Technology's Impact on Human Resource Management Practices

Introduction

By any measure, innovations in technology have affected the manner in which companies of all types and sizes compete in an increasingly competitive marketplace. Perhaps no other discipline, however, has been so profoundly affected by technology as human resource management. The traditional "personnel department" of the mid- to late-20th century has been fundamentally transformed by information and communications technology (ICT). To determine the various impacts of technology on human resource management, this paper provides a review of the relevant scholarly and juried literature concerning traditional HR tasks and responsibilities, and how the introduction of technological innovations has affected these traditional activities. A summary of the research and important findings is 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 — names that 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, "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, organizations must use the best tools available for this purpose — tools that have increasingly been ICT solutions. Many of these solutions have been specifically tailored to the evolving needs of HR professionals, while others have taken advantage of the communications and recruiting opportunities available through Internet-based applications, or both. Taken together, these HR-related information technology systems have collectively become known as "high-performance work systems" (HPWS), which have fundamentally transformed the personnel department of the past into a strategic partner in an increasingly competitive marketplace.

According to Takeuchi, Chen, and Lepak (2009), "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 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 analyses of technology's impact on HRM. 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 HR function with organizational goals, small- to medium-sized enterprises (SMEs) in particular can gain a competitive advantage. 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). 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," Takeuchi et al. 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" (2009, p. 2).

Technological Innovations: Applicant Tracking, Recruitment, and Pre-Employment Assessment

The practicing HR manager has an array of sophisticated technological tools available to help administer HR functions — from before an individual is hired, throughout the individual's career, and even into post-career planning. This start-to-finish aspect of the HRM function begins with applicant tracking systems, which can help reduce the cost of hiring. 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 and where performance measures are quantifiable — such as hourly sales figures, customer service ratings, employment tenure, or termination rates. These are jobs typically referred to as "front-line" or hourly positions. According to Workforce Management, "Given the sheer size of the frontline workforce — nearly 70 percent 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 outcome are taken into account. These tools can help shift the hiring decision process away from simply locating enough warm bodies to fill positions and toward a focus on the quality of new hires — a feature that is especially important for organizations that hire large numbers of people. When managers are freed from elaborate and time-consuming hiring decisions through the use of automated pre-assessment tools, they have more time available to train and coach the workers hired. This reduces employee attrition and improves satisfaction, productivity, and morale — all of which contribute to improved organizational performance and profitability (How science has changed the way businesses hire, 2009).

Technological innovations have not completely replaced traditional recruiting activities, but they have provided a wide array of new methods that HR professionals can use. 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 low-cost or free websites to increase the exposure of their recruiting advertisements, while even modest investments in this area can improve the pre-assessment process and facilitate screening and tracking (Nink & Chieke, 2004).

Organizations can also process larger numbers of resumes and applications using online recruiting tools, making it more likely that they will identify better candidate matches. According to Nink and Chieke, "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" (2004, p. 104). Properly implemented and administered, innovations in technology have been shown to be valuable tools for HR managers — and their value does not stop once an employee is hired, but extends throughout the employee's career.

Conclusion

The research showed that the traditional practice of human resource management has been transformed in fundamental ways by the integration of various ICT-based applications — some specifically developed for HR purposes, others tailored for this use. When used in an integrated fashion, these powerful technological tools provide an impressive array of benefits for companies, most of which directly contribute to organizational productivity and profitability. This is not to say that companies can simply assemble hardware and HRM software and expect benefits to materialize automatically. It is to say, however, that even small companies can take advantage of the ICT solutions developed to facilitate traditional HR management.