Boustani1

Functional Perspectives of Human Resources

Wassim Boustani

Management Information Systems

Professor V. Friedman

10 March 2006
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Functional Perspectives of Human Resources

Executive Summary

Information technology can shift the focus of HR functions to allow professionals to

attend to other issues, and change how organizations manage and deliver HR; it can also become

a partner to develop and implement responses to competitive pressure, and help a company

achieve its strategic goals.

Introduction

Torres-Coronas defines e-democracy as the technological advances in communication

media that provide employees with more information and more direct access to other employees

than previously existed. Knowledge is a primary resource for workers, and the sharing of this

knowledge through technology is an important tool for an organization. However, empowerment

through knowledge creates decentralization and information access in companies that are still

organized in a hierarchy of small management groups, where employee empowerment is limited

(Torres-Coronas, 2004).

Exposition

The impact on HRM and e-democracy

An e-democracy takes advantage of participatory management practices, organizational

citizenship, and communities of practice. This encourages a more democratic organizational

shape to a company’s structure; forcing a change in employee views of their role in the

organization. Social identity theory is based on how our identities are defined by our interactions

with others in a group, which gives us a sense of where we fit in society. Because organizations

are structured networks of groups and inter-group relations, and because employees favor their

workgroup more than other workgroups, changes that affect these workgroups and their relations
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can have serious effects on individual employees in terms of their identities and loyalties (Torres-

Coronas, 2004).

Although technology can successfully increase access to information across an

organization, employees may see technology changes to be about their job satisfaction and

commitment; including the status, power, and resources of their workgroups. HR practitioners

need to consider these perceptions and inter-group relations for smooth transitions during

changes. Otherwise, the high expectations for change when new technologies are implemented

may result in a failed adoption of a complex technology, and expensive IT systems may be

abandoned without reaching their full potential (Torres-Coronas, 2004).

Studies of implementation at a metropolitan hospital have shown that instead of

increasing input and knowledge, failure to train and support employees can actually lead to

frustration and reduced efficiency. The same studies also show that employees involved in the

implementation and monitoring of changes received them more positively than those who were

suddenly confronted with them. However, the redistribution of authority did not change as

expected and staff empowerment did not increase. Furthermore, those identifying with specific

workgroups, or in-group, were threatened by the fact that the implementation was being

managed by another workgroup, or out-group. They were mostly concerned with changing roles,

but group relations and status remained mostly unchanged (Torres-Coronas, 2004).

Hospital staff members were concerned about the effects of new technologies on face-to-

face communications and ultimately relationships with others. While some enjoyed having

information at their fingertips, others feared that not having it handed to them with instructions

by a more qualified person would reduce efficiencies and education. The most common

concerns were about being forced to use a new system without training or compensation; of role
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changes and potential staff losses; that the technology was introduced for budgetary reasons,

rather than improved patient care; all these undermining a legitimate and valuable system that

brought numerous sophisticated functions (Torres-Coronas, 2004).

The study concluded that an organization will choose parts of a new technology that best

suits its predefined structure or arrangement, reinforcing its normal practices. HR practitioners

must be aware that new technologies bring changes to employees’ focus on their roles and

identities, and that group identities are an important part of a successful e-democracy. HR must

create focus groups and workshops to ensure the participation of key groups in the planning and

implementation of changes, and to encourage personnel to engage in the technology. Effective

training procedures should be established and timed to integrate smoothly with the

implementation (Torres-Coronas, 2004).

Statistics of IT usage in HRM

Forty-four percent of companies use IT for most or all of their HR systems, whereas 92

percent have at least some IT-based processes. Surprisingly, there was no increase of IT use

from 1995 to 2001. The lack of growth may be due to investments being made in technologies

that improve preexisting IT processes, rather than adding new ones. The amount of IT used does

not seem to be related to an organization’s configuration or size. Single-business companies and

the largest companies were least likely to use IT for most HR processes, compared to multiple-

business companies and several-sector companies (Lawler, 2003).

Tasks that employees and managers perform most frequently on eHR systems were job

openings, applying for jobs, arranging for travel reimbursements, and changing benefits. Salary

administration has seen the greatest growth, because of its scalability. Meanwhile, the eight most

common managerial activities were not accessible on eHR systems of over 50 percent of
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companies. Transactional activities were more likely done using computers, while those that

require expert advice and decision making were seldom done on a computer (Lawler, 2003).

Another popular usage of eHR was for gathering and managing performance data

throughout an organization. Processes are more likely to be computerized depending on the

magnitude of their size and complexity, the economies of scale that is provided, and their value

to the organization. Companies with knowledge management initiatives are more likely to make

computerized solutions available for HR, with tools being more effectively used. These systems

were found to be the most effective when they involve personnel records, salary administration,

and job information; rather than management tools. This was especially true in large

organizations; partly because of the cost savings they experienced (Lawler, 2003).

