The Role Technology Plays in Today’s Human Resource Management

The Role Technology Plays in Today’s Human Resource Management

By John Peterson

December 18, 2010

The Role Technology Plays on Today’s Human Resource Management

Introduction

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Traditionally human resource management (HRM) has had a people-oriented approach. However today, when the competitive

demands of the marketplace require a reorientation of strategic human resource philosophies and practices, an emphasis are being

given to a knowledge-based administration using technology as a tool. This paper will analyze the implications of this new

imperative on human resource management.

Literature Review
According to Kenter (2003) today’s human resources (HR) tasks cover an ample variety of activities requiring very different skill sets,

“from compensation and benefit administration (highly quantitative) to employee relations (highly qualitative)” (p ix). As a

consequence, there are legitimate questions about whether these tasks need to be together on organizational plans in light of new

realities and technologies (Kenter, 2003).

To be considered successful HR technology must achieve several goals, as described by Walker (2001): (a) Strategic alignment,

which must support the goals of a business by helping users; (b) business intelligence, which should inspire new insights and

learning, by providing users with relevant information and data, and by answering questions; and (c) “efficiency and effectiveness,

which must change the work performed by HR personnel, by dramatically improving their level of service, allowing more time for

work of higher value, and reducing their costs” (Walker, 2001, p. 4).

Figure 1

Holistic model of human resource management practices

Note: Source: Niche Consulting Limited (2009). Human resource management. Retrieved from

http://www.nicheconsulting.co.nz/hrm_recruitment/hr_consulting.htm

Walker (2001) stated that HR technology can help organizations meet their business goals and objectives today and in the future by:

 “Helping managers deploy their workers more efficiently.

 Ensuring that workers receive proper training and development.

 Offering new insights on how to increase productivity.

 Enabling employees and managers to receive needed information faster.

 Reducing HR administrative costs.

 Assisting with better employee assessment and selection” (Walker, 2001, pp. 10-11).

Lewin (2003) wrote that recent studies of HR management and business performances have found that HR’s adopted “high

involvement” (p. 91) practices have resulted in “significantly positively associated” (p. 91) “improvement on market value, rate of

return on capital employed, revenue growth, revenue-per-employee rate, productivity, product/service quality, and even

organizational survival” (p. 91).

We can assume from Lewin’s (2003) statement that the use of technology by HR has proven to assist on the improvement of

business performances. However, Lewin (2001) explained that, although we expect all businesses to have embraced this “high

involvement” on technology, “only about one of every eight business has done so” (p. 91).

Probably a solution for this lack of “high involvement” on technology is for businesses to adopt an HR philosophy which understands

that today’s customers and clients are used to a technological experience, and as Sartain (2005) elucidated, “The mission of the HR

department ought to be to synchronize the employment brand with the customer brand” (p. 180). The author clarified that, in order

for this to happen, HR should bring the customer’s voice to inside an organization, and accomplishing that, upper management will

empower HR to reflect the customer’s “value proposition” (Sartain, p. 180).

Lengnick-Hall and Lengnick-Hall (2003) explained knowledge as, “information that is linked to potential actions because an

individual is able to use it” (p. 78). The authors went further and explained that, in contrast, data “are any signals that can be sent by

an originator to a recipient (human or otherwise)” (Lengnick-Hall & Lengnick-Hall, 2003, p. 78). And information is “data that are

intelligible to the recipient” (Lengnick-Hall & Lengnick-Hall, 2003, p. 78).

These explanations are relevant when we think HR as part of the knowledge-based economy of today. HR is part of the knowledge

management in an organization, and because of this it has to play a role in concurrence with the IT department, and others

responsible for generating and manipulating knowledge. See Table 1 on page 5 for the benefits of knowledge management.

Table 1

“Benefits of knowledge management

Benefits of knowledge management Why benefit occur

Knowledge management can create competitive  By sharing information and best

advantage for a company and its customers. practices, organizations create expanded
opportunities for market share and financial
growth.
 Furthermore, knowledge management
provides a means for organizations to
differentiate themselves from competitors.

Knowledge management can create a truly  Appropriate organizational resources

customer-focused culture. can be directed toward solving customer
problems or meeting customer needs quickly
and effectively.

Knowledge management can be a catalyst.  Through tools, resources, and systems,

it can help ignite creativity and innovation in
the development of an organization’s
products and services.

Knowledge management can improve time to  By leveraging best practices, learning

market. and other time-savers to improve
 productivity, products can be introduced
faster.

