The Study of e-HRM practices in Service Sector

The study of e-HRM practices in Service Sector

1. Introduction:

Every Organization has some different approaches and policies of working. They may be
from any sector; it may be big or small but have some rules and structure of working.
Organizations are not mere bricks, mortar or machineries, they are the people. It is the
people who staff and manage organizations. HRM is a wide-ranging concept. It is the
most important utility at the moment in any business or organization. This is because,
people offer competitive advantage to a firm and managing people is the domain of
HRM. Human resources are the source of achieving competitive advantage because of its
capability to convert the other resources such as money, machine, methods and material
in to output i.e. product/service (Tiwari & Saxena, 2012).

HRM builds Human capital. Human capital refers to the stock of employee skills,
knowledge and capabilities of people. In an organization the most valuable input is the
human element. The success or failure of an organization depends to a large extent on the
persons who manage and run the organization (Ghosh, 2002). Shaping organization is
essential and required task for any management to produce a qualitative and reliable
product for their customers. So, today we can easily find a concept of Human Resource
Management (HRM) in every organization for internal management and efficient
utilization of resource to produce a better and new technological product for their
customers (Srivastava, 2010). Managing human resources involves a complex process of
designing policies, practices and procedures of organizations for recruiting, motivating,
developing and retaining employees (Schneider, 1994).

During the last decade, HRM has been adapting to a variety of changes and
improvements and technology is among them, which has greatly affected the way HRM
departments working culture in organizations. The development of the Internet and other
IT tools are boon to drive any organizations to utilize its possibilities in doing business
and improving performance. HR departments are forced to look for alternative paths for
the delivery of HR activities to meet the increasing demands placed on the HR
departments. These demands, or pressures, are there to increase strategic role of the HR

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departments with diversified behavior as, the greater demand of flexibility, the pressure
to be as efficient as possible, maintain the role as service provider to managers and
employees (Lepak & Snell, 1998).
At the globalized platform, HR Optimization is used, to implement the new technologies
that maximize efficiency, boost return on investment, and accelerate the growth. The core
objective behind it is to support HR functions and for the better resource management for
the superior good of organization as a whole. HR function of an organization is
responsible for complying with the HR needs of the organization (Jovita, 2008).

The beginning era of liberalization and globalization alongside with the advancements in
Information Technology has transformed the world around. It has brought to middle stage
the importance of human resources, more than ever before. Technology and HRM have a
broad range of influences upon each other, and HR professionals should be able to
espouse technologies that allow the reengineering of the HR function, be prepared to
sustain organizational and work-design changes caused by technology, and be able to
support a proper managerial climate for innovative and knowledge-based organizations
(Hempel, 2004).

Service sector is a promising fastest growing sector with high demand in the market. The
importance of this sector in Indian Economy also highlighted the importance of change in
approach by the personnel and administrative departments. Progressively more, service
firms are pursuing strategies that element a greater customer orientation. Service firms
are utilizing their human resource practices to stimulate and reinforce the behavior
needed for the successful implementation of greater customer-oriented strategies
(Jackson and Schuler, 1992).

1.1 Human resource management:

HRM can be defined as a process of procuring, developing and maintaining proficient
resources in the organization so that goals of an organization are achieved in an effective
and efficient manner. In other terms it is an art of managing people at work in such a
manner that they give their best to the organization (Srivastava, 2010). Human Resource
Management (HRM) is the function within an organization that focuses on recruitment,
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management, and providing direction for the employees. HRM can also be performed by
line managers. HRM is the organizational function that deals with the issues, related to
people such as compensation, hiring, performance management, organization
development, safety, wellness, benefits, employee motivation, communication,
administration, and training. It is also a strategic and comprehensive approach to manage
people along with the workplace culture and environment.

Effective HRM enables employees to contribute effectively and productively to the

overall company direction and the accomplishment of the organization's goals and
objectives. In a competitive scenorio, effective utilization of Human resources has
became necessary and primary task of organisations to identify, to recruit, and to channel
competent human resources into their business operations for improving productivity and
functional efficiency(Jyothi and Venkatesh,2006).

In today’s era, diverse changes occurring in the field of human resource management. It
is observed that HR functions are apprehensive with a variety of activities that
appreciably influence almost all areas of an organization. It is the human intellect, human
energy and human inventiveness, which accomplish brilliance for the firm. HRM is a set
of policies designed to maximize organizational integration, employee commitment,
flexibility and quality of work. Within this model, collective industrial relations have at
best only a minor role (Guest, 1987).

