Assessing the impact of e-HRM in the delivery of HR services
Human resource management has become one of the key concepts in assessing the competitive assets of many organizations. Today, with the implementation of new and upgraded HR technologies, organizations are managing human capital in a more sophisticated way. Consequently, the refined IT solutions are designed to administer a wide variety of human resource data which allow organizations to shift from the traditional ways of delivering HRM services to new web-based HR services to both managers and employees through the self-service HR portals. Accordingly, the digital possibilities have created opportunities for HR functions to develop more strategic role. And for this purpose, the HR professionals have to develop new competencies to carry out the new roles and responsibilities.
2.2 Technology as an HR-enabler
Strohmeier (2007) defines e-HRM as the (planning, implementation and) application of information technology for both networking and supporting at least two individuals or collective actors in their shared performing of HR activities.
The author further explains his definition of the e-HRM concept which utilizes information technology in a twofold manner. As a primary aspect technology is necessary to connect usually spatially segregated actors and enable interactions between them irrespective of their working in the same room or on different continents. Secondly, technology supports actors by substituting for them in executing HR activities. Therefore, technology serves additionally as a tool for task fulfillment. Moreover, the planning aspect highlights the systematic and probable way of applying information technology. The use of information technology points out that the sharing of HR activities is an additional feature that underlines the aspect of interaction and networking.
Consequently, technological change is a key driver for HR transformation, providing the foundation to support HR’s growing strategic focus, which in turn contributes to business results.
Many authors have coined the e-HRM concept with virtual HR (M), HR intranet, web-based HR, computer-based human resource management systems (CHRIS), and HR portals. Yet, Ruel et al. (2004) notes that there is a fundamental difference between HRIS and e-HR in that basically HRIS are directed towards the HR department itself and the users of these systems are mainly HR staff. While, with e- HRM the target group is not the HR staff only but people outside the Hr department: the employees and management where HRM services are being offered through an intranet for use by employees.
Marler (2009, cited Ruel et al. 2004) posited that the aim of implementing the e-HRM system is to improve the HR function’s ability to reduce costs, support strategic orientation, and to provide client services to management and employees.
2.3 E-HRM: Challenges in the New Era
There are four main challenges that organizations are facing while putting into practice the concept of electronic human resource management; globalization, technology, talent retention and development and change management.
Globalization
According to Razi (2006), globalization has resulted in significant implications for HR functions as they attempt to develop global HR strategies and design programs and processes to manage a global workforce. The human resources function now faces pressures to globalize by adopting service delivery models that better rationalize costs, leverage common technology and processes, and focus resources on global HR processes that can create competitive differentiation for the enterprise (Piercy and Vernon, 2008).
Technology
Wright and Dyer (2000) stated the technology challenge reflects how the most traditional businesses also become knowledge based in the e-environment. Ulrich (1997) found that technology has become a challenge for managers and the HR professionals as they are responsible to make technology viable and productive part of the work setting.
Talent Retention and Development
Purcell and Wright (2007) argued that with the increase realization that human capital is one of the key resources for sustainable competitive advantage, attention is focused on the management of knowledge workers. They further added that knowledge-based organizations seek to differentiate themselves by offering unique services and thus develop organization-specific skills. While, on the other hand, knowledge workers wish to develop transferable skills that will make them attractive to prospective employers. Therefore, this calls for management practitioners of knowledge-based firms to both retain and develop their knowledge workers.
Change Management
According to the CIPD research 2010, the organizational change is increasing, yet the high levels of failure indicate that effective management of these changes is still lacking. And such a gap indicates that there is much to learn about managing change more effectively. There is no single model of change and no single way out to effective management, but HR professionals need to ensure that managing change is a core part of their role since many employees might resist to the changes.
2.4 Outcomes of e-HRM
Literature suggests that the various goals of e-HRM and the different types of e-HRM are expected to result in outcomes including more efficient HRM processes, a higher level of service delivery and a better strategic contribution (Sanayei and Mirzaei, 2008). Moreover, the e-HRM approach helps to achieve organizational goals.