Knowledge management can expand a  By leveraging intellectual property in

company’s strategic options. research and development efforts as well as
overall market and business strategy,
organizations can discover new ways to
create value.

Note: Source: Lengnick-Hall, M., & Lengnick-Hall, C. (2003). Human resource management in the knowledge economy. San

Francisco, CA: Berrett-Koehler Publishers”.

Meeder and Cude (2002) wrote a very interesting argument, “The demise of post World War II-based assumptions of long-term

attachment between employers and employees, requires a new model of workforce development that recognizes employee mobility,

competitive pressures, globalization, and the pace of change in valuable technologies and skills” (p. 21). There is a fundamental

need in HR to continue developing a transition to technology-focused knowledge management, but with a people-centered

approach. This is an important issue these days because of the intellectual resources of an organization, as elaborated by Ardichvili

(2002). The author wrote that the realization that knowledge management “plays a central role in ensuring competitiveness of the

company rests on the perception that in today’s business world the only truly unique resource of a company is the intellectual and

human capital” (Ardichvili, 2002, p. 91).

Tasks to be Performed by Human Resource Management to Improve

Efficiency
Although HRM are, as Ivancevich (2001) explained, “action-oriented, individual-oriented, globally-oriented, and future oriented” (p.

24), there is a need to streamline its operations and improve efficiency.

According to Cascio (2005) HRs are to be more efficient on the following competencies:

 Assisting the organization business model to compete “for business in the product and service markets in which it

operates”.

 Acquiring “basic business literacy in corporate finance, marketing, accounting, information technology, and general

management”.

 On its “functional areas within HR, such as legal requirements, recruitment, staffing, training and development,

performance management, compensation and benefits, labor and employee relations, and occupational safety and health”.

 Listening skills, as well as the “courage to raise difficult issues” with senior executives.

 Improving its “skills as a strategic business partner by creating an overall talent or people mind-set; creating an HR

strategy that aligns people, processes, and systems” (Cascio, 2005, p. 105).

As explained by Cascio (2005), information technology (IT) is fundamental on the strategy for HRM improvement.
The Role Technology Plays on Today’s Human Resource Management

Technology is the practical application of science to commerce or industry; “the study of or a collection of techniques; a particular

technological concept; the body of tools and other implements produced by a given society” (Luck, 2010).

Technology is here and will continue to progress. To understand the role technology plays on today’s HRM we first have to

understand business technology. According to Luck (2010):

 “Business technology refers to the integration of computer and communications technologies in support of administrative

applications and procedures within an organization.

 Business technology is constantly evolving.

 Business technology is required for a successful business”.

It is no longer enough for HRM to maintain a narrow operational focus, view its activities as restricted to the limits of its own

organization, or to limit itself to traditional human resource (HR) responsibilities (Lengnick-Hall & Lengnick-Hall, 2003), HRs should

go above and beyond.

The HR field has evolved over time and nowadays HR is under more scrutiny and is more accountable than ever. There is little

room for mistakes, which can be overwhelming costly. HRs these days and in the near future have a greater importance in the

strategic business partnership with the organization, and for this challenge to be won there is an increasing need for technology to

be inserted on its daily operations and on its decision-making considerations.

The Impact of Technology in Human Resource Management

Ivancevich (2001) wrote that “prior to the Industrial Revolution most people worked either close to or in their homes. However, mass

production technologies changed this and people began to travel to work locations or factories” (p. 52). Today, with increased

computer technology, there is a move for many to work from anywhere; people are no longer necessarily anchored to one place.

Computer technology, especially the Internet, changed that.

The trends in technology which directly or indirectly have an impact in HRM are:

 Growth in knowledge needs. “World trade is growing over three times faster in knowledge-intensive goods and services

such as biomedicine, robotics, and engineering” (Ivancevich, 2001, p. 52).

 Shift in human competencies. “Some predict that in 2015 almost all net employment growth will be in knowledge workers”

(Ivancevich, 2001, p. 52).

 Global market connection. “Technology is dissolving borders and creating an interconnected marketplace” (Ivancevich,

2001, p. 52).

 Business streamlining. “Easy to use communication, electronic mail, electronic conferencing, and databases are creating

instantaneous dissemination of data to make better decisions to geographically dispersed workers” (Ivancevich, 2001, p. 52).

 Rapid response. “Technology permits quicker communications, which allows faster decision-making” (Ivancevich, 2001, p.

52).

 Quicker innovation. “Teams of marketing, engineering, and production personnel working in parallel with computer

provided files, data, and information develop products faster” (Ivancevich, 2001, p. 52).