Figure 1: Source: http://learnershrm.blogspot.in

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The HRM can also be defined as a strategic approach to manage employment relations
emphasizing on the fact that, leveraging people’s capabilities is critical to achieve
sustainable competitive advantage, and can only be achieved through a distinctive set of
integrated employment policies, programs and practices (Bratton and Gold, 2003). It is
the process of managing people in organizations in a structured and methodical manner.
It observes people as an important source or asset to be used for the benefit of
organizations, employees and society. This envelops the fields of staffing (hiring people),
retention of people, pay and perks setting and management, performance management,
etc.
In other words HRM encompasses the management of people in organizations from a
macro perspective i.e. managing people in the form of a collective relationship between
management and employees (http:// managementstudyguide.com/human-resource-
management.htm). This approach focuses on the objectives and outcomes of the HRM
function. Nowadays, Organizations seek possibilities to run HR operations more
efficiently. The combination of the need to work more efficiently on one hand and the
possibilities of current information and communication technology on the other, have
resulted in the swift development of electronic HR systems (Stanton and Coovert, 2004).
A company can achieve a competitive advantage and reach its goals by adopting an
efficient usage of its personnel (Price, 2004).

In firm performance there is a significant impact of HRM policies and practices on

employee’s outcomes (turnover and productivity) and on the overall corporate
performance (Huselid, 1995). In an array to enlarge a sound HRM system, the
organization should have effectual Human Resource Management practices.HRM
practices refer to organizational activities intended for managing the pool of human
resources and ensuring that the resources are employed towards the fulfillment of
organizational goals (Wright & Snell, 1991; Schuler & Jackson, 1987; Schuler &
MacMillan, 1984).

Basic HRM practices and definitions:

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1.1.1 Recruitment and Selection:

These are two interrelated processes; recruitment is the process of generating a pool of
capable people to apply for employment to an organization while selection is the process
by which specific instruments are employed to choose from a pool of applicants, the
persons most suitable for the job taking into consideration management goals and legal
requirements (Bratton and Gold, 2003).

It is a systematic means of judgment and inducts available manpower to apply to the

company or enterprise for employment. The recruiting activity in itself is selective or pre-
selective, through choosing among the various sources of labor supply and by the
decision as to which candidates applying for employment should be permitted to go
through subsequent selection or screening procedures. Recruitment may be relatively
simple or, on the other hand, it may be complex and expensive activity involving
promotions from within the organization as well as advertising notifying vacancies,
placing order to the employment exchange, campus recruitment, etc.

Recruitment is thus an important step in business/ industrial employment and ultimate

success or failure of such employment depends in large measure upon the techniques
(Sharma and Mehlawat, 2011). Various techniques are used in the recruitment and
selection process including different types of criteria, interviews, discussions etc. to
recruit a person with talents that drive the goals and interest of organization.

1.1.2 Training and Development:

Training is the formal and systematic modification of behavior through learning that
occurs as a result of education, instruction, development and planned experience
(Armstrong, 2001). Appropriate training is required for various need such as to solve
pertinent problems, to boost performance, and also for continuous development of human
resources. The practice is one of the most important aspects of HRM needed to keep
organizations ahead of their competitors (Hilb, 1992).The firms that engage in systematic

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training of their workforce are more likely to enjoy the rewards of a more productive
workforce (Koch and Mcgrath,1996).

1.1.3 Pay and Remuneration:

The remuneration process is crucial and a source of contention in most organizations. It

deals with the rewarding of employee in accordance with their value in the organization.
It is concerned with both financial and non financial rewards and embraces the strategies,
philosophies plans and processes employed by organizations to develop and maintain
reward systems. It plays a motivational role in management and hence, the importance
attached to it. Pay strategies include performance related pay, production based pay, skill
based pay, and knowledge based pay and base pay (Brown, 1991).

