A STUDY ON ELECTRONIC HUMAN

RESOURCE MANAGEMENT (e-HRM)

[A Project Report Submitted in Partial Fulfillment of the Degree of Master of

Business Administration (MBA)]

Submitted By-
Sikha Rani Hazarika
Student ID- MBA4ST0906033
MBA 4th Trimester

Under the Guidance of Academic Advisor-

Mr. Bikash Kalita

Don Bosco Institute of Management

Kharguli, Guwahati
 TABLE OF CONTENTS
Preface
Executive Summary
PREFACE-
EXECUTIVE SUMMARY
 CHAPTER 1
INTRODUCTION

Competitive business environments have compelled the organizations to think

speedily to innovate and excel for their survival. Technology advancement is
one of the powerful driving forces. It has reshaped the way we communicate,
live, work, and also the way business is conducted. Corporations need to shift
from physical technology to information technology, from capital centred
economy to human centred economy, and further from conflict to cooperative
working relationships. Since many years now, Information Technologies (IT)
seems to be affecting individuals and organizations’ communication and
behaviors. The change in information technology is faster than any other
processes in the organization. One of the major hurdles, which the HR
department needs to cross, is the changing technological environment. The IT
possibilities for HRM are endless; in principal all HR processes can be
supported by IT. Computers have simplified the task of analyzing vast amounts
of data and they can be invaluable aids in HR management, from payroll
processing to record retention. With computer hardware, software and data
bases, organizations can keep records and information better as well as retrieve
them with greater ease. E-HRM is the relatively new term for this IT supported
HRM, especially through the use of web technology. E-HRM is the new field of
technology that is widely spreading in organizations around the world. It aims
at transforming the HR functions into one that is paperless, more flexible, and
resource efficient. With the aid of IT and the state-of- art e-commerce, HRM
has become more effective through the use of e-HRM technologies. e- HRM has
the potential to change the way traditional HRM functions are performed. For
e.g. in the analysis and design of work, employees in geographically dispersed
locations can work together in virtual teams using videos, email, etc. under the
recruitment function, job openings can be posted online, and candidates can
apply for jobs online. On compensation and benefits issues, e-HRM will make it
easy for employees to review salary and bonus information and seek
information about bonus plans.
 CHAPTER -2
LITERATURE REVIEW

2.1 HUMAN RESOURCE MANAGEMENT-

Human resource management is an approach to managing the human

resource of organizations, which recognizes the importance of an organization’s
human resource for contributing to its goals and objectives and the utilization
of several functions and activities to ensure that they are used effectively and
fairly for the benefit of the organization, and the employees. In simple words,
HRM means employing people, developing their capacities, utilizing,
maintaining and compensating their services in tune with the job and
organizational requirement.

“Human Resource Management can be defined as a strategic and

coherent approach to the management of an organization’s most valued assets-
the people working there who individually and collectively contribute to the
achievement of its objectives for sustainable competitive advantage.” –
(Michael Armstrong and Angela Baron)

HRM encompasses those activities designed to provide, motivate and

coordinate the human resource of an organization. The overall purpose of HRM
is to ensure that the organization is able to achieve success through people.
The human resources of an organization represent its largest investment.
According to the government report, it shows that approximately 73 percent of
national income is used to compensate its employees. In addition to wages and
salaries, an organization often makes sizeable investment in their human
resources by way of recruiting, hiring, and training people to fulfill its need for
well-trained and experienced staff. We know that human beings are dynamic
and flexible but at the same time, they are also conforming and rigid, and
sometimes unpredictable. But in spite of all this, they are an asset, and never a
liability. Products can be quickly duplicated and services cheaply imitated- but
not innovation, execution and knowledge of employees. Therefore, employees
are the last weapon of competitive advantage in the global market today.

2.2 HUMAN RESOURCE MANAGEMENT AND e-HRM-

HRM has been developed in recent years as a broad encompassing field
of study that incorporates and synthesizes elements from personnel
management, organizational behavior and industrial and labour relatives, etc.
thus it has become a pervasive and influential approach to the management of
employment in a wide range of market economies. The goal of human resource
management is to help an organization to meet strategic goals by attracting,
and maintaining employees and also to manage them effectively.

