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This literature survey attempts to gather the existing knowledge based on how effectiveness of HRIS that has been measured by using Technology Acceptance Model (TAM) can give an impact on human resources (HR) performance. At the starting point of this chapter, the discussion on the definition of human resource performance will be carried out by focusing on elements that will be use in order to measure the effectiveness of Human Resources Information System (HRIS). Besides that, this chapter will also discuss on definition of HRIS that widely be used by organization in performing their human resource function and the effectiveness HRIS will be measured by using TAM model. The elements of TAM model will be use as sources to identify the level of effectiveness for HRIS at the organization.
Human Resources Performance
In the Human Resource management performance there is growing interest for the contribution of HR to the organizational performance. HR performance also can be define as performance management which is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities (Ojo, 2006). It also can describe HR performance as a whole work system that begins when a job for that department is defined as needed. It ends when an
employee leaves your organization (Biemans, P., 2007). HR performance also refers to the degree of accomplishment of the task that makes up an employee's job (Cascio, 2006). Besides that, Sinha (2004), describe HR performance as same as job performance because it related to the willingness and openness to try and achieve new aspects of the job which in turn will bring about an increase in the individual's productivity. Effectiveness of human resource job performance can be measure by the perfomance in human resources process, time and cost saving, information effects and decision making process. (Biemans, P., 2007)
The Impact of HRIS on Human Resource Process
Human Resource Process is the process in the Human Resource Management which means it includes anything and everything associated with the management of a company's employees, and is not tied to a particular orientation towards people management, managerial philosophy, or style, (Boxall and Purcell, 2003). All HR process or activities are dependent upon the managers' efforts to formulate and implement the organizational strategy (Wei and Lau, 2005). Human resource process also include the practices that enhance the knowledge, skills, ability and motivation of employees would have a greater impact on performance if the organization is using a strategy that requires highly skilled and motivated employees (Neal, West and Paterson, 2005).
Human resource can provide a competitive advantage due to the fact that it is valuable, rare, and imperfectly imitable and has no substitutes. Competitors can duplicate the competitive advantage that are obtained via better technology and products but it is difficult to duplicate the competitive advantage that is created through improved management of people (Khandekar and Sharma, 2005). Khandekar and Sharma (2005) also believe that if companies are to survive and thrive in the global economy they require world class human resource competencies and processes for managing them. A critical mass of employee needs to be developed who are knowledgeable or skilled in a particular technology. This can provide source of competitive advantage.
Human resource contributes to create high performance work systems by linking various employees in different departments in the same organization (Brewster, 2007). Organizations use the effectual Human Resource system to increase their competitiveness by investing in employee development (Sutiyono, 2007).
The Impact of HRIS on Decision Making
Decision Making is defined as an act of narrowing down the possibilities, choosing a course of an action and determining the problems of potential consequences (Harsh Takkar, 2011). Human resource decision making entails in finding the most effective ways of investing in people. It involves in determining where to use the fund and resources in order to enhance the business and employee performances. In international business operations, HR managers have to face with the frequent change in global business environment. Deliberately involving in the process of human resources decision making can lead to a positive impact on the local and overseas operations of a business (Diana Wicks, 2011)
HR decision making process may require human determinants, computers, information systems, and communication technology to be added to soft data, especially when in collaborative decision making where anonymous may play a key role. Data that are generated and/or collected from those sources for the decision making are more facilitating and assertive, thus making them the stronger, powerful and hard-earned data in a HR decision making process (James Yao et.al, 2010).
Meanwhile according to Ng, Sktmove and Sharman (2001), organization had become more complex due to the amount of information that they need increases the need for automated information systems and it increase dramatically. The organization also must determine what kind of information that will be need by deciding what kind of decision will be made based on the HRIS information and which will be the decision maker because these needs are likely to change most of the time, it would also necessary to build a certain amount of flexibility.
