Impact of IT on hr

Abstract
Information Technology (IT) as a structural factor and instrument transforms architect of
organizations, business processes and communication, and is increasingly integrated into
human resource management (HRM).
While IT has impacts on human resource (HR), at the same time managers, employees,
customers and suppliers increase their expectancies for HR functions. The importance of
knowledge and human capital make extra suppression on HR functions and new
competencies for HR professionals are expected.

The Impact of Technologies: Technology, with all its self-services and anytimeanywhere communications capabilities, coupled with outsourcing, ensure that
there will be fewer HR
people in corporations. It creates solid reason for HR professionals to become
more strategic. By far technologies fuel the potential for increased productivity
and creativity. Today virtual workers and flexible work arrangements are made
possible through communication technology. Organization can be physically
local, yet virtually global due to technology. It is because of technological impact
that
organizations are looking for cross-border and multinational HR solutions that
provide a single HR
database that gives them access real-time information that will aid in their
decision-making.
Influence of Technology in HRM

Human Resources Information System (HRIS)

Computerized system that provides current and accurate data for
purposes of control and decision making.
Benefits:
Store and retrieve of large quantities of data.
Combine and reconfigure data to create new
information.
Institutionalization of organizational knowledge.
Easier communications.
Lower administrative costs, increase productivity, and
response times.

Major Uses
For
HR Information Systems

How Does Technology Impact HR Practices?

by Jared Lewis, Demand Media

Technology has made recruiting simpler for HR professionals.

Technology has changed the business world many times over. In the Information Age, the advent of computers and the
Internet has increased that impact significantly. Many businesses cannot even function without the use of computer
technology. This impact is seen in nearly all areas of business, including human resources, where technology continues
to have a significant impact on HR practices.
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Recruiting
One way in which human resources has been significantly impacted by technology is in the area of recruiting. Before
the Internet, HR recruiters had to rely on print publications, such as newspapers, to post jobs and get prospects for
open positions. Other methods such as networking also were used, but HR recruiters did not have the ability to post a
job in one or more locations and have millions of people see it all at once. Technology has made recruiting more
efficient and, in the hands of the right recruiter, more effective as well.

Training
Information technology makes it possible for human resources professionals to train new staff members in a more
efficient manner as well. The ability to access company information and training programs from remote locations
eliminates the need for trainers to work directly with new hires on all training. Some interaction will always be
necessary on some level, of course, but training in virtual classrooms makes it possible for the HR professionals to train
a large number of employees quickly and to assess their progress through computerized testing programs.
Related Reading: Technology & How We Communicate

Data Storage and Retrieval

Human resources professionals generally process a considerable amount of paperwork and also have to keep much of
that paperwork on file for a considerable period of time. The use of electronic imaging has made it possible for
companies to store and retrieve files in an electronic format. Technology also makes it possible for human resources
professionals to simply print the forms that are needed for employees. Printing on demand eliminates the need to dig
through an endless number of files in the file cabinet to find what is needed.

Performance Management
Enhanced performance management is another byproduct of technological improvement. Human resources
professionals can use computer technology to assess employee performance and also to get employee feedback to be
used for the betterment of the organization. Various software programs make it possible for human resources
professionals to examine employee performance using metrics to ensure that employees are meeting performance
standards. Employees that don't measure up can be subjected to additional training or let go in favor a replacement
who can come in and do the job.

Executive Information Systems

Executive Information System (EIS) is the most common term used for the unified collections of
computer hardware and software that track the essential data of a business' daily performance and
present it to managers as an aid to their planning and decision-making (Choo, 1991). With an EIS in
place, a company can track inventory, sales, and receivables, compare today's data with historical
patterns. In addition, an EIS will aid in spotting significant variations from "normal" trends almost as
soon as it develops, giving the company the maximum amount of time to make decisions and
implement required changes to put your business back on the right track. This would enable EIS to
be a useful tool in an organizations strategic planning, as well as day-to-day management (Laudon,
K and Laudon, J, 2003).

Managing EIS

As information is the basis of decision-making in an organization, there lies a great need for
effective managerial control. A good control system would ensure the communication of the right
information at the right time and relayed to the right people to take prompt actions.
When managing an Executive Information System, a HR manager must first find out exactly what
information decision-makers would like to have available in the field of human resource
management, and then to include it in the EIS. This is because having people simply use an EIS that
lacks critical information is of no value-add to the organization. In addition, the manager must
ensure that the use of information technology has to be brought into alignment with strategic
business goals

