There is no question that HRISs have dramatically increased the effectiveness of HR plan- ning. However, the introduction of these computer systems has not been without problems.
One of the major concerns is that an HRIS makes it easier for someone from within (or outside) the organization to invade the privacy of employees. The friendlier the system, the easier it can be for unauthorized access to personnel files to occur. 52
Unlawful access to employees’ personnel records can lead to their identity being used by thieves for fraudulent reasons. This illegal activity, known as identity theft, occurs when someone uses another person’s name, address, social security number, or other identifying information without the person’s knowledge with the intent to commit fraud or other crimes. 53 Identity thieves often turn to unsuspecting organizations, for this represents one- stop shopping for electronically stored personnel files, payroll and tax records, and benefits information. 54 The thieves use the employee’s personal information to engage in one or more of the following fraudulent acts: going on spending sprees with the employee’s debit/
credit cards, opening new credit card accounts in the employee’s name and then using all of the available credit to make big ticket purchases, taking out auto loans in the employee’s name, and opening a bank account in the employee’s name and writing bad checks on that account. 55
Identity theft is fast becoming a major national problem. According to the Federal Trade Commission (FTC), which monitors the issue, the number of complaints from victims of identify theft in the United States has increased from 31,140 in 2000 to 278,078 in 2009. 56 Even though identity theft is a felony under the federal Identity Theft and Assumption Deterrence Act of 1998, over 3,000 complaints are being received each week at the FTC’s Identity Theft Clearinghouse, a help desk, databank, and law enforcement aid. 57 Projec- tions indicate that complaints about identity theft will continue to escalate.
The costs of identity theft to the employee are numerous: it is estimated that a victim of identity theft will need to spend on average 175 hours researching and tracking the crime, 23 months correcting credit reports, and $800 in out-of-pocket expenses to restore their financial health and standing. 58
Although it is impossible for an organization to guarantee that information about employees will not be seen or used inappropriately by unauthorized persons, several safe- guards can help to minimize the risks to privacy in an HRIS. Exhibit 5–6 summarizes the steps that organizations should take to ensure that their HRIS is relatively secure and is used only for its intended purposes.
Employees’ rights should also be carefully guarded when an organization develops an HRIS. By their very nature, HRISs create the potential for significant amounts of private information about employees being disseminated. Because there is potential for abuse, organizations should carefully evaluate their policies regarding access to HRIS data. An organization must also determine how much information, legally and ethically, it wishes to
• Before employee layoffs are implemented, add additional security measures to prevent retaliation.
• Review information-gathering practices to determine best way to collect data.
• Limit the information you collect to what’s relevant to a specific business decision.
• Inform employees about the types of information kept on file and how that information is used.
• Let employees inspect and, if necessary, correct the information maintained on them.
• Keep sensitive information separate from other records.
• Limit the internal use of personal information to those activities where it is necessary.
• Disclose personal information about an employee to outsiders only after the employee consents.
EXHIBIT 5–6 Safeguarding Privacy in an HRIS
Source: Adapted from Bill Roberts (July 2009), “Protect Data during Layoffs,” HR Magazine 54, no. 7, pp. 59–61;
Robert Stambaugh (February 1990), “Protecting Employee Data Privacy,” Computers in HR Management, pp. 12–20.
143
HR Challenge
(continued from page 129)After reading this chapter, talking to friends from other firms, and examining some litera- ture, Ted Sloane was not at all confused about HRISs. He called his vice president of human resource management, Anne Wilson, and said, “Anne, I want to thank you for calling my attention to how we could use and benefit from an HRIS. Without good forward planning, we are going to be in trouble with the law. Let’s move ahead and set up an HRIS. By the way, are you familiar with the IBM HRIS system? It’s a dandy.”
disclose to the employee in question. Currently, there is no federal legislation guaranteeing employees the right to inspect and amend data in an HRIS. Many states have passed such legislation, however. Finally, an organization should determine how much control its em- ployees should have over the release of personal information. Research has found that the release of information from an HRIS is perceived to be the greatest threat to privacy when employees don’t retain the right to authorize the release. 59 Thus, the organization must attempt to strike a balance between employees’ privacy and having a user-friendly, easily accessible HRIS.
