management.

Johnson, Human Resource Information Systems, 5e

SAGE Publishing, 2021

6. What makes indirect benefits so difficult to include in CBA? What techniques might

be used?

Indirect benefits are more difficult to obtain than the hard data for direct

benefits. Estimating indirect benefits requires assumptions about the impact of a

specific HRIS functionality without any direct impact of the functionality. For

7. When should benchmarking be preferred to direct estimates of the magnitudes of

benefits? When should direct estimates be preferred? Is it appropriate to use both?

The primary limitation of direct estimation is that the accuracy of the analysis

depends on the expertise of the estimator. Without this expertise, it is difficult to

8. Why does average employee contribution offer a better estimate of the contribution

of individuals to an organization than total compensation (wages, incentives, and

benefits)?

It provides a measure of the contribution of each employee to the organization’s

9. What are the factors you would have to use in calculating a cost–benefit ratio to

support a decision to purchase a new HRIS when the organization already has an HRIS

Johnson, Human Resource Information Systems, 5e

SAGE Publishing, 2021

that was acquired 10 years ago? Be sure to mention the factors that would comprise the

costs, direct and indirect, and the benefits, direct and indirect, of the current system

versus the proposed system.

Direct costs: Employee time on a task force to develop a project plan for the

acquisition, costs of new software and hardware, cost of hiring an external

vendor to assist in the implementation phase of the project.