Chapter XVI: Data Mining for Human Resource Information Systems

Chapter XVI - Data Mining for Human Resource Information Systems
Data Mining: Opportunities and Challenges
by John Wang (ed)
Idea Group Publishing 2003

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Lori K. Long, Kent State University

USA

Marvin D. Troutt, Kent State University

USA

This chapter focuses on the potential contributions that Data Mining (DM) could make within the Human Resource (HR) function in organizations. We first provide a basic introduction to DM techniques and processes and a survey of the literature on the steps involved in successfully mining this information. We also discuss the importance of data warehousing and datamart considerations. An examination of the contrast between DM and more routine statistical studies is given, and the value of HR information to support a firm's competitive position and organizational decision-making is considered. Examples of potential applications are outlined in terms of data that is ordinarily captured in HR information systems.

INTRODUCTION

The role of Human Resource (HR) professionals in organizations has evolved parallel to business-related technological advances. HR professionals are now able to dedicate more time to strategic business decisions as the development of technology has allowed for the automation of many transactional HR processes (Walker &Reif, 1999). While HR professionals may no longer need to manage the manual processing of data, they should not abandon their ties to data collected on and about the organization's employees. The human resources data that is available within organizations has the potential to help support their decision-making processes. The challenge is identifying useful information in vast human resources databases that are the result of the automation of HR-related transaction processing.

Data mining may be regarded as an evolving approach to data analysis in very large databases that could become a useful tool to HR professionals. Data mining involves extracting knowledge based on patterns of data in very large databases. Yet, data mining goes beyond simply performing data analysis on large data sets. Organizations that employ thousands of employees and track a multitude of employment-related information might find valuable information patterns contained within their databases to provide insights in such areas as employee retention and compensation planning. To develop an understanding of the potential of data mining HR information in a firm, this chapter will first discuss how HR-related information contributes to a firm's competitive advantage. Next, we will discuss the components of Human Resource Information Systems (HRIS) and gain an understanding of the steps in the data-mining process. Finally, we will identify opportunities as well as concerns in applying data-mining techniques to HR Information Systems.

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