1.1.4 Performance Management/ Appraisal:

Performance is defined as the record of outcomes produced on a specified job function or

activity during a specified time period (Bernardin and Russell 1993). Effective managers
need to incorporate performance review and feedback as part of their day-to-day
communications with employees (Webb, 2004). Appraisals are used widely for tying pay
to performance (Schellhardt, 1996; Cleveland et.al. 1989). Performance management is
considered as one of the most important and positive developments in the field of HRM.
It is the strategic approach to deliver sustained success to organizations by improving the
performance of employees and simultaneously developing the capabilities of teams and
individual contributors (Armstrong and Baron, 2002). Automating HR tasks and practices
is transforming the traditional paper-and-pencil, labor-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; Wyatt, 2002).
1.2 Growth stages of IT in Human resource Management:

Information Technology (IT) is like God particle present everywhere. It has become an
important and fundamental factor to support any business or organization. The

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application of Information Technology (IT) into Human Resource Management (HRM) is

believed as change agent, while at the same time, HRM allows technology to develop its
full potential (Hempel, 2004). It completely infuses HRM processes and HRM
departments in today’s global networking timeframe (Bondarouk and Ruel, 2009).

Technology and HRM have a broad range of weight upon each other, and HR
professionals should be able to adopt technologies that, allow the reengineering of the HR
function, be prepared to support organizational and work-design changes caused by
technology, and be able to support a proper managerial climate for innovative and
knowledge-based organizations (Hempel, 2004).

Computer usage in human resource management dates back to the 1940s, and can be
sourced to the storing and capturing of employee information through the use of skilled
inventories and payroll systems (Walker, 1980). The 1940s and 1950s marked the
beginning of the human resource technological revolution in the United States with the
automation of skills, inventory systems and payroll systems (Walker, 1993). Typically,
this first system was, Electronic Accounting Machinery (EAM), which consisted of 80-
column card systems that kept information such as employees’ last name, initials, salary
rate, work location, date of birth, gender and department code (Walker, 1980).
Human resource management was recognized as being an early contender for office
automation in payroll, benefits administration and transaction processing applications
(Ball, 2001).

The 1960s were characterized by organizations becoming more complex, resulting in

greater administrative demands on personnel departments. Such development brought
about opportunity and the formation of the company, Information Science Incorporated
(InSci), responsible for the creation of the first packaged personnel system called PICS
(Personnel Information Communication System) used for job matching. The development
of this packaged system initiated requests for customized human resource packages to
meet organization’s specific needs and resulted in the development of the personnel
system called HRS II (Walker, 1993).

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From 1960 to 1980, the integration of HR into core business and the need for
governmental and regulatory requirements increased significantly (Hendricksen, 2003).
People with technical computer skills, such as programmers, were scarce and only
company giants such as General Motors, AT & T, Mobil, General Electric, Ford and a
few others were able to afford such resources. These companies from the establishment
stage saw the benefits of using computers in human resource management, and they
could capture basic information about many employees as well as automatically generate
and print reports that previously required much manpower to produce (Walker, 1980).
The human resource department became one of the principal users of this technology.
These systems grew in size and capacity but continued to operate as mainly
recordkeeping systems. Over the last two decades, the reliance on the human resource
function to present solutions to boost efficiency and effectiveness of human capital has
been significant (Hendrickson, 2003).

Electronic Human Resource Management (e-HRM) is often used practice and has been in
use since the early 1990s when the concept of e-commerce swept across the business
world (Olivas-Lujan et. al, 2007; Lepak & Snell, 1998). The term e-HRM is extensively
used but universally accepted definition is still unclear. It is often used synonymously
with similar terms such as web-based human resources (Walker, 2001), human resource
information systems (HRIS), virtual human resource management, human resource
intranet, computer-based human resource management systems, and human resource
portals (Ruël et al., 2004). Automating HR tasks and practices is transforming the
traditional paper-and-pencil, labor-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; Wyatt, 2002).
The successful HR technology must change the work performed by the Human Resources
Personnel by dramatically improving their level of services, allowing more time for work
of higher value and reducing their costs. Many systems have been implemented it by
cutting HR staff, outsourcing and imposing new technology (Walker, 2001). A key
partnership is being formed between the human resource and information management
professionals who work hand-in-hand and serve as the guiding relationship for all future

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activities and decisions. Capitalizing on the latest web-based technologies, global access
to human resource information should be provided to managers and employees to support
a variety of management and personal decision-making purposes (Sareen and
Subramanian, 2012).

