Effects of Technology on the Hr Function
Effects of Technology on the Hr Function
Critically analyse the ways in which the increasing application of technology at work have an effect upon the HR function. The use of technology within HRM has grown considerably within recent years with the majority of large organisations now using technology of some form within their HR function (CIPD, 2005). As HR becomes increasingly reliant on technology it is important to assess its effect upon the HR function. Firstly, consideration will be given to definition of terms along with a description of the uses of technology within the HR function. Next the change in the structure of the HR profession that has developed alongside the emerging and growing use of technology will be addressed. The goals of the use of technology which have been afforded a significant amount of attention within the literature will then be outlined along with consideration of the realisation of these goals. In addition, the effect of shared service centres, which make significant use of technology, upon the role of HR practitioners will be addressed in conjunction with the views of HR practitioners themselves.
Whilst little attention has been given to the situating of the use of technology in HR within a wider sociological perspective in the academic literature, an attempt will be made to consider the effect of technology upon HR within such a debate. Finally, conclusions will be drawn as to the impact of the use of technology upon the HR function. It is firstly important to consider what is meant by the use of technology within the HR function. The term e-HRM is frequently used to refer to the use of technology within the HR function. The use of e-HRM varies enormously within organisations and may be used for different purposes (Parry et al. 2007). The term Human Resource Information System (HRIS) is also used to refer to any system that helps an organisation to “acquire, store, manipulate, analyse, retrieve and distribute information about an organisation’s human resources” (Tannenbaum, 1990, p.28).
However, the use of technology within HR is broader than the use of HRIS and may encompass manager and employee self-service, the use of staff intranets and e-enabled processes such and recruitment and performance management amongst others (Reilly, 2012). It is acknowledged that some current research focuses on the more recent developments in web-based technology, collectively referred to as social media technologies or Web 2.0 (see Reddington, 2012). However, the use of Web 2.0 is outwith the focus of this discussion. HRIS was originally used for standardising the gathering of information about and for employees (Kovach et al. 2002). However, the use of HRIS has subsequently developed and is now used more broadly for purposes such as recruitment and selection, learning and development, administration of flexible benefits and performance appraisal (Grensing-Pophal, 2001) or to manage HR and employee information across the whole employment cycle (Parry et al. 2007).
Technology has also been increasingly associated with supporting integrated call centres, shared service centres and the use of manager and employee self-service (CIPD, 2007). There is a great emphasis in the literature about the potential goals of e-HRM (Marler, 2009; Ruel, Bondarouk and Looise, 2004). However, there has been less emphasis on whether these goals have been realised in reality (Parry and Tyson, 2011; Strohmeier, 2007). Alongside the development and increasing use of technology is the development and changing role of the HR function itself. Traditionally the HR function has been seen as being a largely administrative function, focussed on administrative processes such as the maintenance of employee and payroll records (CIPD, 2007). It would appear that in its search for identity and the resulting proposed need for transformation of the function (Ulrich, 1997), HR has made use of technology to attempt to facilitate this transformation (Shirvastava and Shaw, 2003).
Ulrich (1997) has argued that HRM should become a strategic business partner, in addition to performing roles as administrative expert, change agent and employee champion. It has been suggested that the use of technology within the HR function may create the opportunity for HR to become more strategic by freeing up time through the automation of many administrative tasks (Parry et al. 2007). The provision of accurate and detailed information available through the use of HRIS could also enable HR practitioners to engage in a more strategic role as such data could be used to inform managerial decisions. The move to new service delivery models of HR and the development of technology can be seen as interdependent as without increasingly sophisticated technology the various elements of HR service delivery may not be as effective (Reddington, 2012).
Drivers for introduction of technology can be described as being operational, relational or transformational (Kettley and O’ Reilly, 2003; Snell, Stueber and Lepak, 2002) Operational goals can be described as having a focus on reducing the administrative burden of HR and cost effectiveness, whilst enhancing the accuracy of data; relational goals relate to improving services for internal customers due to reported low levels of satisfaction with the HR function (Kyprianou, 2008) and transformational goals address the strategic aims of the business (Lepak and Snell, 1998; Martin et al. 2008). These drivers of e-HRM can be seen as addressing either transactional or transformational goals (Martin et al. 2008). Transactional goals relate to operational efficiencies or improved service delivery. There is talk of liberating HR through technology (Shirvastava and Shaw 2003) although this strong statement is qualified by the requirement that it informates as opposed to automates HR processes.