E-HRM provides the information required to manage HR processes.

These may be core employee database and payroll systems but can be extended
to include systems such as- e-recruitment, e-learning, performance
management and reward. The system is web-based, enabling access to be
online and at any time.

2.3 ELECTRONIC HUMAN RESOURCE MANAGEMENT (e-HRM)

E-HRM is a way of implementing HR strategies, policies, and practices in

organizations through a conscious and directed support of and/or with the full
use of web- technology- based channels. The word ‘implementing’ in this
context has a broad meaning, such as making something work, putting
something into practice, or having something realized. Therefore, e-HRM is a
concept of – a way of ‘doing’ HRM. It is typically defining as the use of computer
systems, interactive electronic media, and telecommunication networks to
carry out the functions of the human resource management department.
The e-HRM technology supports the HR function to comply with the HR needs
of the organization through web-technology based-channels. It provides a
portal which enables managers, employees and HR professionals to view,
extract or alter information which is necessary for managing the HR of the
organization. The e-HRM business solution is designed for HR professionals
and executive managers who need support to manage the work force, monitor
changes and gather the information needed in decision- making, at the same
time it enables the employees to participate in the process and keep track of
relevant information. With e-HRM, managers can access relevant information
and data, conduct analyses, make decisions, and communicate with others;
and they can do this without consulting an HR professional unless they choose
to do so. For example, a manager who wants to make a merit pay decision may
access files containing text, and video describing how best to make the
decision. Then the manager can access the data file containing information on
his/her employees. With a click on the mouse, the decision is recorded and
other departments (such as finance) are notified.

With e-HRM, employees can also control their own personal information.
They can update records when their situations change and make many
decisions own their own; they consult HR professionals only when they deem it
necessary. For example, employees can participate in a training program at
home after working hours. The key concepts of this technology are- self service
for managers (MSS) and self service for employees (ESS).

For the HR function, e-HR has the potential to affect both efficiency and
effectiveness. Efficiency can be affected by reducing cycle times for processing
paperwork, increasing data accuracy and reducing HR staff. Effectiveness can
be affected by improving the capabilities of both managers and employees to
make better, timelier decisions. Moreover, it is aimed to improve the HR system
particularly performance management and appraisal system. The automation
of the system can result in faster response and action on meeting
organizational and individual development needs. The impact of e-HR
technology on the performance management and appraisal system is expected
to be dependent on the way the technology is used. It is dependent on what
and how the technology supports the system and also on how the technology is
constructed, this in turn is affected by what the organization is trying to
achieve with the technology, or in other words, what the e-HR goals of the
organization are.

2.4 OBJECTIVES-

The e-HRM is designed to achieve the following objectives-

1. To provide support for future planning and also for policy formulations;
2. To facilitate monitoring of human resources demand and supply
imbalances;
3. To automate employee related information;
4. To enable faster response to employee related services and faster HR
related decisions;
5. To offer data security and personal privacy.

2.5 SCOPE OF E-HRM-

 A decisive step towards a paperless office;

 Higher speed of retrieval and processing of data;
 Collection of information as the basis for improving the strategic
orientation of HRM;
 More consistent and higher accuracy of information/ report generated;
 Fast response to answer queries;
 More transparency in the system;
 Significant reduction of administrative burden;
  Integral support for the management of human resources and all other
basic and support processes within the company.
 A more dynamic workflow in the business process, productivity and
employee satisfaction.

2.6 FEATURES-

 the solution can be accessed and used in a web browser;

 security of data, protected levels of access to individual modules, records
documents and their component parts;
 user- friendly interface;
 modularity;
 access to archived records and documents;
 Connectivity with the client’s existing information system (payroll
accounting, attendance registration, document systems, etc.);
 Multi-language support.

2.7 TYPES OF E-HRM-

E-HRM is not a specific stage in the development of HRM, but a choice for an
approach to HRM.

