RETURN ON INVESTMENT

1. RETURN ON INVESTMENT Chapter 3 Copywrite C 1999 PMi www.pmihrm.com

2. 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

3. 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

4. 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

5. 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)". Copywrite C 1999 PMi www.pmihrm.com

6. 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 Copywrite C 1999 PMi www.pmihrm.com

7. Cost-Justification (con’t) Copywrite C 1999 PMi www.pmihrm.com

8. 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. Copywrite C 1999 PMi www.pmihrm.com

9. 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 Copywrite C 1999 PMi www.pmihrm.com

10. 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 Copywrite C 1999 PMi www.pmihrm.com

11. Question 1 Copywrite C 1999 PMi www.pmihrm.com

12. 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? Copywrite C 1999 PMi www.pmihrm.com

13. 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? Copywrite C 1999 PMi www.pmihrm.com

14. Question 4 Copywrite C 1999 PMi www.pmihrm.com