The distinction between automating and informating is made by Zuboff (1988) whereby automating relates to increasing efficiency through computerising work processes and procedures with decreasing dependence on human skills. In contrast, informating refers to increasing effectiveness through acquiring information by using information technology and using that information to create new knowledge. Automating could be seen as relating to addressing operational goals whereas informating could potentially address the relational and transformational goals through provision of information to inform decisions and strategy. Despite the attention to the promise of technology in transforming the HR function, much less attention has been given to the impact of technology on the HR function and whether or not the highly prized strategic orientation of HR has been achieved (Lepak and Snell, 1998, Shrivastava and Shaw, 2003).
Studies that relate to whether e-HRM is achieving its operational goals provide some mixed results (Strohmeier, 2007). In practice it would appear that HRIS is having a slightly better (but not statistically significant) impact in areas of information processing, for example improving the speed that information is available and the quality of the information available than in economic terms, such as reducing headcount, lowering operational costs and improving productivity and profitability (CIPD, 2005). However, within this survey, in a third of cases the reduction in administrative burden was less than was to be expected. Stronger support for the operational impact of e-HRM comes from analysis of 10 case studies by Parry et al. (2007) which showed that technology can lead to faster and more efficient processes, greater accuracy and consistency as well as a reduction in costs. A number of other studies also provide some evidence of the impact of technology on operational efficiency (Marler, 2009; Ruel, Bondarouk and Looise, 2004; Ruta, 2005).
However, it may be that some caution needs to be exercised in drawing conclusions on the impact of e-HRM in this area as it may be that the efficiencies achieved within the HR function are simply moved elsewhere within the organisation as the responsibility for some tasks is moved from HR to line managers or employees (Ruel, Bondarouk and Looise, 2004). There is some positive evidence for the relational impact of e-HRM, notably improvements in HR service delivery achieved through the increased accuracy of data or by simplification of processes (Gardener, Lepak and Bartol, 2003). However, the relational impact of e-HRM appears to have been granted little attention in the literature (Strohmeir, 2007). Whether technology has led to a transformational impact on the HR function appears even less clear than the impact it has had on transactional processes.
Despite the identification by many organisations of transformational drivers being important in the adoption of e-HR (Watson Wyatt, 2002; Yeung and Brockbank, 1995) it would seem that the issue of whether e-HRM supports a transformation of the HR function into a strategic business partner is only “parenthetically addressed” (Strohmeir, 2007, p.28). Indeed, Bondarouk and Ruel (2009, p.508) state “organisations are definitely silent about whether their HR departments become more strategic with e-HRM”. Where evidence is presented it is contradictory in nature. It would seem that in some cases technology has not led to a more strategic orientation of the HR function and has been used mainly for automating operational processes (Burbach and Dundon, 2005; Dery, Grant and Wiblen, 2009; Kinnie and Arthurs, 1993; Tansley et al. 2001). Indeed, Broderick and Boudreau (1992) found that most organisations have only used technology to support a narrow range of administrative decisions, resulting in efficiencies in managing information but that the potential competitive advantage of technology has not been exploited.
In contrast, other studies have offered some evidence that e-HRM has supported the strategic integration of HR with business strategy (Olivas-Lujan, Ramirez and Zapata-Cantu, 2007; Ruel, Bondarouk and Looise, 2004; Teo, Soon and Fedric, 2001) More recent research has provided some anecdotal evidence for a move towards a more strategic role (Parry and Tyson, 2011) although the evidence supporting the transformational impact compared with the operational and relational appeared to be the weakest. It would appear that there is far greater attention in the literature to the potential for e-HRM to have an impact in the three areas outlined above than there is accorded to the actual outcomes (Shrivastava and Shaw, 2003; Strohmeir, 2007). The reorganisation of the HR function and the introduction of shared service centres appears to have had an impact on numbers of on-site HR staff and a reduction in the number of HR staff to employees (Francis and Keegan, 2006).