1.3 Trends of IT in Human resource Management:

1.3.1 Human Resource Information System (HRIS): A Human Resource Management

System (HRMS) or Human Resource Information System (HRIS) refers to the systems
and processes at the intersection between human resource management (HRM) and
information technology. In the 1980s standalone software packages were developed to
provide management system functionality that facilitated HR functions such as applicant
tracking, performance appraisal, and training and development. These new systems were
called human resource information systems (HRIS), and were defined as information
systems used to acquire, store, manipulate, analyze, retrieve and distribute pertinent
information regarding an organization's human resources (Kavanagh et. al, 1990).

In other words HRIS is a systematic procedure for collecting, storing, maintaining,

retrieving and validating the data needed by an organization for its human resources,
personnel activities and organization unit characteristics (Walker, 1982). It merges HRM
as a discipline and in particular its basic HR activities and processes with the information
technology field, whereas the programming of data processing systems evolved into
standardized routines and packages of enterprise resource planning (ERP) software.

Typically, the better Human Resource Information Systems (HRIS) provide overall:

 Management of all employee information.

 Reporting and analysis of employee information.
 Company-related documents such as employee handbooks, emergency evacuation
procedures, and safety guidelines.
 Benefits administration including enrollment, status changes, and personal
information updating.

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 Complete integration with payroll and other company financial software and
accounting systems.
 Applicant tracking and resume management.

Accordingly information systems should translate the HRM policies into HRM
practices, fulfill and ensure the smooth operation of the HRM practices and the
maximization of organizational integration, flexibility, quality of work, employee
commitment, in order to improve organizational performance (Boselie et.al. , 2005).

Figure: 2 Source:http://misz-katijah.blogspot.in

1.3.2 ERP system: ERP system can be defined as a packaged business software system
that lets an organization automate and integrate the majority of its business processes,
share common data and practices across the enterprise and produce and access
information in a real-time environment (Marnewick and Labuschagne, 2005). ERP
systems is usually a way to incorporate data and processes of an organization into a
single system, and it will usually have many components including hardware’s &
software’s in order to integrate the system. ERP systems in the HR space can standardize
HR information. Many issues faced by HR departments can be resolved by having a
unified simple method for keeping track of employees’ time and communicating with
employees about services and benefits.

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ERP systems can be very complex, leading to difficulties in implementing, managing and
maintaining them. Proper implementation of ERP systems can be very time consuming
and very costly (Tsamantanis & Kogetsidis, 2006). One of the main drivers of enterprise
resource planning has been the integration of the technology from the assorted HR
functions (Keebler, 2001).

Figure: 3 ERP Systems (Source: http:// whatiserp.net)

1.3.3 e-HRM: e-HRM is an extension of above mentioned technologies, adding strategic
value, through automation and information, to the organization. There is a fundamental
difference between human resource information systems and e-HRM (Ruël et al., 2004).
HRIS are intended for the human resource department where users of this technology are
largely HR professionals using the system to enhance processes within the HR
department, with the aim of improving service to the business. e- HRM, on the other
hand, is targeted at employees and management.
The authors identified the main difference between HRIS and e-HRM. HRIS concerns
the automation of HR services and e-HRM provides technological support of information
regarding HR services. Technically, it can be said that e-HR is the technical unlocking of
HRIS for all employees of an organization. e- HRM is seen as a way of doing HRM
(Ruël, et. al., 2007). e- HRM is a fully integrated, organization-wide electronic network
of HR related data, information, services, databases, tools, applications, and transactions
that are generally accessible at any time by the employees, managers and HR
professionals (Hussain et.al, 2007).

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The combination of information technology (IT) tools in HRM processes had been named
electronic Human Resources Management (e-HRM). e- HRM is typically defined as the
use of computer systems, interactive electronic media, and telecommunication networks
to carry out the functions of the human resources management department. e- HRM
loosely defined as a way of implementing human resource management (HRM)
strategies, policies and practices in organizations through a conscious and directed
support of, and/or with the full use of, web-technology based channels (Bondarouk and
Ruël ,2004).