Increasing the use of IT for transactional HR services can shift the focus of HR

professionals to more value-added business activities. Applications that are most related to these

changes focus on management tools that emphasize compensation, benefits, and employee

development. The relationship between the use of IT and changes in HR activities may become

more significant as more companies use IT for HR functions (Lawler, 2003).

Trends and challenges in HRM

If current trends continue, it is predicted that the future of HR could become an

administrative function that manages an IT-based HR system, organizational effectiveness, and

business strategy. HR has to focus on adding value and helping companies deal with human

issues, while it also improves its competencies and develops new ones. These new developments

will require HR to distance itself from its present control and audit role and place itself in a

management and development role, having the HR function take a business partner approach

(Verweire, 2004).
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By using the business partner approach, the HR function develops systems and practices

that provide employees with the needed capabilities to perform effectively; focusing on the

effectiveness of these practices, as well as process improvements. As a key partner in strategic

planning and change management, the main responsibility of HR is to recruit, develop, and retain

employees. The knowledge economy has increased the importance of talent management, which

has become crucial to competitive advantage as knowledge-based resources replace financial

capital, natural resources, and unskilled labor. The fact that it is more difficult to imitate human

capital becomes a determinant of performance (Verweire, 2004).

The value of these knowledge workers lies in their general knowledge, as well as the tacit

knowledge that they have gained through experience in the specific firm. As demographic trends

shift towards a retired baby-boomer generation, the market for skilled knowledge workers will be

smaller, increasing the competition for talent and the importance of HR as a business partner. An

important contribution by HR will be to develop a talent strategy, and focus on its recruitment

and development responsibilities (Verweire, 2004).

Ninety-seven percent of firms use tuition reimbursement and 41 percent used a corporate

university approach, offering e-learning and traditional courses internally. However, most

companies rely on their employees to take responsibility for their own education. Forty-three

percent of senior management was shown to be extensively involved in talent management,

whereas only 24 percent of these systems are linked to HR practices. HR has to increasingly

provide integrated systems that enable efficient approaches to talent decisions (Lawler, 2003).

Large companies were more likely to have talent reviews, provide development

opportunities, and invest more in building their human capital. The focus for firms is on having

the most talented performers possible in the workforce. Fifty-seven percent of companies were
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said to have special programs for employees that have the highest potential to add value. These

programs included special development and assessment activities 88 percent of the time, and

special career development activities 82 percent of the time. Large companies and those with a

growth strategy or in the process of restructuring invested more in the identification and

development of their high-potential talent (Lawler, 2003).

Handheld computers for HRM research and practice

Although handheld technologies have not been a prevalent integration into HR systems,

the advancements in hardware, performance, and wireless capabilities, as well as the

development of HR-related applications will increase their utilization. The successful use of

handheld technologies requires integration into the organization’s IT system as an enterprise

solution, and they must be part of its strategic business plan (Torres-Coronas, 2004).

Currently, the most popular handheld applications are for personal information, such as

calendars, contact lists, to-do lists, and email. Organizational applications are available for time

management, complex work rules, time billing, scheduling, and capability allocation. HR can

make forms and documents available on handhelds, which can be completed and returned

electronically. Traveling employees can have capabilities such as time management, project

management, sales and expense tracking, and immediate access to quick reference material

(Torres-Coronas, 2004).

The use of handhelds reduced medical errors across the medical profession by making

correct information available; it also saved nurses hours per day and allowed for early patient

discharges by eliminating the need to transcribe handwritten notes into desktop computers.

Healthcare costs were lowered by decreasing prescription inaccuracies and insurance billing

errors that are often caused by poor penmanship. The use of a handheld saved time in 81 percent
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of entries and saved effort in 73 percent of entries (Torres-Coronas, 2004).

The most desired applications were those that automated the daily workflow. In the

medical organization; patient and staff schedules could be downloaded to the calendar, point-of-

care data could be input and extracted while interfacing with the patient information system, and

notifications of laboratory results could be received wirelessly. Professional and personal

customization of any handheld application was important to most users, and digitized forms

should resemble their paper-based versions (Torres-Coronas, 2004).

Workers were able to use handhelds with little training and organizational support, and

job analysis and device usage data was easily collected. The primary issue was the lack of

integration of the handhelds with the organization’s IT system, and they hindered personal

interaction where it was important. Providing wireless access, compared to stand-alone

applications, increased the use of digitized forms and communications (Torres-Coronas, 2004).

Handheld technologies must be introduced with attention to existing processes, and HR-

related data should be collected and utilized to rate usage. Security is also important when

considering access to data and personal privacy, especially with the increase of wireless access.

