Chapter 10: Human Resources Management in the Digital Era PDF

 Chapter 10: Human resources management in the digital era  Learning outcomes After reading this chapter, you should be able to: Define the concept ‘e-business’ Define the concept of digital human resources Identify the advantages and disadvantages of digital...

 Chapter 10: Human resources management in the digital era  Learning outcomes After reading this chapter, you should be able to: Define the concept ‘e-business’ Define the concept of digital human resources Identify the advantages and disadvantages of digital human resources Understand how technology can assist in creating and managing an effective talent management strategy Discuss the effects of technology on several key human resources management functions Discuss the advantages of an effective change management strategy when implementing a digital human resources system Discuss how the effectiveness of moving to a digital human resources platform can be measured Discuss why measuring a return on investment is an important step in the entire digital human resources transformation journey Discuss the impact the various emerging technologies are having on the human resources function in relation to artificial intelligence Discuss the advantages a cloud-based self-service human resources solution can offer the human resources team.  The position of the organisation on the digital transformation journey Digital HR focuses on the digitisation of the entire HR function through a comprehensive digital transformation journey. Those organisations that were further along this journey found it easier to respond to lockdowns during the Covid-19 pandemic. Those that had already adopted cloud-based solutions delivered as Software as a Service (SaaS) were in a fortunate position.  E-business business custome digital platform activities rs E P R ‘E-business’ was a term used to define the ability of an organisation to conduct its business through a digital platform. Electronic processes enable an organisation to manage its knowledge through integrated enterprise resource planning (ERP) systems. These systems streamline and automate the organisation’s business processes for both internal and external customers.  Cloud-based business solutions $ $ $ $$ $ $ $ $ $ $ $ $ $ $ $ $ $ Cloud-based solutions are software solutions hosted by the solution provider in either their own or a third party’s data centre. Customers subscribe in a pay-as-you-go manner to have access to the solution for their own business purposes. Cloud-based solutions are provided in a SaaS model, which eliminates the need for the additional costs normally associated with  Cloud-based HR solutions On-premise HR systems were traditionally built with the primary purpose of electronically capturing employee data. These systems were systems of record. The primary users of these systems were the HR team. Cloud-based HR-solutions have been developed as systems of engagement. These systems allow employees to be their primary users. By using cloud-based solutions, the HR department  Formulating a digital HR strategy The digital HR strategy must dovetail with the e- business strategy. e-business strategy digital HR strateg y Implementing a digital HR strategy as part of the corporate strategy Organisations need to understand the latest technologies and how they can best be utilised, both internally and externally. A comprehensive change management strategy needs to be formulated and executed with the e-business strategy. Implementing an e-business strategy requires ongoing investment, so the support of top management is required for the long run. A cross-functional project team must implement the e- strategy. The project team must have its own budget. HR digital transformation  Digital HR ‘Digital HR’ refers to the digital transformation of the services that HR offers employees and other stakeholders using cloud- based HR solutions to ensure efficiency. A human resource information system (HRIS) is a computerised system made up of integrated HR modules covering all the functions within the HR department. These modules generally run off a single integrated database to  Achieving success in digital HR To achieve success in the digital transformation journey, the HR team needs to: o Be informed of available technologies and select a best fit solution o Be aware of the full capabilities of each technology it uses o Create a data-centric culture that provides insights through real time reporting, analytics, and dashboarding o Secure the support of the relevant executives o Put in place a comprehensive change in The four primary phases of a digital journey According to Ulrich (2019), a digital journey involves four primary phases. 4. Connection 3. Information 2. Innovation 1. Efficiency Functional areas of an HR system Touchpoints in a fully integrated HRIS  New-generation tools for HR New-generation tools for the following functions are already in use: o Employee collaboration o Social networking o Just-in-time learning o Continuous performance feedback o Real-time reporting and dashboards o Transparency in all talent-related processes o Mobility to provide 24/7 access to all HR system functions.  Benefits of digital HR Digitising all the various functions within HR provides the opportunity to achieve vast improvements in efficiencies and benefits for HR, such as: o Ease of access o Online processing of applicant data in recruitment o Improved service delivery o Efficient learning o Informed strategic workforce planning o Access to emerging technologies. This business-to-employee (B2E) approach to process strategy automates the entire business-to-employee relationship. It also enhances productivity and workforce return on  Data protection and security Cloud solution providers use encryption for data security. There is, however, a danger that because the cloud solution is hosted on a third-party’s hardware infrastructure, administrative users could gain access to the data by having access to user passwords. When utilising a SaaS based solution, a service provider’s data security policies and procedures must be thoroughly investigated to ensure that they meet with all the relevant legislative requirements. These include acts such as: o the General Data Protection Regulation (GDPR) for the European  Utilising a self-service delivery model Self-service solutions produce many productivity gains. HR can still control all processes via the workflow engine. In this way it can ensure that data and transactions comply with policies and procedures. Through the creation of an environment where both employees and managers are self-sufficient, valuable time is freed up. But to successfully implement self-service functionality, L there must be a focus on communication and training. ‘Selling’ change to employees is not a sustainable strategy. The HR team needs to ensure that all change agents  Introduction of mobile technology and AI As many employees have access to smart phones or tablets, self-service models have migrated primarily to the mobile platform. This empowers employees to do the following, even if they do not have access to a PC: o manage their own personal data o request and conduct learning o edit personal career development plans, performance and goals. In addition, line managers can play a more active role in line HR tasks. AI capabilities make HR solutions more intelligent and proactive in the tasks they perform.  