The effect of Information Technology on Human Resource Management as a strategic tool in an organisation

Alfred Akakpo (Student) Kingston University 2 katie Road Birmingham Telephone: 00441216841163 e-mail: k0943561@kingston.ac.uk

The effect of Information Technology on Human Resource Management as a strategic tool in an organisation

ABSTRACT

This study presents findings of an investigation carried at Marks and Spencer plc, Birmingham branch, to identify the effect of information technology on human resource management as a strategic tool. The investigation also seeks to gain better understanding of the state of use of human resource information system and its impact on human resource functions at Marks and Spencer. A preliminary model was developed and tested through 280 questionnaires, 255 of the questionnaires was received for analysis, which represented 91.1 % response rate. Also, an interview was conducted with the HR manager at Marks and Spencer. The results showed that adopting information technology, also known as the human resource information system helps to speed up work, increase profit, improve training and development, recruitment and update of personal information. However, the findings did not support the use of information technology in absence management and performance appraisal. The relationship between information technology and human resource management also revealed the impact of adopting human resource information system in an organisation reduced paper work and gave accurate human resource information. These results showed that organisations that do not adopt information technology for their human resource operations will not be strategically position and this could affect their competitiveness. Therefore, this study advocates that further research be carried out in other retail organisations to understand the extent and impact of human resource information systems in the retail industry.

ACKNOWLEDGMENT

I would like to express my sincere gratitude to the management of Marks and Spencer, Birmingham branch for giving me the opportunity to carry out this research. Also, I would like to thank the Human Resource Manager who granted me the opportunity to conduct this research, interview her and deploy questionnaires to staffs. I am also deeply indebted to my supervisor Dr Garry Sherwin of Coventry University-Faculty of Engineering and computing whose encouragement and moral support helped me during the period of this research.

INTRODUCTION

Information Technology (IT) is one of the modern technologies that has advanced the operations of businesses in this present age. Developments of network technologies, database systems, web technologies and telecommunication have enhanced business operations globally. Moreover, the present improvement in technology is critical in providing opportunities to streamline and deliver many human resource functions at reduced cost and speed (Hyysalo et al 2007). According to Cedar (2001) who conducted a human resource self service portal survey, revealed that companies that used self service technologies were able to reduce human resource transactions costs by 75 percent in less than two years. Furthermore organisations that used information technology to enhanced human resource functions were found to reduce overall human resource cost by 70 percent (Dzamba 2002). However, a lack of knowledge of organisational development has led to under utilisation of HRIS in most organisations. In addition, resistant to change is also seen as a critical element in changing human resource into a strong business partner. However, the use of HRIS can improve the

way managers and HR practitioners carry out their jobs from administrative to strategic partners (Kosset et al 1994). With many tasks to track and huge amounts of information to process, HR practitioners need to adopt information technology (IT) to help them meet their organisations information needs. Furthermore, as the growth of HRIS increases traditional HR functions such as pay roll administration, selection, recruitment and absence management are done with IT to reduce labour and administrative cost (Lawler and Mohrman 2003). This offers the opportunity for HR managers to be strategic to develop the capacity of change management to create meaningful innovation, problem solving and relationship (Ulrich et al 1989). Moreover, as IT becomes the main platform to deliver HR activities, it has become critical for HR practitioners to demonstrate adequate knowledge in IT to deliver quality HR services to employees (Hunter 1999). In addition, human resource capability is viewed as the most critical asset of corporate IT abilities (Kavanagh et al 1990). Having recognised the importance of HRIS in an organisation, it appears Marks and Spencer, also known as M & S, one of the retail companies in the United Kingdom has not explored the potential of human resource Information System in the management of its human resource base. Despite management at M & S recognising the weak HRIS of the organisation, the rate of adoption is still slow. Therefore, this study investigated the effect of IT on human resource management as a strategic tool at M&S. It is essential for companies to have skilled human resource to provide competitive advantage over their rivals. This is especially so in developed countries such as the UK where there is fierce competition among businesses. However, most firms use Human Resource Information (HRIS) for only administrative and payroll purposes. That is why this study will consider the following research question:

Does the adoption and implementation of information Technology at M & S provide a

competitive and strategic advantage?

This study is justified for many reasons, with increase competition among companies, the dependency on IT as a strategic tool in human resource management is also gaining popularity. However, it has been observed that most companies use IT for only administrative purposes such as payroll and word processing activities (Teo et al 2001). On the other hand, research has also shown that IT can be used as a strategic tool by businesses to gain competitive advantage over competitors (Teo et al 2001).

Since continuous evolving information technologies touch nearly every aspect of human life (Hyysalo et al 2007). The human-technology interaction and the human role in different technologies need constant investigation (Hyysalo et al 2007). With many tasks to perform and to process large amount of information at M & S, the HR department has adopted IT to help them meet the organisations information needs. However, most of these IT functions were used for administrative and payroll routine, these operations have been found not to be strategic. With increase awareness of the potential of IT in HRM, most of the administrative role of HR departments can be performed with HRIS so that HR practitioners and professional can free themselves from administrative routines and become more strategic business partners (Lawler & Mohrman, 2003: Bell et al 2006). In addition, the function of HR is evolving from administrative and employee welfare role to one seen as an essential contributor to business success (Teo et al 2001). Also, companies have realised that employees are the most important assets and would make significant investments in them. Therefore, the objectives of this study are to gain a better understanding of the state of use of HRIS and to investigate the impact of HRIS adoption at M& S. It should further bring needed

support and understanding of the current use of IT in human resource management. This paper is classified into six parts: the first part is the introduction, which gives the basic facts about the effects of IT on human resource management, the research question and objectives of the study. The second part is the literature review; this section provided a detail analysis of literature on information technology and human resource function. It further discussed the adoption, implementation and impact of HRIS on HRM. It further discusses the alignment of business with IT strategy, HR metric and analytics and the conceptual framework and model development for the study. The next section is the methodology; this includes the location and research design and data analysis procedure. The results is the next section, it presented the analysis and interpretation of data. Lastly, it is the discussion and conclusion.

