Human Resource Management

Every company has employees. Companies collect hundreds of pieces of data for each employee—some for management purposes, others because they are required by law. For years, the human resources (HR) department focused on filling out and storing forms. The enormous amount of paperwork alone begs for computerization just to cut down on storage space needed.

Computerized databases also enable managers to find specific data on employees. Early HR software emphasized these two benefits. Modern HR software is expanding beyond simple forms to improving data collection and providing better analyses. To illustrate the problems presented by large-scale transaction-processing systems, consider the three areas of input, output, and processing.

For many sales tasks, the system must compute sales by employee to determine commissions. Professional service firms often ask employees to track their time in terms of billable hours for work that is charged back to clients. In all three situations, as the number of employees increases, it becomes increasingly difficult to collect all of these statistics and verify their accuracy. It also becomes harder to find specific pieces of data.

Think about paychecks you have received. In addition to the payment amount, there could be 10 to 20 other numbers on the pay stub. Companies monitor and report several types of payroll taxes, including federal, state, local, Social Security, and health. Also, firms monitor employee benefits, such as healthcare and retirement. Most firms also handle employee deductions for employee purchases, savings plans, stock purchases, parking, meal plans, and other options. In some situations, companies must garnishee wages and forward them to a third party.

Human resource departments also track days taken for vacations, personal time, and illness. In larger companies, HRM provides training courses and offers testing of critical skills. Employee attendance and performance data is stored and incorporated into evaluations.