Could E Hrm Help The Hr Function Deliver A Cost Effective Service Business Essay

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The introduction of technology in the felid of HR (e-HRM) is to improve the HR operational processes through the use of web technology, which allows distributed access to employees and managers, which makes especially HR specialist more efficient by relieving them from their routine work load, thereby allowing them to concentrate on strategic values of the organization. This paper aims at giving a brief introduction of HRM and demystifying e-HRM by identifying whether the introduction of e-HRM helps the functions of HRM in delivering cost-effective services to the organization through cost reduction and reduction of administrative burden.


Human resource management has gradually grown into a discipline ever since the First World War. It is during this era when we had personal management, which was a fusion between two separate industrial movements known as scientific management and welfare (Lesochier, 1935; Eilbirt, 1959). Personnel management which has also evolved from its main goals of eliminating inefficiency, human suffering, and waste to human resource management, which also focuses on organization and its performance enhancement. HRM which was charged with record-keeping some years ago , has evolved into the areas of sharing boardrooms and a strategic partner within marketing ,finance and the accounting departments (Dulebohn et al., 1995).

Several researches have been done in the early 80's and tried to explain the HRM phenomenon. Most recent, research attempt to identify the adaptation of cross-functional task such as compensation, training, selection and performance appraisal into areas such as strategic alignment, cross-cultural and political influences (Ferris et al., 1999). However, argument in the quest of developing a theory of HRM has always driven wedge between scientist and practitioners (Chalofsky, 1996, 1998). Likewise, research done in recent years also proves the positive correlation between HRM and a firm's performance (Huselid, 1995; Schuler and Jackson, 1987). The human relation which was propounded in the 1930's represents the Behavioural school. They look at the human aspect of enterprise management and the employees. The major writers in this school are Maslow (1943) and Mayo (1933).


The "process of attracting, developing, and maintaining a talented and energetic workforce to support organizational mission, objectives, and strategies" Schermerhorn (2001) is called Human Resource Management. HRM over the years has become one of the most essential departments with various functions within the organization. It is also argued that, for HRM to deliver quality practices, it should include systematic and careful approach to teamwork and group problem solving, commitment to training, recruitment, egalitarian structures, performance and reward systems, Waldman (1994).

Its main purpose is to ensure that the employees of a company, (Human resource) are used in such a way that the employer obtains the greatest possible benefit from their abilities, whilst employees obtain both material and physiological rewards from their work. Human resource management is also based on the use of techniques and procedures known collectively as "personnel management" which deals with staffing, determining and satisfying the needs of people at work, and the practical rules and procedures that govern the relationships between employees and the organization.

Personnel management is that area of management which deals with people in the area of:

Utilization: - Which consists of recruitment, selections, transfer, promotion, separation, appraisal, training and development.

Motivation: - Which deals with Job design, remuneration, fringe benefits, consultation, participation, negotiation and justice.

Protection: - Working conditions, welfare services, safety, and implementation of appropriate legislation.

Although, human resource management was derived from personnel management, these two are often used interchangeably but has some fundamental differences among them.

Personnel management is practical, utilitarian and instrumental, and mostly concerned with the administration and the implementation of policies, whereas human resources management, conversely, has strategic dimensions and involves the total development of human resources within the firm, which deals with matters such as; The aggregate size of the organization's labour force in the context of an overall corporate plan (e.g. how many divisions and subsidiaries the company is to have and the design of the organization)

How much to spend on training the workforce, given strategic decisions on the targeted quality levels, product prices, and volume of production. The desirability of establishing relations with trade unions from the viewpoint of effective management control of the entire organization, Human asset accounting, (i.e. the systematic measurement and analysis of cost and financial benefits of alternative personnel policies (e.g. the effect of various salary structures and monetary consequences of staff development exercises), (Graham and Roger 1998, p. 5)

Introduction to E-Hrm

Organizations are usually faced with declining revenues and significant business losses due to high cost of operations in the HR department. Therefore there is the need for HRM to be more efficient in a firm's technological innovation attempt to improve the company's competitive advantage over other competitors' thereby increasing the company's performance (Huselid, 1995). HRM has grown to a point where technology rescues and reduces the tension between the strategic and administrative roles, as its advances to a point where it reduces part of administrative responsibility (Ellig, 1997).

The expectation is that HR departments using ICT may now "be liberated from administrative shackles and able to focus more on developing intellectual capital, social capital, and managing knowledge to improve an organization's competitive advantage" (Lengnick-Hall and Moritz, 2003, p. 373). The introduction of e-HRM aims to make information availability to managers and employees at anytime and anywhere. Unlike HRM, e-HRM allows employees to control their own personal information by updating records and making decisions, without consulting the HR department and allowing managers to access information and data, conducting analyses and making decisions.