According Byun, D. H. (2003), based on his study, many quantitative or qualitative techniques have been developed in order to support the human resource management (HRM) activities/process, classified as the management sciences/operations research, multi attribute utility theory, multi-criteria decision making, ad hoc approaches, and human resource information systems (HRIS). Most important, HRIS can include the three systems of expert systems (ES), decision support systems, and executive information systems (EIS), decision support systems, and executive information systems (EIS) in addition for the transaction processing systems and management information systems (MIS) which are accepted as an HRIS. As decision support systems, GSS are able to facilitate the HR groups to gauge the users' opinions, user's readiness, user's satisfaction, etc., increase the HRM activity quality, and generate better group collaborations and also decision makings with current or planned HRIS services.
According to Ngai and Wat (2004); Maguire and Redman (2006), HRIS will shape the integration between human resource management and information technology. These systems may rely on the centralized hardware resources operationally, a small group of IS specialists will act to residing within the personnel department increasingly manage, support and also maintain them. In addition, based on the studies that are conducted, HRIS will support planning, administration, decision making, and control. The systems support practices such as; the employee selection and placement, payroll, pension & benefits management, intake & training projections, career patching, equity monitoring, and the evaluation of productivity. Those information systems will increase the administrative efficiency and produce reports capable of improving the decision making.
Moreover, various studies had offered a conclusive evidence to affirm the role of HRIS plays in support of strategic decision-making. There has been a dramatic increase in the HRIS's usage. For example, Lawler and Mohrman (2003) in Agyenim Boateng (2007) and in Hussain et. al, (2006) had established that the use of HRIS consistently increased over the previous years, irrespective the degree of strategic partnership which was held by the HR function. It helps in reducing the HR costs by automating the information and also reducing the need for large numbers of HR employees by helping the employees to control their own personal information and allowing managers to access relevant information and data, conduct analysis, make decisions and communicate with others without consulting an HR professional (Awazu Desouza, 2003; Ball, 2001).
Strategic HRIS consists of tools that are assisting in decision making. For example the strategic decisions may include those associated with recruitment and retaining the employees. Furthermore, the administrative information which was held by the HRIS can be used to analyse an organization and formulate the strategies in order to increase the value of an HRIS. Some expertise also believe that the easy access to vital information will become an integrated part of many strategic decision-making process (Kovach, et. al, 2002)
Strategic value can be derived by using the HRIS tools that assist in decision making concerning with vital HR functions (Farndale et. al, 2010; Troshani et. al, 2011). For example HRIS can be considered as tools that provide strategic planners with needed information that enabling them to forecast the future workforce demand and supply requirements. Moreover, it can also be considered as a tool that helps employers in retaining the right employees in their organization. This can be performed by paying the employees more competitive salaries compared to the market, and retaining them to develop own skills and abilities to carry out their existing and future jobs
The Impact of HRIS on Information Effects
Information is defined as meaningful and organized data (N. Upadhyay, 1992). Human Resource Information System is a concept which had utilized the development of Information Technology (IT) for an effective management of the Human Resource (HR) functions and applications in organizations. HRIS had enables the systematic procedure for collecting, storing, maintaining, and recovering data that are required by the organizations about their human resources, personnel activities and organizational characteristics (Kovach K.A, et al, 2002). The HRIS acquires to stores, manipulates, analyzes, retrieves and distributes the information about an organization's human resources Tannenbaum S.I. (1990).
Initial efforts to manage the information about personnel frequently limited to employee names, addresses, and perhaps history of the employment often scribbled on 3x5 note cards (Kavanaugh, Gueutal and Tannenbaum, 1990). HRIS also provides the management with strategic data that are not only in recruitment and retention strategies, but also in merging the HRIS data into large-scale corporate strategy. The data that are collected from the HRIS provides the management with decision-making tools. HRIS can have wide range of usage from simple spread sheets to complex calculations performed easily (Parry, 2010).