Ruel et al. (2004 cited Beer et al. 1984) discerns four possibilities:
High commitment,
High competence,
Cost effectiveness, and
Higher congruence.
2.5 Types of e-HRM
Many authors found that IT has influenced HR in three significant ways which has given rise to the three types of e-HRM:-
Operational e-HRM – concerns the use of technology within HR focuses on improving the operational efficiency. Operational e-HRM provides free access to employees to keep their own personal data up-to-date through an HR website (Ruel et al., 2004).
Relational e-HRM – concerns more advanced HRM activities. It is where IT allows enhancing HR relationships externally with other parties within the organizations itself.
Transformational e-HRM – concerns more strategic HRM activities. It becomes possible for organizations to create a change-ready workforce through an integrated set of web-based tools that enables the workforce to develop in line with the company’s strategic choices (Ruel et al., 2004).
2.6 Transition of Traditional HR to e-HRM
Early in the twenty first century, as posited by Ulrich (1997), HR was viewed as antithetical to change, with HR systems providing impediments to, not impetus for, change. He also put forward that the emerging responsibility currently rests with external consultants, with many firms delegating the responsibility for driving change to external consulting firms.
However, in organizations today, there is constant talk of downsizing, outsourcing, and redesigning how an organization operates to ensure it remains competitive and efficient, and is able to make the most of economies of scale and scope (Farndale et al., 2009). Walker (2001) and Knapp (2004) note that the transformation of HR requires analysis and identification of opportunities for improvement in the following areas, including:
the people in HR and their competencies;
implementing a new service delivery model;
redesigning or automating work processes;
restructuring the HR organization;
redefining HR talent requirements;
and implementing HR technology support.
Walker (2001) further added that a transformed HR truly adds value to the organization. The e-HRM, therefore, provides organizations with great opportunities to re-think the way HR management is undertaken in organizations.
2.7 Conditions for e-HRM implementation
2.7.1. Alignment of web-based HR with business strategy.
According to Raj (2007), the growing importance of human resources for organizational success has led to an increasing interest in making HR management a more integral, strategy-driven activity in the organization. Furthermore, the alignment of strategies and HR action is expected to be reached through competence and learning. The APQC (2005) posited that an HR organization must understand the business and have core HR processes in place to support the corporate strategy. To become more strategic, HRM strategy need to be in alignment with the business goals and also to avoid any inconsistency between HRM policy goals and that of the business.
2.7.2. Technology support for HR transformation
Marler (2009) founded that developing an e-HRM system that creates or sustains competitive advantage, requires investments in information technology resources and specialized human capital that can integrate IT and human resource knowledge and experience. Furthermore, with the emergence of the Enterprise Resource Planning System that seamlessly integrates various business modules within the information architecture of any business enterprise, Human Resource Information Systems (HRIS) has become a crucial focus for management professionals (Kavanagh and Thite, 2008). Martin and Reddington (2009) put forward that the technology should take into account the e-HR goals, that is whether the architecture draws on operational technologies and operational skills demand of HR, relational technologies and HR skills and transformational technologies and HR skills in areas such as sophisticated search technologies, human capital management systems, e-learning and knowledge management platforms, virtual meetings software, etc.
2.7.3. Knowledge management and innovation
In today’s complex organizations, competitive advantage for business depends on the ways in which employees create and share knowledge in ways in that increase the bottom-line. The challenge of knowledge management therefore is to ensure that employees also benefit from developing and sharing knowledge (Holbeche, 2009). Knowledge-sharing should be encouraged in the organization. Knowledge management also helps to measure an organization’s ability for implementing the new strategy. Knowledge management should be embedded in the corporate strategy.
2.7.4. Training and development
To meet the organizational change requirements, training and development of employees is of utmost importance. As Knapp (2004) argued, changes to the HR function require changes to HR staff and skills which make HR talent management a key transformation priority. On the other hand, Walker (2001) stated that effective staff training is one of the critical factors that affect the quality of service delivery within a service center. Moreover, Yeung (1996) suggested that to sustain the transformation of human resource functions, HR professionals must be trained to be able to develop and demonstrate a new set of competencies to fulfill their changing roles and responsibilities. Likewise, employees should be trained to make use of the complex technology, improving their communication skills and develop problem-solving capabilities.
