The ever-increasing capabilities of human resource information technology (HRIT) and human resource information systems (HRIS) have presented HR departments with an opportunity to generate and analyze vast amounts of employee information that could potentially be used for strategic decision-making purposes and to add value to the HR department and ultimately theentire organization. Research in this area has frequently highlighted that most organizations merely deploy HRIT to automate routine administrative tasks. In general, these studies assume the existence of IT capabilities and sophistication without further investigating what these consist of and how or whether existing IT capabilities could be related to the different uses of HR information, that is, strategic decision-making as opposed to automation. In this article, we introduce and discuss a model that aids the categorization of firms regarding their HRIT capabilities vs. their use of HR information. Furthermore, we will explore the factors that determine the utilization of HR information for strategic decision-making purposes.
As organizations continuously thrive to become more competitive and to reduce operating costs, the pressure on the human resource (HR) function to add value to the organization is mounting. A growing number of organizations are introducing a variety of information and communication technologies (ICT), including interactive voice response (IVR), intranet, self-service HR kiosks, e-HRM (electronic human resource management), and HRIS to achieve just that. The consultation of any practitioner based journal or consultancy reports on that topic will illustrate the range of technologies available, the array of applications, and the plethora of providers of these technologies. We will refer to these HR related ICTs as HRIT throughout the article to simplify matters. Some authors have suggested that the introduction of these types of technologies have presented HR departments with an opportunity to evolve from cost centers into profit centers (Bussler & Davis, 2001; Groe, Pyle, & Jamrong, 1996; Hannon, Jelf, & Brandes, 1996). Others have advocated that IT has the ability to revolutionize the HR function and to transform it into a strategic business unit (Broderick & Boudreau, 1992; Lepak & Snell, 1998). Yet, research has shown that most organizations appear to actuate technology merely to automate routine administrative tasks (Ball, 2001; Groe et al., 1996; Kinnie & Arthurs, 1996; Yeung & Brockbank, 1995).
A host of authors from different disciplines, for instance HR management, strategic management and IT management, have attempted to classify HRIT applications by their purpose, that is, automation vs. strategic decision-making. A number of these classifications are presented in Table 1. Upon observation, it becomes evident that most of these categorizations derive from Anthony’s (1965) three levels of management—operational, managerial, and strategic. On a timescale of decision-making, the functional dimension is considered to be short-term, the managerial to be intermediate and the strategic to be long-term, respectively.Table 1.
HRIT classification summary
|Three Levels of Management (Anthony, 1965)||Operational||Managerial||Strategic|
|Classifications of HRIT Applications in the Literature|
Kavanagh et al. (1990)
||electronic data processing||management information systems||decision support systems|
|Broderick et al. (1992)||transaction processing||expert advice||decision support|
|Beckers et al. (2002)||MIS||DSS||Group DSS||Expert Systems (ES)||Artificial Intelligence|
Key Terms in this Chapter
Information and Communication Technology (ICT): Umbrella term describing the composite of information technologies and communication technologies. Frequently used interchangeably with information technology.
Management Information System (MIS): System aimed at decision making at the middle management level, for instance budgetary information, time and attendance analysis, ad hoc reports, and projections.
Human Resource Information System (HRIS): Specialized HR software applications used to collect, store, analyze, and disseminate HR related information.
Decision Support Systems (DSS): Systems designed to facilitate senior management decision making in the long-term and relate to the overall mission and objectives of an organization and are based on ‘what if’ scenarios.
Enterprise Resource Planning (ERP) System: An ERP system is defined as an enterprise wide system, which fully integrates all functional areas in a business, for example finance, production, marketing, and HRM.