Electronic HRM in the Smart Era

Tanya Bondarouk, Huub Ruël, Emma Parry, Tanya Bondarouk, Huub Ruël, Emma Parry

• Publisher: Emerald Publishing Limited
• Year: 2017
• Print ISBN: 9781787143166
• eBook ISBN: 9781787149182
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

The HRM field is entering smart businesses where the human, digital and high-tech dimensions seem to increasingly converge, and HRM needs to anticipate its own smart future. Technological developments and interconnectedness with and through the Internet (often called the "Internet of Things") set new challenges for the HRM function. Smartness enacted by HRM professionals – notions of "smart industries", "smart things" and "smart services" – all put new pressures on strategic HRM. Since the 1990s, organisations have increasingly been introducing electronic Human Resource Management (e-HRM), with the expectation of improving the quality of HRM and increasing its contribution to firm performance. These beliefs originate from ideas about the endless possibilities of information technologies (IT) in facilitating HR practices, and about the infinite capacity of HRM to adopt IT. This book focuses on the progression from e-HRM to digital (d-HRM) – towards smart HRM. It also raises several important questions that businesses and scholars are confronted with: What kind of smart solution can and will HRM offer to meet the expectations of the latest business developments? Can HRM become smart and combine digitisation, automation and a network approach? How do businesses futureproof their HRM in the smart era? What competences do employees need to ensure businesses flourish in smart industries? With rapid technological developments and ever-greater automation and information available, the HRM function needs to focus on non-routine and complex, evidence-based and science-inspired, and creative and value-added professionally demanding tasks.

CHAPTER
1

An Investigation of the Factors Driving the Adoption of Cloud-Based Human Resource Information Systems by Small- and Medium-Sized Businesses

Richard D. Johnson and Kristina Diman

ABSTRACT

Purpose – The purpose of this study was to develop and empirically examine a model of cloud-based human resource information systems (HRIS) adoption by small businesses based on the technology–organization–environment model (Tornatzky & Fleischer, 1990).

Methodology/approach – This study utilized a survey of 41 small- to medium-sized enterprises in the northeastern United States to examine what HR functions were being supported by cloud-based HRIS and the relationship between three technology factors, three organizational factors, and three environmental factors, and their relationship with the adoption of cloud-based HRIS.

Findings – Findings indicated that small businesses are most likely to implement cloud-based HRIS to support day-to-day HR operations. In addition, the findings indicated that top management support (positive), vendor support (positive), and anticipated growth (negative) were each related to organizational adoption of cloud-based HRIS.

Implications – The study illustrates how the adoption of a cloud-based HRIS is motivated by different factors than those underlying the adoption of other types of information systems. Executives and small business owners will need to adapt their strategy when considering cloud-based HRIS compared to other types of systems.

Social implications – Given that small- to medium-sized organizations are the backbone of most global economies, findings from this study can help support society by helping these businesses better understand how to best consider the factors that will support the implementation of cloud-based HRIS.

Originality/value of the chapter – This chapter represents one of the first to empirically validate a model of the factors affecting adoption of cloud-based HRIS by small businesses.

Keywords: Technology adoption; HRIS adoption; small- to medium-sized enterprise; electronic human resource management

1.1. Introduction

Despite the fact that small businesses account for the vast majority of all organizations (Hayes, Chawla, & Kathawala, 2015), only limited research has focused on how they can more effectively manage their human resources (HRs) (Heneman, Tansky, & Camp, 2000). One way that most, if not all, of the larger organizations have utilized to streamline HR operations and improve efficiency is the implementation of human resource information systems (HRIS) (Johnson, Stone, & Lukaszewski, 2016; Ruël, Bondarouk, & Van der Velde, 2007; Stone, Deadrick, Lukaszewski, & Johnson, 2015; Strohmeier, 2007). A HRIS is an information system “used to acquire, store, manipulate, analyze, retrieve, and distribute information regarding an organization’s human resources to support HRM and managerial decisions” (Kavanagh, Thite, & Johnson, 2015, p. 17). For these larger organizations, HRIS are at the core of how they motivate employees, how applicants and employees develop relationships with the them, and how they receive HR services (Johnson, Stone, et al., 2016; Stone & Dulebohn, 2013; Wirtky, Laumer, Eckhardt, & Weitzel, 2016).