2.7.5. Employee behavior towards new e-HRM system
Employees are the most important element in an organization and employee behavior and attitude are of particular relevance in bringing change in an organization. Employees might not accept the introduction of the new technologies in their workplace or even ready to make use of it. The HR function can make use of the Technology Acceptance Model or the Trust in Information System to determine the employee acceptance level of the new system. Therefore, HR should influence employees’ positive attitude towards the new system, employees should be convinced that this system would increase their performance as well as the organizational performance.
2.7.7 Work Redesign
It refers to the use of modern technology to radically redesign business processes to gain efficiencies. “HR must lead a redesign of the workplace so that work environments foster and encourage sociability, and help organizations tap into employees’ tacit knowledge to unleash creativity and innovation” (Willmott, 2003). The process of redesigning the workplace provides more flexibility and choice to individuals.
2.8 Transformation Team
An HR transformation team is formed with a clear mission for promoting the HR transformation. According to Ulrich, et al. (2009), the CHRO forms the HR transformation team with the support of the senior leaders of the organization. This team includes the HR leaders and professionals, representatives from line management, the customers and investors and also the consultants.
HR Leaders and Professionals
2.8.1 Chief Human Resource Officer (CHRO)
The CHRO sets the direction and tone for the organization. The CHRO also needs to sponsor the HR transformation. Ulrich et al. (2009a) states that the CHRO should initiate, take the lead in the design, and monitor the transformation plan. Porter-O’Grady (2008) also found that the CHRO plays a critical role in developing new position descriptions, advising and supporting leaders in their new roles, and ensuring the different processes are adapted to the new model of governance.
2.8.2 HR Leadership Team
Ulrich et al. (2009a) posits that leadership team consists of the heads of several departments. They are the HR leaders for businesses, the heads of the centers of excellence and the shared service HR leader. Their collective support is very critical in the transformation.
2.8.3 HR for HR
These are the champions of the HR transformation who provide HR services for HR professionals. “They need to have a strong reputation among HR professionals who look to them for guidance and among business leaders whose support may depend on their credibility. They are responsible for facilitating discussions of how to organize the HR department so that the center of expertise and embedded HR professionals collaborate to deliver value” (Ulrich. et al., 2009a).
2.8.4 HR Professionals
The HR professionals play a critical role in the HR transformation. The CHRO and champion of the transformation need to build the business case for the transformation, clearly define the deliverables, and create a blueprint for changing the HR departments and practices for this particular group. Moreover, the HR professionals also need to receive rigorous and regular feedback on how they are doing relative to the roles and competencies required of them (Ulrich et al., 2009).
2.8.5 Line Managers
The line managers has the responsibility to provide a clear business focus for the transformation, to ensure that the transformation team has access to both internal and external information, to ensure that the right people are engaged in the process and to require clear and measurable results from the transformation (Ulrich et al., 2009a).
2.8.6 Customers and Investors
In the HR transformation process, the HR practices should be aligned with the customer satisfaction. Ulrich et al., (2009), suggested that the customers can be directly or indirectly involved in the transformation since they can provide a deep insight of the organizational and leadership capabilities that they expect from the company.
Moreover, the HR departments must align their practices with the requirements of the investment community. The HR transformation team invites key investors into their planning. In this way, the HR team communicates to the investors that their values are being inculcated into the company’s institutional infrastructure (Ulrich et al., 2009).
2.8.7 Consultants and Advisors
(Ulrich et al., 2009) put forward that the external consultants often add value to an organization by bringing experiences from other companies, by previewing and averting common challenges and by being independent contributors to the HR transformation process. However, success depends on the choice of the right consultant since they are involved in the right way and at the right time.
2.9 Redesign the HR department
2.9.1 Embedded HR professionals
Dave Ulrich created the Ulrich model in 1997 to provide a broader insight of the roles of HR professionals should deliver:
As “strategic partner” HR professionals align Hr practices with business strategies.
As “administrative expert”, they deliver HR practices with efficiency.