LITERATURE REVIEW

Information Technology (IT) and Human Resource Function

IT and Human Resource Management (HRM) are becoming the most important elements that companies are using as a strategic tool to compete in this global competitive environment (Jenkins and Lloyd, 1985). To take advantage of this union human resource information system (HRIS) has been identified as the tool for HR practitioners to reduce workload and gain competitive advantage over rivals. Moreover, according to Tannenbaum (1990), HRIS is a system that makes it possible to acquire, store, handle, analyse, extract, and distribute relevant information for the human resources of an organisation. He reported that it is a system, which includes data, people, structures, policies and procedures. Moreover, as it is a system dedicated to a variety of potential users, the uses of information must be to facilitate or support the strategic, tactical, and operation of an organisation. Also, Wagel (1990) and

Hussain et al (2007) predicted that HR would play an important role in the decision making process and increase use of IT to gather and analyse HR data will become paramount in the future. Moreover, HRIS will be used in decision making, support planning, manage and control HR function (De Sanctis 1986: Hussain et al 2007). Furthermore, HRIS has the potential to make HR function more competitive and strategic in firms. In addition, Snell et al (2002) reported that HR functions would become more strategic and effective when it is aligned with information technology. They also stated that if IT were aligned with HR functions it would result in lower administrative cost, improve decision-making, enhance employee service and increase productivity (Snell et al 2002). That is why most firms are currently investing so much in HR technologies to be competitive and strategic (Shrivastava and Shaw, 2003). Moreover, Kavanagh et al (1990) and Hussain et al (2007) reported that the functions of HRIS is linked to the functions of HRM such as staffing, training, career development, compensation and performance management. They further stated that HRIS is in three-level, namely Electronic Data Processing (EDP), Information System Management (MIS) and Decision Support System (DSS). On the other hand, HRIS are planned based on modules to help deal with HR information and data effectively and efficiently. Users of HRIS can report or calculate data to enhance decision-making in administration. Before the effect of any HRIS can be felt in an organisation, IT strategy has to be adopted and implemented strategically.

Adoption Phase of HRIS

It is very important to identify the elements that drive companies to adopt IT in HRM. The primary activity in any technology adoption is the needs analysis. According to Kavanagh et al (1990) needs analysis is defined as providing answers to a question. The quality of

information and the time available are two variables used to capture the variance in needs analysis (Shrivastava and Shaw 2003). Conducting needs analysis would enable an organisation to choose the appropriate HRIS solution and make decision on IT infrastructure. Furthermore, Yeung and Brockbank (1999) and Hussain et al (2007) reported that companies adopt either a technology driven or process driven approach when embarking on IT solution. A technological driven approach is suitable for firms where an off-the shelf package can be implemented.

Implementation of HR Technology Even though many Enterprise Resource Planning (ERP) vendors are introducing different web-based HRIS that could be integrated with many applications, many firms are not taking advantage to integrate IT with HR functions. Lepak and Snell (1998) reported that the academic world has not given the needed attention on the impact of IT on HR, however this ascension is questionable. Shrivastava and Shaw (2003) defined Human Resource Technology as the technology that is used to select, attract, hire, maintained and retained talent, and to support work administration. The success of any HRIS implementation is based on the organisations technology and human resource factors (Kavanagh et al 1999: Lippert and Swiercz 2005). Also, identifying what influences HRIS implementation success is very critical since these determinants can rise at any stage of the technology implementation and installation stage (Lippert and Swiercz 2005). Moreover, human factors such as acceptance, training, user adaptation and on-going support are as important as the technical aspects of the implementation process (Lippert and Swiercz 2005. Furthermore, HRIS implementation success may be influenced by different user issues, technological and organisational factors (Lippert and Swiercz 2005). However, the users, technological and organisational issues identified by Lippert and Swiercz (2005) that may influence HRIS implementation were

organisational culture, organisational trust, pooled interdependence, community membership, technology adoption, technology utility, technology usability, socialisation, sensitivity to privacy, and predisposition to trust. Moreover, Shrivastava and Shaw (2003) also showed that the implementation of IT in any organisation is an innovative practice. While Rogers (1983), said the adoption and implementation of innovation is in two stages. The first stage involves activities that determine the decision to adopt an innovation and secondly the activities that lead to the introduction and continuous usage of the innovation (Rogers 1983). On the other hand, Cooper and Zmud (1990) recognised six stages of IT diffusion namely initiation, adoption, adaptation, acceptance, routinisation and infusion. While Shrivastava and Shaw (2003) reported that HR technology installation is in three stages namely: adoption, implementation and institutionalisation. However, the acceptance and adaptation of innovation can be seen as implementation, while infusion and routinisation are seen as detailed stages of institutionalisation (Lee and Runge 2001).

Transformational Impact of IT on HR HRIS have developed from just being an administrative or transactional tool to one used in managing e-learning, self-service portals, flexible rewards systems, shared services, recruitment and selection (Storey 2007). While traditional HR activities like record keeping and processing, payroll and benefits administration have all gone through transformation with the advancement of HRIS to strategic roles to give firms competitive edge (Ball 2001). The use of IT in HRM has increased over the past decade, CIPD (2005) reported that 77% of organisations in the UK use some form HRIS to manage human capital. Similarly, Cranfield School of Management (2005) also found out that 82 % of UK firms use some form of HRIS in their HR function. Moreover, Wyatt (2002) also reported that 70% of European companies

