Background of Study
The use of technology, particularly Information Technology (IT) has brought upon tremendous influence on HR practices nowadays. It has been widely advocated as one of the key drivers for HR‟s role transition from administrative to strategic role.
As mentioned in the book of Martin, Reddington, and Alexander (2008), transactional routine HR tasks are been conducted more efficiently with the introduction of E-HR systems. Moving along with the technology advancement, businesses are converting many human resource tasks into electronic means (E-HR) (Bell, Lee, & Yeung, 2006).
E-HR is a sophisticated system which allows for instant, interactive, and self-service of many HR functions online. An E-HR system can manage and develop human capital more effectively because it can be accessed from virtually anywhere (Bondarouk, Ruel, & van der Heijden, 2009). This is only possible with the introduction of internet in the late-twentieth century.
Studies as early as Kavanagh, Gueutal, and Tannenbaum (1990) had envisioned the future of HR work by stating that "today and in the future, however, the successful HR professional must be part HR generalist, part HR functional specialist, part consultant, part business manager, and must understand and be comfortable using information systems” (P.325). This means that HR work should move from an administrative role to more of a strategic business partner role, while getting comfortable using technology. Specifically, they stated that HR departments will become more involved in strategic planning processes if they are able to provide adequate, accurate and fast information through the use of information technology.
In the past, HR processes are often merely the support of other processes that are
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support, and hence can hardly help realize the strategic potential within Human Resources Management (HRM). The key to unleashing that potential is to go from HRM to E-HRM by implementing E-HR systems (Maier, Laumer, Eckhardt, &
Weitzel, 2013). E-HR systems help enterprises in the improvement of efficiency and reduction of costs associated with HRM. It also facilitates a more strategic role for HR professionals. (Buckley, Minette, Joy, & Michaels, 2004)
Just as enterprise resource planning systems have done for companies, E-HR systems can automate HR activities in the HR department (Bondarouk et al., 2009;
Tansley, Newell, & Williams, 2001). This not only brings efficient HR services for the entire organization but also makes the HR department a strategic player within the firm (Hussain, Wallace, & Cornelius, 2007). Therefore, the use of E-HR systems may allow the HR department to increase its value and contribute to the competitive advantage of the firm (Parry, 2011). Other benefits of the E-HR system also include savings on expensive printing costs, quicker notification and updates of information (Lengnick-Hall & Moritz, 2003).
With all the new technologies being adopted for HR use, human is still the center of HR processes, despite the technology itself, the processes involving human operation cannot be overlooked. Therefore, it is important to find out which processes are indeed suitable to be conducted with the use of technology; also, which factors indeed influence the Behavioral Intention to use E-HR systems. Therefore, this study involves three P‟s, the process, which involves the Process Virtualization Theory; the product, which involves the IT Capability of E-HR systems; the people, which involves the Individual Attributes of the users.
During the adoption of new technology to complete processes, human challenges associated with the change become an important issue. Meaning it is also vital to get to know the process for individuals to accept new technology. Overby (2008)
developed the Process Virtualization Theory, and put forth the “process virtualization requirements” to predict the difficulty for a process to be conducted using technology.
As HR practices are being replaced with their technological counterparts, processes that used to be conducted physically are now being converted into electronic ones. This is known as the process of virtualization (Overby, 2008). The Process Virtualization Theory seeks to find out which processes are more suitable to be conducted using technology, and which are not. It is a good idea to find out whether a certain function or process is suitable for virtualization or not before diving deep into purchasing or developing the technology (Overby, 2008).
In addition to the virtualization requirements of processes, many studies related to the acceptance of technology have pointed out that Individual Attributes are highly influential in the acceptance of new technology for individuals (Voermans & van Veldhoven, 2007). From review of literature, it became evident that Attitude toward Technology and Computer Self-efficacy plays an important role in an individual‟s acceptance of technology.
The whole idea of E-HR was to perform traditional HR practices with their technological counterparts. Therefore, IT‟s capability of representing their physical counterpart becomes an important issue. The more representative or friendly the E-HR system is, the more intention the user has to use E-HR. Also, the better the system helps with the interaction between people online, the more intention the user will have toward the system (Liu, Chen, Sun, Wible, & Kuo, 2010). Therefore, it is believed that the process virtualization requirements, IT Capability, and Individual Attributes play important roles in the acceptance of E-HR systems.
The Net generation, being the age that grew up with all the “toys and tools of the digital age” are generally believed to have a positive attitude toward new technology
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revealed that there is great diversity in the intention to use new technology in this particular group of people. The Net generation comprises of a tremendous number of the current population and workforce; recent estimation includes over 80 million people just in the United States (Schawbel, 2012). Therefore, it would be beneficial to examine the intention of the Net generation to use E-HR technology.
Problem Statement
As mentioned in the previous section, E-HR systems introduce a lot of benefits for the HR professionals, the employees, and the organization itself. However, although E-HR is gaining popularity among organizations, there are still a lot of problems associated with the actual willingness to implement and use the system.
Implementing an online HR system is a complex process that requires firms to manage both significant changes for the employees as well as the technical aspects of implementation. The initial costs of implementing an E-HR system can be very hefty on the organization, involving over tens of thousands of US dollars. Costs associated with implementing an E-HR system may include computer and internet to access the system for every employee, hardware costs for servers, software costs for application programs, training, and maintenance of the system (Lengnick-Hall & Moritz, 2003).