The 3 tiers of e-HRM are-

3 tiers of e-HRM

Operational e-HRM Relational e-HRM Transformational e-HRM

1. Operational e-HRM-: It is concerned with the basic HR activities in the

administrative area like payroll, employee personal data, etc. The
operational type of HRM provides the choice between asking employees
to keep their own personal data up-to-date through an HR website or to
have an administrative force in place to do this.
 2. Relational e-HRM-: It is concerned with supportive business processes
such as recruiting and selection of new personnel, training, performance
management and appraisal, and rewards. For relational HRM there is the
choice between supporting recruitment and selection through a web-
based application forms and letters, etc.

3. Transformational e-HRM-: It is concerned with strategic HR activities

such as organizational change processes, strategic competence
management, strategic knowledge management, etc. In transformational
HRM, it is possible to create a change ready workforce through an
integrated set of web- based tools that enables the workforce to develop
in line with the company’s strategic choices.

2.8 BENEFITS OF E-HRM-

1. E-HR business enables to have multiple physical presences, with one
virtual HR department, which react quickly to a continually changing
business structure.
2. Obtain human capital information from anywhere in the world.
3. The HR department reduces HR service delivery cost by automating key
HR business processes.
4. It manages workforce with right portfolio of skills and knowledge.
5. Manages reward programs to attract, motivate and retain skilled
workers.
6. Increases error detection or reduce correction cost in case of data entry.
7. Eliminating cost related to printing and dissemination of information to
employees.
8. Employees self service allows quick and immediate access to
information.

2.9 ISSUES IN IMPLEMENTING E-HRM-

 Employees related –

(a) Fear of the new technology developments in organization

(b) Acceptance of the new technology
(c) Acquired knowledge and skills
(d) Training required

 One of the major hurdles which the HR departments need to cross is the
changing technological environment. It is essential that the employees
should be fully aware and comfortable with the fact of introduction of a
 new technology. The important issue in the new technology development
would be the development of a shared culture where the employees
learn to embrace the change amicably. Thus, the HR professionals need
to work with the technical staff and help the employees cope up with the
change. Another issue is that employees are scared of new developments
and they may oppose to the new technology, as they think their
performance evaluation and assessment depend on the successful
implementation of such technology. Therefore, the superiors need to
groom their subordinates to get comfortable with the imminent
technological advances. The managers must take care as to train the
employees in the art of conducting business over the net.

 Unions – In PSUs and government organizations, unions play an active

role, from taking decisions, forming strategies, and to implementing
some technology; union’s decisions are taken into account on behalf of
the employees. In case of e-HRM since it’s a new web-based technology,
employees may not be comfortable in using this new technology. So the
union may oppose in implementing of this new technology.

 Privacy – It is one of the growing concerns about information privacy in

organizations nowadays. Organization may use e-HRM to collect, store,
and disseminate data about job applicants and employees. These data
are used to enhance HR decisions, maintain employee records, and
streamline HR processes, including recruitment, selection, training,
performance management, compensation, etc.
2.10 IMPLEMENTATION OF E-HRM-
There are five phases in the implementation of the e-HRM business solution-

Phases of e-HRM

1. Analysis (Infrastructure) - In the first phase, a company (software

developer) analyzes the existing infrastructure with regard to quantity of
data and classification of business activities.

2. Business processes in the company- After the existing processes have

been analyzed, the options for automating these processes in the client's
environment are proposed. Finally a project plan is developed based on
the model of the processes identified.

3. Implementation- After a fundamental analysis of the processes in the

work team, individual modules is deployed in the client's environment.
With modular design a gradual implementation is possible, and company
specific functionalities are discussed with the client and build upon
request.
 4. Implementation and training- A complete knowledge of the components
of the solution is a key factor for successful implementation. The entire
team of project managers, information technology professionals and
human resource specialist are involved in user training and
implementation.

5. Maintenance- A maintenance contract typically includes:

 Technical support experts available by phone, through e-mail or on
site
 Adaption of existing modules or development of new ones
 Application of software adjustment to changes in the system
environment or operating system
 Functionality improvement and software upgrades in the form of
new versions
 Consultation about further development of the system.