used the internet to process HR services to employees. This shows that most companies are now seeing the importance of HRIS and are adopting it in their organisations as a strategic tool. According to Ensher et al (2002), IT can be used to perform HR activities from performance management, pay and benefits, recruitment, health and safety and work-life balance strategies. Similarly, Martinsons (1996) categorised HRIS into sophisticated and unsophisticated uses. The unsophisticated uses include: employee and absence records, payroll and benefits administration. While the sophisticated uses include: recruitment, HR planning, training, and performance appraisal. One of the important HRIS delivery system is the employee self-service portal (Storey 2007). Self-service portals enable employees to access and maintain HR data about themselves remotely through web access (Storey 2007). In addition, self-service systems can enable employees to manage their yearly holidays, construct their flexible benefits and sacrifice proportions of their pay for higher pensions (Bissell 2004). Moreover, this system can provide management with information to improve managerial effectiveness and position the organisation strategically. Aligning business with IT strategy Companies that have been able to integrate IT and business strategy have developed competitive advantage and created business returns (Bruce 1998). Moreover, aligning IT with business strategies is a very significant tool in quality improvement and mass automation (Bruce 1998). Furthermore, IT integration with business strategy has been found to create cost reduction, barriers to entry, improve supplier efficiency and customer relationship (Bruce 1998: Ensher et al 2002). Moreover, it is critical for the survival and success of firms to integrate IT with business strategy because new roles for IT and business managers are created and may include; interpersonal and cross-functional communications, business problem solvers, project sellers and political and cultural negotiators (Anderson and Weiss 2003). On the other hand, firms that failed to align IT with business strategies have been

found to be inefficient in communicating business strategies to employees and to link budget with strategy (Anderson and Weiss 2003). Also it had been showed that non-alignment of IT and business strategy fails to measure contributions of IT to a business and inability of companies to attract and retain the appropriate skills.

HR Metric and Analytics Most often HR functions gather data and information on efficiency but not on effectiveness (Boudreau and Ramstad, 2003; Boudreau 2004). This is critical because HR departments that gather data and information on effectiveness are seen to be strategic partners. Therefore, for HR function is to be strategic, it will need to be able to collect and measure how human resource decisions affect all areas of the business and vice versa (Boudreau and Ramstad, 2003: Boudreau 2004). However, it has been observed that HR is lacking in providing metrics and analytics that assess HR practices and processes (Lawler and Mohrman 2003). In addition, HR has fallen short of providing analytic models to demonstrate the link between the effectiveness of an organisation and HR practices (Boudreau 2004). Furthermore, Lawler and Mohrman (2003) identified the use of metrics as one of the main characteristics that will make HR to become strategic partner in an organisation. While, Boudreau and Ramstad (2003) differentiated between providing HR measures and providing better logic and analytics in making decision about talent. Therefore, if HR departments can collect different kinds of metrics in order to better understand and evaluate the impact of HR activities that influence business strategy and business performance then they can be strategic partners in an organisation, which can lead to competitive advantage (Boudreau and Ramstad, 2003). Conceptual Framework and Model Development This section discusses the conceptual and model framework used to develop the hypotheses to test the effect of IT on human resource management as a strategic tool at M & S. The model

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development incorporates earlier research work. Ein-Dor and Segev (1978) reported that the use of IT use in an organisation can be categorised into a two-factor model that considers the degree to which tasks have been automated and the level of the resulting Information System used. However, Martinsons (1994) used the above model and reported that unsophisticated applications dominated human resource management and the focus of HRIS applications was to improve efficiency rather than greater effectiveness. He attributed this situation to the fact that there are difficulties in building HRIS and that human resource functions are not strategic. On the other hand, Rogers (2003) developed five factors that influence the adoption of innovation. These include: relative advantage, compatibility, complexity, trialability and observability. While the Technology Acceptance Model (TAM) is an information system model that was developed to show how users accept and use a new technology (Davis 1989). TAM is an IS theory which shows how users come to accept and use a technology (Davis 1989). The model further investigates the perceived ease of use and usefulness of a technology. Given this use and the level of resulting information system theory, the model (Figure 1) was developed with the focus on the following human resource activities: recruitment and selection, training and development, performance appraisal, absence management, update of HR information and performance indicators like increase profit and increase speed of work. Figure 1: Effect of IT on HRM Model IT and Recruitment The use of IT especially the internet in recruitment and selection process is currently attracting more attention. Recruitment, selection, interview and employment are traditional HR functions that are changing at a faster rate (Jenkins and Lloyd, 1985). Therefore, an effective recruitment strategy is important for an organisation to achieve a competitive advantage over its competitors. An organisation may use a mixture of online and traditional

methods of recruitment depending on their resources and strategic recruitment needs. Cedar (2001) reported that the use of IT in recruitment helps to save cost, save time, improves decision making and efficiency of HR departments. According to a survey conducted by the Chartered Institute of Personnel Development (CIPD) in 2005, 77% of organisation responded that they use some form of IT to manage their human resource and 51% reported that they use IT for recruitment and selection purposes (Martin 2005). Furthermore, the main reasons for adopting e-recruitment by organisations are to reduce recruitment cost, advertise vacancies, enhanced employer brand, broaden the selection pool, increase the speed of recruitment time and to develop a personal relationship with the talent candidates (Martin 2005). Moreover, many organisations have identified e-recruitment as cost effective method of attracting new talents to their organisation, however there are some factors that limit the use of e-recruitment (Martin 2005). These may include: Limits the number of applicants as the internet is not the first point of call for all job applicants Is a disadvantage to those who are unable to use IT in their job hunt Prospective applicants can be turn off when websites are not professionally designed

The effect of IT in HRM was considered to be too costly to adopt and implement, but this perception is changing, as the use of computers becomes popular (Martin 2005). On the other hand, Maurer (2002) stated that the reason why most employees may be resistant to change might be due to not understanding why HR processes are being changed, as they prefer faceto-face interaction with human resource department to the automated responses or they lack the necessary technical skills to learn and use new technology. Brockbank (1999) identify six major barriers to adopting IT in HRM; over the expected benefits; morale problems caused by fear of change, underestimation of the complexities involved, political resistance, lack of

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support from top management and technical know how. This leads to the following hypothesis:

H1: The greater the perceived benefits of recruitment and selection in an organisation the more likely IT will be adopted

Training and Development Training and development are seen as the most important tools for introducing change in an organisation with minimal resistance (Venkatesh 1999). Furthermore, Venkatesh (1999) showed that when adequate training is given to staff before implementing a change it will reduce the unfavourable user reactions associated with the introduction of new technologies. Also, training is very important in facilitating organisational change and implementation of new technology, as it can increase employees confidence in their ability to use the system (Argyris 1977). On the other hand, when sufficient training is not given to staff on how to facilitate a new technology, employees will not use the system and this would lead to complete failure. Moreover, Haines and Petit (1997) reported that poor system features and lack of technical support is responsible in low patronage of information systems of employees. Therefore the following hypothesis was put forward to determine the effect of IT on Training and development:

H2: The greater the perceived importance of training and development, the more likely IT will be adopted by an organisation.