As “employee champion”, they help employees to generate commitment, develop competence and discover contribution.
As “change agent”, they help on delivering an increased organizational capability and capacity for change.
According to the author, “the model was conceptualized to support the HR domain”. However, as business conditions are constantly changing, the role of HR also has evolved.
Figure 2: Evolved HR roles
Ulrich et al. (2009) explained the new roles as follows:
“HR professionals are employee advocates, charged with making sure the employer-employee relationship is one of reciprocal value. Besides advocating for employees today, they build the future workforce as human capital developers. HR professionals are also functional experts, designing and delivering HR practices that ensure individual ability and create organization capability. As strategic partners, they help line managers at all levels reach their goals. HR professionals bring business, change, consulting, and learning know-how to their partnership with line managers, so that together they create value. And to tie it all together, they must be genuine leaders – credible both to their own functions and to those outside. When these five roles are played within the HR department, HR professionals have more impact.”
HR Professionals’ Competency skills
Ulrich et al, (2009) recommend that companies should focus on HR competencies since; they integrate the roles and activities of the HR professionals. Ulrich and Brockbank (2007) posited that HR competencies are not just knowledge but the ability to use the knowledge.
Figure 3: HR Competencies
Source: http://sitemaker.umich.edu/hrcs/executive_summary
Ulrich and Brockbank (2007) proposed the above model suggesting that HR professionals must master competencies dealing both with people and business (large arrows). Following one of these two paths independent of the other, leads to failure. Within these two dimensions, Ulrich and Brockbank (2007) arrayed six domains of HR competence, dealing with relationships, processes, and capabilities.
Credible Activist. The HR professional is both credible and active. Some have called this “HR with an attitude.” Ulrich et al, (2009) added that as credible activists, HR professionals create sustainable business outcomes as they link the people and business dimensions with energy, insight, sensitivity and impact.
Culture and Change Steward. Ulrich et al, (2009) mentioned the HR profession appreciates, articulates, and helps shape a company’s culture. They continued with the fact that this culture starts with clarity around external customer expectations and then these expectations are transformed into internal employee and organization behaviors. As being the stewards of culture, HR professionals respect the past culture and help to shape a new culture. In addition, successful HR professionals facilitate changes by helping make culture happen and by developing disciplines to make changes happen throughout the organization.
Talent Manager / Organizational Designer. Ulrich et al, (2009) posited that the HR professionals master theory, research, and practice in both talent management and organization design. Talent management focuses on competency requirements and the flow of people in the organization. Ulrich et al, (2009) further pointed out that the organization design focuses on how a company embeds capability into the structure, processes, and policies that shape how an organization works. Organization and talent work together since without a supporting organization, good talent would not be sustained and also an organization will not deliver good results without talented individuals.
Strategy Architect. The HR professional has a vision for how the organization can win in the future and plays an active part in the establishment of the overall strategy to deliver on this vision. This means recognizing business trends and their impact on the business, forecasting potential obstacles to success, and facilitating the process of gaining strategic clarity. “The strategic HR role focuses on aligning HR strategies and practices with business strategy. In playing this role, the HR professional works to be a strategic partner, helping to ensure the success of business strategies. By fulfilling this role, HR professionals increase the capacity of a business to execute its strategies.” (Ulrich, 1997)
Operational Executor. According to Ulrich et al, (2009), the HR professional executes the operational aspects of managing people and organizations. Policies need to be drafted, adapted, and implemented. Employees also have many administrative needs (such as, to be paid, relocated, hired, and trained). HR professionals must ensure that these basic needs are efficiently dealt with through technology, shared services, and/or outsourcing. This operational work of HR ensures credibility if executed flawlessly and grounded in the consistent application of policies (HRCS Executive Summary, 2007).
Business Ally. Businesses succeed by setting goals and objectives that respond to external opportunity and threats. That is the HR professionals should have complete knowledge about the business, in other words they contribute to the success of the business by knowing the social context or setting in which their business operates. Finally, they have a good understanding of the parts of the business (finance, marketing, research and development, engineering), what they must accomplish, and how they work together, so that they can help the business organize to make money (HRCS Executive Summary, 2007).