HRIS helps the organizations in managing all the Human Resource information. It helps in recording, analyzing employees and organizational information and documents, such as the employee handbooks, emergency evacuation and also the safety procedures (Fletcher P, 2005 & Lee A., 2008). The effective human resources management in a firm to gain the competitive advantage in the marketplace requires timely and accurate information about current employees and potential employees in the labor market. With the evolution used of computer technology, meeting the information requirement has been greatly enhanced through the creation of HRIS. A basic assumption is that the management of employee's information will be the most critical process that helps a firm to maximize the use of its human resources and maintain competitiveness in its market (Mohan. T & Michael J. K,2010).
The better HRIS provides the management of all employees information, reporting analysis of the employees information, company-related documents such as employees handbook, emergency evacuation procedures, safety guidelines and benefits administration including the enrolment, changes in status, updated personal information, complete integration with payroll and other company financial software and accounting systems, applicant tracking and resume managements (Susan M. H., 2010).
With an appropriate used of HRIS, Human Resources staff enables the employees to do their own benefits updates and address changes, thus freeing the HR staff for strategic functions. In addition, data are necessary for employee management, knowledge development, future career growth and development, and equal treatment is facilitated. Managers can have access to the information they need to legally, ethically, and effectively support the success of reporting employees (Susan M. H., 2010).
One of the area in which the HRIS are apparently has had strong positive effects is involves the use of information. Kovach, Hughes, Fagan, and Maggitti (2002) had suggested that the HRIS will become the mechanism for sharing the information across the functional area of an organization. Administrative HRIS is used in day-to-day operations the HRIS is usually in the form of records that hold the employee information. Administrative HR is much more efficient when it is used with Information Technology because HR professionals are better able to handle large amounts of information efficiently (Beadles N. A. et.al, 2005).
The importance of system quality, information quality and system success has been recognized by many researchers as the key ingredients in developing the competitive advantage. The new scales and measures, along with the continued research into an organizational effectiveness and user satisfaction are needed. Accordingly the documents that are found here have been sorted by using a model of HRIS success which was developed by William H. DeLone and Ephraim R. Mc Lean (DeLone and McLean, 2003).
The Impact of HRIS on Time and Cost Savings
Times saving are far from automatic when computerizing the human resources function and the amount of time saved depends largely upon the user's ability to fully utilize the software's capabilities. That's why training is always important with any new application. Here are several examples of companies that have developed innovative ways to replace human effort with software and reaped the reward in dramatic time savings is maintaining records for the New Yorker Magazine's complicated vacation plan used to be a dreary manual task because the plan didn't follow the unalterable format of the DOS-based human resources database the magazine previously used. According to the magazine switched to Trak-It HR (Trak-It Solutions, Sunnyvale, California), they were able to take advantage of the program's relational structure and flexibility to handle all of the required calculations for vacation accrual automatically in the time saving that they can apply on it. (Jerry Fireman 2011).
According to Mark Fryer has received the pose of Director of Human Resources with Furst-McNess Company, an rural provide for supplier, the human resources staff which has five of people working with a manual record -keeping system. There was also has a substantial room for upgrading through automation but according to Fryer also said that never have guess at the time can been point of the savings and he also would be able to complete on it. Human Resources Department already being provided a computer in a place which is suitable for them so he had already started to uses it with an Excel worksheet based on it system Human Resources Information System has saved Furst-McNess a tremendous amount of time in a lot of little ways. For example, the time required to complete the EEO-1 affirmative action report, which the company files once a year has been reduced from 8 hours to less than an hour. At the same time, the level of service offered by the HR department to its customers and the employees and management of the company has been substantially improved. (Jerry Fireman 2011)
The implementation of Human Resources Information System in the human resource department has shown that it contributes considerably in saving time .The most advantages of HRIS commonly has in this studies which is consist of, better correctness, condition of well-timed and quick to retrieves information. In addition, if human resource management is integrated with information systems, it helps in saving time. The usage level of HRIS is measured and its impact is analyzed in saving the time according to designation level of the selected employees. (Dr. M Nishad 2012).