Performance Appraisal

Performance appraisal methods date back to the Second World War when it was used as a formal management tool to evaluate work performance and procedures (Archer North and Associates 2006: Posthuma and Campion 2008). Performance appraisal is defined as structured formal interaction between staff and management, it usually occurs annually, semiannually or quarterly, where the performance of an employee is examined and discussed, to identify weakness and strengths as well as opportunities for improvement and skills development (Archer North and Associates 2006; CIPD 2009). Performance appraisal is universal and very important in determining whether to increase staffs wages or decrease it. However, in the absence of performance appraisal, the possibility of judging staff performance will be ad hoc, arbitrarily and informally (Archer North and Associates 2006; CIPD 2009). This could lead to legal, ethical and lack of motivational issues in an organisation. Hence the following hypothesis was put forward:

H3: The greater the perceived benefits of performance appraisal to an organisation, the more likely IT will be adopted.

Absence Management The absence of employees at work is a significant cost to businesses. That is why most organisations have developed varied strategies including the use of information technology to control absence at work. It has been asserted by the Chartered Institute of Personnel Development (CIPD) that absence of employees cost employers an amount of 659 per employee per year and it also cost employers 8.4 working days per staff and this amounts to 3.7 % of working time (CIPD 2007).

Moreover, it has been reported that absenteeism is the largest cost of lost of productivity time

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in businesses and firms (Harvey and Nicholson 1993 p 841). Also, direct and indirect costs have been identified to be associated to absenteeism (Huczynski and Fitzpatrick 1989). The direct cost of absenteeism are acquiring and replacing labour, leading to overtime payments and high levels of staffing. On the other hand, indirect cost of absenteeism have been identified to be intangible but can result in delays in production, loss of customers through bad customer service and disruption to service (ACAS 2005).
The use of IT to manage absence is becoming more available to employers due to developments in technology. Self-service electronic human resource portals are becoming increasingly popular to employers as they act as a single point of call for employees to access their payroll, personal details, pension benefits, obtain policy information and also report absences, instead of allowing the HR department to perform these tasks manually (Wyatt 2001). Furthermore, Wyatt (2001) reported that some employers hope to perform all their HR functions including absence reporting entirely by self-service within the near future. Hence, the following hypothesis was developed:

H4: Does HRIS improves absence reporting in an organisation

Also, organisations are looking at different ways to streamline business operations to enable them to increase speed of work, maximise profit and at the same time, remain competitive. The economic pressures on firms require that businesses should be efficient and ensure that they are strictly controlled (IT News Africa 2009). Since employees are the important assets of an organisation, a major focus has now been placed on resource optimisation to ensure survival (IT News Africa 2009). Hence companies are adopting user management tools that

provide management with the ability to track, view and record every users actions on a network. Therefore the following hypotheses were put forward to determine the effect of IT on increase in profit, speed of work and updating of HR information

H5: HRIS adoption is linked to increase in profit H6: HRIS adoption is related to increase in speed of work H7: Perceived benefits of adopting HRIS improves update of HR information

METHODOLOGY

Marks and Spencer Group plc, is the holding company of the Marks & Spencer Group of companies. It is one of the UKs leading retailers of food, clothing and home products with over 17 million people visiting their stores each week (Annual Report 2008). The company operates in about 41 countries all over the world with the UK as its head quarters and primary market. It employs about 75,000 people (Datamonitor 2008). The company recorded revenues of 9,022 million during the financial year ended March 2008, an increase of 5.1% over 2007 (Datamonitor 2008). The operating profit of the company was 1,211.3 million, an increase of 15.8% over 2007. The net profit was 821.7 million in 2008, an increase of 24.5% over 2007 (Datamonitor 2008).

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Location and research design This study is the product of a dissertation submitted by the author to Coventry University in the UK, in partial fulfilment of the award of MBA with IT degree in 2008. This research was conducted at M&S branch in Birmingham, in the United Kingdom. An exploratory research study method was used to examine the effect of IT on human resource management as a strategic tool. This is because the research seeks to develop an understanding of this phenomenon, which is still in the developmental stages. Also, M & S has been chosen because the researcher had worked part-timely with the company and it was relatively easy to get access to information and interview personnel.

Inductive and deductive approaches were also used to collect data. Deductive approach enabled the development of a hypothesis that examined the delivery of quantitative and qualitative results for data analysis (Saunders et al 2003), while inductive approach was used where the hypothesis developed as a result of the data analysis. On the other hand, Saunders et al (2003) were critical of the deductive approach since it tends to be rigid in its approach, because it does not allow alternative explanation of data.

Interviews and questionnaires were the primary data collection methods used in this study, along with document examination from M & S, review of relevant literature, and informal observations (Strauss and Corbin, 1998). Using multiple data sources allowed for triangulation in data analysis, which provided more evidence to support the developing theory. In addition, the mixed- method approach was adopted to minimise the possibility of personal bias and not to depend on only one method of data collection (Mambula 2002). The

HR manager was interviewed, data collected was transcribed, coded and analysed. The research was conducted between June and September 2008.

Initially, an informal meeting was conducted with the HR manager at M&S, to seek permission and discussed the purpose of the research. The meeting was scheduled as a means of brainstorming sessions to gather preliminary information and ideas to help in the study. Furthermore, an interview was carried out with the HR manager to incorporate the perception, thoughts and likely outcome of the effect of IT at M & S as a strategic tool. The questions asked ranged from recruitment processes and human resource information system at M&S. The responses were recorded, transcribed and analysed. Interview was used as a method of data collection because it offers the interviewer the opportunity to gather in-depth information about the topic under investigation (McNamara 1999). In addition, questions were asked and companys documents were studied. This is because observational method of data collection helps the researcher to reflect on accurate record of what people say and do in real life situations (White 2000). It also offers the opportunity to observe routines at first hand to gain a better knowledge when interpreting data. However, personal bias has to be taken into consideration when using observation to collect research data. Information observed at M&S included; the HRIS used at M&S, e-recruitment process, and software used to perform HR functions.

