3.7 Human Resource Management Information System
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1 Introduction The payment of salaries and benefits for public employees is Government s largest expenditure. Total salaries and benefits, including government departments and Crown agencies, totalled $1.3 billion in ($1.2 billion ). Of this $1.3 billion, government departments accounted for $297 million comprised of $258 million in salaries and $39 million in employee benefits. Given the magnitude of these expenditures, it is critical that Government have the ability to analyze, monitor and control its human resources and related expenditures. In 1987, government formally recognized the need to automate all its human resource systems to enable it to effectively manage human resources. At that time human resource information within Government was maintained in a number of main systems as outlined in Figure 1. Figure 1 The systems outlined in Figure 1 operated independently of each other and also lacked the capability to provide ready access to important information such as employees education and experience. All of this made it either difficult or impossible to effectively manage Government s human resources. Human Resource Systems 1987 Government Department Finance Works, Services and Transportation Forestry Treasury Board Secretariat Public Service Commission All Government Departments Human Resource Information Payroll system for employees within Government providing information on employees various earnings and deductions. Pension Administration System containing information related to pensionable service. Payroll system for certain of the Department s employees. Payroll system for certain of the Department s employees. Information specific to collective bargaining, classification and compensation, insurance, personnel policy, and salary and position monitoring. Information specific to recruitment, staff training and development, and other personnel services. Manual and automated systems for employees attendance and leave records. 80 Auditor General of Newfoundland
2 To address these issues and to automate all of its human resource systems, Government established a Steering Committee in 1987 to develop a comprehensive computerized Human Resource Management Information System with implementation scheduled for early 1993 at an estimated cost of $2.1 million. The human resource management information system project was intended to overcome these shortcomings by integrating the payroll and other human resource systems within Government. In 1993 we examined human resource management at Treasury Board Secretariat and reported that there was a delay in implementing the planned system. We also reported that existing human resource systems and information in Government were as diverse and incompatible as they were in 1987 when the project started. In 1994, Government agreed in principle with a single centralized payroll system to administer the compensation budgets of all boards, agencies and commissions and directed Treasury Board to proceed with a feasibility study and development of an implementation plan on a priority basis. Scope and Objectives We completed our review of the development of the Human Resource Management Information System in June Our objective was to determine what progress has been made since 1987 in developing a human resource management information system. Conclusions As a result of our review we conclude that: In 1987 Government recognized the need to more effectively manage its human resources and established a Steering Committee to develop a comprehensive computerized Human Resource Management Information System. In 1990 it was determined that a new system would cost approximately $2.1 million and would be completed by March There were 17 functional areas that were identified as necessary to address in order to have the required system. As at 31 March 1995, Government had spent approximately $4.3 million and no further significant costs have been incurred. At the time of our review, Government had only developed or partially developed 5 of the 17 functional areas and made enhancements to 4 functional areas. Government still does not have an adequate Human Resource Management Information System. Auditor General of Newfoundland 81
3 Findings and Recommendations 1. HRMIS Development The Human Resource Management Information System planned in 1987 was intended to provide a comprehensive information system that would capture and report human resource information that could be used to manage Government s human resources and related expenditures. Based on a thorough analysis of Government s human resource management functions, the resulting Systems Requirements Definition document, dated April 1990, identified 17 areas that needed to be addressed in order to have a system that would provide the information necessary to effectively manage Government s human resources. These 17 areas were ranked as either mandatory, highly desirable or desirable and are outlined in Figure 2. We reviewed the current status of these 17 areas that needed to be addressed to determine the current status. Figure 2 outlines our findings relating to these 17 areas. The types of information which would be provided by the 17 functional areas in Figure 2 include the following: Tracking of sick leave on a government-wide basis; Tracking the number of permanent and temporary employees; Tracking employees whose positions are declared redundant and who are subsequently rehired; Maintaining demographic information for such areas as succession planning and early retirement options; Collective bargaining such as costing of employee benefits and projecting the cost of changes; Employee profile including training, education, professional membership and skills; Performance appraisals; and Overtime administration. 82 Auditor General of Newfoundland
