Article

Understanding the eHRM Promise NHRD Network Journal

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and Adoption Imperatives © 2019 National HRD
Network, Gurgaon
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DOI: 10.1177/2631454119873204
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Suryanarayan Iyer1

Abstract
Organisations invest in Electronic Human Resource management (eHRM) by buying into its potential
of strategically transforming the Human Resource (HR) function. However, the posited performance
gains are often obstructed by users and organisations alike in adopting the systems towards realisation
of stated outcomes. The article aims to provide an understanding of the promise of eHRM in terms of
the posited goals and outcomes of eHRM. Through a qualitative study with Chief Human Resources
Officers of 15 large organisations, the article also highlights the key factors influencing adoption of
eHRM in organisations.

Keywords
eHRM, operational eHRM, relational eHRM, transformational eHRM, adoption

Introduction
The last 3 decades have seen substantial changes in the landscape around us. The world around us
is moving towards a service-based economy. As stated by Lepak and Snell (1998): ‘Globalization,
Diversity, Information Technology, Intellectual Capital and the like are at once increasing organizational
variation and providing a catalyst for innovative approaches to collaboration and integration’. Change
has always been the only constant from time immemorial. However, change over the last three decades
has been highly accelerated owing to the advent of technology and innovations in communications, in
particular—‘The Internet’. This has made the world a global market place, where everything is becoming
a commodity and where people and their talent are the key differentiators to an organisation’s ability
to service its customer. As Lepak and Snell (1998) further add, ‘Firms compete less on products and
markets and more on competencies, relationships and new ideas’. Therefore, talent management and
innovation takes a front seat in most of the strategic initiatives and boardroom musings and no wonder
Human Resources (HR) is talked about very frequently on being offered a place at the ‘table’. What
this means is that the traditional roles of HR are undergoing a change from administrative functions to
strategic functions which are aligned to the business (Miles & Snow, 1984; Ulrich, 1997). As Haines
and Lafleur (2008) summarise, ‘Given the central function of HR as a protector and developer of human

1
Solution Engineering, Human Capital Management, Oracle, Thane, Maharashtra, India.
Corresponding author:
Suryanarayan Iyer, Solution Engineering, Human Capital Management, Oracle, Thane, Maharashtra 400610, India.
E-mail: surya1968@yahoo.com
2 NHRD Network Journal

assets and intellectual capital, its transformation from an administrative paper handling entity into a
value-adding contributor is critically important’.
The other aspect of change has been the rate of change itself. Ulrich (1997) adds that, ‘in a world of
change, one must have the capacity to adjust midstream, in other words—responsiveness is the key to
survival.’ In the wake of change and external pressures from various quarters, namely competitive
environment, economic upheavals, political uncertainties and the likes, HR not only needs to become
strategic but also flexible, cost-effective and highly customer oriented. Various studies prove that HR can
indeed meet the aforementioned challenges by leveraging information technology (IT) and help HR
transition its focus from administrative tasks to that of a strategic business partner (Bell, Lee, & Yeung,
2006; Shrivastava & Shaw, 2003; Snell, Steuber, & Lepak, 2002).
This IT enablement of HR through its various technological tools and innovations, namely Enterprise
Resource Planning (ERP) software—also known as Human Resources Information System (HRIS), HR
Shared Service Centres, Interactive Voice Response Systems (IVRS), Self-Service, Intranets, Web
Portals, Artificial Intelligence (AI), etc., helps in understanding electronic-Human Resource Management
or in other words, ‘eHRM’ in organisations. eHRM literature posits organisational goals such as cost
reduction through streamlining of HR operations increased service responsiveness through better
delivery of HR services and improving HR’s strategic orientation (Haines & Lafleur, 2008; Lengnick-
Hall & Moritz, 2003; Lepak & Snell, 1998; Ruel, Bondarouk, & Looise, 2004; Wright & Dyer, 2000).
This article is an attempt to provide a basic understanding of the promise of eHRM, its stated goals
and outcomes and highlight the organisational adoption imperatives that will help realise the stated
eHRM goals and outcomes.

Research Method
This article is an outcome of a review of extant literature and qualitative study with Chief Human
Resources Officers (CHROs) of 15 large organisations in India. The author has opted for ‘purposive
sampling’ and identified those CHROs who had prior experience of implementing eHRM in their current
or past organisations. Through a combination of ‘semi-structured’ and ‘structured’ interviews, the author
has elicited opinion on the eHRM goals and outcomes from the CHROs. The author has also requested
their inputs on their implementation experience, specifically to understand what contributed to successful
implementation and subsequent adoption of eHRM in their respective organisations.