What Is E-Hrm?

A term first used in the 1990's which refers to HRM "transactions" using the internet (Lengnick-Hall and Moritz, 2003), which was inspired from the term "e-commerce" or "Virtual HR." Human resource management (HRM) departments using information and communication technologies (ICT's) is becoming an increasingly important phenomenon commonly referred to as e-HRM? Automating HR tasks and practices is transforming the traditional paper-and-pencil, labour-intensive HR tasks, into efficient, fast-response activities that enable companies to anticipate and profit from environmental shifts to create a much needed competitive advantage (Marler, 2006; Watson Wyatt, 2002).

E-HRM has no explicit definition, but some academics and practitioners refer to e-HRM as the application of any technology enabling managers and employees to have direct access to HR and other workplace services for communication, performance, reporting, team management, knowledge management, and learning in addition to administrative applications, Watson Wyatt (2002).


According to Lengnick-Hall and Moritz, (2003) he identifies the three levels as the main focus of e-HRM as;

Publishing of information: - This involves one -way communication within the organization, to employees or managers. This level of e-HRM uses the intranet as the primary source of delivering information.

Automation of transactions with integration of workflow: - This is when electronic input replaces paperwork through the use of intranet or extranet with a combination of several programming applications.

Transformation of the HR function: - This-HR liberates its function from operational focus and redirect towards strategies, thereby taking the task of partnering with line, creating a centre of expert and service administration.

Other writers have also described the types of e-HRM as; operational e-HRM, relational e-HRM and transformational e-HRM by Lepak and Snell (1998). Also, Wright and Dyer (2000) identifies the 3 types of e-HRM as; transactional, traditional and transformational HRM

E-HR functions/examples

Giving a scenario from a practical viewpoint, as an organization helps deliver services to clients in relation to their technical problem. Yet there is often one technical staff that holds much information about a client problem. As such, if this technical staff leaves the organization the firm-client relationship suffers, which means more complication in solving the client's problem.

Therefore, as organizations become more service and innovation oriented, systems are put in place into today's era of innovation, in which ICT has become a key factor to delivering competitive products and services. The e-HRM literature suggest the three main goals as cost reduction, improving HR services, and improving strategic orientation.The following are some of the major classification of the benefit of e-HRM (Ensher et al., 2002).

Human resource planning

In relation to HR planning, Zeon technologies and Oxford University Press are companies which practise such e-HR, particularly through the functions of employee and manager self-service applications. With the use of Employee Self-Service (ESS) real-time system, employees are able to compare information from their most recent updated data available from the ESS. This has brought substantial progress in terms of employee data updates, personnel changes and job requisitions. This means that, since employees are given the opportunity to update their personal data, the HR record-keeping gains higher accuracy and data quality (Zampetti and Adamson, 2001).

Acquiring human resources

In acquiring human resources, the practice of online recruitment is one of the most widely discussed functions of e-HR. B&Q and Reed are perfect examples of companies that practice online recruitment (e-recruitment). As the company post vacancies on their cooperate website, this allow applicant to send in their resumes electronically via e-mail, which is seen as a unique way to recruit job seekers .Furthermore, this brings a substantial benefit in terms of cost, time, candidate pool and quality of response. The use of e-HRM can also improve the sorting and contacting of candidates, which can also ease the selection of employees, especially where long distances are involved. Examples can be online test for the selection process, and this allows the achievement of spectacular cost and time savings (Galanaki, 2002).

Evaluating human resources

Evaluating human resources is one of the functions of e-HR. this allow the whole performance appraisal to be conducted on-line via the corporate internet interface or intranet. One such example the NHS; they have what is called NHS Appraisal website. This means that managers and employees are able to submit performance data directly to the HR department in electronic form, which reduces paperwork and can impressively decrease time and cost for the HR department. The self-service application allows managers to immediately enter PA results and employees to manage their performance goals and results and plan their performance on their personal HR page. It can also provide managers with information on how to conduct a PA, the specific criteria and measurements of given positions and roles as well as examples and models of effective appraisals (Adamson and Zampetti, 2001).


