The Role of Technology in Human Resource Management - Assignment Example

Student Name Professor Name Course Title Date In this globalization era, human resources management (HRM) faces many challenges. The challenges range from global competition, advancement in information technology, managing diverse workforce to application of new management techniques. Ashbaugh and Miranda argue that application of information technology to managing human resources in organizations will enhance competencies of human resources managers to cope with those globalization era’s challenges (8). Application of information technology to human resources management is called human resources management system or human resource technology. Thus, the role of technology in human resources management is critical for effectiveness and efficiency of organizations in both public and private sectors. To investigate thoroughly how important the role of technology in human resources management is, this study will attempt to answer the following research questions: (1) What are challenges faced by human resource management in organizations? (2) How does information technology impact on human resources management? (3) What are differences among data, information, and intelligence? (4) What are trends on human resources technology? (5) What are obstacles to implement information technology for human resources system in organizations? (6) What are factors for investments in human resources technology system? (7) What are benefits of technology in human resources system? 1. Challenges faced by human resources management Advances in information technology and their application to human resources management will enhance the challenges faced by human resources department in both public and private organizations. Human resources management functions include (1) planning, (2) recruitments, (3) staffing, (4) job design, (5) training/development, (6) appraisal, (7) communications, (8) compensation, (9) benefits, and (10) labor relations. When carrying out the functions of human resources management, on one hand, organizations face the challenges of (1) globalization, (2) technology, (3) managing change, (4) human capital, (5) responsiveness, and (6) cost containment. On the other hand, the human resources management is mainly concerned with employees in the matters of (1) background diversity, (2) age distribution, (3) gender issues, (4) educational levels, (5) privacy issues, (6) work attitudes, and (7) family concerns. First, many companies are seeking business opportunities globally. In US economy, it is found that more than 80% of companies, no matter how big is the size, is affected by international competition. Second, with the advances of information technology, organizations can store data, retrieve them, and use them in a wide verity of ways, from simple record keeping to controlling complex equipment. With employment of new high advanced technology, many business organizations will face decrease in number of jobs with lower skills level and increase in number of jobs with higher skills level. Third, managing changes such as total quality, downsizing, re-engineering, outsourcing, and the like are being made by organizations to modify the way they operate to be more successful. Some of these changes are reactive, while others are proactive and designed to take advantage of targeted opportunities. Fourth, human capital refers to knowledge, skills, and capabilities that may not show up a company’s balance sheet but nevertheless have tremendous impact on an organization’s performance. Fifth, to meet customer expectations, managers must focus on quality, innovation, variety, and responsiveness. Total quality management (TQM), for example, lays a solid ground for practices and principles that encourage and discipline employees to increase understanding needs of customer, and aiming for continuous improvement. Six, many organizations in service industry have to bear higher costs of labor which contribute to the highest portion of expenditures. Organizations have tried approaches such as downsizing, outsourcing, and employee leasing to reduce costs, particularly labor costs (Bohlander and Snell Ch 1). To meet those challenges mentioned above, many organizations embrace technology and its application to human resources management system. Figure 1. Overall Framework for Human Resources Management: Competitive Challenges, HRM Functions, and Employee Concerns Source: (Bohlander and Snell Ch 1). 2. Impact of information technology on human resources management Information technology has directly influenced the HR directly. The three ways that information technology influences HRM. First, it influences operationally by automating routine activities, alleviating administrative burdens, reducing costs, and improving internal HR productivity. Second, it impacts relationally by providing line managers and employees with remote access to HR database, supporting their HR-related decisions, and increasing their ability to connect with other parts of the corporation. Third, it also impacts transformationally by expanding the scope and function of the HR department (Bohlander and Snell Ch 1). Figure 2. Impacts of Information Technology on Human Resources Management Source: (Bohlander and Snell Ch 1) HR uses information technology systems in its HR functional activities. A technology Survey was conducted by Deloitte & Touche and Lawson Software, 1998 (see Figure 3). Among 13 functional activities, three most frequently used for information technology are (1) payroll processing, (2) employee data maintenance, and (3) benefit administration. Whereas the least frequently used activities are (1) diversity programs, (2) employee relations and (3) employee