Understanding the Promise of eHRM

eHRM has been drawing a lot of research interest in recent times. The growing body of research in this
area is mainly due to three critical developments in the world around us.
First, the rapid proliferation of the internet and its immense capacity to integrate businesses both
internally and externally lends greater significance to the growing interest in eHRM research. In a world
where change is exponential, the key to survival and organisation’s success is cost competitiveness and
service responsiveness towards its customers, suppliers, employees and all other stakeholders alike
(Ulrich, 1997). The internet, with its primary characteristics of exponentially influencing speed, reach
and coverage has been successfully deployed to achieve the requisite responsiveness and radical change
through the e-enablement of the HR function (Martin & Reddington, 2010). eHRM systems are widely
Iyer 3

used by large organisations for attracting job applicants, delivering web-based learning, managing the
talent management processes such as performance management, compensation and benefits and career
and succession planning. These applications, as research posits have helped organisations reduce
administrative costs, increase productivity (reducing transaction times, reduce errors and repeat work;
Guetal & Stone, 2005; Strohmeier, 2007) and increase service responsiveness towards employees.
Additionally, eHRM has been also been optimistically posited to help the HR department to transform
itself from a paper handling entity to a value adding business contributor, namely organisational change
agent, building organisational competencies and knowledge management (Haines & Lafleur, 2008; M.
L. Lengnick-Hall & C. A. Lengnick-Hall, 2006; Lengnick-Hall & Moritz, 2003; Lepak & Snell, 1998;
Martin, Reddington, & Alexander, 2008; Ruel et al., 2004).
Second, the emergence of collaborative technologies (Web 2.0), its proliferation in day-to-day life
and the significant influence it wields across multiple generations on the new standards of work and their
renewed expectations from employees. Collaborative technologies such as wikis, blogs, discussion
boards and social networking have created new opportunities for organisations to ‘socialise’, encourage
collaboration, and lend customers and employees greater ‘voice’ in the organisations. Social networking
in particular, has generated immense research interest due to its transformational value in attracting
talent by reaching out to active and passive job seekers on the social networks such as WhatsApp,
Facebook, LinkedIn, Twitter, Instagram, etc. Usage of informal and formal networks for knowledge
sharing helps link the Human Capital (knowledge, skills and abilities) with the Social Capital (trust,
shared values and behaviours that bind employees together) and, in turn, improve organisational
effectiveness and firm performance (Lengnick-Hall & Moritz, 2003; London & Hall, 2011; Martin,
Reddington, & Kneafsey, 2009; Meister & Willyerd, 2010).
Third, the rise of AI technologies in daily life that ushers in new ways of working in an interconnected
world of networks, devices and data. A Mckinsey report of January 2017 highlights the importance of
automation technologies such as AI and robotics in driving productivity and economic growth. The use
of AI in HR function is optimistically discussed amongst the consultant and HR practitioners fraternity.
Some of the biggest promises being discussed are in the areas of recruiting, onboarding and learning. AI
in HR is currently seen in the context of three areas:

1. Chat bots—or ‘Digital Assistants’ that can engage potential recruits during the selection process
and provide them with a personalised experience. Potential outcomes such as higher applicant rates
and higher offer acceptance are posited through an enriched digital candidate experience. Once a
prospective employee is hired, AI steps in to provide a rich, personalised onboarding experience
and adaptive learning right through to ensure a highly engaged and productive employee.
2. Process bots that help automate routine, repetitive tasks and those that need complex and
simultaneous processing. Running a payroll simultaneously for a large employee base, processing
thousands of CVs to shortlist potential candidates for a job or even running advanced, intelligent
searches to find the right candidate are examples of AI driven automation. These innovations
help drive productivity, accuracy, scale, and above all frees up HR executive’s time for more
employee focused development initiatives.
3. Cognitive innovations that use advanced AI tools like Natural Language Processing (NLP) that
engages in conversation by understanding the context of the communication. These tools learn
continuously from human conversations in the form of text and voice and provide logical
responses. For example, video interviews help finding the right candidate by studying facial
expressions and body language that seek to eliminate human biases during interviewing.
4 NHRD Network Journal

e-HRM: Goals and Outcomes

A review of existing literature in understanding the goals and outcomes of eHRM identifies into three
specific areas: Operational eHRM, Relational eHRM and Transformational eHRM (Lengnick-Hall &
Moritz, 2003; Lepak & Snell, 1998; Martin et al., 2008; Ruel et al., 2004).

