The aim of the literature review on e-HR is to find out what e-HR is, to examine benefits, strengths, weaknesses, issues, and barriers, and to analyse and focus the perceptions of importance of the information technology in HR activities. What are the importance of Internet to HR practitioners and the Internet support for human resource management. How the Internet applications provide support for HRM. How are an expanded model of the factors affecting the acceptance and effectiveness of e-HR systems. And also analysed the factors of e-HRM adoption. The analyses of strategy are for enhancing the effectiveness and acceptance of e-HR systems.
This review is organised by different phases, mentioned about e-HR definition and use in the first phase, e-HR strengths, weaknesses, and issues in second phase, e-HR adoption in the third phase, and finally the discussion and conclusion in the fourth phase.
e-HR stands for Electronic Human Resource. The term e-HR refers to deal Human Resource Management transactions using an internet. E-HR aims to keep information available to employees and managers at anywhere at any time. E-HR may include organizations HR portals and web applications, Enterprise Resource Planning, HR service centers and interactive voice response. There are three identified levels of e-HR such as publishing of information (delivered by intranet medium), automation of transactions with integration of workflow (intranet or extranet used) and transformation of the HR function (redirect HR function towards a strategic one). (7, PR 36,2 278) E-HR is characterized in field of HRM as having numerous innovations in Technology and it provides wider potential in term of usages including employee self service, information sharing, functions administration and production of reports. (Pass, 2002) (6, PR 37,1 66)
e-HR is developments in technology to create a real-time, information-based Self-service, interactive work environment. With e-HR, managers can access relevant information and data, conduct analyses, decision making and communicate with others and employees are able to control their own personal information like update their records when it changes and make any decision on their own without consulting with any professionals help. (4, PP 365-366)
e-HR will effect both efficiency and effectiveness of Human resources function in such a way that the efficiency of the human resource process can be effected by reducing cycle time for paperwork, Improvements is data accuracy and reducing manpower requirement. In similar way the effectiveness of human resource process will be effected by improving the capabilities of both employees and managers to make a better and accurate decisions. (4, PP 365-366)
e-HRM as an enterprise-wide strategy that used scalable, flexible and integrated technology to link internal processes and knowledge workers directly to the business objectives of the organization. (5, PP 515)
Benefits of e-HR and e-HR adoption
Sharing of information with one way communication from the organization to employees or managers through the companies intranet system (reduce the expensive printing cost, users can get current information, Quick notification of any changes).
Automation of transactions with the combination of intranet with different application program. The paper work is totally replaced with electronic media. (4, PP 369)
The adoption of E-HR brings benefits in major areas in the HR processes such as HR planning, acquiring HR (recruitment and selection), HR evaluation (performance appraisal), communication, rewarding HR (performance appraisal, compensation and benefits) and developing HR (training and development, career management). (7, PR 36,2 278)
- Users can access database and able to update and search in formations and make decisions accordingly through e-profile.
- Allows managing of recruitment and hiring process (Job advertisement, Manage applications and interview) in a systematic manner through E-recruitment.
- Application and approval process of leave management and its review through e-leave.
- On-line submission and approval process of employees claim to Finance is possible through e-claims.
- Web-enabled appraisal, skills development and career mapping can be performed through e-appraisal system.
- Managing of payroll processing will be very systematic and fast way by e-HR system. which involves the calculation and reporting of taxes, gross or net pay and deductions, arranging or allotment of money to different cost centre.
- Computerized Job evaluation or performance rating system is another strength of e-HR to determine the worth of each job and to decide the correct pay rate. This is based on the points system rated against the each type of job and its nature.
- Computerized salary surveys can conduct among the companies to gain information about the current pay levels and pay structure.
- The feature of salary planning application can calculate the total salary and allocate it according to the merit or seniority of the people. (2, PP 245-247)
Use and reasons for E-HR adoption
Based on the research in the article, few percent of organizations do not have a web page and most of the organizations already have web page to improve customer communication, product advertisement, public relations, recruitment process, cost effectiveness, services to internal customers, and staffing procedure and communication. Based on the respondents believe that the various HR functions will become more wide spread in the future and also appears that the use of e-HR, the communication will be decreased as well. (7, PR 36,2 282-290) The use of E-HR provides more gains in time management, company image, operating-cost reduction and minimizes mistakes. However some companies not using e-HR due to less usefulness, security issues, inconsistency with practices used and other practical problems. (7, PR 36,2 282)
E-HR and the role of HRM
Based on the study and HR experts, the role of the HR function can be changed by e-HR adoption. The adoption of e-HR practices has a great impact on strategic goals of the organization image, alignment and cost reduction. Only few percentage of HR managers have doubtful in the relation to e-HR as no replacement for face to face communication and personal contact. Higher percentage believe that the HRM role will be upgraded with e-HR in term of strategic improvement in speed, quality and achievements of services. (7, PR 36,2 290-291)
Importance of the internet to HR Practitioners
In the technology points of view the HRM can be characterized as human resource information system (HRIS), electronic human resources (E-HR) and virtual human resources (VHR). HRIS gather and maintain HR data, E-HR provides employee self-service, sharing information, reports and administrative functions. VHR creates network-based structure built with partnerships through IT. Internet allows organizations to automate HR processes like various current existing HR-functions, services or applications can be transformed into web-based function. (6, PR 37,1 67)
Internet support for human resource management
The growing number of internet users the HR professionals can be benefited as the internet provides reductions of communication cost, information management facilities, wide range of communication through emails, information accessing from web sites searching. The intranet also helps to support HRM functions and enables activities like information search, communication and database access, and establishes company information system. (6, PR 37,1 66-67)
Internet applications providing support for HRM
The internet revolution helps to shift HR activities to specialized online service providers. Frequently cited useful Internet support HR applications are recruitment and selection, training and development, payroll, benefits and compensation management/administration, Performance appraisal, HR planning, internal and external communication, self-service including web-portal, and knowledge management. (6, PR 37,1 68-71)
In the perceptions of the relative importance for adopting the internet for HRM, hypotheses test shows that the differences between the observations of importance of the internet to human resource practitioners is not associated either with the size of organization or with the internet connectivity. (6, PR 37,1 72)
An expanded model of the factors affecting the acceptance and effectiveness of electronic HR systems
Technology is highly profound in the human resource management, almost most of the large organization use electronic human resource (eHR) systems to attract job seekers and provide training, manage employee performance, and admin benefits and compensation systems.
