THE IMPLICATIONS OF IMPLEMENTING ELECTRONIC- HUMAN RESOURCE MANAGEMENT (E-HRM) SYSTEMS IN COMPANIES

The managers of 21st century envision that Information Systems will have a major influence on their style of decision making. The objective of this paper is to identify the challenges associated with the implementation and maintenance of e-HRM systems and also to offer recommendations for enhancing the effectiveness of e-HRM systems. The paper presents a comparative picture between the services vs manufacturing sector w.r. t. the adoption of e-HRM systems in Indian companies. The broad framework of the research design incorporates aspects pertaining tothe possible drivers for introducing e-technology to the HR systems; the barriers to progress in the e-HRM journey; usage of e-technology for HR functions; usage of HR Service delivery tools; perception of respondents regarding their company’s position in the e-HRM journey and opinion of respondents on various aspects of the e-HRM functioning. Implementation of e-HRM involves several challenges with its attendant implications like huge set-up costs, presence of an IT culture, the security of the information and loss of the ‘human touch’. Continuous monitoring and feedback are critical for the success of any e-HRM effort in an organization. Any e-HRM installation exercise if taken up in the right perspective, keeping all the challenges in mind can take an organization a long way towards success and manage better the company’s most important resourceits people. KeywordsHuman Resource Information Systems, Enterprise Resource Planning, E-HRM, Employee SelfService, Service Excellence, Talent Management, Change Management, Paperless Office. INTRODUCTION Over the past decades the role of the personnel department has been transformed from that of an administrator to more recently a critical component in the competitive success of the business. Companies have now begun to embrace a “human capital approach,” one that considers the money spent on fostering innovation in the workforce as an investment. Just as the role of Human Resources continues to change, technology has continued to evolve. If the role of Human Resources has always been to deliver the workforce support and management based on the needs of the business, then technology’s role has been that of an enabler. Companies are leveraging human capital technologies for use by everyone in the business. E-HRM (ElectronicHuman Resource Management) is a web-based solution that takes advantage of the latest web application technology to deliver an online real-time Human Resource Management Solution [1]. There is a fundamental difference between HRIS (Human Resource Information Systems) and e-HRM in that basically HRIS are directed towards the HR department itself whereas with e-HRM, the target group is not only the HR staff but people outside this department: the employees and management. Technically speaking it can be said that e-HRM is the technical unlocking of HRIS for all employees of an organization. Wright and Dyer distinguish three areas of HRM where organizations can choose to ‘offer’ HR services face-to-face or through an electronic means: transactional HRM, traditional HRM, and transformational HRM [2]. E-HRM is a way of implementing HR strategies, policies, and practices in organizations through a conscious and directed support of and/or with the full use of webtechnology-based channels [3]. As is the case with all new systems and concepts, e-HRM too comes with its own set of challenges and issues which require a careful scrutiny before being adopted and launched in any organization. REVIEW OF LITERATURE According to Beer, Michael, et al. [1985] since the inception of modem management theory, the terminology used to describe the role and function of workers has evolved from "personnel" to "industrial relations" to "employee relations" to "human resources" [4]. In the 1990s several forces were shaping the broad field of HRM and the key The implications of implementing electronichuman resource management (e-hrm) systems in companies 11 Journal of Information Systems and Communication ISSN: 0976-8742 , E-ISSN: 0976-8750, Vol. 2, Issue 1, 2011 force was that the new technologies—particularly information technology—brought about the decentralization of communications and the shakeup of existing paradigms of human interaction and organizational theory. Broderick & Boudreau [1992] point out that over the years Human Resource Systems have been acknowledged as important inputs of corporate decision making process [5]. Noe, Hollenbeck, Gerhart and Wright [2000] define e-HRM as the processing and transmission of digitized information used in HRM, including text, sound, and visual images, from one computer to another electronic device. E-HRM has the potential to change all traditional human resource management functions. Employees do not have to be in the same geographic areas to work together [6]. Alfred J Walker [2001] advocates the business process re-engineering of the HR function first, then e-engineering the HR work. He suggests the formation of re-engineering teams of providers, customers and users to examine the whole range of HR activities including those which are not being done at present. The end product is a set of processes organized into broad groupings such as re-sourcing, compensation or training and development. These processes should then be examined by the re-engineering team and redesigned. From this redesign comes the picture of a new HR function but Walker argues that the most effective approach is to introduce new technology to deal with the redesigned processes [7]. According to Biswanath Ghosh [2002], in an organization the most valuable input is the human element. The success or failure of an organization depends to a large extent on the persons who manage and run the organization [8]. S.A. Kelkar [2003] identifies the main activities of Human Resources Management where Information systems can be applicable asEmployee records and management, Recruitment & promotion, Training, Job rotation, Succession planning, Employee stock options, Evaluation, Compensation and benefits management. Information Systems also facilitate – Groupware, Document control, Brainstorming, Collaborative work, Work flow automation. It can definitely be said that Integrated system better than dispersed systems [9]. According to L.M. Prasad [2003] large organizations generally install e-HR because it enables them to collect store, process and manipulate large amount of data inputs, reduce costs of maintaining human resource data, and provide accurate information about human resources anytime and anywhere [10]. As asserted by Ketlley P, and Reilly P [2003], technology has only recently developed in a way that enables e-HRM to make its mark, especially the introduction of corporate intranets and web-enabled HRIS. Before embarking on e-HRM, organizations should review and optimize their business processes. The development of e-HRM systems is growing, allowing the HR function to become more strategic. This can most easily be observed by the fact that today employees tend to ask for advice rather than administrative assistance. This is the reverse of the situation in the late 90s. Furthermore, the nature of HR departments has changed because of the development of e-HRM. A few years ago businesses tended to have more, but less qualified HR staff whereas today the reverse applies. S. Sadagopalan [2004] observes that Information systems to support the personnel function have once again taken the record keeping view rather than the decision support view. Particularly in the Indian context, it is limited to creating large databases often of questionable value and accuracy. Slowly this trend is changing at least in more enlightened companies [12]. Laudon and Laudon [2004] explore the digital integration of the firm and the use of internet technology to digitally enable business processes for electronic business and electronic commerce. They focus on new applications and technologies that improve firms’ relationships with customers and create additional value through closer collaboration with suppliers and other business partners [13]. Gupta and Chhabra [2004] assert that the twin objectives of any Human Resource Information Systems can be understood asOperational Efficiency and Effective Managerial Decision Making [14]. Jessup and Valacich [2004] explore the various kinds of Information Systems and the innovative techniques by which they are being used by organizations for their benefit [15]. According to Garry Dessler [2004], technological applications play an increasingly important role in HR. Technology improves HR functioning in four main ways: self service, call centers, productivity improvement and outsourcing [16]. Foster [2004] describes that the application of the internet to the Human Resource function (e-HR) combines two elements: one is the use of electronic media whilst the other is the active participation of employees in the process. These two elements drive the technology that helps organizations lower administration costs improve employee communication and satisfaction, provide real time access to information while at the same time reducing processing time [17]. Jawadekar [2005] emphasizes the role of decision support systems in Management Information Systems (MIS) and explains the factors behind successful implementation of Management Information Systems within the organization [18]. O’Brien [2005] places a major emphasis on the strategic role of information technology in providing business professionals with tools and resources for managing business operations, supporting decision making, enabling enterprise collaboration and gaining competitive advantage [19]. Varma Shilpa and Gopal R 12 Copyright © 2011, Bioinfo Publications Fletcher [2005] traces the transformation of human resources from manual processes to sophisticated CRM and ERP systems and examine the effectiveness of online strategies for attracting talent