As usually as we know that, time saving is one of the barometers aligned with the effectiveness of any IS system can be gauged. According to (Usman sadiq 2012) in his survey study show that 75% of the respondents said that the system can gives helpful impact on administrative functions such as time spend that Human Resources Department on recruiting, usual staff decisions, giving out of paper work, and error alteration. Besides that, only few of them said that HRIS can actually help to improving the communication of information within the organization. Besides that, only a third of the survey by employees believed that HRIS can decrease the time spent on training. (Usman Sadiq 2012).
Based on the universal as a benefits from the findings of HRIS applications is to reduce time spent on Human Resources method and from the results it been show that the impacts of the HRIS on time savings are varied. (Kovach and Cathcart, 1999; Targowski and Deshpande, 2001. Again based on their study has shown that, the traditional of Human Resources tasks of recruiting, training, and staffing were not really impacts,because noticeable has decrease in the amount of time spent on these activities on the time spent communicating in order within the organization.
According to (Goldy Mahajan 2012) in his study was contributed that at least half of the respondents, but some of them had believed that their institution had realized some savings in the time spent on correcting errors. The time saving with uses Human Resources Information System (HRIS) in the Human Resources professional it can be assign to other, more imperative tasks for the organization (Mohan Thite 2011). One of the main benefits of the design, progress, and implementation of HRIS is to reduce amount of time the Human Resources staff had spend on transactional activities which can ensure the staff to spend more on their time in traditional and transformational activities (Micheal 2011).
The impact of HRIS on cost savings (Alex 2010) in his perception that HRIS will create cost savings in Human Resources Department that can turn their attention to provide better analysis of recent data and makes a innovative to use of the HRIS which is to provide well again and more precise from the data upon based on it strategic decisions. Some others authors have proposed that use of a HRIS can reduces HR costs by computerize information and reducing the need for large numbers of HR employees by helping them to manage their own delicate information; and by allow managers to admission related information and data, do analysis, make decisions, and correspond with others without confer with an HR professional (Awazu & Desouza, 2003; Ball, 2001).
The implementation of information technology in their human resource department has shown that it contributed significantly in cost cutting. (Dr M. Nishad 2012) .The usual advantages of HRIS commonly cited in the study has include saving of costs. According to Dipankar Sarkar (2007) in his contributed study identified that the HRIS practice in Human Resources Department the major objectives have been to find ways to reduce costs and calculate human resource returns meaningfully through a confusion of indirect costs and has long term benefits..(Thite 2011). There are few clear cut ways to assess the value of Human Resources Information System. While there are also have a scope for administrative HRIS such as cost decreases in Human Resources departments, it is difficult to measure specifically the return on investment and specific improvement. (Kavanagh 2011).
It is also important to note down that the cost savings is to reducing staff time to create the report is not the only benefit from support of computer-based HR Department (Mohan Thite and Michael J. Kavanagh 2011). One of the proposed advantages of human resource information systems is that processing costs should been reduces to ensure that cost savings can been made. (Kovach and Cathcart, 1999). According to (Kovach and Cathcart, 1999) regarding cost reductions for public universities, the apparent effects of the HRIS were insignificant. Few, if any, of the HR directors perceived any decreases in training, recruiting, data input or hiring operating expense or in the amount spent on HR salaries.
HRIS can be used as a tool to enhance efficiency of HR information management by reduction of overhead costs by task computerization and process automation so that the number of HR specialists required goes down (Thite 2011). Besides that, HRIS also helps to reduce HR costs by automate information and reducing the need for increaces a numbers of HR employees by helping them to manage their own personal information and by allowing managers to retrieves information which has been includes in data, conduct analysis, make their own decisions and communicate with others without consult on HR professional (Awazu & Desouza, 2003; Ball, 2001).
According to the survey findings that has been made by (Wyatt's 2005) shows that cost reductions can been covered by Human Resources Department. In addition, from the extent to which HRIS is used in a planned trends differs across organizations with the vast majority of organizations continuing to use HRIS simply to reduce costs (Bee & Bee,2005). HRIS can been uses to contribute by cost reductions, quality or customer satisfaction, and innovation in Human Resources Department(Broderick and Boudreau, 2006). In addition, according to (Beadles 2005) the actual cost saving from HRIS in every organization, it shows the result there were pretty similar to their researches, such as the one accepted out by him said that only 37.5% of the respondents believes that the HRIS had in fact lower of the cost in hiring and the recruitment operating expense or the wages of HR employess.