In addition, open and closed ended questionnaires were developed. The questionnaires were distributed randomly to two hundred and eighty employees of M & S at Birmingham Branch in June 2008. Two hundred and fifty five completed questionnaires were recovered for analysis. Questionnaires were used because it provided an orderly method of data gathering in a systematic manner so that the responses from the questionnaires were categorised,

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quantified and analysed statistically (White 2000).

Data Analysis Procedures

The responses from interview and questionnaires were categorised and relationships developed for ease of analysis. Analysis of the data was carried out using SPSS.

Potential for Bias

Since the authors worked part timely at M&S, during the interview with the HR manager effort was made to avoid asking personal questions known to the author that could result in personal bias. Also the distributions of questionnaires were done randomly across all departments.

RESULTS AND FINDINGS

This section discusses the results and findings from the interview, observations and questionnaires in a concise and logical manner. It further discussed the findings with supporting evidence from literature. The purpose is to highlight on any concerns and trends in the effect of Human Resource Information Systems on HRM at M&S.

Demography analysis

Two hundred and fifty five filled questionnaires were recovered for analysis, which

represented 91.1% of the responses from the work force, out of which 68.6% (175) were males and 31.4 % (80) were females (Table 1). This high level of response may have been due to the fact that the author of this study worked part-timely at M & S, so it provided the opportunity to do regular follow up and collect as many completed questionnaires.

Furthermore, 2.1 % (6) represented the percentage of management who took part in the survey including the HR manager, one commercial manager and four section managers. Even though the number of management staff that took part in the study was small they provided valuable information to the HRIS at M&S.

It was also observed that employees who fell between 20-30 years age group represented the highest number of respondent 42.0 % (107) compared to 1.6 % (4) for employees who were age 60 years and above (Table 2). Research has shown that the age of staffs in an organisation is linked to behavioural and attitudinal difference (Konrad and Hartmann 2002). As older employees tend to receive less development and training, because they did not need it or it is a waste of investment (Kirton & Greene 2000). This might be due to the small number of older employee at M & S. However, since most of the employees fell in the age group 20-30 year, they formed the powerhouse of the organisation.

Table 4: Gender of respondents

Table 4: Age group of Respondents

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Educational Levels of Respondents

The educational levels of respondents were determined to find out whether there is any link with levels of recruitment and impact of IT adoptions. It was observed that 37.6% (96) of respondents were either in secondary school or were secondary school leavers, followed by 28.2% (72) university students or those that have completed university (Table 3). This shows that majority of the employees were in formal education and this is seen as an asset to the companys future staff base. According to Kritikidis (2006) increase in employment comes mainly from a labour force with high educational qualifications. On the other hand, Dumont (2008) argued that the link between the level of education and job opportunities is not straight forward. However, it can be said that with majority of the work force in education or have completed some form of education (Table 3), this is a future asset for the company in terms of strong work force.

Table 4: Educational level?

The effect and adoption of Human Resource Information System (HRIS) Before testing the hypothesis about the effect of HRIS adoption, simple analysis was carried out about the effect of IT on HRM. Respondents were asked about the uses of HRIS in the organisation. It was revealed that the HRIS at M&S was used mainly for payroll administration purposes (89.9%) followed by employee records keeping (86.7%), While 3.7% was recorded for absence management (Table 4). These uses of HRIS were found to be traditional uses; which means the HR department uses the IT system for operational activities

instead for strategic purpose (Johnston and Carrico 1988). In addition, Johnston and Carrico (1988) identified three roles of HRIS in an organisation as traditional, evolving and integrated.

Traditional: HRIS supports operations and not strategy related. It is used mainly for administrative purposes.

Evolving: HRIS is actively used to support the corporate strategy although the competitive potential of HRIS is not considered when defining and developing strategies.

Integrated: HRIS is integral part of strategy and it is used to create new services, change linkages with users and establish new standards of performance within the industry.

Table 4: Uses of HRIS at M&S

Furthermore, the extent of HRIS adoption in an organisation can be used to show the contribution of IT in HRM (Tye and Chau 1995). One of the indicators used to measure the extent of IT adoption in HRM is the number of computers in the organisation (Teo et al 2001). At M&S there were on average 12 or more computers at the Birmingham branch and out of these six was used for HR activities to support over 500 employees while the rest were used for other operations.

To test the hypothesis to determine the effect of HRIS adoption, logistic regression analysis

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was used, because more than 70 % of the sampled respondents reported that they strongly agreed or agreed that M & S should adopt advanced HRIS. A logistic regression model is a non-linear transformation of a linear regression (Maruyama et al 2009). As a logistic regression requires dichotomous independent variables to be identified, to make statistically significant contributions toward the likelihood that a certain event takes place (Maruyama et al 2009).

The logistic regression results are shown in Table 5. The models fit is significant at (p < .05). The hypothesis on the performance appraisal (H4) and absence management (H5) were not significant, hence they were not supported, while recruitment and selection, training and development, increase in profit, update of HR information and increase speed of work were significant and supported the hypothesis (Table 5)

Table 5: Logistic Regression Analysis

Table 6: Effect of IT adoption on HRM

Also, respondents views were measured on a set of scale ranging from strongly agree, agree, unsure, strongly disagree and disagree to determine the effect of HRIS adoption. It was observed that 95.7% of respondents said when HRIS is adopted it would reduced the amount of paper work, increase profit and lead to quick hiring of new talents (Table 6). While 82.7% said it would facilitate more accurate HR information, give up-to-date HR information, lowers HR head count, utilisation of HR skills and HR information would be more streamlined (Table 6).

Recruitment and Selection process at M&S

.