Research suggests that small- to medium-sized enterprises (SMEs) have been unable to take advantage of the cost and efficiency savings these systems make possible, and have lagged larger organizations in the extent to which they have adopted these systems (Ball, 2001; CedarCrestone, 2014). According to the US Small Business Administration, an SME is a business that has fewer than 500 employees (although in some industries, it can be as large as 1500 employees) (U.S. Small Business Administration, 2016). There are several reasons that SMEs lag behind their larger counterparts in the adoption of HRIS. These include a lack of financial resources to support its implementation and a lack of organizational readiness for the complexity needed to adopt large-scale, integrated HRIS (Iacovou, Benbasat, & Dexter, 1995; Johnson, Stone, et al., 2016). For this reason, SMEs often use some combination of paper-based forms, Excel spreadsheets, and simple Access databases to manage their HR data. But, as SMEs data needs expand, these approaches can become burdensome and unable to handle the complex reporting needs required for a growing SME.

Recent technological advances in cloud computing are changing the situation for small businesses. With cloud computing, the large capital investments, complex implementations, and expensive hardware and software requirements are reduced relative to traditional on-premise solutions require. (Kavanagh et al., 2015). Rather than designing and customizing software for each organization, cloud vendors offer standardized, non-customizable software that all organizations can configure to their specific needs (Johnson, Stone, et al., 2016). The software is then accessed and delivered over the Internet.

It is appropriate to study the adoption of cloud-based software for several reasons. First, the vast majority of all businesses are small businesses. Recent statistics suggest that SMEs make up over 99% of all businesses in the United States and Europe (Airaksinen, Luomaranta, Alajääskö, & Roodhuijzen, 2016; U.S. Small Business Administration, 2012). Second, the growth of cloud-based HRIS provides small businesses with an alternative to either outsourcing HR or utilizing less efficient methods. Third, HRIS vendors are continuing to look for new markets to sell their products, and ways to better meet the needs of all organizations. This study can help by identifying the important factors SMEs consider when adopting HRIS. Fourth, the factors that drive adoption of information systems by SMEs, may differ between smaller and larger organizations (Chong, Ooi, Lin, & Tang, 2009; Lee, Lin, & Pai, 2005). Finally, unlike other information systems, HR data collection and reporting is more constrained by legal and government regulations (DeSanctis, 1986; Johnson & Gueutal, 2012; Johnson, Stone, et al., 2016). For these reasons we believe that additional research is needed that focuses on the factors that drive decisions by SMEs to adopt cloud-based HRIS. Specifically, this chapter focuses on three key research questions:

1. What are the theories that can be used to address the adoption of cloud-based HRIS by SMEs?
2. What functions are being adopted by SMEs (e.g., recruitment, selection, benefits, etc.)?
3. What are the specific factors that drive adoption decisions?

The remainder of this chapter is organized as follows. First, we discuss the key terms in this chapter. Next, we present a series of theories that have been used to investigate the adoption of information systems, by individuals, SMEs, and large organizations. After this, we outline our theoretical model of choice, the Technology–Organization–Environment model (L. Tornatzky & Fleischer, 1990). We then present the results of an introductory study of SMEs in the United States and the factors that drive their adoption decision. Finally, we discuss the results of our study, and its theoretical and practical implications.

1.2. Background

Although HR was one of the first areas of business to be automated (e.g., payroll), it has often lagged behind other areas of business in its use of technology. Today, though, most large organizations have implemented large-scale, integrated HRIS to support HR operations and the use of employee data (CedarCrestone, 2014). An HRIS is an information system “used to acquire, store, manipulate, analyze, retrieve, and distribute information regarding an organization’s human resources to support HRM and managerial decisions” (Kavanagh et al., 2015, p. 17). HRIS are used to support core HR functions such as recruitment, selection, and benefits, as well as areas such as succession planning, employee scheduling, and engagement. The major organizational goals of implementing an HRIS are to streamline HR operations, make better people decisions, and ultimately to make HR more strategic (Bondarouk, Ruël, & van der Heijden, 2009; Johnson, Thatcher, & Burleson, 2016; Parry & Tyson, 2011; Schalk, Timmerman, & Van den Heuvel, 2013).