The organization’s values, goals and resources induce the development of organizational systems and processes to facilitate achievement. Most of the organizations implement systems and processes for convincing talented job applicant, encouraging employee to achieve organizational goals and sustaining employee with his role. This affects the organization’s ability in the achievement. Similarly, individuals’ values, goals and skills involves the determination of intentions and behaviors. Based on the above, the combination of e-HR systems and individual factors affect the system acceptance. Organizations use e-HR systems to convey HR details, and induce individuals’ attitudes and behaviors. This shows that e-HR systems vary the nature of the communication media and message characteristics. the communication easies the relations between message factors, media characteristics, and system acceptance and effectiveness. (8, PP 136)
Factors of e-HRM adoption
E-HRM is as the application of IT to both network and support environment to perform HR tasks. The concept of e-HRM is like Virtual HRM and web-based HRM. The adoption of e-HRM takes in individual level and organizational level. The organizational level comprises of several phases such as initiation, and implementation phases of adoption. The general and contextual factors are derived and tested using a large-scale survey. (10,JMP 24,6 483)
In the influence of adoption, the general factor is identified as size, industry, demography, work organization, structure of employment and HRM configuration of organization. (10,JMP 24,6 486)
In larger organizations the HR tasks in large quantities that can be justifiable for large investments in IT to clear out huge amount transactions using number of applications per week to save administration costs. But small organizations with few applications have difficult to justify for such a huge investment in IT. â€œThe size of an organization reveals an effect on the adoption of e-HRM since the larger organization will more frequently adopt e-HRM.â€ (10,JMP 24,6 486)
Industries like bank have larger stationary and clerical work can easily adopt. Industries like building construction have non-stationary and non-clerical tasks cannot adopt e-HRM. â€œThe industry of an organization reveals an effect on the adoption of e-HRM since industries with mainly clerical and stationary tasks will more frequently adopt e-HRM.â€ (10, JMP 24,6 486-487)
Based on research, the acceptance of employees to adopt e-HRM is crucial as individual qualification and motivation vary with different demographical attributes. Age is considered in individual adoption. Many organizations may not consider older age than younger age. In gender, female has less IT experience so many female may not be considered in the adoption. â€œThe demography of an organization reveals an effect on the adoption of e-HRM since organizations with a high percentage of young, male, and educated employees will more frequently adopt e-HRM.â€
The increasing of telecommunication organization that helps HR and employees and personal interaction is effectively and time consuming. Since the telecommunication employees have basic technical qualifications and existence of basic technical equipment, e-HRM can be easily implemented. â€œThe work organization of an organization reveals an effective on the adoption of e-HRM since organizations with a high percentage of telecommuting employees will more frequently adopt e-HRM. (10, JMP 24,6 486-488)
The relation of permanent and temporary employees should bring relevant influences. The temporary employees allow non-critical HR activities, compensation should provide to agency and non-investment on training for temporary users. â€œ The employment structure of an organization reveals an effect on the adoption of e-HRM since organizations with a high percentage of temporary employees will more frequently adopt e-HRM. (10, JMP 24,6 486-488)
The configuration of HRM of an organization approaches the institutionalization of HRM(formal HR department), comprehensiveness of HRM (extent of performed HR functions) and strategic orientation of HRM (Automation HR). The automation brings more beneficial to the HR department and gains from administrative burdens. HR department should handle like quantitative and qualitative challenges of e-HRM. The extent of performed HR functions may influence the adoption. â€œ the configuration of HRM within an organization reveals an effect on the adoption of e-HRM, since organizations with an institutionalized, comprehensive, and strategic HRM will more frequently adopt e-HRM. (10, JMP 24,6 486-488)
The identification of contextual factors can be classified as the institutional openness of contextual influences on e-HRM and the uniformity of contextual influences on e-HRM. The institutional openness refers the fact of open concerning the employed HR methods, the covered HR functions, and the included HR actors. The uniformity of influences exemplify from National political, legal, and educational system. The institutional openness contextual factors can be identified at present. The uniform influences focus towards the adoption of e-HRM. The political, legal, and educational influences be given for IT exploitation and provide nation-wide net infrastructures, basic IT education etc.