Information technology is expected to improve the performance of Human

Resource Management (HRM) by shifting its focus from administration or
personnel management to strategic HRM. The strategic role of HRM is
supposed to add value to the HR function, and leads the essence of HR
function to transform.
In the theoretical chapter, HR function, HR function transformation and HRIT
are conceptualized. Firstly, the HR professional is moving from operational
level to strategic and managerial levels. Line managers have taken an
important part of HR function. Secondly, HR function transformation is a
business process that changes the HR tasks and expands the involvement of
actors in HR function, and that makes HRM concentrate more on strategic,
value-creating activities for the long-term business objective. Thirdly, HRIT is
supporting and forcing the traditional HR function to transform, and changes
the way of management. However, HR professionals need to pay attention to
deal with the drawbacks brought by HRIT, which might leads negative effect on
both social interaction and information accuracy.
In the second part, the analysis of empirical evidence provides insight into the
practice role of HRIT in HR transformation.
The empirical evidence shows that the devolution and decentralization of HR
function is leading to role dissonance between HR professionals and line

managers, and the HR professionals do not always focus on strategic issue

but still put attention to daily managerial and operational tasks. On the other
hand, the HRIT is considered as indispensable parts on supporting HR
function transformation. It is because HRIT provides the platform and
opportunity for HR function transformation and shifts the traditional HR function
to technology-based new function.
Development of technology
The last driven force for HR function transformation is the technology
advancement. The technology enables organizations to improve their business
competence through various aspects.
For example, technology changes the management of information, and
releases the burden of publishing information of HR department. The rapid
technology changes also ask for HR professionals to get new skills through
education, or sourcing HR professionals who have certain IT ability. Yeung et
al. (1994) report that more than half of the companies which they interview
have used the HRIT to integrate their databases, and their information system
provide better information access for managers and employees. Moreover,
Sagie and Weisberg (2001) perform research about HR function in companies
in Israel and find out that the technology levels have divided the HR
department into two parts: the high-tech and low-tech sectors. The high-tech
sector focuses on the strategic issues while the low-tech sector deals with
traditional tasks. The HR function needs to adjust itself to maximize the benefit
of using HRIT.

IT in HR function transformation
3.3.1 Form of HRIT
HR data has various forms, including historical and current policies, job
records, employees personal data, training programs, individual performance
details and so on.
The HRIT provides the possibility to store and repeatedly use the information
as electronic database, which could be accessible by anyone, anytime and
anywhere within the organization. For HR function, the HRIT can be applied
into HR tasks and help improving the HR service delivery. The application of IT
into HR process can be done via the web-based tasks application. The
information publishing, for instance, is a simplest and easiest implementation
of the HRIT (Gardner, Lepak & Martol, 2003), which is kind of one-way
communication from the higher management level to lower ones. The
information can be the policies, news, and publications from the organization.
Although this simple function only needs to provide the information through the
website, it benefits the organization through the reduction of printing cost, the
instant delivery of the information on-line, and re-accessibility to information at
any time.
The higher-level application of HRIT is the automation (Gardner, Lepak &
Martol, 2003): to use IT to manage the workforce data. At this level, the HRIT
uses the intranets together with internets. There are two kinds of data: one is
the individual data of all employees, and the other is the business data, such
as the structure of the organization, position arrangement, wage scale and so
on. These basic data are used for all the HRIT applications for HR function.
HRIT automation can reduce the amount of the routine works, such as

business records maintenance, which previously must be done manually by

HR professionals. Now, employees can update their information by
themselves, and HR professionals can be freed from the time-consuming
tasks, and focus on interpreting the information (Gardner, Lepak & Bartol,
2003).
The third level is the interaction level, which goes beyond simple information
publishing and basic automation, and provides advance benefit and
effectiveness for HR function (Tansley, Newell & Williams, 2001; Gardner,
Lepak & Bartol, 2003). Individuals not only can obtain information from the
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HRIT platform, but can return their feedbacks. By selectively filtering

information, employees can take the initiative to self-plan their career, which
turns the job planning from department-orientated to employee-orientated.
Moreover, the interaction function can link the different departments together
to share the service and use the public information to reach harmonious work
flow. Through the interaction of work flow and exchange of data, both internal
and external HR professionals can carry on the cooperation of the ceaseless
HR program.
The highest-level of HRIT application involves envision of the HR function.
From the information to automation to interaction and then to envision, HRIT
starts to move the HR function beyond the traditional focus, out of the
boundaries of HR department, and towards a strategic one. Based on the
abundant data, HR professionals can obtain the information through data
statistics and analysis, like program achievements assessment, employee
training, appraisal record, and so on. Further, they can use statistics results to
formulate strategy to meet with the future demand on the human resource of
an organization, and plan salary-scale of employees regarding to financial
balance trend.
Both the HRIT application and the HR function transformation have impact on
each other. The transformation of HR function requires powerful tools to assist
and help managers and employees to do things better and do better things. On
the other hand, the application of HRIT makes the transformation of HR
function become realistic, and to some extent, changing the HR function
radically it requires HR professionals to learn the new and mixed skills for
HRIT, and attracts HR professionals to pay attention to HRIT supportive and
transformational activities. As a kind of the new HR function pattern, the HRIT
is the software platform that moves HR function toward the network and
knowledge based activities.

