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Chapter 6
cost effective and flexible, but companies must consider several important factors (the
first of which is data security) when deciding whether to use cloud computing for
sensitive data such as human resources records.
Numerous laws impact a company’s relationship with its employees, and much of
the data maintained for human resources’ purposes is sensitive and governed by privacy
laws that vary by country. Companies must develop procedures to control access to this
information. If a company’s human resources data is stored on the cloud, it is much
more difficult to ensure that the data is managed in a manner that meets privacy laws.
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A company cannot simply assume that the cloud-computing supplier provides this
security. For example, in 2011, German data protection authorities adopted an
“orientation guide” to cloud computing that emphasizes that German cloud computing
customers are responsible for compliance with all data protection requirements under
German law. This compliance includes all subprocessors involved in providing cloud
computing services. Thus, it is not sufficient for a company to just accept the cloud
computing provider’s assurance that its systems are secure. Cloud computing customers
should “access logs, tour the data center, go through data center questionnaires and see
who has the administrator’s password,” according to Grady Summers, principal,
information security, at Ernst & Young. “Make sure that the service provider can meet
regulatory requirements as well.”
Questions:
1. What modifications would be required to a company’s standard human
resources security procedures to address using a cloud-based human
resources information system? What documentation would you require from
the service provider?
2. Will laws and regulations affecting cloud-based human resources systems
become more standardized and simpler in the future, or will there be a growth
in complexity with an increase in associated costs? Provide the reasoning
behind your answer.

Human Resources Duties After Hiring
A human resources department has responsibilities that continue beyond the hiring and
job start of an employee. The human resources department must maintain an ongoing line
of communication with the employee and his or her supervisor to make sure the employee
is performing well.
Fitter, like most companies, issues performance evaluations to new and current
employees. As part of the process, the supervisor performs an evaluation and reviews it
with the employee. After the review, the supervisor may modify the evaluation, which
both the supervisor and the employee then sign. The employee may also submit a written
response to the review, listing any disagreements or explanations. The employee’s
department manager is expected to review the performance evaluation and employee
response, and may add a separate written comment. The completed package is then
forwarded to the Human Resources Department, where all documents become part of the
employee’s file. These files are critically important if an employee fails to perform
adequately over a period of time. If an employee must be terminated, the company needs
sufficient documentation to demonstrate that the termination is warranted; otherwise, if

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