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RETURN ON INVESTMENT. Chapter 3. Human Resources Management Systems: A Practical Approach. By Glenn M. Rampton, Ian J. Turnbull, J. Allen Doran ISBN 0-459-56370-X Carswell. Personnel costs. Personnel is the largest part of many organizations' operating costs

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return on investment

RETURN ON INVESTMENT

Chapter 3

Copywrite C 1999 PMi www.pmihrm.com

human resources management systems a practical approach
Human Resources Management Systems: A Practical Approach
  • By Glenn M. Rampton, Ian J. Turnbull, J. Allen Doran

ISBN 0-459-56370-X

Carswell

Copywrite C 1999 PMi www.pmihrm.com

personnel costs
Personnel costs
  • Personnel is the largest part of many organizations' operating costs
  • Costs can range upwards of 80% to 90% of total operating budgets

Copywrite C 1999 PMi www.pmihrm.com

importance of hrms
Importance of HRMS
  • Personnel also among most difficult resources to manage
  • HRMS required to collect info, manage it, and report
  • Access to such information increasingly important for decision-making
  • HRMS becoming important strategic tool

Copywrite C 1999 PMi www.pmihrm.com

cost justification
Cost Justification

As Stright (1993) points out:

”HR has to earn its keep. If you can't specify exactly how you contribute to the bottom line, you'll have increasingly few resources available. Not only does the HRMS have to generate a significant return, but also, customers need to understand exactly how it's accomplishing that return (p. 70)".

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hrms cost justification
HRMS Cost-Justification

Justification of costs associated with the purchase and implementation of a Human Resources Management System one of the most pressing challenges facing many HR Departments

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cost justification con t
Cost-Justification (con’t)

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human resources often undervalued and misunderstood
Human Resources Often Undervalued and Misunderstood
  • HR practitioners have not been very effective at justifying what they do in a way that other managers readily understand.
  • HR practitioners are not used to cost-justifying what they do
  • HR Department often considered a“necessary liability”, not a corporate asset.

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cost benefit analysis
Cost-Benefit Analysis
  • Outlined in detail in books by Casio and Fitz-Enz
  • Not commonly known or used by HR practitioners, although this is changing
  • Applies to organizations of all sizes

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examples
Examples
  • Closer control of salary and benefits costs
  • Streamlining HR administrative overhead
  • Input into Labour negotiations
  • More effective use of personnel in support of corporate goals and objectives

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question 1
Question 1

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question 2

Question 2

Traditionally, Chief Executive Officers of Canada's major corporations were drawn from the ranks of people with backgrounds in operations or marketing. Increasingly, corporate heads are being drawn from more diverse backgrounds such as engineering, legal, or finance. It can be argued, that individuals with mainly human resources backgrounds are under represented as Chief Executives. Why do you think this might be so? Do you feel that it is justified? What might HR personnel do to change this situation?

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question 3
Question 3

Many organizations required to implement pay or employment equity have found this to be very labour intensive without the support of an effective HRMS. Why do you think this might be so? What are some of the things that these organizations might have done to better prepare for the advent of these equity programmes? Might ensuring that the organization's HRMS was able to support these programmes effectively, have broader advantages for the organization? In what ways?

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question 4
Question 4

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