Advances in Human Performance and Cognitive Engineering Research, Volume 3 (Advances in Human Performance and Cognitive Engineering Research)

4260 00 Prels 4/12/02 11:05 am Page vii

Chapter Title

1 2 3 4 5 6 7 8 9 10111 11 12 13 14 15 16 17 18 19 20111 21 22 23 24 25 26 27 28 29 30111 31 32 33 34 35 36 37 38 39 40111

vii

INTRODUCTION TO VOLUME 3 It is clear that we live in an information society and that technology has become a key component of our social and economic lives. It has touched almost every element of society, including art, music, literature, medicine, and has had a dramatic impact on organizations. For example, technology has: (a) prompted changes in their structure (e.g, virtual organizations); (b) modified work arrangements (e.g, telecommuting, virtual teams); and (c) influenced how people are managed. Furthermore, in recent years, technology has greatly transformed organizational processes including human resources (HR) management systems. In fact, HR systems are changing at such a rapid rate that the momentum is propelling the field into some very new directions, one of which is eHR. The field of eHR includes, but is not limited to, a wide array of computerized HR systems, including those designed for distance learning, employee selfservice systems, web-based human resources portals, online recruiting, virtual work arrangements, and the use of virtual work teams. Despite the increased use of technology in the field of HR management, little research has focused on the many issues associated with eHR. Thus, the primary purposes of this volume are to: (a) consider eHR and its impact on organizations, HR management, and the employees of organizations; and (b) generate increased interest in research on these issues. A brief overview of the contents of the volume is provided below.

CONTENTS OF THE VOLUME The volume begins with an intriguing paper by Wayne Cascio titled How Technology Facilitates Virtual Work Arrangements. It provides an excellent point of departure because it defines virtual organizations and discusses the impact that these new organizational forms will have on work arrangements, teamwork, and communication in organizations. In particular, Cascio stresses that technology is the primary enabler in the virtual workplace, and he describes a number of new technologies that may facilitate virtual work arrangements including groupware, peer to peer technology and netmeetings. In the Brave New World of eHR, Hal Gueutal provides an extremely interesting review of the trends in eHR, starting with a brief history of HR information systems. Furthermore, he describes the state of the art technology vii

4260 00 Prels 4/12/02 11:05 am Page viii

viii

1 2 3 4 5 6 7 8 9 10111 11 12 13 14 15 16 17 18 19 20111 21 22 23 24 25 26 27 28 29 30111 31 32 33 34 35 36 37 38 39 40111

INTRODUCTION

used in HR management today, including employee self-service systems, managerial self-service systems, human resources portals, and ASPs (application service providers). He also discusses the impact of these new technologies on several HR functions including pay administration and compensation, performance management, staffing, and employee development. The next paper by myself, Eugene Stone-Romero and Kimberly Lukaszewski is titled The Functional and Dysfunctional Consequences of Human Resource Information Technology for Organizations and their Employees. It offers a model of the impact of technology on HR management in organizations, and discusses the functional and dysfunctional consequences of using technology for three key stakeholders in organizations, i.e. the overall organization, managerial employees, and non-managerial employees. It also considers the impact of eHR on several aspects of HR-related processes, including recruitment, selection, performance management, compensation, and HR planning. Finally, it provides a sociotechnical systems-based recommendation for the design of eHR systems. In the paper titled Distance Learning in Organizations: A Review and Future Needs, Mary Kosarzycki, Eduardo Salas, Renee DeRoun, and Stephen Fiore provide a much needed review of the literature on distance learning in organizations. In recent years there has been a dramatic increase in the use of distance or e-learning in both work organizations and educational institutions. However, despite the widespread use of distance learning, little research has focused on the issue. Thus, the paper provides an important review of several key issues associated with distance learning, including: (a) the advantages of distance learning; (b) the types of technologies used for distance learning; (c) the topics that can be taught via distance learning; (d) the guiding principles underlying distance learning; and (e) the effectiveness of distance learning. The next paper by Robert Cardy and Janice Miller, titled Technology: Implications for HRM, builds on the eHR theme of the volume. It stresses that technology influences both the content and process of HR management. In particular, it offers an insightful framework for understanding the impact of technology on work characteristics in general, and HR in particular. For example, Cardy and Miller suggest that technology often results in reduced cycle times, rapid changes in processes, and increased communication capabilities. Moreover, they discuss how these changes influence several areas of HR including job analysis, selection, and performance management. In the paper titled Changing the Rules? Human Resources in the 21st Century, Richard Johnson and Linda Isenhour provide a very thought provoking overview of how virtual organizational structures influence HR practices. Using the framework developed by Galbraith (1973), Johnson and Isenhour discuss how organizational strategy and technology influence the structure of virtual