The study confirmed that when HRIS is improved this will lead to effective recruitment and selection process (Table 5). This was consistent with Rozelle and Landis (2002) and HR Portal (2003), that when IT is adopted for recruitment it will lead to effective recruitment process, wider accessibility and cost saving. The use of IT especially the internet in

recruitment is currently attracting more attention. Moreover recruitment, selection, interview and employment are the traditional HR functions that are changing at a faster rate (Jenkins and Lloyd, 1985). The HRIS identified at M&S for recruitment were the companys website and the use of telephone. The companys job vacancies are advertised on the companys website, sometimes in other print media where applicants can view detailed job description, job specification, information about the organisation and apply online. Company documents and website reviewed showed that the recruitment process at M&S is linked to the different recruitment routes in the organisation. Interview with the HR manager and company documents revealed that there are nine recruitment routes and roles in M&S. They are

o Customer Assistant roles o Section management role o Store management roles o Head office roles o Shared services roles o Graduate recruitment o Trainee Management Scheme o Business Placement o BP connect simply foods roles

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Customer Assistant Role The recruitment process for customer assistants at M&S involves initial filling of online application form, followed by competency assessment to be taken on the companys website or by phone interview. When a candidate is successfully, the candidate is invited for an instore interview, and subsequently hired when successfully.

Management Roles The management roles include; Shared Service, Section and Store management roles. The recruitment process for these roles may take the form of talent screening, when successful an applicant is invited for an in store assessment, hired if successful. On the other hand most of the store management roles involve the promotion of commercial managers who have gained adequate experience to manage stores.

Graduate Recruitment Role

The recruitment process for graduates includes; graduate recruitment roles, trainee management schemes and business placement programmes. The process of recruitment for these roles involves initial online application form submission, when a candidate is successful, invited to undertake a competency test, which involves a verbal and numeric skills test on line. Successful candidates are invited into an in house interview involving different tasks, when successful applicants are invited to the company stores and head office departments depending on the role applied for induction and training.

Recruitment Strategies

Company documents and interview with the HR manager revealed that the recruitment strategies adopted by M&S include; job redesign, development of hidden talents, use of inhouse talents and external talent recruitment.

Job Redesign

This is when recruitment is conducted internally by promoting an employee from one department or job role to another job role or department. M&S had used this recruitment strategy to fill in positions in the organisation. The benefit of this process is cost saving, referencing checks are done easily and identification of potential talents within the organisation (Izzo and Withers 2002).

Development of Hidden Talent One of the recruitment strategies identified at M&S is the development of hidden talents of existing employees. The company designs training programmes for staff to provide them the opportunity to bring out talents hitherto not realised for managerial roles. Appraisals were carried out once a year to identify staffs with talents for jobs to be reassigned.

In-house Talents Talent is seen as the ability of an individual with gifted abilities to do something. In-house talent are talents identified within staff and used as a strategic advantage in the organisation. 27

Employees with special talents are identified and job roles are reassigned to maximise the potential of employees. External Talent Recruitment It was also observed that M&S employs experienced and skilled talents from the external job market who may bring in new and fresh ideas to the organisation

Training and Development

The study showed that there was strong support for the use of IT in training and development (H2) (Table 5). Training and development are important tools for introducing change with minimal resistance in an organisation (Venkatesh 1999). Furthermore, Venkatesh (1999) showed that when adequate training is given to staff before implementing a change it will reduce the unfavourable user reactions associated with the introduction of new technologies. In addition, training is very important in facilitating organisational change, increase productivity and quality of work, reduce staff turnover and absenteeism and it can increase employees confidence in their ability to use the system (Argyris 1977). On the other hand, when sufficient training is not given to staff on how to facilitate a new technology, employees will not use the system and this would lead to complete failure. Moreover, it was observed that training is one of the important HR functions that an organisation uses to update its employees about new developments. This is because training helps to improve skills and knowledge in employees.

Absence Management

Surprisingly, there was no significant difference in absence reporting with HRIS adoption
(H3) (Table 5). However, it was revealed that the level of absence by employees cost

M&S 1.5million to management the situation in the past 12 months (April 2007 to April 2008). The absence target set for the period was 3.63% however the absence level achieved over the same period was 4.68%. The setting of absence target supports CIPD (2007) report that most organisations set absence targets and monitor the cost of absence at work. This can be more effective when the company adopts HRIS in monitoring absenteeism.

Performance Appraisal

Similarly, performance appraisal did not show any significant part in the adoption of HRIS (H4) (Table 5). However, it was observed that performance appraisal is done once in a year at M & S, where all staffs are informed of the date and time. It is normally carried out by the section managers and not by HR staff. The performance appraisal reviews the staff performance and past behaviour as a basis for future improvements (Posthuma and Campion 2008: CIPD 2009). Unlike a good appraisal where the staff is allowed to do most of the talking with the appraiser listening and develops scope for analysis and reflection (CIPD 2009), at M & S the section managers read a list of items that they require the staff member to have achieved, most often the appraisal focuses on a list of failures and what have been achieved, most often the whole process is controlled by the section manager.

Furthermore, respondents were asked whether they are kept updated about any changes made to the IT system. It was showed that 69.4% (177) of respondents said they were not informed of any HRIS system updates while 26.3% (67) said they were kept updated. Those who were not kept updated may be due to the fact that they do not use the HRIS for their day-to-day job

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operations. However, it has been observed that change in any organisation is inevitable, but to make any change effective it would be appropriate to communicate clearly the purpose of the change to staff and develop working parties (Lewis 1952). This is because it would help management to have administrative support of employees and staff would feel they are being involved in the decision making process. As it can be seen, 69.4% of respondents at M&S claimed they were not informed of any updates to the IT system. This could lead to employees not understanding the purpose of the change or would not use the IT system introduced.

The studies also supported the hypotheses that, the adoption of HRIS led to increase in profit and speed of work (Table 5). This is consistent with (Bradford et al 2006), that the current technological advancement provides the opportunity for companies to streamline and deliver many human resource functions and practices at reduced cost, maximise profit and speed. Similarly, adoption of HRIS led to improvements in update of HR information.

