Introducing a Computer-Based Human Resource System into the United Way
ROBERT J. KRASMAN
The United Way for human health and social services is one of the largest fund-raising organizations in the country. Changes in technology and competition among philanthropic organizations over the last eight years have led to new ways of doing business requiring related changes in internal organizational structures. The United Way of Allegheny County, located in Pittsburgh, Pennsylvania, provides an innovative example of introducing a computer-based human resource system to meet the needs of the changing environment, while overcoming strong staff resistance related to fear of obsolescence and budget constraints. In this case study, a computer system in introduced to an office with three people having many years of experience with the old system. This study highlights the importance and complications of technological change not only for large organizations, but for small ones as well.
Most United Ways throughout the country function in a similar manner. There is a great misconception, however, about what they do. The funds raised, usually on an annual basis, are allocated to agencies providing human health and social services to their local communities. The allocation is done by volunteers who also live and work in these communities. The same volunteers also work to identify new and emerging issues that affect their communities. The task facing each United Way is how to
raise funds and act as a catalyst within the community to bring the necessary resources together to help solve these problems.
The competition among philanthropic organizations over the last eight years has increased. In the past, the United Way held a special place in most companies because they had a payroll deduction program. Recently, with the cutback of available funding for nonprofit health and social service agencies, the competition for the use of payroll deduction has increased. Increased competition and changing markets have forced most United Ways to restructure and refocus. They are doing strategic plans, organizational assessments, and environmental scans. They no longer talk about donors, but about markets. Technology is facilitating the use of telemarketing, credit cards, and direct mail campaigns in ways that were not used 10 years ago to raise funds.
When a strategic planning process was started in the Allegheny County United Way, one of the most valuable resources was information. The process of gathering, storing, and disseminating information to the users provided one of the most interesting challenges. By making use of technology, it was hoped that resources could be more efficiently used in this process.
One of the weaknesses of United Way fund raising was the unavailability of donors' names. The use of payroll deduction as a primary method for raising money eliminated the need for gathering names of donors. If donors work for a corporation and contribute through payroll deduction, their names are not known to the United Way. To communicate more effectively, United Way began to collect the names of donors.
How to get the names and what to do with the information became a major question. Over the past four years, United Way placed great emphasis on the use of technology to answer this question for fund raising: for learning where the donors are, how to reach them, how they want to be reached, and how to solicit them for funds. This emphasis placed a strain on some of the internal functions of the organization, particularly the human resource system.
Until the mid-1980s, there was a manual system for tracking employee information, including a job application and the forms needed for benefits, government requirements, retirement plans, and training activity. The employment base in the organization was stable. There was an organization of about 50 employees,
and during the course of the year, 8 to 10 of those people would leave. It was relatively simple to look through these forms for particular information that was needed.
The telemarketing program, however, along with several other ventures, more than doubled the size of the organization, to about 120 employees. The telemarketing program also had extremely high turnover of 4 to 6 people a week because of the nature of the work. In addition to the internal requirements for tracking employees, there were also a number of external requirements for retirement plans under the Employee Retirement Income Security Act (ERISA) and the Consolidated Omnibus Budget Reconciliation Act (COBRA) laws enacted in 1989. The paper system was no longer useful in providing the necessary information. The results were missed deadlines, internally inaccurate information, and inability to make good decisions. It became necessary to introduce new technology.
The problem was how to design a system and train people that had no experience, and did not want any experience, with technology. One staff member provides an example of how new technology is viewed. She wanted a fax machine; it was embarrassing to pass out business cards and not have a fax number. Yet she was very resistant to a new computer system. It was the buzz words and things that could be shared with friends that were important. The harder task was to bring her into a project within the organization and actually get her to use new technology.
In the administrative area of the business, the employees had from 22 to 36 years of experience. Computers were something they did not want to hear about, and they began to find numerous reasons why the old paper system would work. They felt extremely threatened. It was important to get them to explain how and why the current system was used, what was needed, and what they were not getting. The first thing that came to their mind was that they were to be replaced once this information was put on the computer. Yet these people knew the most about the system, the flow of paperwork, and what results were needed. They had to open up so that a functional system could be designed.
An alternative in trying to introduce technology into an organization is to bring in new people who are familiar with computers and their applications. There are two problems, however, in an organization the size of the United Way of Allegheny County.
Not only is there less flexibility because of limited resources, but also the individuals who have this computer literacy do not know the operations of the organization. You cannot replace the skills, knowledge, and dedication of staff with new technology. The goal was to marry the two, resistant staff and new technology, and to do it in such a way that people did not feel threatened.
A complementary strategy was introduced in 1986. Within the organization, individuals were identified who seemed to be adapting best to technology. For example, several people working as clerks were taken out of that environment and put in the Management Information System (MIS) department. Salaries and position titles were upgraded, and they began working with the departments as trainers in a much less threatening environment. They are now beginning to develop as mentors in the departments.
The human resource system was designed by seven students at Carnegie Mellon University under the direction of Sarah Kiesler at a total cost of $5,700. A successful system for desktop publishing was already being used. Students built on this system to keep the standardization that had developed, even though it may change in a few years, and to create a more low-key, nonthreatening situation. They were dubious about the system's capabilities but worked with the staff to develop a system with a Tandy 3000 personal computer, a word processing program, a relational data base, and other software.