Operational eHRM
eHRM can make a significant impact on the operational aspects of HR function by automating the key
processes of the HR function such as employee records, payroll, absence management, time accounting
and employee benefits. This automation results in two distinct advantages; streamlining of processes and
reduction of cost in terms of HR staff optimisation, improved productivity and reduction of manual and
non-value adding activities (Groe, Pyle, & Jamrog, 1996). Managers would be able to access all types of
employee data from a centralised database (single source of truth) and meaningfully query information for
quick decision-making (Lengnick-Hall & Moritz, 2003). For example, paid-time accruals and balances,
benefit coverage and participation, personal records, job or work-related information, time records and
work schedules, international transfers, payroll updates and retirement plans. These processes, which
normally required a lot of paper work and multistage approvals, would now be done through system-
generated workflows, thereby reducing the total elapsed time of transactions.
Operational eHRM therefore, is posited to achieve the ‘cost reduction/efficiency improvement’ goal
of the HR function and realisation of the following outcomes (Gardner, Lepak, & Bartol, 2003; Groe,
Pyle, & Jamrog, 1996; Hawking, Stein, & Foster, 2004; Lengnick-Hall & Moritz, 2003; Lepak & Snell,
1998; Ruel et al., 2004; Ruta, 2005):

1. streamlining of HR processes (e.g., reduced recruiting, selection and training costs, payroll costs,
time administration cost, and benefits administration cost),
2. reduction of ‘HR middlemen’,
3. speed of transactions,
4. reduction of information errors,
5. better control and tracking of human resource actions, and
6. freeing of time for HR personnel due to reduction of administrative work.

Relational eHRM
eHRM can make a significant impact on relational aspects of HR function by increasing the service levels
with the employees, managers and external business partners, trainers, consultants, recruitment agencies,
etc. By implementing employee and manager self-service (the ability to access HR databases over the
internet or intranet and carry out transactions remotely), eHRM provides for considerable improvement
in process time thereby leading to increase in employee productivity. Employees are also able to connect
with other members of the organisation as well as external business partners and perform HR activities
themselves, thereby reducing the response times and improving service levels (Lepak & Snell, 1998).
For example, employee self-service allows employees to manage their own transactions online such as
leave application, request for a transfer, training enrolment, applying for an internal job posting, updating
Iyer 5

the new family status (marriage, birth of a child), updating a new competency acquired, filling up an on-
line performance appraisal and so on. However, manager self-service allows managers’ online approval
of leave requests, timesheets, competencies acquired, and training enrolments or allows managers to
perform employee actions such as training enrolment, promotion requests, award bonuses or salary
increases and so on. With the advent of Web 2.0, firms now have collaboration capabilities and are able
to ‘engage’ employees by using collaboration tools such as wikis, blogs and discussion boards to ‘voice’
their opinion and create a platform ‘to be heard’ in the organisation (Martin et al., 2009).
Relational eHRM therefore, is posited to achieve the ‘Increased Service Responsiveness’ goal of
the HR department and realisation of the following outcomes (Dineen, Ash, & Noe, 2002; Dineen,
Noe, & Wang, 2004; Hawking et al., 2004; Jacobs, 2010; London & Hall, 2011; MacPherson, Elliot,
Harris, & Homan, 2004; Martin et al., 2009; Meister & Willyerd, 2010; Ruta, 2005; Van Rooy,
Alonso, & Fairchild, 2003):

1. employee productivity,
2. employee satisfaction,
3. positive applicant perceptions thereby better applicant attraction rates,
4. lower training cost and higher reach and
5. employee ‘voice’ and ‘openness’.

Transformational eHRM
eHRM can significantly influence the transformational aspects by enabling the HR function to change its
focus from an administrative role to a strategic role, which is aligned to business strategy (Ulrich, 1997).
The role of eHRM in integrating the talent management function (acquiring, retaining and developing
intellectual capital) enhances the realisation of key strategic HR outcomes such as employee productivity,
increased capabilities of human capital in managing change, social climate of trust, shared values and
co-operation, creation of alternative communication structures, increased flow of information and
knowledge exchange (Lengnick-Hall & Moritz, 2003; Lepak & Snell, 1998). Further, with the advent
of Web 2.0 technologies and social media (WhatsApp, Facebook, LinkedIn, Twitter, Instagram, etc.)
organisations have enhanced capabilities to attract passive job seekers and increase knowledge sharing
(Meister & Willyerd, 2010). Social networking and web 2.0 collaboration technologies, in particular, are
posited to help create ‘communities of practice’ (creation of informal groups and networks on the basis
of shared interests and expertise) that helps synergise the human capital (knowledge, skill and abilities)
with the social capital (trust, shared values and behaviours that bind employees together) in order to
improve organisation effectiveness and firm performance (Lengnick-Hall & Moritz, 2003).
Transformational eHRM therefore, is posited to achieve the ‘Improving HR’s strategic orientation’
goal of the HR department and realisation of the following outcomes (Lawler & Mohrman, 2003;
Lengnick-Hall & Moritz, 2003; Lepak & Snell, 1998; London & Hall, 2011; Martin et al., 2009; Wright
& Dyer, 2000):

