Impact of Technology on HR Policy and Practices - Literature review Example

Impact of Technology on HR Policy And Practices Increased productivity in modern organizations over the recent past has been necessitated by the effective use of information technology. However, the rise in hi-tech capacity has brought a wide range of organizational changes especially in terms of human resource. Human Resource (HR) practices are defined as a system of attracting, developing, motivating, and retaining employees to ensure the survival of the organization and its members (Tan & Nasurdin, 2011). These practices are used by the organization to manage its employees through facilitating their competence growth, producing complex social relation and generating organizational knowledge to ensure that the organization retains its competitive advantage. The greatest challenge has been in integrating and aligning information systems with the appropriate human resource strategies. The adoption of IT in HR policies and practices dates back in the late 1970s when organizations began to invest in information systems because the technological costs had declined (Deb, 2013). The accelerated advancement of information technology in the recent past has simplified the tasks of human resource function. Human resource function involves many practices and activities such as HR management, payroll processing, and record retention, workforce planning and staffing, recruitment and selection, training, and compensation among others (Briscoe, Schuler & Tarique, 2012). The IT has transformed the architect of organizations because of its structural factors and instruments. The Human Resource function is increasingly integrating the IT function into its policies and activities. According to Briscoe, Schuler & Tarique (2012), HR is becoming more complicated because it is even being internationalized. In such a case, the structure and design of the organization changes and this also impacts the HR function. Policies have to be carefully formulated and executed because businesses organizations today are also increasingly engaging in mergers and acquisitions, and alliances. The human management practices and HR policies are being updated for managing new forms of work (Aubert, Rivard, Patry, Pare & Smith, 2009). The new ways of working make human management more complex. The concerns of HR managers are about controlling and coordinating a large workforce in a wide location. These managers must concern themselves with how to structure, control, and evaluate work and management of such things as security, communication, and productivity in every area of the organization. To accomplish this task, the HR managers must set clear expectations for work and help their followers to translate general strategies into action plans with specific outcomes, time frames, and accountabilities. Accelerated innovation in IT offers prospects for conducting business in ways that are different from the past. IT has brought a lot of impact on HR policies and activities. IT enables HR managers to access and disseminate information more efficiently and also influences what is expected of them. Competition between organizations has intensified, and the organizations have changed the way of managing their workforce to achieve business success (Deb, 2013). HR personnel has undertaken unprecedented innovation in the coordination of HR operations, decentralization of the control of HR practices, the speed of response to changing employee aspirations and organizational policies, and quality of service to employees. With a technology-enabled environment, HR has added greater value to the organization by focusing on strategic issues in human resource. In their research study, Galve-Gorriz & Castel (2010) established a relationship between technological innovation and human resource changes. The authors associate IT with numerous changes in requisite employee skills, HR structure, and job design. The introduction of IT has contributed to an increase in required skills in many organizations. The greatest impact that technology has had on HR is changing the nature of work which has made HR policies to change. Information technology in an organization has generated a bias towards more skilled workers making organizations to increase their demand for skilled workers. As a result, the cost of acquiring such skills has increased. The challenge shifts to reducing these costs. In their study, Galve-Gorriz & Castel (2010) drew three hypotheses to show how IT has positively impacted the HR policies and activities. They argue that organizations that have adopted IT have a higher level of skilled employees compared to organizations that have not adopted IT. Increased use of IT requires increased technological capabilities. In case an organization acquires a technology that it does not have the ability to use, it must develop absorptive capacity. The organization must invest in more skilled human capital. The increase in IT usage goes hand in hand with an increase in skill requirements of the human resource to maximize the use of the new technology. Furthermore, organizations have to increase their skilled labor pool to remain competitive. Also, skilled employees are more likely to utilize new information technologies to the advantage of the organization. Secondly, Galve-Gorriz & Castel (2010) hypothesize that organizations that adopt IT present their workforce with higher levels of wages. Wages are higher in organizations utilizing IT than the ones that do not. This explains the reasons behind increasing wage inequality because of high wages of skilled employees compared to the unskilled ones. Skilled-biased technological change has been cited as the main cause of this wage inequality. The more skilled an employee is, the higher the salary level. Therefore, employees with high skills in IT enjoy high wage premiums. Thirdly, organizations that utilize IT have a high level of employees undertaking specific training. Impact on Human Resource Policies In their early stages of transformation and IT adoption, many organizations break the psychological contract thus making their employees dissatisfied. Changes that have accompanied IT adoption in organizations have affected the feelings of unskilled employees. These changes make employees experience high levels of job insecurity, and this may directly or indirectly affect the performance of the employees. This de-motivation makes organizations lose many best performing employees at a critical stage. There is a lack of conceptual frameworks and practical guidelines to integrate all aspects of HR policy with those of information systems strategy. Successful organizations are providing opportunities for both personal and career development by introducing new HR policies that support this kind of