Technology Acceptance Model (TAM)
Perceived Ease of Use
Technology Acceptance Model
Figure 2.1: Technology Acceptance Model
User acceptance of technology has been the most important field of study for over two decades now. Although many models of recent or previous study have been proposed to explain and predict the use of a system (e.g. the Technology Acceptance Model (TAM) has been the only one which has captured the most attention of the Information Systems community (Adam & Nelson, 2002).
The technology acceptance model (TAM) was first created by Davis (1989), and it based on the theory of reasoned action (TRA) in psychology research. The TRA posits that individual behavior is driven by behavioral intention where behavioral intention is a function of an individual's attitude toward the behavior and subjective norms surrounding the performance of the behavior (Fishbein & Ajzen, 1975). As a definition of Technology Acceptance Model, this model has been created by Fred Davis in the year of 1985 and has been the only one which has captured the most attention of the Information Systems community. This theory also become so popular that it has been cited in most of the research that deals with user's acceptance of technology (Venkatesh, 2000). By using the TAM Model, the effectiveness of information system in performing human resource performance can be measure through the elements in TAM model which is perceived ease of use and perceived usefulness. (Lee, Kozar, & Larsen, 2003).
Davis (1989) recognized that workers very often use technology because it is required of them as part of their job or might improve their job performance, but they might not use it otherwise. That is why Davis develops this theory and explaining how this two important element which is perceived ease of use and perceived usefulness can give an impact on effectiveness of the information system. Because new technologies such as personal computers are complex and an element of uncertainty exists in the minds of decision makers with respect to the successful adoption of them, people form attitudes and intentions toward trying to learn to use the new technology prior to initiating efforts directed at using (Venkatesh & Davis, 2000). Attitudes towards usage and intentions to use may be ill-formed or lacking in conviction or else may occur only after preliminary strivings to learn to use the technology evolve. Thus, actual usage may not be a direct or immediate consequence of such attitudes and intentions. (Bagozzi, 2007)
Research has been conducted by Benbasat and Barki (2007) that measure the development and test of a theory of technological learning and usage by using TAM model. They found that the elements in TAM model are suitable to measure the acceptance of technology learning and usage. In general TAM focuses on the individual 'user' of a computer, with the concept of 'perceived usefulness', with extension to bring in more and more factors to explain how a user 'perceives' 'usefulness', and ignores the essentially social processes of IS development and implementation, without question where more technology is actually better, and the social consequences of IS use. (Benbasat & Barki, 2007).
Many researches have been conducted to identify the importance of TAM model in measuring technology effectiveness. TAM has been applied in numerous studies testing user acceptance of information technology, for example, word processors (Davis et al, 1989), spreadsheet application (Segars, 1993), e-mail (Grover, 1993) and web browser (Venkatesh et all, 2003).
Perceived Ease of Use and Perceived Usefulness
Perceived Usefulness and Perceived Ease of Use are the elements in TAM model and also can be define as causes for people to accept or reject information technology (Davis, 1989). Among the many variables that may influence system use, previous research suggests two determinants that are especially important. First, people tend to use or not use an application to the extent they believe it will help them perform their job better. Davis (1989) refers to this first variable as perceived usefulness. Second, even if potential users believe that a given application is useful, they may, at the same time, believe that the systems is too hard to use and that the performance benefits of usage are out- weighed by the effort of using the application. (Davis et all, 1989)
According to Chuttur in his working paper, Overview of the Technology Acceptance Model (2009), the addition to usefulness, usage is theorized to be influenced by perceived ease of use and perceived usefulness defined in his working paper as the degree to which a person believes that using a particular system would enhance his or her job performance and it also supported by Venkatesh and Bala (2008). This overview of TAM model is follows from the definition of the word useful: "capable of being used advantageously." Within an organizational context, people are generally reinforced for good performance by raises, promotions, bonuses, and other rewards (King & He, 2006). A system high in perceived usefulness, in turn, is one for which a user believes in the existence of a positive use-performance relationship.