1.4 e- HRM (Electronic Human Resource Management):

e- HRM is the planning, implementation and application of information technology for

both networking and supporting at least two individual or collective actors in their shared
performing of HR activities. This concept highlights several crucial aspects of e-HRM.
At the outset, e-HRM utilizes information technology in a twofold manner: First,
technology is necessary to connect usually spatially segregated actors and enable
interactions between them irrespective of their working in the same room or on different
continents, i.e. technology serves as a medium with the aim of connection and
integration. Second, technology supports actors by partially – and sometimes even
completely – substituting for them in executing HR activities (Strohmeier, 2007).

e- HRM could be narrowly defined as the administrative support of the HR function in

organizations by using Internet technology. The composite of databases, computer
applications and hardware and software used to collect, store, manage, deliver, present
and manipulate data for Human Resources. There was a positive relation expected
between reported ease of use, usability, user support and output quality of an IT system
and the attitude towards e- HRM (Voermans and Veldhoven, 2007). Virtual HR is a
network based structure built on partnerships and typically mediated by information
technologies to help the organization acquire, develop, and deploy intellectual capital
(Lepak & Snell, 1998). A Computerized Human Resource Information System (CHRIS)
consists of a fully integrated, organization-wide network of HR related data, information,

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services, databases, tools and transactions. Such a system can be described as e- HR,
meaning the application of conventional, web and voice technologies to improve the HR
administration, transactions and process performance (Kettley and Reiley, 2003).

With e-HRM, managers can access relevant information and data, conduct analyses,
make decisions, and communicate with others - and they can do this without consulting
an HR professional unless they choose to do so. Hours of processing are reduced to
minutes, and much paperwork is avoided by the use of this technology. For the HR
function, e-HRM has the potential to affect both efficiency and effectiveness. Efficiency
can be affected by reducing cycle times for processing paperwork, increasing data
accuracy, and reducing HR staff. Effectiveness can be affected by improving the
capabilities of both managers and employees to make better, timelier decisions. e- HRM
also provides the HR function the opportunity to create new avenues for contributing to
organizational effectiveness through such means as knowledge management and the
creation of intellectual and social capital (Lengnick & Moritz, 2003).

e- HRM and its self-service characteristics can be the cheapest and fastest way to provide
specific HR activities (Lawler and Mohrman, 2003). e- HRM is a web-based solution that
takes benefit of the latest web application technology to transport an online real-time
human resource management solution. It is wide-ranging but easy to use, feature-rich yet
bendable enough to be customized to your specific needs. e- HRM as HR portal is a
vehicle through which HR information and applications can be channeled effectively and
efficiently. Through HR portals, administrative activities could be updated by users and
may have the access to customized and personalized news, resource applications, and e-
commerce options. Through HR portals managers are able to generate reports, examine
employee activities and manage their own activities (Ruta et al., 2005).
e- HRM as an umbrella term covering all possible integration mechanisms and contents
between HRM and Information Technologies aiming at creating value within and across
organizations for targeted employees and management (Bondarouk and Ruël, 2009). e -
HRM also offers customized portal for every individual user. Users, under certain
security level, are able to visit the documents, process daily work and participate in

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related projects. e- HRM is the basis of business collaboration. Besides traditional HRM
functions, e- HRM gives all employees access to information systems via Internet
(Abhilasha, 2011). e- HRM is advance business solution which provides a complete on-
line support in the management of all processes, activities, data and information required
to manage human resources in a modern company (Srivastava, 2010).

The shift from traditional HRM to e-HR practices gives rise to several effects on the role
of HRM. e- HRM, 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). The concept of Electronic Human Resource Management known as
e-HRM means that the adoption of technology in delivering Human Resource HR
practices due to the digital revolution in the world is such a tool that organizations can
employ to manipulate the performance and behavior of the people on whom they rely on
to achieve business success. E-HR refers to conducting human resource transactions
using the internet technology (Kovach et.al. 2002).

Every e-HRM activity can be carried out by means of an intranet. An intranet is defined
as a network based on TCP/IP protocols, an internet belonging to an organization, usually
a corporation, accessible only by the organization's members, employees, or others with
authorization. The intranet’s purpose is to safely share part of an organization's
information or operations with its employees and to facilitate the sharing of this
information. They support many real job functions and can become the primary avenue
that employees use to communicate with people in other groups within the organization
and the way you find the information you need to do your job effectively and easily
(Nielsen, 2000).
The concept of computerized HRIS is derived as an organized method of providing
information about human resources, their functioning, external factors relevant to
managing human resources. Large organizations generally install e-HR because it enables
them to collect store, process and manipulate large amount of data inputs, reduce costs of