There have been a number of terms used to describe the use of technology to support the HR function. These include electronic human resource management (e-HRM) (Gueutal & Falbe, 2005; Strohmeier, 2007), web-based human resources (Ruël, Bondarouk, & Loosie, 2004), and virtual HRM (Lepak & Snell, 1998). In addition, the sixth international e-HRM conference has encouraged researchers to begin studying the impact of digital and smart HRM on the practice of HR (e.g., Van den Heuvel et al., 2016).

Of these terms, the two most commonly utilized are e-HRM and HRIS. In this chapter, we take the perspective of Johnson and colleagues (Johnson, Stone, et al., 2016; Johnson, Thatcher, et al., 2016) that the term HRIS focuses on the technology itself and focuses on the various information systems that organizations have implemented to support the HR function and people-related decisions within the organizations. Conversely, e-HRM reflects technology-enabled HR practices. As Ruël et al. (2004) note, it is “a way of doing HRM” (p. 366). This study focuses on HRIS, specifically the factors driving the adoption of a HRIS by small businesses, rather than how technology can enable different types of HR practices.

1.3. Previous HRIS Adoption Research

It is important for researchers to study not only technology-enabled HR practices (e.g., e-HRM), but also issues surrounding the implementation and use of that technology (e.g., the HRIS). Johnson, Stone et al. (2016) identified a number of studies that have focused on the adoption and use of HRIS by larger organizations. The majority of these studies have been theoretical or case study focused. For example, researchers have reported on the types of technology being utilized by private and public sector organizations to support HR (Ball, 2001; Elliott & Tevavichulada, 1999). Others have focused on the factors that affect the diffusion and use of HRIS (Florkowski & Olivas-Luján, 2006; Marler, Liang, & Dulebohn, 2006). Finally, others have presented case studies on the implementation of a specific HRIS in a specific organization (Olivas-Luján, 2007; Ruël et al., 2007; Tansley, Newell, & Williams, 2001). Despite a growing interest in how and why organizations adopt HRIS, more research is needed that focuses more theoretically and empirically on the specific factors driving organizational-level adoption decisions by SMEs.

1.4. Theories of Information Systems Adoption

Researchers have long been interested in how organizational information systems are adopted, and many different theories have been proposed to explain how and why individuals and organizations adopt information systems. At an individual level, the adoption of an information system is defined as an individual’s “decision to make use of an innovation” (Van Slyke, Belanger, Johnson, & Hightower, 2010, p. 18). In other words, adoption occurs when an individual uses the information system. There are a few theories which have dominated research on individual’s decision to adopt and use new technology. These include the technology acceptance model (Davis, Bagozzi, & Warshaw, 1989), the theory of planned behavior (Azjen, 1991), innovation diffusion theory (Rogers, 1995), and the unified theory of acceptance and use of technology (Venkatesh, Morri...

Table of contents

• Cover
• Title Page
• Chapter 1 An Investigation of the Factors Driving the Adoption of Cloud-Based Human Resource Information Systems by Small- and Medium-Sized Businesses
• Chapter 2 Assessing the Degree of Human Resource Innovation: An Exploratory Analysis of Irish Hotel Corporations
• Chapter 3 HR Analytics: Here to Stay or Short Lived Management Fashion?
• Chapter 4 e-HRM Systems in Support of “Smart” Workforce Management: An Exploratory Case Study of System Success
• Chapter 5 Professional and Non-Professional Social Media as Recruitment Tools: The Impact on Job Seekers’ Attraction and Intention to Apply
• Chapter 6 Aligning the e-HRM and Strategic HRM Capabilities of Manufacturing SMEs: A “Gestalts” Perspective
• Chapter 7 Aiming for Strategic e-HRM: Motives and Consequences of e-HRM Implementation in an MNC
• Chapter 8 e-HRM Challenges: An Australian Perspective☆
• Chapter 9 Smart Industry Research in the Field of HRM: Resetting Job Design as an Example of Upcoming Challenges
• Chapter 10 What about Agency in e-HRM Research?
• Chapter 11 Changing Role of Social Media at Work: Implications for Recruitment and Selection
• Chapter 12 The dis-app-earance of HRM: Impact of Digitization on the HRM Profession
• Index