â€œThe national business system reveals an effect on the adoption of e-HRM, since organizations located in economically developed nations will more frequently adopt e-HRM.â€
(10, JMP 24,6 489-490)
Some of the items which are very critical to be consider while implementing e-HR in any organization are given below. (3, PP 54-55)
- The structure of Human resource process or master planning in a company should be properly formulated. If it is not done properly, HR systems become a difficult task or frustrating for users.
- Ensure the availability of enough resources like computer and centralized system for each and every employees to utilize the e-HR system on regular basis. Otherwise people need to use their personal computers at workplaces and it can demoralize the users.
- Training of employees are an important criteria in making successful e-HR system especially when some users may be far less skilled with computer than others.
- The use of e-HR system had a direct impact on the bottom line and made it more competitive. So organization can get the opportunity of reducing manpower in HR. It can leads to unhappiness over the staff.
- HR professionals must have a good working relation ship with their companies IT professional otherwise there will be a chances of conflict between them during implementation or integration of application.
- Employees with little knowledge in computer may resist a move towards computer based e-HR system. So the organization may need to take special care in encouraging the users with an offer of incentives for using these programs.
- Security of e-HR system is another issue to be consider and make the system as non threatening as possible and keep confidence.
- Effective communication among employees is a necessary part of the process . Communicate and educate them about the importance of the system.
- The Identification of Investment required for software and hardware is one of the main issue and also the return of investment or payback period will be unpredictable and based on the estimation it will take one to three year.
Strategic of e-HR
There are two strategic perspectives way the HR can become more strategic .Both these can provide useful frameworks for connecting HR system to the business strategy. The first one takes an economic perspective of the organization to achieve more competitive advantage in an external market environment. The second one is based on the Resources based view and it focuses on the strategic resources and capabilities within the organization In companies perspective, more attention is always given to applying an economic perspective towards the externally focused business strategy than the resource based view. So the primary role is cost reduction and it can be achieved by eliminating all HR transactional functions though e-HR system. (5, PP 516)
The primary role of HR managers spend their most of time in administrative expert role, strategic partner role and capability builder (5, PP 517)
The HR functional activities like tracking of job requisitions, processing and managing payroll of employees, benefits programs etc are under the role of administrative export role.
The strategic business partner role consists of planning of business, workforce and succession, business management and compensation design to support the business strategies of the company.
Building organization capabilities and human capital are primary deliverable in which most of the time spending in the development of human capital and organizational capability.
Automating and streamlining of administrative transactions by implementing e-HRM system make the HR function more strategic because those in the HR role can now spend more time on strategic activities in a way of reduce the cost involvement, Lead time , Increase the efficiency of HR services and communication, improve the productivity and finally able to operate at lower cost. (5, PP 518-519)
Previously the cost factor was the strongest focus of e-HRM practice, but nowadays the focus is not only towards cost but also more towards the integrative consequences of deploying e-HRM in a Company. The cost reduction and transformation of all process of an HR department into a strategic unit because of the introduction of e-HRM. (1, PP 508)
Strategies for enhancing the effectiveness and acceptance of eHR systems
The strategies can be used in several ways for enhancing the effectiveness and acceptance of her systems. For example, organizations may allow applicants to apply for their job through web, but use web based systems to give applicants to verify the requirements. The same way, the organizations may use e-HR systems to gather performance data and enter performance reviews, but managers may have face-to-face meeting with applicant to give rating.
The control perception be increased by electronic selection systems (e.g., touch screen system, kiosks) that can also used by traditional users as well. These kind of systems may allow individuals who are not very efficient with computers access.
The data subjects (eg. Incumbents) have the ability to rectify invalid data in e-HR systems. This strategies decrease the extent to e-HR systems privacy. The organization should minimize the monitoring systems that could limit individual’s freedom and control in organizations. The organization may enhance both productivity and employee well being and merit the way employees performed tasks. This will decrease employee’s stress levels. The organizations would expand definitions of performance to include incumbents which are measurable in positively. The broader definition of performance consists quantity of work performed as well as increases the welfare of the individual, group and organization. The study proves that the e-HR systems are being used increasingly by organizations.
(9,PP 14, 7)
The research reviews the critical analysis of strengths, weakness and issues of electronic Human Resource Management (e-HRM) and also conducts a brief analysis of whether the e-HR can contribute towards HR to become more strategic. Based on this, some of the major implication for current issues, benefits and future improvement required in e-HR as well as in HR could be derived. e-HR may improve the employee productivity, employee morale, decision making, information sharing, enhance innovation and speed up the product launching to market. However, the cost involved in an implementation of e-HR is too high especially for the software, hardware, training etc. It will be a big investment for an organization and the return on investment will not be immediate and it is unpredictable. Finally, the e-HR is good for an employer perspective but not good for an employee as it can end up in a less work force environment.