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The Role Technology Plays in Todays Human Resource Management

The Role Technology Plays in Todays Human Resource Management


By John Peterson
December 18, 2010
The Role Technology Plays on Todays 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) todays 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 HRs 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 Lewins (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 todays 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 customers voice to inside an organization, and accomplishing that, upper management will
empower HR to reflect the customers 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


advantage for a company and its customers.

By sharing information and best


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


customer-focused culture.

Appropriate organizational resources


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 organizations
products and services.

Knowledge management can improve time to


market.

By leveraging best practices, learning


and other time-savers to improve

productivity, products can be introduced


faster.
Knowledge management can expand a
companys strategic options.

By leveraging intellectual property in


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 todays 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 Todays 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 todays 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 dont 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 employees 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 countrys 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 ebusinesses 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 organizations 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.

References
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