Use
of information technology in HR management
In
view of the fact that HRM centres on an organisation’s unique human and
“inimitable” component, whereas technology is more standard and replicable,
incorporating technology into HRM introduces some interesting and relevant
concerns for practitioners. For example, to what extent is it productive to
invest in technology relative to investments in employee development,
mentoring, or career management? Or can technology actually support or
accelerate management? Or can technology actually support or accelerate
positive outcomes in these areas? Does success depend less on how firms manage
their technology than on how they manage their human assets?
In
short, the contrast between “content” concerns and “process” concerns
confronting HRM are intriguing issues to explore, as these contribute uniquely
to the way organisations manage and develop their members.
Increase
in productivity
The
use of technology in performance management has the potential to increase
productivity and enhance competitiveness. We believe that appraisal
satisfaction is a key concept that is central to any discussion of technology
and performance management. Clearly, gains technology makes are Pyrrhic
victories if appraisal satisfaction does not improve as well. Contemporary
attention to psychological variables such as appraisal satisfaction that
underlie the appraisal process and user reaction to the performance management
system have supplanted previous preoccupations with appraisal instrument format
and rater accuracy (Cardy & Dobbins, 1994; Judge & Ferris, 1993;
Waldman, 1997). In view of the uniqueness and competitive advantage that human
resources provide, it is appropriate that organisations pay greater attention
to questions of employee satisfaction and with how firms evaluate their performance.
We
believe that appraisal satisfaction will remain a relevant concern, even when
technology is a primary mechanism for the feedback process. Beyond this,
appraisal satisfaction is also a critical concern when technology actually
becomes the appraisal process. This is because an important link exists between
satisfaction with appraisal processes and technology’s potential as an
effective force for change and improved performance.
Performance
feedback
Given
that high-quality performance feedback should be one factor that helps
organisations retain, motivate, and develop their employees, these outcomes are
more likely to occur if employees are satisfied with the performance appraisal
process, feel they are treated fairly, and support the system. Conversely, if
ratees are dissatisfied or perceive a system as unfair, they have diminished
motivation to use evaluation information to improve their performance (Ilgen,
Fisher, & Taylor, 1979). In the extreme, dissatisfaction with appraisal
procedures may be responsible for feelings of inequity, decreased motivation,
and increased employee turnover.
Furthermore,
from a reward standpoint, linking performance to compensation is difficult when
employees are dissatisfied with the appraisal process. Noting this difficulty,
Lawler (1967) suggested that employee opinions of an appraisal system might
actually be as important as the system’s psychometric validity and reliability.
The question of appraisal satisfaction is a relevant concern in discussions of
how technology interacts with performance management systems since absent user
satisfaction and support, technological enhancements are likely to be
unsuccessful.
Technology
as content
Technology
may contribute to performance management and thus to appraisal satisfaction in
two primary ways. First, technology may facilitate measuring an individual’s
performance via computer monitoring activities. This frequently occurs as an
unobtrusive and rote mechanical process that relies on minimal input from
individuals beyond their task performance. Jobs that incorporate this type of
appraisal technology are frequently scripted or repetitious and involve little
personal judgment or discretion. Working in a call centre or performing data
entry are examples. In this instance, the very act of performing a job
simultaneously becomes the measure of how well a jobholder accomplishes it.
Keystrokes, time on task, or numbers of calls made are recorded and at once
become both job content and appraisal content.
A
second approach to technology and performance management changes the emphasis
so that technology becomes a tool to facilitate the process of writing reviews
or generating performance feedback. Exa-mples here include multi-rater
appraisals that supervisors or team members generate online, as well as
off-the-shelf appraisal software packages that actually construct an evaluation
for a manager. This particular technological approach occurs more often in the
context of jobs that involve personal judgement, high discretion, and open-ended
tasks for which real-time performance monitoring is not an option.
Use
of IT in financial management
General
Ledger
The main use of a management
information System (MIS) in finance is that it automatically updates all the
transactions in the General Ledger. The General Ledger is the core component of
all financial information systems. Financial transactions are simultaneously
posted on the various accounts that comprise the organization's "Chart of
Accounts". Simultaneous updating of accounts such as sales, inventory and
accounts receivable, reduces errors. It also provides an accurate and permanent
record of all historical transactions.
Cash
Management
Cash flow management is an important
use of MIS in Finance. Cash Management refers to the control, monitoring and
forecasting of cash for financing needs. Use of MIS in Finance helps companies
track the flow of cash through accounts receivable and accounts payable
accurately. Accurate records also help in monitoring cost of goods sold. This
can help pin point areas that eat up cash flow such as inventory costs, high
raw material costs or unreliable sales.
Budget
Planning
Financial budget planning uses
proforma or projected financial statements that serve as as formal documents of
management's expectations regarding sales, expenses and other financial
transactions. Thus financial budgets are tools used both for planning as well
as control. MIS in finance helps organizations evaluate "what if"
scenarios. By modifying the financial ratios, management can foresee the
effects of various scenarios on the financial statements. MIS thus serves as a
decision making tool, helping in choosing appropriate financial goals.
Financial
Reporting
The use of MIS systems in Finance
enables companies to generate multiple financial reports accurately and
consistently. Generation of financial statements both for internal reports as
well as for shareholder information takes less effort because of the automatic
updating of the General Ledger. Compliance with Government regulations as well
as auditing requirements is also easier because the records are accurate and
provide a permanent historical map of transactions that can be verified.
Financial
Modeling
A financial model is a system that
incorporates mathematics, logic and data in the form of a large database. The
model is used to manipulate the financial variables that affect earnings thus
enabling planners to view the implications of their planning decisions. MIS in
Finance enables organizations to store a large amount of data. This helps
managers develop accurate models of the external environment and thus
incorporate realistic "what if" scenarios into their long-range
planning goals.
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