2.11 E-HRM FUNCTIONS-

E-HRM business solution is based on the idea that information
technologies, including the Web, can be designed for human resource
professionals and managers who need support to manage the workforce,
monitor changes, and gather the information needed in decision making. At the
same time, it enables employees to participate in the process and keep track of
relevant information.
Two important functions of human resource management are-

1. Workforce Management
2. Recruitment

 Workforce Management (WFM) - it encompasses all the activities

needed to maintain a productive workforce. It includes-
1. Payroll and benefits
2. HR administration
3. Time and attendance
4. Career and succession planning
5. Learning management and/or training management
6. Performance Management

 Recruitment – it refers to the process of attracting, screening qualified

people for a job at an organization or firm. It is the process of creating
huge pool of potential candidates. Recruitment mainly concentrates on
two aspects- firstly, discovering the sources of manpower to match the
 job description and job specification, and secondly, to pull the
application of potential candidates to make the selection process
successful. The process is generally carried forward by the recruiters;
he/she can be the member of the organization or can be the
employment agency.

Various functions of E-HRM-

1) E-Recruitment: Recruiting the right person for the right job is the
most critical aspect of human resource management. Starting with high caliber
people is the first step. Only then can this be followed by effective performance
management and employee development.

E-recruitment simplifies this process by providing a sophisticated web-

based solution that manages the process of recruitment from start to finish. It
is also known as ‘online recruitment’. E-recruitment is a tool for many
employers to search for job candidates and for applicants to look for job. It can
be either a job website like- naukri.com, or the organization’s corporate website
or its own intranet. Many big and small organizations are using internet as a
source of recruitment.
Using a job centric design with multiple position linkage provides
features as job advert generation, online applications, applicant matching,
interview question database and letter of appointment generation. The
recruitment monitor shows at a glance the status of organizational recruitment
and provides reports that compare candidate suitably to the job profile. The
candidates can visit the sites, post resume, and the prospective employees can
draw the resume depending upon their requirements.
There are two kinds of e-recruitment that an organization can use, they
are-
 Job Portals: i.e. posting the position with the job description and the job
specification on the job portal and also searching for the suitable
resumes posted on the site corresponding to the opening in the
organization. 
Companies can have an online recruitment/ application section in their
own website, where the job seekers can submit their resumes in to the
database of the organization for consideration in future, as and when the
roles become available.
 Resume Scanners: it is one major benefit provided by job portals to the
organizations. It enables the employees to screen and filter the resume
through pre-defined criteria’s and requirements (skills, qualifications,
experience, payroll, etc.) of the job. Job sites provide a 24*7 access to the
database of the resumes to the employees facilitating the just-in-time
 hiring by the organizations. Also jobs can be posted on the sites almost
immediately and is also cheaper than advertising in the employment
newspaper. E-recruitment helps the organizations to automate the
recruitment process, save their time and costs on recruitment.

 Advantages-

● Cost efficient: Advertisements in internet when compared to

newspaper, magazines, and employment agencies is considerably cheap.
● Time saving device: Time to deliver; to communicate is minimized by
e-recruitment. Response is direct and immediate without any delay.

● Widens the search:  It provides global reach that also within a fraction
of second. The process supports the definition of recruitment by creating
a vast pool of potential candidates.

● Standardization: The information of the candidates is collected in a

standard format. Besides collecting the data it also consolidates
information received from various sources.

● Reservoir: It acts as the reservoir of information. From the job profile

to candidate profile is available along with past applicant data.

● Lessen paper work: As the data collection, filing, administrative work

are done electronically thus paper work or documentation has been
lessened.

 Disadvantages-

● vast pool of applicants: This benefits the Organizations as well as it is

disadvantage to them also. Because the huge database cannot be
scanned in depth. Either first few candidates are called for interview or
the resumes are screened based on some key words. On the other hand
applicants also face global competition.

