AnExaminationofeHRMPracticescarriedoutbySMEsatAnkleshwarBelt

By
Mr.MehulD.Mehta,AssistantProfessor,
S.R.LuthraInstituteofManagement,Surat.
EMail:mehtamehuld@yahoo.com,Mobile:9409117355

ABSTRACT

Nowadays,HRisnottreatedassingledepartment/function,ithastoperformmultipleroles
becauseofincreasingpressurefromexternalaswellasinternalenvironment.Thetechnology
advancementisthebiggestchallengesforallkindsoforganizationandtheyhaveunderstood
itsimportanceofInformationTechnology.
Enormous Organizations are adopting technology to offer better HR Services to different
functioningofanorganizationandtheysucceedalso.Bylookingtothesuccessstoryofthese
organizations, Small and Medium Scale firms are also trying to incorporate IT with HR to
copeupwiththechangesthatarecomingintheindustry.
The main objective of the study is to examine the adoption of technology in carrying out
different HR Functions by SMEs & to identify the drivers for eHRM. The challenges,
attitudesofemployeestowardseHRM.Toconductthisstudyprimarydatawillbecollected
from Small and Medium Scale firms operating at ankleshwar belt. Field Survey will be
carried out to gather primary data with the help of Structured Questionnaire. The present
studyrevealthatEHRMpracticesarecarriedoutforrecruitment,selection&dataretrieval.
Employees attitude towards EHRM is positive and they also accept that it help and
organizationtoreducecost&providespeed.Lackofcommitment&lackofexpertiseinIT
aremajorbarriertoEHRM.

KEYWORDS:eHRMEmployeesAttitudeDriversandChallengestoeHRMatSMEs

Introduction
With an area of globalization, market structure of Indian economy has changed which
increased competition for business as well as for labour. To make presence in these hyper
turbulent scenario organization of all kind whether MNCs, Big Giants or SMEs have to
produce products and services at cheaper rate than their competitors. To do this, HR
departmenthastoperformthestrategicrole.TransformationhastakenplaceintermsofHow
Human Resources are managed in recent years and these can be achieved by using
informationtechnologyindeliveringHRMPractices.
EHRM can be understood as (planning, implementation) application of IS for both
networking and supporting actors in their shared performing of HR activities (Strohmeier
2007).EHRMwillhelpanorganizationtocontinuouslyflowtheinformationaboutpayroll,
employees personnel data, recruitment & strategic orientation and also reduce the paper
work.

ReviewofLiterature
Electronic Human Resource Management is relatively new concept and it needs proper
understanding otherwise it create a misconception in the mind of HR Professionals.
According to Ruel, Bondarouk & Looise (2004), eHRM is the use of webbased
technologiesfortheimplementationofvariousHRMstrategiesorpractices.(2)
EHRMreferstoconductingHRMtransactionsusingtheInternetandotherIT.Althoughthe
epartisareflectionoftheelectronicmeaningthatithasinebusinessorecommerce,
itreallymeansonlineHR.AneHRsystemaimstoprovideusefulinformationtomanagers
andemployeesanytime,anywhere.Forinstance,itallowsemployeestotakeoversomeofthe
administrative roles of the HR department, by controlling their personal information,
updatingrecordsandkeepingcontroloftimingandagenda.Asformanagers,ithelpsthemto
access information and data, conduct analyses, and make HR related decisions without
consultingtheHRdepartment(1).
EHRM have three drivers / types: operational, which involves strictly administrative
functions (salary and personnel data administration), relational concerned with business
processes(suchasrecruitment,trainingandperformanceappraisal)andtransformational

relatedtostrategichumanresourcesactions,suchasorganizationalchangeandstrategically
reorientation(Snell,Stueber&Lepak,2001Ruel,etal.,2004).(3)
DIMENSIONANDINDICATORSOFEHRM

Variable

Dimension

Indicator
Pagesrelatedtotherecruitmentagencyswebsite

ERecruitment

x UseSpecificwebsitesaimedatrecruitment
x Interactive tools for processing requests from
applicants
Responsibilities & Transparency of the E Selection

ESelection

Process
x Easeofuseandaccesstotheweb
x Fundingmechanismforprocessandsystem
x Usingsatellites,audioandvideomedia,computers,

ElectronicHuman
ResourceManagement

multimediafacilities
EEducation

x Fundingforeducationaltrips,staffaccommodation
costs & lost work time for employees to attend
trainingcourses
x Assessmentprocessthroughawebbasedchannel

EEvaluation

x To recognize the importance of the electronic

evaluationsystem

EReward
System

The organizations ability to collect, store, analyse,

applyanddistributedataandinformationrelatingto
therightsandbenefitselectronically.