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maintaining human resource data, and provide accurate information about human
resources anytime and anywhere (Prasad, 2003). e- HRM technology should not only be
designed to make the HR processes as efficient and cheap as possible, but the e-HRM
technology should be made useable too, to increase the service experience of the
managers and employees. In this way a client service improvement of the HR system can
be achieved. Increasing the efficiency of the HR system and improving service quality
are two e-HRM goals (Keebler and Rhodes, 2002).
e- HRM enables businesses to integrate domestic and global HRM activities and thereby
withdraws possible overlapping HR practices and activities, enables better access to
communicate and attract talents from abroad and provides better insights in cost
reductions of potentially outsourced HRM practices (Harris, 2008; Dowling et al., 1994).
There are many ways through which employers utilize technology to enhance and support
the HR function. Technology is used for recruitment, career planning, performance
management, determination of rewards and recognition, training and development, and
employee relations (Andors, 2005). It would have seen that, global multinational
corporations experienced more of the benefit gained from implementing e-HRM, in terms
of cost reduction and downsizing in comparison to less developed global organizations
(Dolan and Flamma, 2005).

e- HRM supports HR measurement in recruitment, people administration, competence

development, training administration, career and succession planning and performance
management (Jaquenoud, 2005). It alleviates the administrative burden and produces
increased accuracy of results and quality of HR activities. It leads to increased
information responsiveness and more information autonomy. It also provides savings of
time and cost (Strohmeier, 2007). The application of the internet to the Human Resource
function (e-HR) combines two elements, foremost is the use of electronic media whilst
the other is the active participation of employees in the process. These two elements give
the momentum to the technology that helps organizations to lower administration costs,
improve employee communication and satisfaction, and provide real time access to
information and reducing processing time (Forster, 2004).

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Advance applications of e-HRM are such as virtual career centers, integrated personnel
assessments, e-learning platforms, web-based surveys, and on-line performance
appraisals (Jones & Arnold, 2003). Important updated HR information is produced from
these applications for real-time analysis. Sources of HR information include assessment
results, background data, training history, competency profiles, and performance
evaluations (Jaquenoud, 2005). e- HRM is an innovative, lasting and substantial
development in HRM that needs to be further addressed as a real and enduring
phenomenon (Strohmeier, 2007).
e- HRM is a resource saving tool as, if, implemented and used properly, will save costs,
time and money by cutting down the time required for interviews and testing job
applicants. These systems are typically web-enabled, allowing the distribution of data and
processes to managers, employees, applicants and other groups, whether based in the
office, at home or any location with a suitable internet connection. Over 90% of US
organizations claim to be using web-based HR technology to support administrative
operations (Crestone, 2009). e- HRM varies not only in the functions for which it is used,
but also in the degree of sophistication which it involves (Martinsons, 1994).

e- HRM supports many of the HR administration duties and is a suitable tool for routine
tasks. It can improve quality of HR information, as; it is up to date. It allows for
decentralization and standardization of HR tasks across global boundaries. From an
employee’s perspective, it provides, access to more information regarding their own
growth and development and control of their own careers. Line managers will also be
having readily access to required employee information for decision-making. It reduces
human bias and maintains anonymity of staff in evaluation and giving feedback. Finally,
e-HRM allows HR to spend more time on strategic decisions and problem solving.

The core goal of e-HRM is to assist the organization and human resource professionals to
get non-strategic, transactional HR tasks done quicker, more cost-effectively and with
less dependence on HR staff. In doing so, HR can move onto the more tactical HR
interventions by directing the intellectual capital (skills, knowledge and capabilities of
individuals in the organization), developing the social capital (relationships between

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individuals that promote innovation and greater productivity), and with the end goal of
creating new products and services, improving customer service and developing greater
Value (Lengnick and Moritz, 2003).

e- HRM permitted the employee self-service as well as manager self-service. Employees

are able to select electronically preferred benefits and rewards, thereby reducing the
amount of HR administration required to implement these choices. Managers are able to
make decisions about salary changes bonuses and rewarding of other benefits
(Panayotopoulou et al., 2007). In present scenario, with a shortage of critical skills and
individuals taking ownership of their careers, the power has shifted to the employee. e-
HRM is seen as a vital tool to support this paradigm shift. e- HRM suggests improving
HR services toward clients, reducing HR costs and improving the strategic orientation of
the human resource function (Bondarouk and Ruël, 2006).

