The contribution of technology to effective and efficient HR provision

There is a wide range of ways in which technology can contribute to the HR function and we have discussed many of these so far in this text, for example the use of techno­logy to enhance recruitment and selection activities and to widen the range of learning experiences, and a broad summary of the potential uses of technology to support HR activities is given in Table 33.1.

In this section therefore we will focus on technology as a means of providing and manipulating HR information via HRIS (human resource information systems) and technology as a means of delivering HR as in e-HR which we touched upon in Chap­ter 32. In the latter part of this chapter we will see how such systems also have the potential to provide a major input into Human Capital Measurement (HCM)

1. HRIS

HRIS, in one form or another, have been around for about three decades, and debate continues about how they are and should ideally be used. Early systems were basic administrative tools containing employee data, with operational, analysis, modelling, and interactive facilities gradually being exploited over time. However Ball (2000) found that HRISs were still being used primarily for administrative rather than analytical ends and exploitation remains painfully slow and patchy. One of the key attractions of tech­nology for the HR function is that it can reduce time on administrative chores to free this up for more strategic activities. However the introduction and enhancement of HRIS is usually accompanied by staff cuts, and Gardener and her colleagues (2003) found that although the technology did free up time in one sense it also created a need to spend time on IT support and training.

In terms of the contribution that technology makes to the HR function, Zuboff (1988) makes a very useful distinction between automating current activities, so that they are done more efficiently and require fewer staff, and informating. This latter is explained as supplying new forms of information which requires new ways of thinking, for example by carrying out activities in a different way, carrying out new activities, integrating data across the whole organisation, making access to the data available to different users, rather than replicating current activities and ways of doing things. The tendency to automate rather than informate severely restricts the potential of any HRIS.

If we link this view of the potential of technology with the HR capability model of Reddington et al. (2005), the variable contribution of HRISs to HRM becomes clearer. Reddington et al. suggest that three primary drivers promote HR capability:

  • ‘operational’ (i.e. improving cost effectiveness by reducing the costs of its services and headcount);
  • ‘rational’ (i.e. improving its services to employees and line managers who are increas­ingly demanding); and
  • ‘transformational’ (i.e. addressing the key strategic drivers of the organisation).

Automating in Zuboff’s terms clearly addresses the operational driver, and we have seen evidence of this in reducing HR headcounts, and automating may also make some contribution to the rational driver. Informating, however, is essential to progress the transformational driver and also to satisfactorily progress the rational driver, and this is essential for HRISs to make a significant contribution to HCM. So if technology is to make a real contribution to the HR function we need to go beyond automating. The evid­ence for this is patchy but there are some good examples of new approaches, if we think more broadly of the examples of the use of technology we have quoted in previous chapters. But these are often highlights in an overall picture of basic provision.

In the 2005 CIPD survey on People Management and Technology (CIPD 2005) just over three-quarters of the respondents reported use of an HRIS, and just over half of these had a single integrated HR system, but few (16 per cent) were integrated with other IT systems in the wider organisation, which is important for informating. The three key functions of an HRIS were reported as absence management (85 per cent), training (75 per cent) and reward (75 per cent), and these are also the three most likely to be run as an integrated system within HR. Analysis showed that the greater proportion of func­tions that are integrated as part of the HRIS, the more likely that the system would be used to aid human capital reporting, comply with supply-chain partner requirements, improve profitability, reduce headcount and deliver against economic criteria. Interest­ingly, respondents said that if they were to introduce their system again almost three- quarters would seek greater integration and more clarity with providers; slightly fewer respondents said they would arrange more training.

The five most popular reasons for introducing an HRIS are: improving quality (91 per cent), speed (81 per cent) and flexibility (59 per cent) of information, reducing the administrative burden on the HR department (83 per cent) and improving services to employees (56 per cent). Again there is more evidence of automating than of informating. In terms of who the intended users of the HRIS are, 99 per cent identified members of the HR department; 46 per cent identified line managers elsewhere in the business, while 32 per cent included employees. This suggests that some progress is being made in this respect towards informating. Tansley and colleagues (2001) provide an excellent insight into an organisation trying to develop an HRIS intended to encourage transformational change in the organisation and going beyond automating. This system is shown in the next Window on practice.

2. e-HR

One of the difficulties with e-HR is that it can be defined in a wide range of ways. It can include HR and corporate intranets containing static information, interactive HR and corporate intranets, email-based initiatives and the Internet. The emphasis here is on intranets. The CIPD (2005) found that 71 per cent of respondents claimed their organ­isation had an intranet with an HR facility, with larger organisations being more likely, not surprisingly, to have them. Of respondents 98 per cent say that the main purpose is to provide access to HR information and 88 per cent say it is to provide a facility for downloading forms. An intranet can also allow employees the facility to interact with the system to input information or make choices where applicable, which the CIPD terms an HRSS (HR self-service) system. Twenty-two per cent of respondents had such a system. CIPD survey’s findings on the purpose of introducing such system are shown in Table 33.2.

The CIPD found that access to such self-service systems was limited as only 64 per cent of organisations reported that all employees have access to this, and only 32 per cent said that all employees have been trained to use the system. As with other initiat­ives, much of the drive for such systems has come from the need to liberate the personnel function from its administrative tasks to allow it to focus on more strategic matters (Trapp 2001) and indeed the CIPD found that this was precisely the view of its respond­ents. Some identified problematic aspects such as the need to spend more time on the computer, leaving less time for face-to-face activities. Another disadvantage cited was software costs and training time to use such systems. Such systems are often introduced along with HR service centres, the intention being that the system should be the first port of call, before the service centre. In this way the pressure on service centres should be reduced in the long run. Different surveys have produced very different results con­cerning the extent of use (see, for example, Trapp 2001; compare this with IRS 2002b), and we will not dwell on the figures. However, it is generally agreed that more sophist­icated applications are still not very common and are most likely to be found in IT or related companies. IRS (2003) found that improvement in communications (73 per cent) was most frequently cited as the specific reason for introducing e-HR, followed by reduc­tion of routine administration (60 per cent), whereas only 37 per cent said they were looking specifically for cost savings. Tyler (2001) also suggests empowering employees as another reason for introduction. In terms of the static information they hold, intranets are likely to contain HR policies, rules and regulations, details of training courses, stand­ard forms, staff handbooks, induction information and information on benefits.

More sophisticated systems include such features as the ability to update one’s per­sonal details (password access), reviewing and changing the flexible benefits that one has chosen, checking one’s remaining leave entitlement and requesting leave, submitting expense claim forms, asking questions (such as pension projection figures), performance management and salary review tools. IRS (2002b) identifies three user groups of such systems: HR service centres or the HR function, line managers and employees. In terms of employees such systems are often referred to as self-service or self-management systems.

Some of these applications will clearly require changes in the organisational culture. In addition there are concerns about the loss of the personal touch and security of information (Trapp 2001). There are also issues about the access to computers and the computer literacy of some staff. Some companies have introduced kiosks where computers can be used by a range of staff, but there are issues about the extent to which staff will prefer to use their coffee breaks booking holidays on the computer.

Web case 33.1 on this book’s companion website, www.pearsoned.co.uk/torrington, focuses on the use of technology in HR.

Source: Torrington Derek, Hall Laura, Taylor Stephen (2008), Human Resource Management, Ft Pr; 7th edition.

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