Summary
As with nearly all of the HRM activities discussed in this text, there is no one best method for conducting HR planning. How much planning is needed, which forecasting techniques will work best, and how far into the future these estimates should extend all differ from organization to organization.Surveys indicate, however, that many companies probably do not devote enough time and energy to the HR planning process. Others are not aware that many solutions exist to any gap that might develop between the supply and demand of labor. Finally, organizations must begin to realize that an effective HR plan should work in partnership with a strategic plan. For this to happen, organizational goals must be clearly understood and effectively communicated to employees. Organizations throughout the United States now understand how critical HR planning is to this process. Companies around the world, such as Fiat, Pirelli, and Benetton of Italy, attribute much of their recent success to HR planning and its related policies and programs.
To summarize the major points covered in this chapter:
1. The major reasons for formal employment planning are to achieve a. More effective and efficient use of human resources.
b. More satisfied and better-developed employees.
c. More effective equal opportunity planning.
2. The human resource planning process is a joint responsibility of HR and operating man- agers, with each performing specific functions in the process.
3. Four forecasting techniques used to determine workforce needs described in the chapter are expert estimates, trend projection, modeling, and unit forecasting.
4. An important step in the planning process is to determine the availability of those presently employed by the organization who can fill projected vacancies. The skills inventory can serve this purpose.
5. Action decisions where there is a shortage of employees depend on the magnitude of the shortage and include overtime, retraining of less-skilled employees, hiring addi- tional employees, and subcontracting some of the work.
6. A growing number of firms are now using computerized human resource information systems to help in the planning process. HRISs perform a number of functions, includ- ing applicant tracking, succession planning, skills inventories, and employee services.
7. Action decisions where there is a surplus of employees include attrition, early retire- ment, demotions, layoffs, and terminations.
8. Organizations need to analyze the supply of and demand for employees in advance so they can take necessary steps to reschedule, recruit, or lay off employees. The organization should analyze workforce composition to determine whether it meets legal constraints.
Human resource planning can be an integral part of the HRM program. It is directly related to recruitment, selection, training, and promotion. By matching supply and de- mand, the organization can know how many people of what type it needs to fill positions from within (by promotion or training) and how many it must acquire from outside (by recruitment and selection).
Chapters 7 and 8 are devoted to recruitment and selection, of effective employees, in which employment needs are filled from outside the organization when personnel and employment planning decisions show this need.
Key Terms
Delphi technique, p. 132 executive information systems (EISs), p. 140 human resource information system (HRIS), p. 1391. What is human resource planning? How does it relate to other human resource man- agement activities?
2. How can an HRIS help organizations respond to today’s pressures to reduce costs and be more efficient?
3. Describe the pros and cons associated with outsourcing most of your organization’s HR functions to an independent vendor for a contract period of 10 years.
4. What factors would affect your choice of an HR planning system? What factors would influence your choice of forecasting methods?
5. Assume that your organization wants to retain senior employees who might otherwise want to retire. What incentives and other retention techniques should you use to keep these valued employees? Explain.
6. Why should organizations keep their skills inventories up to date? Explain.
7. Assume that someone hacked into the HR records of your company. It appears that employee names, social security numbers, and home addresses were downloaded by the hacker. If you were the director of HR for this company, what would you do in this situation? For the employees today? To prevent this kind of identity theft from happening again in the future?
8. What kinds of action decisions are available to an organization when there is a surplus of labor? A labor shortage?
9. What is succession planning? How have HRISs helped companies integrate career planning with effective succession planning?
10. In your opinion, will HR planning become more or less important as we near the time in which the baby boom generation will begin to retire? Explain.
human resource planning, p. 129
nominal group technique (NGT), p. 132
skills inventory, p. 135
strategic human resource management (SHRM), p. 130
strategic planning, p. 130 succession planning, p. 140
Questions for
Review and
Discussion
Chapter 5 Human Resource Planning 145