1. creation of change-ready workforce,

2. trust and shared values,
3. knowledge exchange and
4. open and collaborative learning (shared learning).
6 NHRD Network Journal

Key Imperatives for Technology Adoption

Organisations buy into the potential of eHRM adding strategic value and proceed with investing millions
of dollars towards achieving this objective. However, these performance gains and strategic advantages
are often obstructed by user’s willingness to accept and use the available system (Bowen, 1986; Young,
1984). In the absence of appropriate adoption of eHRM, organisations fail to realise the expected value
of cost savings, improved efficiency, increased effectiveness and responsive employee services (Marler,
2009; Porter, 1985). Extent literature points to four organisational contexts that influence realisation of
the expected strategic outcomes from eHRM. This was further corroborated by the author in a qualitative
study with CHROs of large organisations in India.

Prevalence and Acceptance of High Performance HR Practices

An organisation with a primary administrative focus is less likely to reap the outcomes of transformational
eHRM in comparison to an organisation with an existing strategic HR focus (Bondarouk & Ruel, 2009;
Marler, 2009). The central question here would therefore, change to, ‘Does eHRM adoption make
organisations with a strategic HR focus, more strategic’. In other words, given the pre-requisite of an
organisation having a strategic HR focus, does adoption of eHRM improve its strategic contribution?
Conversely, it will also be pertinent to question, ‘Does eHRM adoption force an organization with a
primary administrative focus to think strategically?’ In other words, ‘do the inherent best practices that
come with eHRM systems influence a change in the HR practices in organizations’. This discussion
would lead to the next focus area of adoption, effect of change and its management.

Willingness of Senior Management in Embracing Change

Several research studies point to management inertia and scepticism as impediments to realisation of
eHRM goals (Hustad & Munkvold, 2005; Shrivastava & Shaw, 2003). In addition to the role change and
its impact on associated professional competencies of the HR professionals, eHRM brings along certain
positive changes, namely transparency, speed and productivity and range of performance expectations
from stakeholders. On the one hand, this calls for a certain level of IT literacy and systems orientation
from the management personnel. In other words, this change calls for an investment on the part of
senior management to learn contemporary technologies and adjust to the new standards of work in the
organisations. The inability to learn leads to perceptions of lack of knowledge about the systems and
processes and in turn continuously leads to perception of loss of managerial control in the minds of the
senior management. On the other hand, the benefits of eHRM implementation namely, ‘transparency’,
‘openness’ and ‘employee voice’ could potentially be viewed by senior management as increasing their
accountability and exposing their decisions to public scrutiny. This in turn could also lead to perceptions
of loss of managerial control in the minds of senior management. As a result, organisations experience
stiff resistance towards adoption of eHRM systems.
As one of the participants stated,

During the eHRM implementation in our organization, especially Integrated Talent Management, we were
faced with a lot of resistance from some of our senior managers due to feelings of loss of control. These were
generally people who thought that too much information and transparency will reduce their importance in the
Iyer 7

organization. We were lucky because the executive sponsor of the eHRM project successfully enforced the
change in spite of initial resistance from some of our senior managers.