3.3.2 HRIT in HR function transformation

While the application of HRIT in human resource services has been developed
since 1990s, the effects of IT on HRM are broadening over years (Florkowski,
Olivas-Lujan, 2006). Considering its ability of contributing to the overall
performance of organization, HRIT supports the fundamental transformations
concerning the HR function.
Interaction model
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Hempel (2004) has developed a model of the interactions between the

technology and the HRM, including the design of the organization and work,
the HR professionals, and employees. According to the model, a new
development of technology can cause the changes in reengineering the

organization and work design, which changes alter the outcome of HR

practices. HR professionals get more powerful technologies to foster changes
happened within organization, through managing the innovative and
knowledgeable employees. From this opinion of view, the relationship between
HRIT and HR function is kind of interaction. Hempel (2004) considers that the
HR professionals are on the catch-up position. Due to the fact that the
technologies first change the structure of the work, such as virtual global work
groups, HR function needs to evolve in order to support these changes. HR
professionals already involve into the redesign process, thus they need deep
understanding of the business on both operational and strategic sides to
handle and support the innovation.
HRIT functions
When considering the impact of HRIT on the HR daily activities, some
researchers have examined HRIT from its functions, such as the e-recruiting
system, e-selection system e-performance system, and e-compensation
system, and pointed out that HRIT can have both positive and negative
influences on HR function (Stone, Romero & Lukaszewski, 2006). Through the
investigation on these functions, the understanding of HRIT influence on the
transformation of HR function can originate from the information flows, social
interaction patterns, perceived control of individuals and system acceptance
(Ashbaugh & Miranda, 2002; Stone, Romero & Lukaszewski, 2006).
Information flows
The application of HRIT can change the information flows significantly, due to
the fact that the system enables users more efficiently to collect, disseminate
and access the information (Stone, Romero & Lukaszewski, 2006). For
example, in the recruitment, without the face-to-face interview and inquiry
HRIT can make the applicants easier to collect information about jobs and to
access to the HR professionals. In another case, HRIT can provide more
frequent feedback to employees, and improve the supporting capability of an
organization. Moreover, the information flowing among the various
departments can help the HR professionals hold the complete and
consummate information for strategy making. Although HRIT has increasing
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an organizations ability on data collection and management, there still some

limitation on this aspect. For instance, the e-performance management system
may not have the capacity to measure all the behaviors of the employees
(Stone, et al., 2006). The system can measure the quantity, but not the quality.
Thus, HRIT allows the HR professionals to manage large amount of
information with great accuracy. The automation of HRIT is thought to be the
best way to improve the effectiveness, and it becomes a valuable contributor
of HR function. But in some cases, the system may not be as useful as
traditional methods (Haines & Lafleur, 2008).
Social interactions
The HRIT reduces the face-to-face interactions in organizations. Each member
can be connected through internet, such as internal email and telecommuting
system, so that work can be cooperated without the location constrain (e.g.
working at home, international company). From this point of view, the HRIT
broadens the interaction among the employees within the organization.
However, on the other hand, due to the face-to-face interactions are
decreased, HRIT may have negative effects on trust levels among managers

and employees (Stone, Romero & Lukaszewski, 2006), which requires the HR
professionals to rebuild the trust and relationship among employees.
Perceived control
The traditional personnel management is to control and monitor the employees.
With the application of HRIT, whether the controlling of individuals is more
effective than before or not is uncertain. From one side, the increasing
employee and manager self-service asks for more participation in individuals.
In this sense, such decentralization gives more freedom on management of
employees (Ashbaugh & Miranda, 2002). The supervisors are reported
increasing satisfaction on HRIT systems because the systems provide greater
amounts of feedback and control over their employees performance than
traditional ways (Stone, Romero & Lukaszewski, 2006). On the other hand, the
same HRIT system also has more tightly control on individual performance,
due to reduce the freedom and controls levels of individuals (Stone, Romero &
Lukaszewski, 2006). For example, the managers can exactly check the time of
each employee spend on their tasks. It may lead to negative react to the
e-performance management systems. Moreover, invalid data about the
performance of employees, and employees may behave in rigid ways that
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make them look good from the systems also damage the organization in the
long run (Stone, Romero & Lukaszewski, 2006).
To sum up, HRIT forces the traditional HR function to transform, and changes
the way of management. HRIT brings the ability for all members to simplify
work, measure activities, provide instant feedback, and reduce wasted time
(Ashbaugh & Miranda, 2002). The application of HRIT meets the need of
end-users and real situation of organization. Otherwise, the decreased social
interactions and negative effect on both quality control and information
accuracy can damage the benefit of organization (Stone, Romero &
Lukaszewski, 2006). HR professionals need to pay attention to deal with the
drawbacks when enjoying the benefits brought by HRIT