training and development (Bohlander and Snell Ch 1). A survey conducted by Society of Human Resources Management indicated that application of information technology to human resource management still cannot satisfy HR professionals. First, there is no significant decrease in time spent on their routine administrative work. Second, recruitment system has not effectively improved yet. Third, HR professionals are unable to allocate more time on planning and leading the organization. Fourth, employee information still cannot be accessed among managers in different departments. However there are success areas in human resources management due to employment of information technology. First, there is an increase in accuracy of employee information. Second, employee information transaction process has been shortened. Third, human resources staff can spend less time on their routine work. Fourth, information on employees can be accessed by managers. Fifth, human resources department is able to manage entire workforce without recruitment of new staff in the department. Figure 3. Major Uses For HR Information Systems Source: HR and Technology Survey, Deloitte & Touche and Lawson Software, 1998. 3. Data, information, and business intelligence Weatherly (2) pointed out three levels of information technology, data, information and business intelligence. Application and use of HR information technology is aimed at improving business performance. The distinction between data, information, and business intelligence should be clear for human resources professionals (see Figure 4). First, data input are done in the transactional self-service process by the human resources department. Second, facts or data are generally gathered and analyzed. From the findings, a deduction or inference can be drawn. Third, with required skills and competencies, strategic partner tries to perceive or discover opportunities and activities to be carried out for the organization, to estimate business scenarios and to make recommendation for senior management (Weatherly 9). Figure 4. Difference among data, information, and business intelligence (information technology and human resources management) Source: Adapted from (Weatherly 2) 4. Trends of human resources technology Human resource technology is an application of information technology to human resource management. Weatherly stated the following information technology application to managing human resources will gain a momentum in two to five years. First, not only large organizations, but also small- and medium-size companies will employ human resources applications via application service providers (ASPs). Outsourcing ASPs offer advantages of lower costs, shortened time for development, and minimized utilization of resources. HR practice leaders must carefully scrutinize verndor’s terms and duration of service agreements. Second, many organizations will tend to employ web-based manager and employee self-service applications. They will upgrade their applications from basic transactions to strategic applications which are useful for employee training and development, managing talented people, and so on. There will be an easier access to more precise and accurate employee information. However some certain employees are expected to show resistance to change and human resources managers must play a role of change agent. Third, many business organizations will employ e-learning technology in an increasing rate in the near future. However some employees may not be able to adapt to the e-learning environment. Therefore, formal classroom type learning may still be in use in organizations. Fourth, human resources managers should play an important role in human resources technology issues. Universities and colleges will develop or add human resources technology related courses to their existing courses or curriculums. In the near future, human resources managers will upgrade or acquire knowledge of human resources information technology. HR managers with insufficient knowledge of information technology will be incompetent in their work and thus there will be delay in professional advancement. Fifth, HR data privacy issue will receive more attentions and awareness. It is necessary for protection of data privacy by government and local authorities. Legislation and regulations must be imposed on organizations to comply in order to protect the data privacy. Organizational compliance of legislation and regulations will make sure the protection of identity theft and personal privacy. Sixth, organizations will find it much easier to buy application from an HR business processing outsourcing (HR/BPO) vendor. Outsourcing vendors will provide up-to-date technology applications and support systems to organizations. When making decision on outsourcing vendor, human resources managers must take a careful caution and make good judgment in vendor service agreements. Seventh, many vendors will consolidate among themselves in providing human resources management applications to organizations. Human resources managers will have limited choice of vendors as they become consolidated in the near future. They will also provide more unique products to their clients. Eight, with advancement of new information technology, many organizations will use more of wireless devices. This will enable them to connect with their employees 24 hours a day, seven days a week. Production costs as well as market prices will decline due to increase in number of users. One of the consequences of more connected time with work, employee productivity will decline. Ninth, companies will implement paperless pay systems in the near future. The paperless pay systems will allow employees to see their deposit or payments online. However, certain