Chatbots The main functionality of a chatbot is an ability to interpret questions and provide answers based on key words found in the question. Chatbots are also able to utilise machine learning to build up a comprehensive library of responses by their ability to ‘learn’ from all the previous questions asked and answers given. This enables organisations to build up a comprehensive database of responses, slowly eliminating the need for humans to answer routine questions. Chatbots have been designed to be proactive in their replies. Chatbots also have the ability to ‘learn’ over time what  Predictive analysis As an organisation starts accumulating historical HR information, this data can be analysed to determine patterns. These patterns can be used to start predicating the probability of certain events happening. The key to having reliable predictions through predictive analysis is having lots of data to analyse. The more data, the more accurate the predictions can  Blockchain in HR A blockchain is a process of storing data across various computer servers, ensuring that no one individual can edit a record without the approval of all other parties who have access to that record. Blockchain can be applied to any sets of data where the value of the data is in its integrity. For example, all data submitted through blockchain in a recruitment process can be trusted as it would have been verified through this secure technology. This reduces the time and effort required throughout the recruitment process, ensuring that the required talent is selected and employed in a much shorter time frame.  Internet of Things The advent of wide-spread Internet connectivity facilitated the concept of having all things connected. 5G technology can transmit large amounts of data in milliseconds. Within the context of HR, employees using connected devices, such as smart phones or smart watches, enables the organisation to both push and pull relevant information to and from the employee. In the management of the health and safety of employees, the  Digital HR in recruitment and selection By opening the HRIS system through the Internet, applicants will be able to apply for vacancies via the Internet. Through platforms such as LinkedIn ‘jobs can look for people’. Online screening techniques such as keyword systems, online interviews, and personality assessment can be used. Digital HR helps with the selection process by involving fewer staff. But there are several dysfunctional consequences: o The system may make the process more impersonal and inflexible  Steps in the digital HR recruitment and selection process Step 1: Draw up a flow chart of the current assessment process. Step 2: Draft the desired flow process that will result from the selection process. Step 3: Consider how the various new stakeholders and clients will use the system. Step 4: Choose a new technology-enabled scoring system. Step 5: Prepare the candidate for the test.  Recruitment utilising emerging technologies  Digital HR in learning and development  Digital learning The latest technologies of virtual reality (VR) and augmented reality (AR) simulate a work environment. Auto-assessment functionality allows learners to be graded as soon as they compete the assessment. Through direct integration, on the completion of any digital learning module the employee training record (and skills profile) can be immediately updated. The latest technology can assist organisations to determine the impact of upskilling and reskilling: o Upskilling refers to employees acquiring new skills to improve or expand their current skill set to continue performing their job.  Performance management and the analysis of performance data The use of technology Computerised as a tool to facilitate performance the process of writing monitoring reviews or generating performance feedback Organisations can only reap benefits from online performance appraisals if they consider the issues of trust, fairness, system factors, computer literacy, and the training of both the raters and the ratees. A 9-box grid can be used to display each employee’s position regarding potential and performance. This will assist the manager in creating individualised career plans for employees and highlight the high-potential, high-performing  Defining the employee’s roles One of the keys to the success of performance management is to have clearly defined role definitions for each employee. Employees need to clearly understand what their individual role is, how this role fits into the goals of their team, and how it contributes to the strategic goals of the organisation. These tasks can generally be broken down into those that require technical skills, those that require soft skills, and those related to how the employee is expected to act in relationships with co- workers. Having a single integrated HRIS to fulfil the role of performance management enables an organisation to  Compensation and benefits management The role of compensation is an important tool for attracting, retaining, and motivating the talent needed for survival over the long term. New and emerging technologies are broadening the scope of the payroll or finance teams in the ways they can now manage or process payroll data through the following: o Machine learning o Analytics. The HRIS that has integrated payroll functionality as part of its core functionality provides the tools for the organisation to gather, store, manipulate, analyse, utilise, and distribute compensation data and information.  Digital HR and job analysis and job evaluation Many software companies supply electronically advanced job-analysis and job-evaluation techniques for organisations to use in the establishment of their compensation structures. Some software systems can specify whether an occupation is managerial, the number and type of compensable factors, the number of levels within each factor, and the points associated with the factors, which is a process known as job evaluation. The Oracle Cloud HCM SaaS solution means that managers can plan, budget, and coordinate integrated information from internal pay structures, performance ratings, risk of loss, impact of loss, and external market data to design pay structures effectively and efficiently.  Success of the HR digital transformation journey With self-service technology and web-based solutions now being the norm, each employee within the organisation is affected by changes in the HR systems. Managers must play an important role as they need to become change agents throughout the duration of project. Employees also need to be included in the change management process, including employees from the various groups that would either directly or indirectly use the system. Employee self-service cannot survive after initial implementation if all employees do not start utilising the product to obtain the host of additional benefits it can offer.