Impact of Human Resource Information System on Firm Financial Performance

Abstract

This study analyzed the impact of the applications of human resource information system (HRIS) on firms' financial performance. Performance estimation models developed based on five years performance related data extracted from annual reports of total 41 (89%) banks operated under four strata: state-owned commercial (9%), specialized (6%), private commercial (63%), and foreign commercial banks (11%) in Bangladesh while multivariate analysis of covariance (MANCOVA) tested to examine the varied corporate financial performance according to ownership patterns. The study found direct and positive relations of HRIS applications with the firm's financial results. However, the corporate performance does not vary significantly according to the ownership patterns. Moreover, the findings of the study may lead human resource (HR) professionals and other stakeholders to enhance their financial intelligence about its applications in business which may eventually enable them to be strategic partners in the acute global market environment.

Human Resources Information Systems: Transactional and Strategic Paradigm

“…In the early stages of its development, HR function has been considered as Personnel administration covering activities such as employee enrolment, payroll and benefits administration, hiring, and firing employees (Shilpa et al, 2011;Rao et al, 2012). Human resource management and human capital approaches have emerged in later stage of the development when has been recognised the importance of HR function in accomplishing organisational business strategy (Bhuiyan et al, 2015). In that respect, Personnel administration evolved into HR, which further expanded into two different but interrelated directions known as strategic and transactional HR.…”

“…Strategic HR is considered as proactive approach to the HR, containing progressive concepts and ideas, and thus complementing the organizational business strategy, mission, values and culture by establishing long-term objectives supported by implementing functional HR activities (Ujunju, 2012;Sadiq et al, 2013;Beadles et al, 2015). In that respect, strategic HRM function serves as strategic business partner creating engaged, motivated and committed workforce with superior skills and competences capable to contribute to achievement of organisational performance and competitive advantage (Rao et al, 2012;Bhuiyan et al, 2015).…”

“…The reward management as a connection between performances and the contents of the employee's compensation package is usually associated with the performance lifecycle (Delmotte et al, 2012;Bhuiyan et al, 2015).…”

“…That complexity, reflected in the organisation's setup (architecture and size), changing organisational culture and diverse labour force requires from management to face growing number of challenges in running daily business operations (Shilpa et al, 2011;Buller et al, 2012;Ababneh et al, 2014). Therefore, as various studies proved, the needs and requirements of the different and complex contemporary workforce cannot be satisfied through classical HR management approach (Dhiman, 2015;Ababneh et al, 2014;Bhuiyan et al, 2015).…”

“…Diverse surveys associated with HRIS are conceptual and non-empirical studies. Using either a qualitative or quantitative approach, the large range of surveys have explored the situation in the HRIS usage and integrated HR services (Ahmer, 2013;Delmotte et al, 2012;Marler et al, 2013;Bhuiyan et al, 2015). The two extremes in exploring the potential benefits of HRIS are its exclusive use as an administrative tool and its complex strategic use, although their definitive goal is increase of organizational value and efficiency (Shilpa et al, 2011).…”