The system was up and running and all the data entered in late December 1988. Some of the basic reports were available in January for year-end closings. Other people in the organization not directly involved in the human resource system also had informational needs that the system could provide. The next stage of success was reached when the staff was able to provide useful information. The staff members who wanted no part of technology began to feel pride when they realized that they were providing useful information to their peers. When they were able to feel this sense of accomplishment, they started to feel an ownership of the system.
This success was achieved by students and employees undergoing a very tedious process. They began by defining what the problems were with the paper system. After the initial staff meeting,
the students met with the director. They reported that according to the staff there were no problems with the system, only with the director. If he would quit asking some of the questions that had not been asked in the past, there would be no need for a new system. Given that the questions were asked, however, the second problem—time—was the most difficult. The employees would say a suggested change looked great, but they did not have the time to work on it. After the problems were defined, it was a constant push for employees to make the time necessary to work with the students. Without making the time, they were never going to succeed.
In addition to meeting with the staff, the students met with representatives of the MIS department. Initially the MIS staff resisted going outside the organization to design and implement a new human resource system. They reported that they could not support the project and that if there were problems they could not be pulled off another project to help. The alternative was to let the MIS staff design the system, but they did not have the time.
We could have used professional consultants, but there was a very limited budget. The students were ideal. They were patient with the users in the development and training stages, and their time was not a critical factor, because we were not paying for the service on an hourly basis. Not having a deadline ensured a great deal of success. The MIS department was given the opportunity to be part of the process and to select the hardware that they could support.
Once the problems were defined, the students worked on solutions with the hardware that had been selected. Again, they came back and went through the process and the application of the system to define the design. At each step of the design stage, the staff found excuses not to meet; usually a lack of time was the reason given. Testing was also done by the students. There were many mornings when they began work at 7 o'clock and did resting and revisions at night based on what they were hearing from the staff.
After the system was designed, the students made a presentation and then began training the staff. Training was the key to successful introduction of the system. Success was due to the one-to-one relationship between the experts who designed the system, and the employees who would use it. Through that slow process they began to develop a trust. Considering the obstacles, the patience and the dedication of the students working with the employees was phenomenal. The students wanted the system to
succeed and spent at least 18 hours working with staff members, just to get through the basic menus.
Again, lack of time was the major complaint from employees because their jobs included duties not related to the personnel system, and they still had to maintain the old paper system. But when their workloads were reviewed, the biggest problem was the avoidance of the assignments given to them by the students. As obstacles were removed and workloads reduced, it seemed that they were afraid that they would not be able to learn the system. They were afraid of failure.
Patience was the greatest virtue needed. Following a training session that did not go well, students were able to maintain enthusiasm. They began to hear from the staff all of the things that did not work with the system, but they resolved problems in a nonthreatening environment and they got the staff members involved. For example, after the system was about 90 to 95 percent completed, the staff decided that this was very inefficient. To access an employee's personal record, his or her Social Security number was necessary. Under the paper system, records were filed alphabetically in six or seven binders or files depending on the subject. One Social Security number seemed easier. Staff members developed a phone directory with all employees' names in alphabetical order and right beside that their Social Security number. One of the users went into the system and made a directory.
An important factor in student success was the structure of the program. Most of these students were experts, with jobs in industry before they worked on this project in summer school. Their grades depended on the value of the system that they built, not on the time they put in or whether they attended classes. They did not have to take tests or write papers. The course was designed so that students would care about and internalize the goals of the organization they were working for. They now work for Microsoft and IBM and management consulting companies that are leaders in the field of management information.
The students were in fact teachers. In addition, there was some success in training staff members by using games on the computers and also cassette tapes for PC applications. People could sit, listen to a tape, and work on the terminal. In another approach, some of the secretaries who were resistant to change were asked to design programs to teach somebody how to type. They became interested because their typewriters were real security blankets to them; making comparisons between the typewriter and the
personal computer helped to overcome their fears. One of the most counterproductive things a manager of this process can do is to become frustrated with staff members. Rather, remind them of other changes they have made in the past, and they respond.
After two months of operation, the three staff people began a new problem identification process in which they could make changes to this system. Some of their ideas are good and are being considered for application at a later date. Although there is still some resistance to the new system, the hesitation and the fear are gone.
There were two major payoffs from the computer-based human resource system. People accept innovation and it helps them and the organization. The system is functional and provides information. For example, the system is very useful in tracking benefits and their costs. There was probably no other way to get these results in the short term. Another example is that because of the changes throughout the organization over the past years, the training budget has been upgraded. As a part of the new system, training programs are being tracked with individuals' interests. Employees are asked during the evaluation process about what training opportunities they need, and this information is correlated with information about workshops and training programs in local universities. This is a functional part of the system that greatly helped the human resource department because there was no other way to provide this service.
The system will soon outgrow itself, or the organization will soon outgrow the system. That is not a concern in terms of the investment, however. There is no way to put a dollar value on taking three employees who had their feet dug in and their stakes in the ground, saying they are not going to change, and then demonstrating that they are capable, that it is not hard, and that it helps them to perform their job more efficiently. This is particularly valuable to others in the organization who will soon have technology introduced into their jobs. The real value of the technological changes discussed here is not measured in dollars, but in the value to the organization of retaining the experience of the staff members affected. The major factors contributing to success were the skill and patience of the students and the training they provided.