● Non-serious applicants: Lot of applicants forward their resumes just

to know their market value. As personally the candidates are not
checked thus whether they are serious is not known. At the time of
interview the recruiter might realize that the candidate is not serious in
leaving the current job. But by that time some serious candidates might
have been rejected. 

● Disclosure of information: Candidates profile and company details

are available to public. The applicants do not want their employer to
 know that they are looking for a change. Phone number, address
information leads to many security problems.
2) E-Performance Management: e-Performance is a web-based tool that has
been designed to make performance review easier than ever. It places
effective performance management where it belongs in the hands of
managers for employee performance and focus areas, which are accessible
in an instant.
Advantages-
 Reduce the time and money spent conducting and recording employee
performance appraisals.
 Easily track and manage the entire appraisal workflow from the HR
control center.
 Free up employees, managers, HR and IT to spend more time on
strategic activities.

 Can conduct appraisals by own way, using own process and employee
appraisal forms.

3) E- Salary Review: This module provide the functionality to model salary

increases taking into account the employee’s performance, the budgeted
salary increase and the industry benchmark salary for each job. In addition,
the system operates on the principle of managing salaries within a
particular band by limiting the recommended increases of over paid
employees even if they perform well and recommending increases to
underpaid employees even if they perform poorly.

Benefits for Line Managers: E-salary applies performance-based increases, manage

salaries within industry range, address overpaid and underpaid employees and ensure
salary budget is met. On the other hand, E-salary prevent organizational blockage by
overpaid employees. Also ensure retention by addressing underpaid high potential
employees and huge potential savings by effectively managing salaries e.g. a company
with 500 employees with an average salary of $100000 is a save 0.1% by effective
management salary budget of $50 million equals R50 000 (for year 2, 3 and 4 as well).
2.12 COMPANIES ALREADY IMPLEMENTED e-HRM-

Ford Motor Company IBM

Belgacom
ABN-AMRO Dow Chemicals

1) Ford Motor Company-Ford is an American Multinational corporation based

in Dearborn, Michigan. It was founded by Henry Ford on June 16, 1903. In
addition to Ford, Lincoln, and Mercury brands, Ford also owns Volvo cars in
Sweden, and a small stake in Mazda in Japan. It is currently the second largest
automaker in the US and the fourth largest in the world based on number of
vehicles sold annually. By the end of 2009, it was the third largest automaker
in Europe. It has employee strength of about 213,000 employees at around 90
plants and facilities worldwide. It has major manufacturing operations in
Canada, Mexico, United Kingdom, Germany, Turkey, Brazil, Australia,
Argentina, and several other countries.
In 1988, Ford India originally an American company entered the Indian
market with its Ford Escort. Ford Motor India Pvt.Ltd is owned by the Ford
Motor Company in India with its headquarters in located Chengalpattu in
Tamilnadu. Currently it is the eight largest car manufacturers in India.

4) IBM- International Business Machines is a multinational computer,

technology and IT consulting corporation. Its headquarter is in Armonk,
North Castle, New York, US. It is the fourth largest technology company and
the second most valuable by global brand. It manufactures and sells
computer hardware and software, and offers infrastructure services, hosting
services, and consulting services in areas ranging from mainframe
computers to nanotechnology. With employee strength of 400,000
employees worldwide, it is the second largest by market capitalization and
the second most profitable information technology and service employer in
the world. It has eight research laboratories worldwide. The company has
scientists, engineers, consultants, and sales professionals in over 200
countries.
IBM employees have earned five Nobel Prizes, four Turing Awards, nine
National Medals of Technology, and five National Medals of Science. As a
chip maker, it has been among the Worldwide Top 20 Semiconductor Sales
Leaders in past years.
5) ABN-AMRO- ABN-AMRO Bank is a Dutch bank with its headquarters in
Amsterdam. In 1991, ABN-AMRO was created as a merger between
Algemene Bank Nederland (ABN) and Amsterdam and Rotterdam Bank
(AMRO). In 2007 the bank was acquired, in what was at that time the
biggest bank takeover in history, by a association made up of the Royal
Bank of Scotland Group, Fortis bank and Banco Santander, of which the
first two got into serious trouble as a result of the Financial crisis of 2007–
2010. Prior to acquisition by the associations in 2007, ABN AMRO was the
largest bank in the Netherlands and eight largest banks in Europe by
assets. At the same time, it was placed at number 15 th in the list of world’s
biggest banks and it had operations in 63 countries, with over 110,000
employees, by a magazine, The Banker. ABN AMRO offers unparalleled suite
of client services in India. By leveraging its global reach and drawing on the
expertise of its team of research, sales and trading, equity capital market
and M&A advisory professionals, ABN AMRO has led many of the biggest
and most innovative landmark transactions in India for its corporate and
Institutional clients. In addition they offer a broad range of transaction
banking products, fixed income and foreign exchange products and services
 including sales and trading, fixed income origination, derivatives, structured
lending and commodity financing.