The operation of such shared service centres relies on technology that is characterised by formalisation, routinisation and centralisation resulting in an impact on staffing of such centres, which require specialised but generally low level HR administrators (Martin and Reddington, 2009). Research that addresses the issue of how HR practitioners have viewed the increasing use of technology appears to be limited to date. There is evidence that some practitioners may view the use of technology and an associated increase in the use of shared service centres cautiously because it has resulted in a reduction of face-to-face relationships, which is often the reason individuals cite for choosing a career in HR (Francis and Keegan, 2006). Martin and Reddington (2009) suggest that the significant role of technology within shared service centres will lead to a lowering of the status of those employed in such environments especially when compared to the status of HR business partners. It is argued that there is a risk of deskilling within the administrative function of HR and that staff may be confined to more routine tasks where they had previously had a wider role (Reilly, 2000).
It is also suggested that within shared service centres different skills may be required and staff may be employed who have customer service skills but who do not necessarily have a background in HR as technical knowledge can be learned whereas the right attitudes may be harder to learn (Parry et al. 2007; Reilly, 2000). In addition to this, there is evidence that suggests that there a perception amongst HR practitioners of an increasing distance between those at the top and bottom of the career ladder and that people from outwith the HR function are “parachuting” into the top jobs (Francis and Keegan, 2006). This effect could possibly be explained by the requirement of new areas of expertise, such as technical, consultancy and project management skills (Parry and Tyson, 2011), which may require developing within HR practitioners and could possibly result in recruiting from outside the profession.
Indeed a number of reports emphasise the skills of HR staff as a significant barrier to transformation of the HR function (see Reilly, 2012). The debate on the use of technology within HRM can also be situated within a wider sociological perspective. Whilst the sociological literature appears to focus mainly on the use of technology within manufacturing environments or of computerisation in general as opposed to within the HR function an attempt to situate the effect of technology upon HR could be made in terms of attempting to assess the effect upon the organisation of the function and the impact on the level of skills required. The attempts to understand the impact of technology upon the organisation of work have resulted in divergent views. The debate focuses mainly on two opposing views. The managerialist and essentially optimistic perspective associated with writers such as Blauner (1964) argues that the application of technology will render obsolete routine and more manual jobs and create more skilled and complex opportunities resulting in an overall effect of “upskilling”, along with organisations characterised by decentralised structures, reduction in hierarchy, increased worker autonomy and a prevalence of knowledge workers (for example, Attewell, 1992; Piore and Sabel, 1984)
Such analysis suggests that in the earlier phases of industrialisation advances in technology tended to reduce skills and devalue work but that more recent technological developments have had the opposite effect. Examination of the increasing use of technology and its impact on skills levels has provided some evidence for a raising of skills levels (Daniel, 1987, Gaillie, 1991) In contrast, labour process theorists have argued that technological changes have a degrading effect on work and result in “deskilling” of the labour process and reduced worker autonomy, with a centralised, neo-Taylorist form of organisation, with separation of conception from execution (for example, Braverman, 1974; Zimbalist, 1979). The issues of the expansion of non-manual work and the apparent rising skills levels as suggested by formal skills gradings are not inconsistent with the labour process perspective (Gaillie, 1991) who argues that non-manual work has undergone a major transformation, resulting in work that is increasingly routinized and mechanised (supported by the increase in office automation).
From such a perspective non-manual workers are no longer accorded their relatively privileged position and are now accorded a similar level of skills as manual workers. Support for the process of deskilling can be found in many analyses of the effects of computerised technology (Meiksins, 1994) Analysis of the experience of employees within the call centre environment emphasises the process of deskilling (Desai, 2010) which is described by Taylor and Bain (1999, p.109) as a situation of “an assembly-line in the head”. The impacts of such call centre roles are often high turnover rates and high levels of absence (Ackroyd, Gordon-Dseagu and Fairhurst, 2006) and the effect on employees is outlined by Rose and Wright (2005, pp.156-157): “low skilled call centre jobs allied with high levels of technological and management controls do not contribute towards employee well-being and satisfaction” This account of the impact of technology resonates with the description above of shared service centres whose result has been the deskilling of the administrative function of HR and the recruitment of those who do not have a background in HR (Martin and Reddington, 2009; Reilly, 2000).
