European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.7, No.21, 2015 198 Human Resource Information System and Competitive Advantage of Companies Listed on Nairobi Securities Exchange in Kenya Margaret Muthoni Kariuki Lecturer University of Nairobi, School of Business, Department of Business Administration, P.O. Box, 30197-00100. Nairobi. Abstract The main objective of this study was to determine the influence of human resource information system (HRIS) on competitive advantage of firms listed on Nairobi Securities Exchange. Data was collected using a questionnaire from the human resource managers of firms listed on Nairobi Securities Exchange. 62 questionnaires were distributed to various firms and 39 were returned and fully completed forming a response rate of 63 percent. Data was analyzed using multiple regression analysis to test the effect of HRIS on each component of competitive advantage (market share, profitability, public image). The results show that HRIS had a significant influence on profitability, public image and overall competitive advantage and no influence on market share. Specifically, the results show human resource analysis explained profitability, public image and overall competitive advantage. Keywords: Human Resource Information System, Public image, profitability, market share, Competitive Advantage 1.0 Introduction In the recent years organizations have deployed information’s systems for achieving efficiency, effectiveness, enhancing quality and gaining competitive advantage. Human Resource Information systems (HRIS) are used by HR department to achieve the same objectives ((Kumar, 2012). The deployment of HRIS in organization is the key to development of information technology. It is an important tool to achieve crucial organization human resource objectives. HRIS is used in HR administration, salary administration, leave and absence recording, skill inventory, performance appraisal, training and development, HR planning, recruitment and career planning and others HR activities (Mureithi, Gachunga and Burugu, 2014). Human resource information systems should add value to the outcomes for the organization. Declining costs and time consumption, improved communication should create an environment in which the HR department plays a strategic role in the organization (Lengnick- Hall and Moritz, 2003). HRIS give the HR department an opportunity to become strategic partners with top management. Kumar (2012) argues that HRIS should allow the HR functions to become more efficient and to provide better information for decision making. The vision 2030 economic reform progress initiated by the government of Kenya is aimed at turning Kenya into middle income country. It incorporates information communication technology (ICT) as a social economic force under the economic pillar for driving development among other sectors. The government key objective is to turn Kenya into global ICT hub and premier location for business process outsourcing. To capitalize the synergy between these two assets, HRIS is an emerging area that may lead HRM into new era. Technological developments and particularly those based on advancing information technology (IT), are essential for organizational effectiveness and are powerful drivers of organizational change (Warui, Mukulu and Karanja, 2015). According to Mureithi, Gachunga and Burugu (2014), Kenya ICT has been widely used in the HRIS from the late 1960s. The technology has changed with time. In 1960s, it was the mainframe type which was used in processing the payroll and government accounts. In the late’s 1970s and early 1980s it was the micro computers which were used in word processing. Client servers came to use in the 1990s and were used in information sharing and online transactions (Wachira, 2010). ICT has been used in organizations to add value in transactions by improving efficiency of transaction services. It is also used in back office, production time of staff and in offering choice of delivery channels from face to face, online or through telephones, teleconferencing etc and information sharing through building IT systems with technology that enables information to be shared across departments which means citizens or clients or customers can receive faster and more transparent service (Wachira, 2010). This shows that even though there has been use of HRIS, most organization in Kenya engage the use of HRIS to carry out mundane tasks at a very basic level which would not lead to competitive advantage. Listed companies in NSE are very competitive and their HR managers should be at forefront to ensure that HRIS is adopted and used optimally in their organizations so that they can leverage on its benefit that will help the government of Kenya to achieve its vision 2030. Huselid and Berker (1997) found that there were financial returns for the