Age of HRIS at M&S

The age of HRIS in an organisation helps to provide information on the extent of adoption of IT in HRM. During the interview with the HR manager, it was revealed that the age of the HRIS at M&S were over twenty years (20) that shows that the IT system used for HRM were old and they were built in-house. The HR manager in his comments described the system as antiquated and slow. The age of any HRIS is said to be linked to how long an organisation had been using its IT in performing HR functions. This has been found to have a strong effect on the success of IT in an organisation (Tye and Chau, 1995). Furthermore, the Birmingham

branch where this study was carried out is classified as one of the major stores, but had 12 or more computers for a staff of over 500, this shows the ratio of computers to staff at 1:42. On the other hand, the points of sale (POS) facilities were updated in 2008 to facilitate the retail business. .

HRIS Opportunities at M&S

The opportunity of adopting HRIS in an organisation are numerous, to investigate the HRIS opportunities at M&S, respondents were asked to give their views on a scale of 1-5, 1meaning strongly agree and 5- strongly disagree. It was showed that 61.2% (156) (Table 7) of the respondents said they strongly agree that M&S should introduce self-service HRIS to facilitate speed of work, update personal information, training, functionality, absence management and share/health/pension information. While 8.6% (22) strongly disagreed because they felt the system would be abused (Table 7). That was why Kosset et al (1994) reported that the automation of HR functions will enable HR professionals to deal with complex situations and make faster decisions to cope with the external pressures facing organisations and to automate routine work such as headcount and time savings. These changes will enable HR staff to free themselves up to be involved in business planning and decision support.

Table 7: Employee responses about introducing a self-service HRIS

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It was further revealed that 25.9% (66) of respondents would like to update personal information using HRIS and 4.3% (8) would like to perform appraisals, assess new starter information and overtime on their own (Table 8).

Table 8: Processes staff would use IT to do on their own without the assistance of HR department

Main Concerns about current IT system for HR department

Employees were asked about their concerns about the HRIS system at M&S, it was showed that 30.2% (77) do not use the HRIS for their job role or have no idea of the HRIS system in the organisation, so they could not contribute on the IT system while 22.8% (58) responded that the system is old and slow (Table 9), this was reaffirmed by the HR manager who said the system is old and antiquated.

Table 9: What are the main concerns with the current IT systems you use for HR

Discussion

This section would consider a detail discussions on the results and findings of the effect of Human Resource Information System (HRIS) at M&S as a strategic tool. The results of the study revealed interesting development as to the effect of IT on HRM adoption at M & S. The Extent of HRIS Adoption at M&S The effect of Human Resource Information System (HRIS) in an organisation has a relationship to the contribution of IT in HRM. It was observed that HRIS at M&S is used for basic administrative work like payroll administration (89.7%), employee record keeping (86.7%) and recruitment (76.6%)(Table 4). However, it had been showed that good information management can reduce the cost of HR operations if the right IT facilities and infrastructure are used for HRM (Dzamba 2002). Furthermore, research has showed that HR departments can achieve substantial cost savings by cutting down on wastage through timely availability of information through adopting HRIS in HRM (Dzamba 2002). Moreover, it had been observed that HR function is currently seen as one of the most important functions in developing and implementing an HRIS strategy (Yeung and Berman 1997). However, some business issues were identified at M&S that were influencing the adoption of advanced HRIS, this include: constant government regulatory and legal changes in benefit and pensions, tax and labour laws, complex and inflexible company policies and aging and payroll driven software. In addition, other business issues influencing the adoption of HRIS are lack of integration and limited reporting capability from junior staff to senior management. On the other hand, the growing demand for HR information for making decision are some of the issues prompting M&S to seek and integrate HRIS so that employees can share and manage personal and business information. However, the current HRIS cannot meet these demands because the system is old, slow and outdated.

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Effect of adoption of IT in HRM To test for the model developed a number tests were carried out using regression analysis (Table 5). Results of the study confirmed that the use of IT in HRM will provide effective recruitment process (H1). Advances in information technology have necessitated the need to restructure job roles and modify the selection, recruitment, training and appraisal techniques of organisations (Teo et al 2001). Moreover, HRIS is a system that companies are using as a strategic tool to compete in their HR strategic methods (Jenkins and Lloyd, 1985). Therefore an effective recruitment strategy is important for an organisation to achieve a competitive advantage over its competitors. Moreover, organisations may use a mixture of online and traditional methods of recruitment depending on their resources and strategic recruitment needs. In addition, Cedar (2001) reported that the use of IT in recruitment helps to save cost, save time, improves decision making and efficiency of HR departments.

Furthermore, the results of the study show that there was a strong support for (H 2): Training and development are the important factors in the adoption of HRIS. This is consistent with Bernthal (2007) and Kirkpatrick (1998), that when HR practitioners identify the importance of training and development this should eventually lead to positive return and improve staff performance and business operation. Furthermore, Bernthal (2007) reported that training and development helps management to gather feedback for ongoing improvement in an organisation, to demonstrate the relationship between HR activities and companys strategy and to meet targets set by professionals. In addition, training and development is carried out when performance appraisal reveals that an employee needs further performance improvement (Kirkpatrick 1998). So, when IT is adopted in performance appraisal it enables job satisfaction, increase employee motivation and reduced employee turnover (Kirkpatrick

1998).

Even though the results did not support the use of HRIS in absence management (Table 5), absence at work is a significant cost to businesses. Report released by Chartered Institute of Personnel Development (CIPD) showed that the absence of employees cost employers 659 per employee per year and it also cost employers 8.4 working days per member of staff and this represents 3.7% of working time (CIPD 2007). Nevertheless, the use of IT to manage
absence is becoming more available to employers due to developments in technology. Self-service Electronic Human Resource portals are becoming increasingly popular to employers as they act as a single point of call for employees to report absence, access payroll, personal details, pension benefits and obtain policy information, instead of allowing the HR department to perform these tasks manually (Wyatt 2001). The study revealed that the absence target set

by M &S for the financial year (April 2007- April 2008) was 3.63% however the company was able to achieved an absence level of 4.68%. This supports the study carried out by CIPD (2007) that when organisations set absence target it will help them to monitor the cost of absence at work.