Although handhelds have become affordable and many applications are already available on the

IT system, cost will remain a major factor in handheld usage for HR research and practice.

However, the benefits of increased job accuracy and performance may outweigh these costs

(Torres-Coronas, 2004).

Social network mapping software in HRM

Human decisions are mostly functions of the ties between people in a social network.

Much of the individual’s support, information, and power come from this network structure, and
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from their position in that network. Social network mapping software helps discover, visualize,

and analyze network structures within an organization, which could have effects on HR activities

(Torres-Coronas, 2004).

Social network analysis functions include data collection, descriptive modeling, and

decision support. During data collection, members of the network are surveyed about

themselves and their relationships to others, including the measure of activity between members.

Descriptive modeling maps the structure of the network, while quantitative models can measure

properties to represent centrality and prestige of a network group. Other models can measure

criticality, cohesion, inclusiveness, correspondence analysis, and regressions. Visualization

models can use graphs and diagrams to display useful patterns of the network. The decision

support function is useful for those that want to alter or manage the social network. Reports are

used to detect trends or unusual activity, to analyze various what-if scenarios, and to predict the

long-term evolution of the network (Torres-Coronas, 2004).

Information on knowledge, power, communication, and status flow help HR managers

make better decisions about managing people. Knowledge flow shows how human, social, and

intellectual capital is produced. Power and status flow identifies the sources of motivation and

productivity. Information related to a position can be collected over time to reveal a profile of its

skills and social requirements; helping HR make management, training, knowledge distribution,

and recruiting decisions. Social network mapping is especially relevant for managing groups;

giving HR a picture of a group’s members, internal and external interactions, operations, and

leadership. This can help optimize reachability, compensation, and the inclusiveness of a group

in a network (Torres-Coronas, 2004).

Recruiting on career Web sites

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E-recruiting is one of the most successful applications for reaching potential job seekers.

According to Forrester Research, online recruiting costs $183 per hire compared to $1,383 for

traditional methods. 46% of companies polled by Recruiters Network indicated that e-recruiting

was best for getting the most hires and the best resumes, followed by referrals (35%) and

newspaper ads (11%). According to iLogos’ research, 91% of Global 500 companies had their

own career Web sites and 9% posted openings on third-party job boards in 2001. This is a large

shift compared to 1998, when it was 29% and 57%, respectively (Torres-Coronas, 2004).

Traditional recruiting processes have been burdened with task delays and

miscommunications, increasing the length and cost of the hiring process. Unlike the batch

processes of traditional recruiting, e-recruiting is a continuous online process with activities that

can be performed in tandem. Benefits of e-recruiting include a centralized job database, Web-

enabled applications, electronic submissions of applications to division managers, resume search

by criteria and keywords, candidate qualification screening, and online background checks

(Torres-Coronas, 2004).

There are six main e-recruiting sources. General-purpose job boards provide solutions to

employers and job seekers across different industries. Niche job boards serve specific markets

by profession, industry, education, location, or specialties. E-recruiting application service

providers develop and market services in recruitment software, process management, education

and training, management expertise, and the hosting of corporate career Web sites. Hybrid

recruiting service providers are traditional firms that provide e-recruiting services such as

electronic versions of their newspaper ads, resume builders, search engines, job market research

reports, salary information, career news, and industry trends. An e-recruiting consortium, often

created by a non-profit organization and colleges, simply drives traffic to corporate career Web
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sites; saving up to ten times the costs paid to job boards (Torres-Coronas, 2004).

Corporate career Web sites are most widely used by Fortune 500 companies, while 64%

of all companies use a combination of job boards and their own career Web site. Ninety-four

percent of Fortune 100 companies have corporate Web sites, 72% posted opportunities on their

homepages with hyperlinks to their career sites, and 96% subscribed to third-party job boards.

Only 5% of companies used online pre-screening tools to eliminate unqualified candidates, while

88% of job seekers were willing to answer questions about their skills to find appropriate job

matches. Information on job training was provided only 23% of the time. Many job seekers

may prefer job boards because they can search for jobs provided by multiple companies, and

apply to multiple jobs by submitting only one résumé (Torres-Coronas, 2004).

Employee self service portals

Employee Self Service (ESS) is a Web-based solution that provides employees with

relevant HR data and transactions. The system has a high potential return for business-to-

employee human resource use. Studies show that transforming paper-based HR forms to digital

format reduced transaction costs by 50%, administrative staffing by 40% and management’s HR

duties by 80%, including a 10-fold speed-up of HR processes (Torres-Coronas, 2004).