However, whilst it could be argued that a labour process perspective accounts for the effects of technology on some aspects of the HR function, it does not address the effect on the function as a whole as it does not appear to account for the strategic end of the spectrum, where it seems that business partner roles are accorded status and prestige along with substantially increased salaries (Francis and Reddington, 2006). The role of business partners cannot easily be reconciled with the notion of deskilling. There has been a tendency to view the classification of either upskilling or deskilling as too simplistic and some writers have moved away from this conceptualisation of work by postulating that instead there is an increasing polarisation of the workforce in terms of skill level with at one end, highly skilled workers with high levels of autonomy and at the other end a lower skilled sector characterised by an intensification of work through deskilling and management control (Edwards, 1979), who can be dispensed if surplus to requirements (Berger and Piore, 1981).
This polarisation of the workplace appears to be a better reflection of the changing HR function with the autonomous business partner role, with the accompanying perception of a high level of skill and status at one end of the spectrum and at the opposite end, the shared service centre roles characterised by routine and deskilling. In relation to professional work, there is some argument that professionals have not been adversely affected by computerisation and continue to be accorded high status and prestige (Friedson, 1984, 1986). In contrast, it is argued that technology may have differing effects on professionals, depending on the relative status of the profession and on the status of individuals within the profession (Burris, 1998). It is argued that alongside polarisation of the workplace, there tends to be poorer career prospects for non-expert workers (Baran, 1987; Hodson, 1988) with higher level posts being filled from outwith the organisation (Hodson, 1988; Burris 1983,a,b)
This issue within HR is highlighted by Reilly (2000) who suggests that there may be less opportunity for career development if lower level staff do not build the experience that they would gain in more generalist roles in traditional HR functions. As stated earlier, there also appears to be a perception that the higher status business partner roles are at least sometimes being filled not just from outwith the organisation but from outwith the HR profession (Francis and Reddington, 2006). Whilst the issue of the impact of technology upon the HR function appears to have been given little attention within research (Lepak and Snell, 1998; Shrivastava and Shaw, 2003) it would seem that what discussion there has been relates mainly to the promise of technology in transforming the HR function and facilitating a more strategic orientation.
The reality of the impact of technology in achieving an impact in operational, relational and transformational areas is much less clear although evidence would suggest that the greatest impact is in achieving operational efficiencies. Alongside the development of the use of technology has been the reorganisation of the HR function. Although there has been little attempt to consider the impact of technology from a sociological perspective, it can be argued that the increasing use of technology, which has been used to support the shared service centre model may be resulting in a deskilling of an element of the HR profession and reducing career development paths for some practitioners. In addition, there appears to be a change in skills viewed as necessary within this function, with a focus on customer service skills as opposed to specialist HR knowledge. In contrast, although the evidence for a transformational impact of technology upon HR is weaker and more contradictory, there would appear to be a perception of a higher status role in the business partner, with accordingly higher remuneration, thus demonstrating a polarisation of the HR function in terms of both skills and status.
However, this reorganisation of the HR function and the development of a more strategic orientation, which it is argued can be facilitated by the increasing use of technology, although being seen as having an upskilling effect on those in a more strategic role could be argued as achieving the opposite effect if the result is recruiting from outwith the profession. This could leave HR professionals in a precarious position in terms of career and skill development, which could at least in part be attributed to the effect of technology as without increasingly sophisticated technology the new models of service delivery may not be possible or at least may not be as effective.
Whilst, a lack of academic attention to the actual impact of technology on the HR function requires that caution is exercised in drawing conclusions, the tendency to focus on the potential impact of technology could be followed in suggesting that the potential of technology in facilitating the move to a transformation of the HR function may be to tend towards a degradation of the HR profession, with low skilled staff employed in shared service centres and more highly skilled and valued business partners being recruited from outwith the HR profession. However, without significant further research in the area, in particular on the impact of technology and the accompanying change in service delivery models upon the career paths and development opportunities for HR practitioners, this conclusion remains just a potential.
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Subject: Human resources,
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 22 December 2016
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