employees will fear from losing their privacy. In certain countries, government laws and regulations may not allow organizations to adapt this system. Tenth, organizations will adopt universal standards for data exchange between human resources information system. Awareness of requirement on HR-XML standard will increase among various vendors. Human resources managers should be aware of this HR-XML stand and should select the vendors who comply with the standard. The following table 1 summarizes the top ten human resources management technology trends and their implications. Table 1. Summary of Top Ten Human Resources Management Technology Trends Applications Emerging trend Implications for HRM 1. Web Application Service Provider (ASP) Due to lower cost, small companies enable to obtain and use HR software applications A careful scrutiny is required on the terms and duration of service agreements 2. Web-based manager and employee self-service applications Managers can spend less time on their routine administrative work More access to accurate employee information Human resources must act as a change of agent for those who may resist to change 3. E-learning Increase in investment in e-learning applications Certain employees may find difficult to adapt to e-learning environment and need formal classroom training 4. Human resources managers important role in coping with technology issues Academic and business programs in universities add HR technologies in their curriculum HR managers with insufficient knowledge of technology will be less competent and slow advancement in their profession 5. Human resources data privacy Organizations must be imposed with laws and regulations in order to protect data privacy Additional staff to control compliance of legislation and regulations 6. HR business processing outsourcing (HR/BPO) Vendors will provide more up-to-date HR technology HR managers will take extra caution in making decision and good judgment on selecting vendors 7. Vendor consolidation There will be fewer venders from which to choose Costs for applications will increase Introduction of new applications will be less frequent 8. Wireless devices and long hours of connectivity Lower costs for devices and more connected time to work Employee productivity will decrease due to longer hours of connectivity with work 9. Paperless payment system Posting payment statements online, employee self-service access to all payroll and benefits information online Resistance from certain employees, In some countries, the government laws and regulations may prevent from adopting this system. 10. Universal standards for data exchange between HRIS applications More vendors will recognize the needs of standard XR-HML and offers more of applications HR managers must recognize the need of standard XR-HML and select appropriate vendors 5. Obstacles to implementing information technology for human resources management system Implementing information technology for human resources management faces obstacles. The top three obstacles which many organizations face when implementing information technology for human resources are: (1) Funding and budget approval (2) Resistance to change, and (3) Unprepared infrastructure (Weahterly 9). In the study of Ashbaugh and Miranda (17), there obstacles are: (1) insufficient project budget (2) inadequate implementation preparation (3) unrealistically provided time for project (4) poor implementation strategy (5) ineffective staffing to the project (6) unexpected resistance to change (7) issue resolution delays, and (8) system design complexity. 6. Factors for investments in human resources technology system The top ten factors that influence investments in human resources technology system are as follows: (1) Initial costs and annual maintenance costs (2) Fit of software packages to the employee base (3) Ability to upgrade (4) Increased efficiency and time savings (5) Compatibility with current systems (6) User-friendliness (7) Availability of technical support (8) Needs for customizing (9) Time required to implement (10) Training time required for HR and payroll ((Bohlander and Snell Ch 1). 7. Benefits of technology in human resources management system There are certain benefits from application of technology in human resources management system. They are: (1) Store and retrieve of large quantities of data. (2) Combine and reconfigure data to create new information. (3) Institutionalization of organizational knowledge. (4) Easier communications. (5) Lower administrative costs, increase productivity and response times (Bohlander and Snell Ch 1). Conclusion This study has examined the role of information technology in human resources management in organizations. The study attempts to answer seven questions related to role of technology in human resources management. Many organizations are facing the challenges of (1) globalization, (2) technology, (3) managing change, (4) human capital, (5) responsiveness, and (6) cost containment. Information technology in human resources management will assure to meet these challenges. Three impacts of information technology on human resources functions are operational, relational, and transformationl. There are three levels of information technology in human resources management, namely data, information, and business intelligence. Top ten trends of information technology and its application to human resources management are anticipated and their implications to organizations are discussed. The obstacles to implementing information technology applications to human resources management system, factors influencing on investments in human resources management system, and benefits from application of information technology are also discussed. Read More