initiative. Technology advancement has created the opportunity for employees to conduct their work away from the workplace environment. This working state is a major advantage because it eliminates commuting costs and time thus allowing blocks of work that fit personal schedules. This type of working is commonly referred to as telecommuting, and it can both serve as recruitment as well as the retention incentive. Additionally, the HR policy-makers include the requirement for appropriate checks while formulating their hiring policies to avoid negative impacts such as lawsuits. For example, failure by Manor Park Nursing Home in Texas to conduct a criminal background check of an applicant led to a lawsuit that cost them $1.1 million (Lachnit, 2010). The applicant was hired through e-recruitment and later sexually assaulted a resident of Manor Park Nursing Home. The jury found an instance of negligence on the side of nursing home for its failure to conduct a background check. Work Planning and Staffing Through technological revolution, HR has been freed and is increasingly focusing on strategies that support the organization’s most important assets – its employees and their collective knowledge. The development of the HR function has been highly dependent on the technology that supports it. As a result, HR function has changed. According to Sadi, Khan, Ikhlaq & Mujtaba (2012), the revolution of IT has completely changed the workplace and made HR systems more effective by introducing new techniques. One study surveyed 18 HR managers in Pakistan to investigate how IT has contributed to the addition of value in the organizations (Sadi, Khan, Ikhlaq & Mujtaba, 2012). The results indicated that IT has enabled the HR managers to have increased capacity to gather, store, and retrieve information in a timely and effective manner. In addition, while HR administrative efficiencies are not wholly dependent on IT, the scales of operations created by centralizing operations across the organization demands some level of automation. Specifically, large organizations have a large volume of activities. To manage this volume of activity successfully at low cost and high-performance levels, HR managers depend on the intervention of technology on several levels. HR managers use virtual work arrangements. As a result, there is increased demand in the workplaces for training for virtual work arrangements. Technology has enabled work to be performed in a remote location by employees who have limited contact with peers but can communicate electronically. Some of the technology tools that have had a great impact on HR activities include Recruitment Management Systems (RMS) and Learning Management Systems (LMS) (Rickard & Boroughs, 2009). Training and development According to Elnaga & Imran (2013), human resource is the backbone of any organization. The success or failure of an organization is highly dependent on the performance of its employees. Training and development are important factors in organizations. Organizations can adopt effective training programs to improve the performance of their employees. Lack of skilled workers can act as a huge barrier to the growth of the organization. Previously, organizations were incurring huge costs from hiring trainers Sadi, Khan, Ikhlaq & Mujtaba (2012) characterize the twenty-first century as the knowledge century. Today, almost every organization is dependent upon the knowledge of its workforce. These organizations have highly invested in knowledge management practices enabled by technology. Information systems are considered to be an integral part of every HR function. According to Rickard & Boroughs (2009), LMS is used by HR managers, training staff, and employees to plan and administer all types of the learning and development intervention. Additionally, it serves as a platform from which the users access e-learning. Finally, LMS holds data around a catalog of learning options and competency requirements associated with job positions. Technology has provided a lower cost solution for training and development of employees. Online training has reduced expenditures such as the production of training materials, direct costs of travel, and opportunity costs workplace absence. Online training also enables employees to learn faster and better; learning is delivered free from the limitations of space and time. One of the major impacts that IT has on training and development is ensuring that all workers get the same training regardless of where they are located. IT enables organizations to deliver standardized and consistent training to a wide pool of employees across the organization and worldwide. Training that is designed in different locations results in differences in content, delivery, and effectiveness (Elnaga & Imran, 2013). Also, a large number of employees is trained within a short period. Training is not constrained by the number of instructors or the need for training space. Impact on Recruitment It is argued that recruitment of employees has been the most influenced area in HR by technological changes. Before IT was integrated into HR processes, HR managers used to rely on print media to post job adverts. The HR function did not have the ability to post a job advert in more than one location and have a wide pool of job seekers to see the advert at once. Technology has made this possible, and recruitment has become more efficient. Recruitment of the best employees with high talent plays a critical role in the development of organizations (Sadi, Khan, Ikhlaq & Mujtaba, 2012). As a result, organizations are devising more creative and elaborate methods to hire the best talent from the narrow labor pool. HR managers depend on technology to enhance their recruiting effectiveness. IT also helps the HR department to keep costs down, facilitates the processes of succession planning, the motivation of employees, employee retention, and reduced turnover. The HR department must have complete information regarding the nature and demands of the job at hand and personal competencies required to fulfill this job. Most HR recruiters search for applicants online using a general search on the internet. They also target potential employees on social networking sites. Although this practice is sometimes considered illegal, many recruiters are opting for this hiring channel. However, they include an electronic search to establish whether the applicants have any history that might make them an inappropriate choice for the organization. HR uses RMS to create vacancies, administer multiple vacancy applications, manage administration, manage the selection process, advertise internally (intranet) and externally (web and third party sites), and generate MI (available positions and interview schedules) (Rickard & Boroughs, 2009). RMS has significantly contributed to