Willingness of Users in Adopting eHRM

User acceptance of eHRM needs to be studied from two perspectives. The first perspective relates
to studying the technology adoption factors influencing eHRM adoption. The traditional models of
technology acceptance and diffusion of innovation (Davis, 1989; Moore & Benbasat, 1991; Rogers,
2003; Venkatesh & Davis, 2000; Venkatesh, Morris, Davis, & Davis, 2003) point to two factors central
to perceived usefulness and perceived ease of use that influence successful adoption of eHRM by the
users. Davis (1989) defined ‘perceived usefulness’ as ‘the degree to which a person believes that using a
particular system would enhance his or her job performance’ and ‘perceived ease of use’ as ‘the degree
to which a person believes that using a particular system would be free of effort’.
The second perspective on user adoption is related to transparency and trust towards the eHRM
system. Users would be motivated to use the eHRM system only if they are able to trust the system. This
discussion traces back the point on ‘willingness of senior management in embracing change’. In other
words, if the employees are able to consistently experience the transparency of the eHRM processes and
systems over a period of time, their trust in the system would go up and in turn influence the continued
usage of the eHRM system.
One of the participants took Integrated Talent Management as an example to articulate the pre-
requisites to gain the trust of the users:

Top management should really focus on a comprehensive implementation of the complete process covering
job profiling, competency benchmarking, and linking it to performance monitoring, career progression,
succession planning, training & development and finally rewards & recognition. Regular updates of
competencies after due certifications should be a priority of everybody (employees, managers and top
management). The insight from the system should be transparently used towards creation of development
plans and help employees climb the corporate ladder. In the absence of the above, the trust in the system will
never be achieved. Consequently, it will seriously impact the adoption of the system and thereby nullify its
transformational value.

Professional Competence of HR Executives

The article has already discussed the shift in HR roles from an administrative focus to strategic focus,
namely strategic business partnership, change management and employee advocacy (Ulrich, 1997). The
central questions therefore are, ‘What would be the impact of the HR role change on the professional
competencies of HR executives’ and ‘What would be the impact of professional competence of HR
executives on the realisation of the eHRM outcomes’. Bell et al. (2006) have studied the impact of
eHRM on professional competence of HR executives and identified four specific competencies namely,
knowledge of business, delivery of HR practices, change management and technology expertise that are
critical to successful deployment and adoption of eHRM.
The participants highlighted the following with respect to HR competencies:
8 NHRD Network Journal

Understanding of business is important for HR to ensure the goals of individuals are aligned to the business
goals. eHRM gives them the ability to align goals and view line of sight up the CEO’s goal, however, that
feature of eHRM would be best put to use only if HR has an understanding of business strategy, sectoral
strategy, and the challenges faced by the sector/business.
A critical ingredient to acquire strategic HR skill is the will to contribute strategically. Any amount of HR
digitization will not be able to free time in case HR executives do not have the willingness to learn and
contribute to HR and business strategy.
It is very important for HR to learn data-driven decision making. Our HRMS system has so much of data, but we
are rarely able to use it because we don’t know how to extract data from the system. We also need to learn the ‘do
it yourself’ techniques for converting data into metrics that we want to measure for our daily decision making.

Conclusion
The promise of eHRM is immense for the HR function. To the question of ‘Is HR Strategic?’, they are
being called to deliver on four objectives (Lepak & Snell, 1998):

1. Development of human capital that enable enterprises to be more competitive, maximise

effectiveness and execute business strategies successfully
2. Usher more flexibility in HR programmes, policies and services provided
3. Cost containment
4. Manage employee relationships and provide responsive employee services

In achieving this objective, technology is seen as a major influencer. This confluence of IT and HR, also
known as eHRM is optimistically posited to achieve the above stated strategic HR goals of cost reduction
through streamlining of HR operations increased service responsiveness through better delivery of HR
services and improving HR’s strategic orientation.
In this article, through a detailed literature review, the author has summarised the eHRM goals and
specific outcomes that are realisable through the three types of eHRM—operational, relational and
transformational. The author also states that organisations will realise value in terms of cost reduction,
efficiency, effectiveness and service responsiveness only if the eHRM system is adopted towards
realisation of these stated outcomes. Through a qualitative study with CHROs of 15 organisations, the
article also summarised the organisational adoption imperatives that drive successful realisation of stated
eHRM outcomes.

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship and/or publication of
this article.

Funding
The author received no financial support for the research, authorship and/or publication of this article.

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Author’s Bio-sketch
Suryanarayan Iyer is currently the Senior Director (Solution Engineering—HCM) at Oracle India. Prior
to this, he was the Vice President (Group Human Resources) at The Aditya Birla Group responsible for
their Group wide Digital HR strategy formulation, execution and HR technology change management.
A doctorate from XLRI, Jamshedpur, Masters in Finance and Bachelor’s in Electrical Engineering, he
has over 25 years of work experience spanning Management Consulting and IT Advisory, Digital HR
Transformation & change management, and ERP/HCM Consulting.
He is a visiting faculty in various management schools in India. His research interest includes SHRM
and HR technology adoption.