Glossary of Human Resources Management and Employee Benefit Terms
An employee database is a digital filing cabinet HR professionals use to store critical employee data, including name, job position, salary, hire date, and other work-related information.
The five main reasons for creating and maintaining an employee database are to:
Comply with personal information security regulations
Increase the HR department’s accuracy and productivity
Evaluate employee data for ensuring fair compensation
Track instances of disciplinary action or grievance
Issue reports to help management make strategic business decisions
An HR database is the same thing as an employee database. In other words, an HR database is used to track relevant employee information, such as recruitment details, qualifications and special designations, past and current salary, performance reviews, etc.
There are various ways to create an employee database, the most common being:
Paper documents stored in a locked file cabinet
Spreadsheets, word processing documents, and database software stored on a company server or computer’s hard drive
Cloud-based employee database software
Paper and documents-on-a-company-server employee databases are not ideal, as they are cumbersome to create, maintain, secure, and use. They are also prone to data loss, entry errors, constant updates, and non-compliance with federal information privacy requirements.
Newer, cloud-based employee database software is quickly becoming the norm due to its centralized control, automated functions, ease of use, in-depth reporting capabilities, and strong security features.
An employee database should record and track a variety of employee information, including:
Name, birth date, address, and contact information
Job position, hire date, and employment contract
Salary, bonuses, annual pay reviews, and bank account information
Standard working hours, clock-in and clock-out times, and time tracking
Performance reviews and evaluations
Trainings, certifications, licenses, and permits
Personal details, such as hobbies and interests
Here are a few crucial rules for properly managing an employee database:
Retain employee records in compliance with all state and federal laws governing employee record retention and destruction.
Keep all employee medical records separate from other employee information to help prevent discrimination according to Title I of the ADA.
Limit full database access to HR staff and designated managers. State law and company policy determine an employee’s right to access their own personnel file.
In addition to employee database laws and regulations, there should be a company policy for:
Controlling the creation and accessibility of records
Securing data against breach according to current FTC protecting personal information guidelines
Maintaining a backup and recovery plan in case of emergency data loss
What Is Employee Database Software?
Employee database software eliminates home-grown spreadsheets and compiles all employee information in a more secure, convenient and efficient system. This makes it easier for a company to remain compliant with laws, regulations, and policies.
Some of the functions an employee database software performs are:
Automating data transfer and record input
Eliminating entry errors
Producing customs reports
Storing records and preserves data security
Training new database users
There are benefits to these features, namely:
Efficiency: Since the software is on the cloud, you can access real-time key data anywhere, at any time.
Knowledge: HR professionals are better able to analyze and strategize based on employee data, making them a great resource for company leaders when it’s time to make decisions.
Empowerment: Employees enter much of their own data, removing a massive time and cost burden from HR staff, even as HR remains in full control of sensitive personnel and company data.
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