reduced costs and time needed to fill job positions in the organizations. The internet has also enabled the organization to have access to global talent instead of limiting themselves to local application tools have a small talent pool. Previously, organizations were incurring huge costs of placing job advertisements in the print and other media. Additionally, the recruitment process took a lot of time before the appropriate candidate is identified. Today, organizations are recruiting employees through the internet. The resumes submitted are narrowed down to most appropriate candidates who get invited for interviews. Information technology enables internal job-matching process and this has equitably and efficiently been accomplished using Web-based markets (Khosrow-Pour, 2013). Intelligent agents provide an excellent potential to help both employers and employees find one another in a distributed electronic marketspace. According to Khosrow-Pour (2013), a good example of a governmental organization that effectively uses intelligent agents is the U.S. Navy. This organization uses a centralized, hierarchical labor market to match enlisted sailors to jobs. Sailors are then categorized according to their qualifications, experience, training, and career path among other competencies. The groups with similar skill are arranged in communities, and a detailer allocated to each community to match Sailors to jobs. Sailors express their personal preferences to the detailer. However, this labor-intensive process has a negative impact on both sailors and commands because it often leaves them dissatisfied. This is one of the negative aspects of IT on human resource. Impact on Performance and Knowledge Management Average and poor managers get differentiated by their ability to evaluate performance levels for diverse employees and positions. Technology has helped these managers to distribute performance evaluation materials. HR managers can make the appraisal forms available online. IT has also enabled HR managers to conduct employees’ performance assessments and collect feedback from the employees. Software companies have developed software programs that make it possible for HR managers to examine employees’ performances. However, technology has not had much impact on the area of performance management because this area of HR is not well developed in terms of technological tools. One study investigated how IT influences knowledge management practices in Jordanian Industrial Companies (Hawajreh & Sharabati, 2012). The findings indicated that IT had a significant influence on knowledge management because it causes an explosion of information. The authors also concluded that IT offers knowledge management to abilities. IT grants the ability to create fast connections and ability to disclose knowledge among knowledge channels. Fast connections and disclosure of knowledge across knowledge channels has contributed greatly to organizational performance. Human Resource Information System (HRIS) and e-HRM The positive impacts of IT on HR policies and practices outweigh the negative impacts. According to Hendrickson (2003), IT affects all HR policies and practices. The IT tools have found wide usage in HR practices. Web databases are extensively used for learning, completion of work, and decision making. The common term for IT in Human Resource Management is Human Resource Information System (HRIS). HRIS is an integrated system used to acquire data, make analysis and store it (Hendrickson, 2003). HRIS is necessary to give HR managers the ability to make decisions relating to employee relations. HRIS software can track core-competencies of employees and trends within departments and inform managers about the areas of expertise that require attention or improvements. This tracking enables HR managers to formulate policies that will match with the organization’s mission. Thirdly, HRIS enables HR managers to manage the intellectual capital and skills. The use of electronic resumes and skill database provides HR managers with an instant snapshot of organizational expertise. The HRIS software has also proved useful in decision-making. For example, e-recruitment systems have the ability to track the demographics of the applicants and select potential recruits by the predefined criteria. HRIS also uses job boards and corporate Websites to select the most compatible recruit for a specified job through hiring management systems. Finally, HRIS is an ideal integration tool because it can integrate and execute HR tasks as it requires less staff and time. Consequently, e-HRM deals with the execution of HR plans, policies, in addition to, practices in organizations via a cognizant and directed aid of Web-technology-based channels. Corporations have been aggressively seeking the best talents in the world. This search has been simplified by e-recruitment. E-recruitment has allowed these organizations to tap a huge talent beyond the national boundaries. Additionally, it is low in cost, time efficient, has a wide range of applicants, and is accessible worldwide. These characteristics make e-recruitment have a shorter recruitment cycle, and lower cost-per-hire compared to the traditional recruitment. For example, Nike has effectively used e-recruitment to its advantage. E-recruitment has enabled Nike to fill job positions within 42 days up from 62 days used previously (Levy & Brown, 2004). Nike has also reduced recruitment costs by 54 percent. In general, technology has increased accessibility. Conclusion This paper has discussed the available literature and evidence that IT has impacted on HR policies and practices. The rapid development of technology and it adoption in HR function has significantly influenced the functions in HR. Today, HR function is moving towards playing the greatest strategic role in organizations. IT has enabled HR to influence and impact the overall performance of the organization. IT affects the performance of HR and enables it to reduce time wasted, automate processes, and employee development among others. The paper has found out that IT enables organizations to deliver standardized and consistent training to a wide pool of employees across the organization and worldwide As a result of intensified competition between organizations which has changed the way organizations manage their workforce (Deb, 2013), HR personnel has undertaken unprecedented innovation in the coordination of HR operations, decentralization of the control of HR practices, the speed of response to changing employee aspirations and organizational policies, and quality of service to employees. This change has influenced the way in which the HR function conducts its activities. References Aubert, B., Rivard, S., Patry, M., Pare, G. & Smith, H. (2009). 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