6) Dow Chemicals- it is an American multinational corporation, headquarter

in Midland, Michigan. In 2007, it is the second largest chemical
manufacturer in the world by revenue, and as of February 2009, it was the
third largest chemical company in the world by market capitalization. Dow
chemical is a provider of plastics, chemicals, and agricultural products with
presence in more than 175 countries and employing 46,000 people
worldwide. It was founded in 1897 by Canadian- born chemist Herbert
Henry Dow. It is a member of the American Chemistry Council. Human
Resources at Dow is focused on unleashing the power of the human element
with award-winning people processes and programs designed to not only
attract, but develop, reward and retain diverse talents in the places where
they do business. Dow’s presence in India began in 1957 with the Polychem
Limited joint venture. Dow India has employee strength of 900 employees.
Over the last few years, the Company has strengthened its market franchise
in India by creating Centers of Excellence. These critical commercial and
technical resources improve Dow India’s ability to serve the market while
providing a strategic advantage for the Company globally.

7) Belgacom- It was founded in 1930 as the national telegraph and telephone

company (RTT). Its headquarter is in Brussels, Belgium. It is the largest
telecommunications company in Belgium. Its main subsidiaries are –
Proximus (Belgacom Mobile), Telindus (Belgacom ICT), Belgacom
International Carrier Services, Skynet, Tango, and Scarlet. It has employee
strength of 16,800 employees. In 2007, the Belgacom Group reviewed the
entire organization and created a new operating structure based on 4
pillars:

 The Consumer Business Unit (CBU)

 The Enterprise Business Unit (EBU)
 The Service and Delivery Engine Unit & Wholesale (SDE&W)
 The Staff and Support Unit

1) Consumer Business Unit- it markets voice products and services,

internet and television, both on fixed and mobile networks, for residential
clients.
2) Enterprise Business Unit- the EBU meets the ICT needs of professional
clients.
3) Service Delivery and Delivery Engine Unit and Wholesale- it groups
together the network and IT services. Its wholesale activity offers
telecommunications services to other operators and suppliers on the
Belgian market.
 4) Staff and Support- this unit brings together all the horizontal functions
that support the Group’s activities.

CHAPTER 3
RESEARCH METHODOLOGY

Research is defined as “a scientific and systematic search for relevant

information on a specific topic”.

3.1 Research Questions-

 What is e-HRM?
 What are its objectives and scope?
 What can be the issues involve in implementing e-HRM?
 What are the phases in implementing e-HRM?
 What functions e-HRM has to perform?
 Who are the organizations that have implemented e-HRM?
 What are its outcomes?

3.2 Research Objectives-

 To know what does e-HRM means.

 To know its benefits.

3.2 Research Objective

 To make a SWOT analysis of various skills sets available in India in various

technology & operational tasks.
 To recommend measures to improve India’s competitive position in the
world scenario.
 To find the competitive position of India w.r.t to other competitors in terms
of strengths and weakness.
 To find the key drivers of growth of BPO Industry.
 To find the critical success factors for outsourcing.
 To find the competitive position of India w.r.t other competitors in terms of
strengths and weakness.
 Measuring the practices to avoid outsourcing failures.