4 Figure 2 Human Resource Management Information System by ranked functional area and development status Functional Area Action since 1990 Departmental access Comments Considered Mandatory Position Administration Developed Inquiry Classification Enhanced Inquiry Additional data captured. Compensation Enhanced Inquiry Additional data captured. Payroll Processing Developed Data entry and inquiry Payroll data standardized; however, a separate payroll system maintained by the Department ofworks,services and Transportation was not combined with Government s payroll system. Demographics Enhanced Data entry and inquiry Additional data captured. Attendance/Leave Management No progress No access Highly Desirable Recruitment and Selection Developed No access Separate system developed for use by the Public Service Commission. Insurance Developed Inquiry Manual system automated in Treasury Board Secretariat. Staff Training and Development Partially developed No access Separate system developed for use by the Public Service Commission; however, it does not reflect departmental training initiatives. Desirable Collective Bargaining Enhanced No access Capture of additional data and ad hoc reporting as required. Communications No progress No access Development Opportunities No progress No access Staff Relations No progress No access Employee Services No progress No access Employee Profile No progress No access Health and Safety No progress No access Other Administration No progress No access Source: Systems Requirements Definition Document Auditor General of Newfoundland 83
5 As Figure 2 indicates, five functional areas were developed or partially developed, four functional areas were enhanced and no progress was noted in eight functional areas. While certain functional areas were developed or enhanced, the development or enhancement was not integrated into one system as was originally proposed. The Project Scope Document dated February 1989 envisioned a solution for human resource information where the HRMIS system would be a repository of information on positions, employees, and employment. This system would be connected with other specialized systems that provide or require employee information. The efficiencies from such a system have not been realized due to the fact that, for example, data is duplicated in separate systems and human resource data is not accessible on a government-wide basis. There was an existing payroll system prior to the HRMIS initiative. This was the Public Service Payroll System which was operated by the Department of Finance and processed payroll for Government departments. As a result of the HRMIS initiative, Government s existing payroll system was decentralized beginning in January 1995 and Departments were given responsibility for completion of all forms, data entry and data verification. In addition, employees paid by a separate payroll system maintained by the Department of Forestry were transferred to Government s payroll system in However, employees paid by a separate payroll system maintained by the Department of Works, Services and Transportation also scheduled to be transferred to Government s payroll system were not transferred and that system continues to operate. There are 1,650 employees on this system and the Department spends approximately $57,500 per year to run and maintain it. 2. HRMIS Expenditure Expenditure on HRMIS exceeded its budget and planned implementation targets were not met. The Implementation Strategy and Project plan document dated October 1990 contained a budget estimate of $2.1 million to implement systems for the 17 functional areas outlined in Figure 2. All of this work was scheduled to be completed by 31 March Our review indicated that the cumulative cost, excluding the salary cost of seconded employees, incurred for the HRMIS development from 1 April 1988 to the fiscal year ended 31 March 1995 was $4.3 million and no further significant costs have been incurred. At the time of our review, Government had only developed or partially developed 5 of the 17 functional areas and made enhancements to 4 functional areas. 84 Auditor General of Newfoundland
6 3. Human Resource Information Management Development Status In January 1998, a new initiative was undertaken as a result of public service reform. A Human Resource Information Management Strategy project team was formed with the purpose of developing a strategy aimed at satisfying the human resource information needs of departments, central agencies and other users of Government s human resource information. The project team concluded that many of the major issues identified in 1987 and again in 1990 were still issues and that time had only increased the need to have shortcomings in human resource information management addressed. This project team presented its report to the Public Service Reform Secretariat and the Organizational and Human Resource Management Task Force. Recommendation Treasury Board Secretariat should implement a comprehensive human resource management information system. Treasury Board Secretariat Response The Human Resource Management Information System (HRMIS) project resulted in significant progress in terms of delivery of the human resource management function for government. Prior to HRMIS, government departments operated primarily with a highly clerical, manual paper process of recording payroll and position transactions which were then forwarded and processed centrally at the Department of Finance. As part of the delivery of HRMIS, these processes were standardized, automated and decentralized to departments for data entry and inquiry purposes, with some functions remaining central for purposes of ensuring necessary security and control standards. Additionally, new and enhanced functionality was delivered in many areas which did not previously exist such as Group Insurance Administration, Seniority Administration, Position Administration, Classification Administration, etc. It became evident during the systems development effort that the orginal estimate of $2.1 million had to be revised and that not all functional areas could be addressed given the complexity and breadth of human resource information required in Government. As a result of these findings, it was necessary to revise the scope of the project and funding allocated. During the annual budget process, Government approved additional funding based on the revised project plan. Auditor General of Newfoundland 85
7 Following these efforts, overall Government information technology priorities changed with the focus shifting to non-human resource related areas for a period of time. The Secretariat disagrees with the recommendation to develop a single, comprehensive human resource management information system but it does intend to review and address current day requirements, utilizing a modular approach, as funding permits. 86 Auditor General of Newfoundland
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