Communication is one aspect of e-HR which includes the use of electronic mail to communicate with its employees. Zipnet/Broadband Home Ltd, a leading ISP company in Ghana is an example, where communication is an essential part of the company's day to day activities. The company has an intranet called INTRA ISP; this allows field engineers and network operation centre (NOC) to communicate effectively in troubleshooting, detecting fault and resolving client problems. This has become the communication medium within the company, the Intranet and e-forums have also altered corporate communication, allowing easy access to all kinds of information that management wants to transmit to employees and also easing upward communication, and finally this saves time and reduces cost of phone bills (Bontis et al., 2003).

Rewarding human resources

Employee self-service allows employees to submit electronically their preferences in terms of benefit selection, reducing the burden for the HR department. Experience has shown that after the implementation of a self-service employee benefits system, employees may still be calling with benefit questions, confused about their choices and unable to grasp a broader rewards perspective (Dietch, 2001). However, it is believed that web-delivered employee benefits, which also allows the manager to take on or confirm salary actions, salary changes, bonuses and stock management. The application usually notifies managers on the choice they need to make or verify about rewards of their subordinates and asks them to insert their decision.

Developing human resources

The development of the human aspect of HR is essential in cutting down costs in the HR department, making implicit knowledge more transparent, company's uses HR- solutions to document the knowledge of each single employee. These skills management support companies to recognize existing skills of their employee's, and to use these skills systematically, this can be used to extend the skills of employees with training measures with the help of intranet, or it can be useful to recruit new employees. The e-mail and electronic forms on the intranet of the company or a restricted web site are used to gather information on training needs assessment, inducing benefits in terms of less paperwork, lower administration cost, shorter distribution and response time, and higher response rate (McClelland, 1994).


Although-HRM has much positive contribution to the HR department; it also has some negative impact. The traditional social task of the HR-department suffers, as the increasing distance of e-HRM causes with its virtual online process. The partial loss of face-to-face communication may have a negative impact. Secondly the HR-worker is affected by the change In the HR-process. The ongoing automation of formerly time-consuming task leads to long-term staff cut in the HR department thus the HR-worker is a central component of the implementation of e-HRM because it is the key-factor to realize the newly installed processes.

When an HR-worker is de-motivated due to the anxiety to lose his own job, an implementation of e-HRM is futile, as E-HRM will assume an active role for line management and employees in implementing HRM strategies, policies, and practices. In terms of the more operational and information processing work, such as administration, registration and Information distribution, there will be less demand for HR people.

The shift from traditional HRM to e-HR practices gives rise to several effects on the role of HRM. E-HR, apart from substantial reductions in cost and time and transition of administrative activities from the HR department to the employees themselves, can bring about an "increased emphasis on HR as a strategic business partner whose primary challenge is to recruit, develop and retain talented employees for the organizations" (Ensher et al., 2002, p. 238).

On the other hand, this may also mean that with the use of e-HR, fewer HR professionals are needed, because e-HR eliminates the "HR middleman" (Lengnick-Hall and Moritz, 2003). Therefore, the effect of e-HR on the HR profession may be seen as both a threat and an opportunity, which means it poses the challenge for HR professionals to consistently keep up with new developments in their field, in order to maintain their advisory-consulting role (Ulrich, 2000).


In conclusion, front line manager frequently show distrust about the capability of HR functions in delivering strategic technology tools when they are unable to operate a strategic HR function, which in some cases, fail to deliver good operational services. Lack of confidence at the functional level is therefore linked to poor expectations with regard to transformational technology. While this factor might lead to a desire to address strategic HR needs, the development of a common vision regarding e-HRM is often problematic.

The arguments still hold as e-HR reduces HR transaction costs and headcount, an example will be, supplying the same HR information to large numbers of people on a virtual rather than physical basis. Secondly, e-HR can substitute physical capability by leveraging the 'law of digital assets' to re-use information flexibly on an infinite number of occasions at little or no marginal cost, an example, is the most notable in the real time delivery of e-training and e-learning to large numbers of people across the globe.

Third, e-HR can facilitate more effective virtual 'customer relationships' and internal labor markets by increasing the reach and richness of two-way information. Illustrations of such improved information flows are already evident in certain applications, including enabling internal/external recruitment and search by 'deep-web mining', online-career development and performance management, employee engagement surveys to tailor specific 'employee value propositions' to small groups of employees, more flexible working to attract people from non-traditional recruitment pools, and outsourcing of key HR services.

Fourth, it can transform the traditional HR 'business model' by e-enabling HR to provide strategic value to organizations that it previously could not do, for example, by using online learning to 'feed forward' into organizational learning and organizational knowledge, creating international virtual communities of practice, capturing data for real-time human capital management, and facilitating more flexible organizational structures and ways of home-working.