The study did not support the hypothesis that when HRIS is adopted it will result in effective performance appraisal (H4) (Table 5). Performance appraisal is universal and very important HR function in determining whether to develop further training for employees or increase wages (CIPD 2009). However, in the absence of performance appraisal, the possibility of judging staff performance will be ad hoc, arbitrarily and informally (Archer North and Associates 2006; CIPD 2009). This could lead to legal, ethical and lack of motivational issues in an organisation. So, for M&S to be strategically positioned in its HRIS and compete

35

healthy in the retail industry it would be appropriate to adopt advance technology in HRIS to stream line HR functions with business operations. The results support the hypothesis that the adoption of HRIS will increase profit (H 5) (Table 5). This is consistent with Snell et al (2002), that when HRIS were aligned with HR functions it would result in lower administrative cost, increase profit, improve decisionmaking, enhance employee service and increase productivity (Snell et al 2002). On the other hand firms that failed to align IT with business strategies have been found to be inefficient in communicating business strategies to employees and to link budget with strategy (Anderson and Weiss 2003).

Also, the study confirmed that when HRIS is adopted it will help to speed up work (H6) (Table 5). This is consistent with Bradford et al (2006), that current technological advancement provides the opportunity to streamline and deliver many human resource functions and practices at reduced cost and high speed (Bradford et al 2006). Furthermore, it was revealed that 61.2% of the respondents strongly agree that M&S should introduce selfservice HRIS to speed up work, update personal information, training, functionality, absence management and share/health/pension information (Table 6 and Table 8). Similarly, Cedar (2001) showed that companies that used self-service technologies could reduce human resource transactions costs by 75 % in less than two years. Furthermore, organisations that used information technology to enhanced human resource function were found to reduce overall human resource cost by 70 % (Dzamba 2002). It was also observed that the use of technology has resulted in the improvement in quality and time management of HR services and organisational efficiency (Dzamba 2002). Furthermore, as the use of information technology (IT) in Human Resource Management increases, administrative routines of Human Resource Management (HRM) can be done by HRIS to free HR practitioners from

administrative routines and become more strategic in planning HR practices (Brock-bank 1999). Similarly, Dzamba (2002), stated that the use of information technology in HR operations would result in the improvement in quality and time management of HR services and organisational efficiency (Dzamba 2002). In addition, Yeung and Brockbank (1995) identified three main factors that drive organisations to seek IT adoption and to drive HR functions as: the delivering of high quality services, cultural change and cost reduction. Furthermore, Wagel (1990) predicted that HR would play an important role in the decision making process and increase use of IT to gather and analyse HR data will become paramount and strategic in the future. Moreover, organisations have realised that employees are the most important assets and would make significant investments in them to enhance their competitiveness (Teo et al 2001). Although a number of important findings regarding the effect of IT on HRM as a strategic tool were identified, the study had the following limitations:

the study did not try to identify the risk associated with the adoption of advanced HRIS

Another limitation is, the study was carried out at only one branch of M & S because of time constrain. It would be appropriate if data was gathered from other branches to develop a comparative study

CONCLUSION

This study investigated the effect of IT on HRM at Marks and Spencer, Birmingham, as a strategic tool. It was revealed that M&S has an old and slow HRIS. It has been shown that the

37

age of the HRIS in an organisation helps to provide information on the extent of the effect of IT on HRM, at M&S the HRIS were over 20 years, slow and ineffective. Furthermore, it was observed that the HRIS at M&S is used mainly for administrative roles like payroll administration and record keeping, however this functions have been found not to be strategic. Even though the organisation have identified the importance of introducing an advance HRIS to gain strategic advantage, it is slow in adopting this changes. This confirms the work of (Teo et al 2001) who stated that most organisations use their HRIS for administrative purposes rather than for strategic roles like successive planning. In addition, it has been observed that companies that have aligned IT capabilities with HRM developed competitive advantage compared to companies that did not. On the other hand, it has been argued that it is not the IT applications of an organisation that give competitive edge but the ability to develop capabilities and apply IT to HRM and business activities that promotes competitive advantage (Barney 1991). The study confirmed that when HRIS is adopted it will enable effective recruitment and selection process, improve training and development, increase profit and speed of work. On the other hand, the study did not support the improvements in performance appraisal and absence management when HRIS is adopted. Furthermore, it was revealed that most of the respondents strongly agreed that M&S should introduce a self-service portal for updating information and absence reporting to speed up operations and save time. This is because when IT is used as a competitive tool and aligned with an organisations strategic business goal the organisation can gain competitive advantage over its competitors by delivery quick service, reduce cost and reduce paper work. The ability of an organisation to do so depends upon the strength of the human resources and HRIS. Also, it was observed that the effect of HRIS helped to reduce the amount of paper work, increased profit and led to quick hiring of new talents. On the other hand, the study did not consider other web-based HRIS and interactive voice response kiosk, however, the opportunities

available for M&S to develop its HRIS were numerous and included: introducing a selfservice portal for staff to update personal date, report absence and conduct training and performance appraisals. It has also been shown that the use of IT in recruitment in recent times has increased tremendously because there are many benefits to be derived when IT is used for selection and recruitment processes compared to traditional methods of recruitment (CIPD 2005). These benefits included; reduction in recruitment cost, advertise vacancies online, enhanced employer brand, broaden the selection pool, speed the recruitment time and to develop a personal relationship with the talent candidates (Martin 2005). Future research can be conducted to develop comparison between the adoption of HRIS in large and Small and Medium Scale Enterprise (SME). In addition, the study can be replicated in other retail organisation at a different time to draw any parallel and similarities.

AUTHOR I was an MBA/information Technology student at Coventry University. I have just got admission to pursue a PhD degree at Kingston University in the UK. My research interest includes organisational behaviour, Impact of human resource information system on human resource management and organisational behaviour in small and medium scale enterprise. e-mail: akakpoa@coventry.ac.uk

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