4260 00 Prels 4/12/02 11:05 am Page ix

Introduction

1 2 3 4 5 6 7 8 9 10111 11 12 13 14 15 16 17 18 19 20111 21 22 23 24 25 26 27 28 29 30111 31 32 33 34 35 36 37 38 39 40111

ix

organizations (e.g. the use of flat hierarchies, networked relationships, and geographically dispersed teams), and describe how these new structures affect the way that organizations manage HR systems (e.g. recruitment, selection, socialization, and reward systems). Furthermore, the authors provide an interesting overview of how virtual organizations may affect leadership in organizations. In the paper titled Information Technology Implementation: The Need for Compensation System Congruency, James Dulebohn discusses some of the challenges associated with implementing HR systems in organizations. As noted in several of the other papers in this volume (e.g. Gueutal, Stone et al.), although eHR systems are often beneficial to organizations, they are typically very expensive and difficult to implement. Thus, the implementation of e-HR systems is often considered to be the Achilles Heel of the HR field. Given the difficulty implementing such systems, Dulebohn argues that organizations should consider the role that compensation and other support systems have on the successful implementation of HR information systems. Furthermore, he presents the results of a study designed to test the effects of compensation system congruence on employee attitudes toward system changes. In addition, he suggests several strategies for managing the implementation and change processes in organizations. Finally, in Back to the Future: A Classical Consideration of the Impact of Technology on Human Resources Management, Marshall Schminke and Jie McCardle provide an excellent summary of the papers in the volume, and discuss the influence of organizational design and structure on technological change. In particular, they use three classical organizational theories (i.e. sociotechnical systems, buffering and boundary spanning, and structural contingency theory) to illustrate some common threads among the papers in the volume. In addition, they highlight how the field of organizational theory can offer insights for managing change in the field of HR management, and conclude with suggestions for future research on eHR. Given that eHR is an emerging issue that is of great importance to the HR field, I hope that you find the papers in this volume interesting. They should serve as a solid foundation for both the conduct of research on eHR, and the guidance of HR practices. In closing, I would like to express my appreciation to each of the authors who contributed to this volume. Without their scholarship and dedication, this volume would not have been possible. In addition I would like to express my gratitude to Eduardo Salas, the Editor of the series, for affording me the opportunity to edit this volume. Finally, I want to thank Eugene F. Stone-Romero for his special assistance with the volume, and Mark Hartman for his continual support. Dianna L. Stone Associate Editor ix

4260 Ch01 4/12/02 11:06 am Page 1

1 2 3 4 5 6

1. HOW TECHNOLOGY FACILITATES VIRTUAL WORK ARRANGEMENTS

7 8 9 10

Wayne F. Cascio

11 12 13 14

INTRODUCTION

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

For many employers the virtual workplace, in which employees operate remotely from each other and from managers, is a reality now, and all indications are that it will become even more prevalent in the future. No longer do employees have to work in their offices at their company’s place of business to have access to the people, information, and resources they need to do their jobs. Rather, their “workplace” may be at home, it may be a small branch office, even a hotel room. Modern technology makes it possible to work anytime, anywhere, in real space or in cyberspace. To put these issues into perspective, let us begin by defining some terms. Virtual organizations are multisite, multiorganizational, and dynamic (Snow, Lipnack & Stamps, 1999). At a macro level, a virtual organization consists of a grouping of units of different firms (e.g. other businesses, consultants, contractors) that have joined in an alliance to exploit complementary skills in pursuing common strategic objectives (Dess, Rasheed, McLaughlin & Priem, 1995). The objectives often focus on a specific project, such as a defined objective in research and development, a multi-faceted, complex consulting project, or a legal case involving multiple issues (Igbaria & Tan, 1998). The essence of a virtual organization is that it is a temporary collaboration. In fact, one observer has referred to this phenomenon as an “organizational tent,” as opposed to a conventional organization, referred to as an “organizational palace” (Hedberg, 2000).