Although the technical installation will become less of a challenge when the financial problems are resolved, human challenges associated with change will almost always exist. During the implementation phase of an E-HR system, employees must become accustomed to a new kind of relationship with the HR, as well as accepting interaction with a computer rather than with a real person (Ruta, 2005).
The study of Yeh and Wei (2012) found that the HR processes in Taiwan that used E-HR systems were mostly compensation related administrative work and employee attendance. Other tasks were conducted with the assistance of Microsoft Office software. As a result, the benefit of E-HR system was not fully fulfilled in
Taiwan. There may be many reasons for this, it may be that the organization did not implement the E-HR processes, or the company did implement the processes, but the employees were not willing to use them. Another study conducted in Europe concluded performance appraisal to be the least used process with E-HR technology with merely 15.1% of use (Strohmeier & Kabst, 2009). Many E-HR software such as Oracle PeopleSoft does provide performance appraisal functions. However, the employees did not want to use the function because they did not see the benefits in using technology or just did not want to learn new things (Panayotopoulou, Vakola, &
Galanaki, 2007). As previously mentioned, the initial costs of implementing an E-HR system is very heavy, it is important to know which processes may have a low chance of success when converted from a physical process to an electronic one.
This study intended to compare three theoretical perspectives that predict the use of E-HR systems by empirically testing the Process Virtualization Theory, IT Capability perspective, and Individual Attributes perspective towards the use of technology. It is important to explore the issue of virtualizing HR processes. For organizations, it would be a better idea to invest in E-HR processes that are more easily virtualized. Without understanding the requirements for process virtualization, organizations may invest in costly technology implementation that employees never use. Also, the technology itself may pose an important effect on the Behavioral Intention to use E-HR technology; for example, how friendly the user interface was designed. It is also vital to know how Individual Attributes toward technology affects the Behavioral Intention of the employees to use E-HR technology. These are all key factors that need to be answered before organizations automate human resource management processes.
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Research Purpose
Extensive study has been conducted on E-HR itself and its effect on organizations and its employees. However, no known literature has explored the phenomenon of the virtualization process of HR and how IT capabilities and Individual Attributes affect actual usage. Therefore, this study attempted to test which HR processes are more suitable to be virtualized while implementing E-HR systems.
Other critical issues of this research include testing how the capabilities of IT affect intention to use and examining the effects of Individual Attributes such as Attitude toward Technology and Computer Self-efficacy on intention to use.
Research Questions
With the purposes stated above, the research questions are developed to address three key predictors of behavior intention to use E-HR, Process Virtualization Requirements, IT Capability, and Individual Attributes. While extensive studies have already been conducted to clarify the pros and cons, antecedents and consequences of E-HR systems and its effect on organizations, no known research has been done on which HR processes are more suitable to be virtualized in the first place. Also, modern advancements in IT have made some HR processes more amendable to be virtualized. This study hopes to clarify the effect of current IT Capability, to examine which IT Capability has more influence on E-HR usage. With human being the center of human resource processes, Individual Attributes in E-HR system use cannot be overlooked. Therefore, Individual Attributes and its effect on Behavioral Intention to use E-HR is another issue of interest in this study. The questions this research seeks to answer are as follows:
1. Which process requirements have more influence on an individual's Behavioral Intention to use a virtualized E-HR system?
2. How does IT Capability affect an individual's Behavioral Intention to use a virtualized E-HR system?
3. How do the Individual Attributes affect an individual's Behavioral Intention to use a virtualized E-HR system?
Definition of Terms Process Virtualizability
Process virtualizability describes how suitable it is for a process to be conducted without physical interaction between people or between people and objects. There are four constructs mentioned in the Process Virtualization Theory, which are Sensory, Relationship, Synchronism, and Identification and Control Requirements. They are said to determine the virtualizability of processes (Overby, 2008).
IT Capability
According to Overby (2008), IT has three capabilities that impact process virtualization. They are Representation, Reach, and Monitoring capabilities, these factors can actually be seen in various literatures and are believed to affect a user‟s intention to use a computer system.
Net Generation
The Net generation is the first generation that uses technology such as e-mail, instant messaging and cell phones since their childhood and adolescence. Both HR professionals and psychologists are just beginning to see the effect of constant
“tethering” to technology has on these people; they are different from the last generation in the way they work, communicate, make decisions and interact (Tyler, 2007).
Electronic Human Resource Systems (E-HR)
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policies and practices in organizations through a conscious and directed support of and/or with the full use of Web-technology-based channels" (Schramm, 2004, p. 3).
Attitude toward Technology
Attitude toward Technology has been described as a potential user's assessment of the desirability of using that technology (Davis, 1989). It is defined as “an individual's overall affective reaction to using a system” (Venkatesh, Morris, Davis, &
Davis, 2003, p. 455).
Computer Self-efficacy
Computer Self-efficacy refers to the user‟s perception of his or her ability to use a computer to accomplish a specific task (Venkatesh & Morris, 2000). Generally speaking, when individuals are confident with their technology ability, they are more likely to accept new technologies.
Behavioral Intention
Ajzen (2002) mentioned Behavioral Intention as an indication of an individual's readiness to perform a given behavior. It is assumed to be an immediate antecedent of behavior. Intentions are believed to capture the motivational factors that influence a behavior. Generally speaking, the stronger the intention to engage in a behavior, the more likely should be its actual performance.