BasedonthecurrentliteratureavailableineHRMgivehintsaboutimprovedproductivityas
aresultofadoptionofeHRMPractices.TheliteratureindicatesareductioninHRstaff,cost
savingsandlessadministrativeburdenduetoautomation(Hawkingetal.,2004Rueletal.,
2004citedinStrohmeier,2007).However,thesavingsintimeasaresultofeHRMcannot
bedirectlytranslatedintofinancialbenefits(Dias,2001).Variouscompanieshavelookedfor
anInternetbasedHRfunctiontobringaboutthemuchdesiredcostsavings(Hawkingetal.,
2004).Walker(2001)hintsthatforsuccessoftechnologyintheHRdomainthereneedstobe

a dramatic improvement in the level of service, reducing costs and allowing more time for
higher value tasks. In present scenario, the HR function is expected to provide a strategic
direction to the human capital management in an organization and be a strategic player in
achieving organizational objectives (cited in Hawking, Stein, Foster, 2004 cited in Lepak,
Bartol, Erhardt, 2005). The literature mentions terms like global HRIS, GIS (global
information system) (Akmanligil and Palvia, 2004), IHRM (Sparrow, 2007). The synergy
betweenITandHRMhelpstoestablishthesharedservicescentresforHRdomain.
There are concerns over change management and technology acceptance by the end user
(Reddingtonetal,2005Rueletal,2004,Martinetal.,2006).Changeissituationboundand
often a complex process in which receptive contexts play an important part, especially in
transferring practices across international boundaries or even corporate ones. A change
management model will focus on a complex set of events, activities, linguistic practices,
emotions and reactions that help explain what would be needed for successful change to
occurandwhymostsuchinitiativesarelessthansuccessfulinproducingsustainablechange
(Martin & Beaumont, 2001). Nevertheless, one of the most important factors shaping the
successoftechnologicalchangeisuseracceptance(Fisher&Howell,2004).

Needs/Importanceofthestudy
Various studies had been carried out by different researcher on EHRM, the drivers for E
HRM,challenges.ButvaryfewauthorhastriedtoidentifythepracticesofEHRMCarried
outbySmall&MediumEnterprise.AnkleshwarwhichisconsideredasAsiaLargestGIDC
in terms of units is having more SMEs. This study will help all those SMEs in terms of
advantagewhichcanbegainandwhatarethedifferentareaofHRwhereEHRMpractices
canbeimplementedthatultimatelyproduceefficiency&competitiveadvantages.

StatementofProblem
Why organization exits? What are the objectives of organization? The simple answer is to
create wealth. This objectives can be achieved by generating revenue or profits and to do
these organization must be effective and efficient. HRM with the use of IT can help the
organization. This study has been carried out to find out the reasons of adopting EHRM
practicesinSMEs,alsotofindoutpracticeofEHRM.Organizationwill

Objectives
ToidentifydrivingforcesforEHRMinSMEs.
To examine the extent to which SMEs have adopted technology to carry out HR
functions.
TostudyemployeesattitudetowardsEHRM.
TounderstandthebarriershinderingEHRMpractices.
TosuggestvariousstrategiesforeffectiveimplementationofEHRMatSMEs.

Hypothesis
Ho:HREmployeeshavepositiveattitudetowardsEHRMwithrespecttosavingtime.
H1:HREmployeeshaveNegativeattitudetowardsEHRMwithrespecttosavingtime.

ResearchMethodology

A descriptive research design has been adopted in this study to find out EHRM practices
carried out in SMEs. To collect the primary data, survey method has been adopted and
questionnairewasusedasatoolstoelicitfirsthanddatafromtherespondents.Convenience
random sampling were used to collect the data. 67 employees from different SME units
operating in the field of chemical, pharmaceuticals, pigments, pesticide were taken as
samples. Percentage methods and SPSS had been used to analysis the data and to check
hypothesisfortheresearch.

DataAnalysis
No.
1

DemographicCharacteristics

Respondents

Percentage

43
24

64
36

38
24

57
36

25
32
10

37
48
15

9
30
28

13
45
42

Gender
Male
Female
EducationalQualification
PostGraduateDegree
GraduateDegree

Diploma(ISTD,DiplomainHRM)
WorkExperience
13years
46years
Morethan6years
HRPracticesCarriedout
Traditional(Paperwork)
EHRM/HRIS
CombineApproach

Fromtheabovetableitcanbereviledthat64%ofrespondentsaremale,majorityofthemthatis57
% respondents are Post Graduate followed by 36% Graduate respondents. 48% respondents are
having the experience between 4 6 years which identified that employees working in SMEs are
experienced.Inthelastitcanbeinterpretedthat45%SMEsareusingEHRMpracticestocarryout
HRMfunctions.