2.9.2 Shared Service Centers
According to Hunter (2005), the shared service center is fundamental to the delivery of the role of HR as administrative expert. He further explained that it provides the focused administrative excellence that drives financial efficiency and HR credibility through the quality of its output, ‘getting the basics right, every time’. The SSC also enables the consolidation of similar HR administration activities from multiple business units. By consolidating processes, the SSC is able to control transactional administrative activities better, drive out costs and create a platform for investment in new technologies.
Literature describes that the shared service centers allows employees and managers to manage much of their HR administrative work which is known as the self-service. The approach of employee self-service helps employees to update their own transactional records (which may be associated with their personal details or with a process). Self-service also provides a means for employees to have access to data to resolve their own queries (online policies or HR process description). The management self-service, on the other hand, gives managers the freedom to move beyond traditional day-to-day administration and concentrate on improving the performance of employees. It provides management with tools needed to efficiently perform routine employee administration, as well as the information required to help employees improve their performance and enhance their skills. It also minimizes unnecessary human resource involvement in manager-employee interactions while increasing organizational productivity.
2.9.3 Center of Excellence
Hunter (2005) stated that the HR business partners need the support of the deep technical knowledge of the business that has traditionally resided in HR. The Centers of excellence is separate entity which offers businesses specialist skills and knowledge in particular areas like compensation, benefits and employee relations. The centers of excellence, also called as the centers of expertise, bring together technical experts in each HR area who would otherwise be distributed throughout a firm’s business unit, allowing ideas to be quickly developed and shared. The centers of expertise often focus on transformation-based services or HR activities that help implement strategy, create a new culture, or accomplish business goals (Ulrich, 1997). Moreover, Hunter and Saunders (2005) postulated that the culture and tacit knowledge about how people management activities should be defined and introduced are supposed to be lost as the HR teams get closer to the business and move away from HR and the Center of Excellence provides a means to address this issue and indeed creates a more favorable situation that the old model allowed.
Ulrich et al (2009) postulates that the center of expertise HR professionals plays several important roles in an HR transformation:
They create service menus which are aligned with the capabilities driving business strategy.
They identify needs and recommend services most important to the situation.
They collaborate with embedded HR professionals in selecting and executing the right services.
They create menu offerings if the current ones are insufficient.
They manage the menu.
They shepherd the learning community within the organization.
2.10 Barriers to implement e-HRM
In a recent survey, HROA (2009) found the following as the most prominent hurdles to HR transformation:
Lack of staff expertise
Many companies might fail to provide the right training to employees and this causes an obstacle in the change management process. Therefore, HR professionals must make sure that employees possess the right skills for the new working system.
Internal bureaucracy
More often, organizations use the bureaucratic style of leadership, where all decisions are made at high levels of management. However, it is not always right to use the bureaucratic management style, since employees will not be encouraged to work and as a result their performance level might be low.
Lack of adequate technology
Another type of barrier is the lack of adequate technology. Organizations which do not have adequate technology support for the transformation. The right technology must be available for successful change management.
Underestimation of the resources needed
While thinking for a change, organizations must plan to have the required resources because lack of resources will end up as a barrier. Planning should be done in terms of human resources, financial support, technological support, etc.
Lack of employee and business buy-in
Employees should be completely involved in the transformation process. Change initiatives should be incorporated in the organization’s mission. When employees buy into the mission, they become a force for driving the mission. In case, there is lack of employee and business buy in, this can cause a barrier to transformation.
Lack of senior management support
A lot of projects might fail if senior management does not provide their full support. They might not support the decision of implementing new working system or even providing funds for projects. Lack of support might be because management does not have all the facts regarding the need.
Resistance to change
Resistance to change might take several forms, such as employees might refuse to make use of new system, or even refuse to cooperate with the change.
2.11 Conclusion
In close, human resource management has shifted from the traditional ways of doing HR to the use of new human resource information system which has made the work easier. The paradigm shift requires a transformation team who leads the transformation process in order to redesign the HR department and to make the transformation; several areas need to be considered. However, the transformation process fails due to some existing barriers. The figure below concludes the above literature.