 Quality improvement. “The concept of building quality into the entire process of making, marketing, and servicing is

enhanced by computer monitoring systems and through robotics” (Ivancevich, 2001, p. 52).

Human Resource Information Systems (HRIS)

Mathis and Jackson (2003) explained HRIS as “an integrated system providing information used in HR decision making” (p. 57). An

HRIS serves two major purposes in organizations: (1) improves the efficiency with which data on employees and HR activities are

compiled; (2) having accessible data enables HR planning and managerial decisions making to be based to a greater degree on

information rather than relying on managerial perceptions or intuitions (Mathis & Jackson, 2003).

Figure 1

Typical HR software interface

An HRIS has many benefits for an organization; one of the most frequently used is the automation of payroll and benefit activities.

Figure 2

HRIS areas of action

Note: Source: Total Reward Partners, Inc. (2010). Professional administrative services. Retrieved from

http://trpartnersinc.com/HRIS.html

A perfect example of HRIS implementation is from CapacityPlus, a USAID-funded global project focused on the health workforce

needed to achieve the Millennium Development Goals.

CapacityPlus (2010) stated that,

“Many developing countries face daunting obstacles to meeting the health care needs of their people. To ensure that the right health

care provider is in the right place with the right skills, these countries require current, accurate data on human resources for health
(HRH). A strong human resources information system (HRIS) enables health care leaders to quickly answer the key policy and

management questions affecting health care service delivery. The Capacity Project (2005-2009) developed free, open source HRIS

solutions to supply health sector leaders and managers with the information they need to assess HR problems, plan effective

interventions, and evaluate those interventions. The follow-on global project, CapacityPlus, builds on the HRIS strengthening work

initiated by the Capacity Project. We don’t provide just software but rather a program of technical assistance and expertise to ensure

that the technology is transferred effectively and serves the ability of decision makers to use data to lead and manage. Our

participatory approach results in systems that are appropriate for the context in which they are used and sustainable after we leave”

(CapacityPlus, 2010).

Example of HRIS Application

Figure 3

iHRIS Manage logo

iHRIS Manage is a human resources management tool that enables an organization to design and manage a comprehensive

human resources strategy. iHRIS Manage is a free, open source software solution distributed under the GPL and developed by The

Capacity Project, an innovative global initiative to help developing countries build and sustain the health workforce (CapacityPlus,

2010).

“iHRIS Manage helps an organization manage its workforce more effectively and efficiently, while reducing costs and data errors.

Using the system, the HR professional can create a hierarchy of positions for an organization based on standard titles, job

classifications and job descriptions, even spread over diverse geographic locations, offices and facilities. HR staff can solicit job

applications for open positions, assign employees to fill positions and maintain a searchable database of all employees, their

identifying information and their qualifications. Managers can track each employee’s history with the organization, including their

position and salary histories, and record the reason for departure when the employee leaves” (CapacityPlus, 2010).

“iHRIS Manage is primarily intended to be used to manage health care workers employed by a country’s Ministry of Health, a

hospital or other large health care organization, or a private provider of health care services. However, it may be readily adapted to

other types of organizations and workforces” (CapacityPlus, 2010).

The Internet Economy and HR

Noe, Hollenbeck, Gerhart, and Wright (2007) explained that with the widespread adoption of the Internet by business and people

there is a greater use of electronic business (e-business) processes. E-business includes several forms of buying and selling

products and services, such as:

 Business-to-consumer transactions. Per example: purchasing books and tickets, and conducting services including

banking online.
 Business-to-business transactions. This is when there are transactions between manufactures and wholesalers, and

between wholesalers and retailers.

 Consumer-to-consumer transactions. An example would be the website ebay.com.

According to Noe et al. (2007) “e-business relies on the Internet to obtain product information online, directly order products and

services, receive after-sale technical support, and view the status of orders and deliveries”. Noe et al. (2007) claimed that e-

businesses create many challenges for HRM departments because of the fast pace of changes on information technology. HRMs

are required to continually update their skills requirements and then recruit and train people to meet these requirements.

Conclusion
Today, as shown in this paper, HRMs are presented with the challenge of becoming more effective and productive, and they are

accepting this challenging by turning to technology as a mean to improve their performance; however technology presents its own

challenges as well. The role technology plays on HRM is most fundamental when used as part of an organization’s business

strategy. There are specific technology designed for HRM decision-making, however the efficiency of these decisions remain

dependent on the human training and skills. Technology is incorporated on the fiber of our lives because of its overwhelming

presence on e-business, as Internet continues to have an exponential growth.

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