Perceived ease of use, in contrast, refers to the degree to which a person believes that using a particular system would be free of effort (Davis et all, 1989). This follows from the definition of "ease": "freedom from difficulty or great effort" (Lee, Kozar, & Larsen, 2003). Effort is a finite resource that a person may allocate to the various activities for which he or she is responsible (Radner and Rothschild, 2005). All else being equal and an application perceived to be easier to use than another is more likely to be accepted by users. (Bagozzi, 2007)
Human Resources Information System (HRIS)
Human Resources Information System (HRIS) is consider as a systematic procedure system for collecting, storing, maintaining, and recovering data required by an organization about their human resources, personnel activities and organization characteristic (Kovach, Hughes, Fagan and Maggitti, 2002). HRIS is also known an effective tool that can be used for streamlining the administrative functions of the HR department by creating an elaborate and relevant database. HRIS can benefits organization by reducing cost of operation by automation the information and reducing the need for the large number members of human resources employees by control their own personal information and allowing manager to access the relevant information about consulting the human HR professional (Delorme & Arcand , 2010).
Therefore, the use of HRIS is very important in every organization because with an efficient HRIS in the workplace by using the data from HRIS, HR department can make a contribution towards organization strategy formation within an organization and from the efficient use of HRIS, developing HR function will be easier especially in performing organization process. (Dessler, Griffiths, and Walker, 2004). Burbach and Dundon (2005) conducted a study to assess the strategic potential of HRIS to facilitate people management activities in 520 organizations in the Republic of Ireland. They found that most of the organization adopted HRIS to performing their HR function. They also found that HRIS technologies were used for administrative rather than strategic decision making propose. Another recent study conducted by Delorme and Areand (2010), aimed to elaborate on the development of the roles and responsibilities of HR practitioners from traditional perspective to a strategic perspective, found that the introduction of new technologies for example HRIS in the organization affected the way HR professionals accomplished their tasks within the HR department and the rest of the organization. The study of Krishnan and Singh (2006) explored the issues and barriers faced by nine Indian organization in implementing and managing HRIS. The main HRIS problems were lacks of knowledge of HR department about HRIS and lack of importance given to HR department in those organizations. Cooperation is required across various function and divisions of the organization for proper implementation of HRIS.
THE THEORETICAL FRAMEWORK
The theoretical framework of this study for the impact of extrinsic rewards towards employee's job performance at Honda Motor Company, Ltd. is shown in Figure 2.2.
Elements of TAM Model Human Resource Performance
INDEPENDENT VARIABLE DEPENDENT VARIABLE
Human Resource Process
Perceived Ease of Use
Time and Cost Saving
Figure 2.2: Theoretical Framework for the Effectiveness of HRIS by using Technology Acceptance Model (TAM) on Human Resource Performance at Honda Motor Company, Ltd.
H1: Perceived usefulness has a positive influence on the Human Resource Process at
Honda Motor Company, Ltd.
H2: Perceived ease of use has a positive effect on the Time and Cost Saving at Honda
Motor Company, Ltd.
H3: Perceived ease of use has a positive effect on the Decision Making at Honda
Motor Company, Ltd.
H4: Perceived usefulness has a positive influence on Information Effects at Honda
Motor Company, Ltd.
This chapter reviews the literature of the effectiveness of HRIS on Human Resource Performance by using the TAM model. The theoretical framework shows the relationship of the TAM model's element which is the perceived ease of use and the perceived usefulness with the Human Resource Performance in terms of Human Resource Process, Time and Cost Saving, Decision Making and also the Information Effects. There shows the relationship between the two variables. This chapter also included the definition of related variables as well as to the study.