Employee Relationship Management (ERM) can be a platform for information delivery,

process execution, and collaboration in the organization. It can also focus on issues such as

recruitment, development, retention, progression, and succession. A Customer Service

Representative (CSR) and Interactive Voice Response (IVR) were used in 20-30% of employee

inquiries, whereas ESS Web applications were used 50% of the time. Manager Self Service

(MSS) is used for processing travel and expenses, purchase orders, and leave requests (Torres-

Coronas, 2004).
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ESS provides employees real-time access to their data, including functions such as

updating personal details, applying for leave, viewing their pay details and benefits, viewing

internal job vacancies, as well as booking training and travel. The average cost of an ESS

implementation range from $32 to $155 per employee. The main motivators were improved

service, better information access, reduced costs, streamlined processes, and strategic HR. The

applications utilized most by employees were communications, pension services, training, and

leave requests (Torres-Coronas, 2004).

Successful implementations of ESS were reported 53% of the time, with 43% being

somewhat successful. The value included a decrease in transaction costs by 60%, inquiries by

10%, cycle time by 60%, and headcount by 70%. Employee satisfaction increased by 60%, and

the return on investment was 100% in 22 months. The main barriers to implementations were

the cost of ownership or budget, a perceived lack of privacy and security, the lack of technical

skills, low HR priority, and having no HR management system in place (Torres-Coronas, 2004).

Web portals are being used to develop employee relationships. Components of an ERM

strategy include self-service technology, collaboration tools, communication tools, knowledge

management techniques, personalization focus, and access technology. An application-rich

portal can become more than an information tool, but also a process tool where business is

performed. Portal development must compliment the business, since many processes that can be

used in an application-rich portal may not exist in the organization (Torres-Coronas, 2004).

E-learning and the corporate university

U.S. companies spent an estimated $56.8 billion in 2002 on education and training of

employees in an attempt to keep their skills, knowledge, and abilities updated; and to retain top
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employees. Over the past 15 years, the number of corporate universities has increased from 400

to over 2000 in an effort to meet these educational needs. New positions such as Chief Learning

Officer (CLO) repositions HR to the highest levels of organizational influence and decision

making. The corporate university is becoming a primary method of conceptualizing,

implementing, and assessing workplace learning opportunities; as well as being extensively

involved in strategic planning processes (Torres-Coronas, 2004).

Unlike traditional HR training and development, the corporate university is proactive, has

long-term focus, is strategically aligned, is integrated, focuses on corporate growth as a whole,

has an expanded role for higher education, is grounded in evaluation, has more Web-based

delivery, has effective measures, has managed enrollment, and learning is an employee

requirement. The benefits of e-learning include cost savings, greater flexibility, and increased

productivity. In 2001, only 4% of the worldwide corporate market used e-learning; however, by

2006, this is expected to grow by 30%. In the banking industry, 91% have adopted e-learning,

compared to 45% of pharmaceuticals; showing a gap being industries (Torres-Coronas, 2004).

The major trends that have contributed to the growth of corporate universities include the

recognition of HR management as a partner in corporate strategy; the emergence of knowledge

management concepts and their integration into organizational practices; and the availability and

development of technologies that support e-learning. Today’s virtual classrooms can have multi-

person audio, the ability to share applications, and provide ways for several students to

participate (Torres-Coronas, 2004).

The corporate universities’ goal of promoting continuous improvements in organizational

performance can achieve this by being the primary delivery mechanism for organizational

strategy, HRM, knowledge management, and e-learning. The effectiveness of the corporate
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university is limited by the lack of integration, management, and nurturing of its main functions.

Systems that support e-learning include learning management systems, portals, communications,

and content management systems (Torres-Coronas, 2004).

For a corporate university to work there must be a strategic alignment with the

organization. Evaluations are needed for organizational assessment, strategic alignment,

curriculum development, and program implementation – including related performance

improvements. E-learning technologies will influence organizations by expanding their impact

on human resource development and workplace learning. Corporate universities will play a key

role in this new model for workplace learning, providing competencies for success in a fast

changing global marketplace (Torres-Coronas, 2004).

Conclusion

In the current market, the knowledge workers are always demanding better ways to

communicate and collaborate. Many innovative companies have created various solutions for

collaboration. These products will replace the current working style and environments for the

knowledge workers. HR needs to become a strategic partner and leverage these solutions to

provide the most value for their organization, while maintaining harmony in the social network.

References

Lawler, Edward E. Creating an Effective Human Resources Organization: Trends and New
Directions.
Palo Alto, CA, USA: Stanford University Press, 2003.
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Torres-Coronas, Teresa (Editor). e-Human Resources Management: Managing Knowledge

People.
Hershey, PA, USA: Idea Group Publishing, 2004.

Verweire, K.(Editor). Integrated Performance Management: A Guide to Strategy

Implementation.
London, GBR: Sage Publications, Incorporated, 2004.