OS 352 1/17/08 I. More jetBlue … II. ERP systems and HRM. III. Next time: Please read and bring the following articles to class: A. Kouzes & Posner (2005) B. Levine (2007)

Dimensions of HR Structures (The Ways in Which Firms will Manage HR Differently) Internal v. External Responsibility for HRM (proportions and content) HR v. Management Responsibility for HRM (proportions and content) Degree of Centralization (i.e., highly centralized  headquarters controls HR decisions; highly decentralized  business unit head controls HR decisions Degree of Formalization (i.e., rules and procedures) Strategic Importance of HRM Staffing of HR Department with HR Experts v. Management rotations

Enterprise Resource Planning (ERP) System/Software Programs to help manage company-wide business processes, using a common database and shared management reporting tools (Brady, Monk, Wagner, 2001)

HRM Integration with Other Functions Human Resources Sales & Marketing Production & Materials Mgt. Accounting & Finance

Human Resource Information System (HRIS) A computer system used to acquire, store, manipulate, analyze, retrieve, and distribute information related to an organization’s human resources. HRIS’s are increasingly being implemented as part of an ERP.

Useful HRM Aspects of SAP Employee self-service Manager’s desktop KSAs inventory and succession planning Cost control / budgeting

SAP HR: Employee Self-Service Before: Ee relies on benefits experts, HR professionals for information and decision- making assistance. ERP: information accessible by computer; expert systems assist with decision-making. Experts, professionals assist with non-routine requests.

SAP HR: Manager’s Desktop Before: Ee documentation and info in hard copy only or in non-integrated spreadsheets. Report generation time- consuming. ERP: Ee info on-line and accessible to relevant persons; report generation quicker and more accurate.

SAP HR: Manager’s Desktop Before: Security handled by locked file drawers, limited accessibility to the HR area, confidentiality agreements. ERP: Security handled by careful entering of accessibility privileges, id/password protection, manager training, system monitoring, confidentiality agreements.

SAP HR: Skills Inventory Before: Uneven documentation of ee KSAs in hard copy only; time-consuming report generation. ERP: Standardized documentation of ee KSAs in electronic format; quick and more accurate report generation  facilitates succession planning.

SAP HR: Cost Control Before: Payroll and other HR costs not linked to accounting and reporting functions. Other cost monitoring and cost/benefit calculations infrequently done. ERP: Payroll and other HR costs integrated with financial statements, and tax and other report preparation. HR-related financial analysis quicker and easier.

ERP Drawbacks to Consider … ERP framework may not work with current business processes  change processes or pay for customization. Best ERP for HR is not necessarily best ERP for other functions. System, implementation and training costs may outweigh benefits. Processes may be better for upper management but worse for administrative staff (e.g., 20 minutes to input an employee record). Others?

Terms You Should Know ERP system HRIS

You Should be Able To … Describe useful characteristics of ERP systems for the management of people. Discuss the potential drawbacks of ERP systems.