EmployeesAttitudetowardsEHRMPractices
KMOandBartlett'sTest
KaiserMeyerOlkinMeasureofSamplingAdequacy.
Approx.ChiSquare
df
Sig.

Bartlett'sTestof
Sphericity

.604
177.369
36
.000

RotatedComponentMatrix
1
itisdifficulttoimplementEHRM
EHRMisuserfriendly

.798
.711

Component
2

EHRMhelpsinincreasingefficiency&productivity
EHRMimprovesclientservice

.705
.586
.873
.654
.627

EHRMhelpsinsavingtimes
EHRMincreasespeedofRecruitment&Selection
itenablebettercommunicationamongstdepartments

.764
.750

EHRMenablequickretrieval&dataprocessing
EHRMprovidessecurityforDatabase

ComponentTransformationMatrix
Component
1
2
3

2
.790
.601
.127

3
.509
.526
.681

In

.343
.603
.721
research of EHRM,

thevariablesconstitutingComponent1are:
x

EHRMisdifficulttoimplement.

Itisuserfriendly.

EHRMhelpsinincreasingefficiency&Productivity.

EHRMimproveClientService.

TheVariablesconstitutingcomponent2are:

EHRMhelpsinsavingtimes.

EHRMincreasespeedofRecruitment&Selection.

EHRMalsofosterbettercommunicationamongstdepartments.

TheVariableconsistingcomponent3are:

EHRMenablequickretrieval&dataprocessing.

EHRMprovidessecurityforDatabase.

The result of Principal Component Analysis reveal that employees attitude towards EHRM
practicesare:
1.EHRMEfficiency.

2.Costsaving&fostercommunicationspeed.
3.Quick&Securedataretrieval&processing.

ONESAMPLETTEST:

Ho:HREmployeeshavepositiveattitudetowardsEHRMwithrespecttosavingtime.
H1:HREmployeeshaveNegativeattitudetowardsEHRMwithrespecttosavingtime.

OneSampleStatistics

EHRMhelpsinsaving
times

Mean

Std.
Deviation

Std.Error
Mean

67

3.7015

.93768

.11456

TheresultofOneSampleTesttableshowthatthereisasignificantdifferencebetweenthe
hypothesizedmeanandthesamplemean,sincetstatisticis2.606andtheassociatedpvalue

OneSampleTest
TestValue=4
95%ConfidenceIntervalofthe
us 0.011 which is less than 0.05, Study
to accept null hypothesis and it can be
Sig. failedMean
Difference
t
Df
(2tailed) Difference
interpretedthatHREmployeeshaveNegativeattitudetowardsEHRMwithrespecttosavingtime.
Lower
Upper
EHRMhelpsin
2.606 66
.011
.29851
.5272
.0698
savingtimes

DriversforEHRM

FromtheabovegraphitcanbeinferredthatImproveDataAccuracy,ReducePaperworkand
ImproveEmploymentServicearethemajordriversforEHRMpracticeinSMEs.
ChallengestoEHRM

Major factors that hinder effectiveness of EHRM Practices at SMEs are Lack of
Commitmentbyemployees,FearofLosingjobsandlackofexpertiseinIT.
x ThemajorareaswhereEHRMPracticesareextendedinHRMFunctionsare:
a)DataMining&Analytics
b)FileMaintains&AbsenceMonitoring
c)PerformanceAppraisal
d)Recruitment&Selections

Conclusion

EHRMpracticesareadoptedbymajorityoftheSMEsinoneoranywaytocarryoutHR
Functionseffectively.EHRMisusedtocarryoutfunctionslikeRecruitment,Selection,and
Data Processing & Retrieval. The major drivers for the EHRM practices are Reduction in
operational cost, quick data processing with enough security measurement. The attitude of
employees towards EHRM is positive for Cost Saving, efficiency and speed. Lack of
Commitment from employees, fear of losing jobs and lack of expertise in IT are major
barrierstotheeffectivenessofEHRM.ToimprovetheefficiencyofEHRM,organisation
canbuildHRPortalthroughwhicheveryoneintheorganisationwillbeconnectedandthey
cansharethenewcontentswiththefacilityofHelpDesktoanswerquestionstoresolve
queriesofusers.

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