Literature Review on "Impact of Technology on Human Resources"

Literature Review 16 pages (5157 words) Sources: 12

[EXCERPT] . . . .

Technology on Human Resource Management

By any measure, innovations in technology have affected the manner in which companies of all types and sizes compete in an increasingly competitive marketplace, but perhaps no other discipline has been so profoundly affected by technology as human resource management. Indeed, the traditional "personnel department" of the mid- to late-20th century has been fundamentally transformed by information and communications technology. To determine the various impacts of technology on human resource management, this paper provides a review of the relevant juried and scholarly literature concerning traditional human resource tasks and responsibilities and how the introduction of technological innovations have affected these traditional activities. A summary of the research and important findings are presented in the conclusion.

Traditional Human Resource Tasks and Responsibilities

The practice of traditional human resource (HR) management has been transformed by the introduction of technology in so many ways that many authorities have suggested that new names are in order which better reflect the strategic relationship between HR and organizational performance that has emerged as a result. In this regard, Larson and Luthans (2006) report that, "Meeting the challenge of effectively managing human resources requires new thinking and approaches. Importantly, there should be a distinction in both perspective and actual practice between traditional human resource management and the newly emerging human capital management" (p. 75). In sharp contrast to years past, human capital management places a premium on developing the value of its human resources through interactive communication. According to Larson and Luthans, for example, "Human capital management involves more of a dialogue, an interactive communication between the employee and organization" (p. 75). In order to realize the full range of benefits that can accrue to effective human capital management practices, though, organizations must use the best tools that are available for this purpose and these have increasingly been information and communications technologies (ICT). Many of these ICT solutions have been specifically tailored to the evolving needs of human resource professionals, while others have taken advantage of the communications and recruiting opportunities available using Internet-based applications, or both. Taken together, these HR-related information technology systems have collectively become known as "high performance work systems" that have fundamentally transformed the personnel department of the past into a strategic partner in an increasingly competitive marketplace. According to Takeuchi, Chen and Lepak, "High demand and competition for employee and managerial talent has led to increasing interest in understanding the potential benefits of using high-performance work systems (HPWS) as a means to maximize firms' competitive advantage" (p. 1).

Although other terms are frequently applied to these tools, the HPWS designation provides a useful point of departure for further analyses concerning the impact of technology on human resources management because of the scope of practices that are involved. For instance, Takeuchi and her associates note that, "HPWS refer to a group of separate but interconnected HR management practices, including comprehensive recruitment and selection procedures, incentive compensation and performance management systems, and extensive employee involvement and training, which are designed to enhance employee and firm performance outcomes through improving workforce competence, attitudes, and motivation" (2009, p. 2). By using it solutions to strategically align the traditional human resource management function with the goals of the organization, small- to medium-sized enterprises (SMEs) in particular can gain a competitive advantage. In this regard, Takeuchi et al. also point out that, "Research has shown that HPWS can help companies leverage their human capital toward improving firm performance. Indeed, HR systems affect firm performance by creating an organizational environment that elicits employee behaviors and capabilities that contribute to firm competitive advantage" (2009, p. 2). Finally, the impact of technology on human resource management has been to alter the traditional role of the personnel department with organizational goals in ways that have not been possible in the past. In this regard, Takeuchi and her associates conclude that, "The field of strategic HRM research has increasingly recognized the role of employees in the HRM practices-firm performance relationship" (2009, p. 2). In fact, Takeuchi et al. suggest that in order to become truly "strategic," human resource management must embrace technological solutions to better perform its traditional responsibilities. "In line with sociotechnical views of organizations," they note, "several scholars have proposed that the HRM technical system, consisting of HRM strategies and practices, influences organizational outcomes through various social mechanisms, such as climate, social exchanges, and employee attitudes and behaviors" (Takeuchi et al., 2009, p. 2). Taken together, it is clear that technological innovations have a number of important implications for human resource management, and these issues are discussed further below.

Technological Innovations with Implications for Human Resource Management

Applicant Tracking and Pre-Employment Assessments

The practicing human resource manager has an array of sophisticated technological tools available to help better administer HR functions before an individual is ever hired, throughout the individual's career with a firm and even help plan post-career opportunities. This start-to-finish, cradle-to-grave aspect of the HRM function today begins with features such as applicant tracking systems which can help reduce the cost of hiring. For example, according to Trahant and Yearout (2006), "Outsourcing is not always a cost-effective answer to recruiting issues. Sometimes improved infrastructure -- good applicant tracking systems, strong in-house recruiting skills, good interview design, and other factors -- can reduce hiring costs. An organization should look to improve these internal processes first" (p. 57).

Technological innovations have also been developed to improve the pre-employment assessment process. These methods have been shown to be most useful in hiring situations for positions that can be learned in a relatively short period of time (e.g., within a few weeks) and where the performance measures used are quantifiable (i.e., the number of hourly sales, scores on customer service ratings, employment tenure, percentage of positions terminated involuntarily, etc.), jobs that are typically referred to as "front-line" or hourly workers (How science has changed the way businesses hire, 2009). According to the authorities at Workforce Management, "Given the sheer size of the frontline workforce (nearly 70% of all U.S. workers) - and the high churn associated with these positions - even a modest improvement in hiring, retention, and performance could drive hundreds of thousands, even millions of dollars, to an organization's bottom line" (How science has changed the way businesses hire, 2009, p. 2).

Automated pre-assessment tools can improve the effectiveness of hiring decisions, especially when the broad range of variables that can affect a hiring decision outcome are taking into account. The use of these tools can help transform the hiring decision process to locating a sufficient number of warm bodies to fill available positions to a focus on the quality of these new hires, a feature that is especially important for organizations that hire large numbers of people (How science has changed the way businesses hire, 2009). The net effect of these improved hiring decision processes can be impressive. When managers are freed from elaborate and time-consuming hiring decision responsibilities through the use of automated pre-assessment tools, they will have more time available to help train and coach the workers that are hired. This will further reduce employee attrition and will help improve employee satisfaction, productivity and morale in the process, all of which have the potential for contributing to improved organizational performance and profitability. Given the enormous costs associated with new employee recruitment and training, these attributes bear further investigation by any company that is routinely faced with new hiring decisions (How science has changed the way businesses hire, 2009, p. 2).

Recruitment Advertising. Technological innovations have not completely replaced the traditional recruiting activities used by human resource managers, but they have provided a wide array of new methods and approaches that can be used for this purpose. In this regard, Nink and Chieke emphasize that, "Advances in technology have opened the door to new methods, such as the Internet, which is available 24 hours per day, and are becoming more prominent in the human resources professionals' tool kit. Research clearly demonstrates that many more applicants are finding positions through the Internet" (2004, p. 104). Companies of all types and sizes can take advantage of a low-cost or free Web site to increase the exposure of their recruiting advertisements, but even modest investments in this area can reap major rewards in terms of improving the pre-assessment process and facilitate screening and tracking as well (Nink & Chieke, 2004).

Organizations can also process larger numbers of resumes and applications using these online recruiting tools and methods, making the identification of better match-to-fit candidates more likely (Nink & Chieke, 2004). According to these authorities, "This is especially true for younger workers and those more technologically advanced who may be looking for an exciting job opportunity. Systems with various rural facilities also could benefit from expanding the recruiting net" (Nink & Chieke, 2004, p. 104). Properly implemented and administered, then, innovations in technology have been shown to be valuable tools for human resource managers, but their value does not stop once an employee is hired, but… READ MORE

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