Electronic Human Resource Management (e-HRM) is like an implementation Support

System (ISS) for HRM in favor of understanding the better skills, creative abilities and
talents of human resources at a very quick time there must be a concept of e- HRM; In
general, e-HRM is an interface through which one can directly communicate or know
about the right talent through some list or records in their personal database without
creating any issue (Srivastava, 2010).

When compared to classical –HRM, e-HRM which includes features based on corporate
Intranets and many other self-service appliances for employees and corporate staff, also
covers the major areas of responsibility of traditional HRM and has constantly gained
more and more attention in corporate environment around the world (Lawler and
Mohrman. 2003). e- HRM is an enabler of transformation of HR and the organization as
main objective rather than the efficiency of HR processes and increased access and
quality of HR data (Reddington and Hyde, 2008). e- HR aims at making information
available to managers and employees at anytime and anywhere.

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Currently, an e-HR system may include enterprise resource planning software (ERP), HR
service centers, interactive voice response, manager and employee portals and web
applications. Thus, a modern e-HR system allows employees to control their own
personal information by updating records and making decisions, and allows managers to
access information and data, conduct analyses, make decisions and communicate with
others, without consulting the HR department (Panayotopoulou et al., 2007).The adoption
of e-HRM is viewed as an attempt by an organization to maximize the strategic
capabilities of the HR function through changing the HR role from that of administrative
expert towards becoming a strategic partner, and enabling the HR function to spend less
time on HR administration(Bondarouk and Ruel, 2013).

It is expected that the HR professionals require additional skills to cope with the change
of focus and technology maintenance responsibilities. The increased responsibilities
require skills of the HR professionals as they should receive proper training and
education to be able to carry the responsibilities of such a role (Ruël et. al.2004, Stanton
and Coovert, 2004). Some researchers accept that e-HRM helps to accomplish the
globalization aims of the organizations (Ruel et al., 2004).The synergy between IT and
HRM helps to establish the shared services centers for HR domain. However the
differences in the laws of different countries can lead to complex situations in introducing
e-HRM. Even supposing globalization brings about many unknown and complex
variables which pose as a major challenge up till now the benefits of e-HRM for global
organizations are substantial. e -HRM helps to create competitive advantage and make
parallel the function more closely with business/corporate strategy and the longer-term
branding and reputational objectives of organizations (Akmanligil and Palvia, 2004).
On the negative side, e-HRM can alienate staff members who may require more personal
support. It may also push away managers from their subordinates, as there is no longer
the need for managers to interact with their staff. Another relevant disadvantage is that, e-
HRM systems are subject to corruption and data losses which would be devastating for an
organization. In this respect, there are technical developments which can mitigate the
risks (Strohmeier, 2007; Bell et. al, 2006; Zhang & Wang, 2006; Wright & Dyer, 2000).
HR managers have witnessed negative effects in moving from a face-to-face to a virtual

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 The Study of e-HRM practices in Service Sector

and/or more distant relationship in HR and people management. It is important to

mention that control and security issues will also be a challenge for paradigm shift of HR
to e-HR (Sareen and Subramanian, 2012).

e- HRM is basically a blockade not a trigger for HRM transformation. IT continues to

impact the HRM function. For a decade now, digital possibilities are challenging the
traditional ways of delivering HRM services within business. The traditional two-level
HRM function based on HR department and middle managers is being questioned for its
stubbornness, stiffness, innovative capacity (Paauwe et.al, 2008).

Table 1: KEY CHNAGES IN HR FUNCTIONS

PRESENT
Strong functional orientation, function
specific career path Standard HR Role
Separated HR organizational entities i.e.
country or regional orientation
Local and Nation specific platforms leading Standardized IT platforms for key HR
to highly heterogeneous HR processes.
Mix of different HR organizational models,
integration of governance and services in
comprehensive HR
Local, unlinked control of HR dimensions
qualitative orientation
FUTURE
Business orientation, rotation between
business and HR , strong performance
orientation
Integrated worldwide HR organization, a
global dynamic network
processes uniform globally
Well defined global business partner and
shared services setup, separation of
government and
service
Global standardized and segment related
HR metrics.

Source: Study of Human Resources Information Systems in Public Sector Banks in India – A Case
Study (David, 2010)

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