36 37 38 39 40

Advances in Human Performance and Cognitive Engineering Research, Volume 3, pages 1–12. Copyright © 2003 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0986-5

1

4260 Ch01 4/12/02 11:06 am Page 2

2 1 2 3 4 5 6 7

WAYNE F. CASCIO

In the context of intact work organizations, virtual work arrangements are those in which employees operate remotely from each other and from managers. This represents a dramatic change in how we work, and it alters the very concept of an organization as a fixed location where people gather to perform work. Two forms of virtual work arrangements are virtual teams and telework. The next sections describe each of these in more detail. Then we will address technology as an enabler of such work arrangements.

8 9

FORMS OF VIRTUAL WORK ARRANGEMENTS

10 11

Virtual Teams

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

In a virtual team, members are dispersed geographically or organizationally. Their primary interaction is through some combination of electronic communication systems. They may never “meet” in the traditional sense. Further, team membership is often fluid, evolving according to changing task requirements (Townsend, DeMarie & Hendrickson, 1998). Such an arrangement provides several advantages: • It saves time, travel expenses, and eliminates lack of access to experts. • Teams can be organized whether or not members are in reasonable proximity to each other. • Firms can use outside consultants without incurring expenses for travel, lodging, and downtime. • Virtual teams allow firms to expand their potential labor markets, enabling them to hire and retain the best people regardless of their physical location, or, in the case of workers with disabilities, whether or not they are able to commute to work. • Employees can accommodate both personal and professional lives. • Dynamic team membership allows people to move from one project to another. • Employees can be assigned to multiple, concurrent teams. • Team communications and work reports are available online to facilitate swift responses to the demands of a global market. Of course the major disadvantages of virtual teams are the lack of physical interaction – with its associated verbal and non-verbal cues – and the synergies that often accompany face-to-face communication. A second issue is trust. Trust is critical in a virtual team because traditional social control based on authority gives way to self-direction and self-control. Members of virtual teams need to be sure that everyone will fulfill his or her obligations and behave in a consistent, predictable manner.

4260 Ch01 4/12/02 11:06 am Page 3

How Technology Facilities Virtual Work Arrangements 1

3

Teleworking

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Another form of virtual work arrangement is telework, that is, work carried out in a location that is remote from central offices or production facilities, where the worker has no personal contact with coworkers, but is able to communicate with them using electronic means (Gupta, Karimi & Somers, 1995). Teleworking is a popular and rapidly growing alternative to the traditional, office-bound work style. Survey results indicate that employees want more opportunities for telework, and that their top priority is to gain the flexibility to control their own time (“The New World of Work, 2000; Conlin, 1999). At least nine million American workers take advantage of telework opportunities, and the number may be as high as 24 million. The reason for the discrepancy in reported estimates is that each survey relies on a somewhat different definition of telework, and therefore arrives at a different tally (Wells, 2001). Telework is not an either/or phenomenon. Rather, it may assume several sub-forms. For example, it may be part-time or full-time. It may involve various combinations of days in the office and days away from the office. It may even involve parts of each work day, in order to avoid peak commuting hours (Pritchard, 2001). More specifically, it may involve: • Occasional telework from home. • “Hoteling” (where workers reserve a hotel space at work such as a cubicle or conference room, as needed). • Being tethered in the office (expected to report to the office on a regular basis). • Home-based (only office is at home, with some mobility to visit customers). • Fully mobile (no office, expected to be traveling or visiting customers at all times). Whether it is virtual teams or some form of telework, computer-based technology makes it all possible. The next section addresses technology issues in more detail.

32 33 34

TECHNOLOGY: ENABLER OF THE VIRTUAL WORKPLACE

35 36 37 38 39 40

It is no exaggeration to say that modern technology is changing the ways we live and work. The information revolution will transform everything it touches – and it will touch everything. Information and ideas are key to the new creative economy, because every country, every company, and every individual depends increasingly on knowledge. Technology facilitates the rapid diffusion of 3

4260 Ch01 4/12/02 11:06 am Page 4

4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

WAYNE F. CASCIO

information and knowledge. It is the engine that enables the various forms of virtual organizations. Without information and knowledge, workers in virtual workplaces would become emasculated and ineffective. Fortunately technology and enlightened management practices can ensure that this does not happen. Where we work, when we work, and how we communicate are being revolutionized, as a “seamless” web of electronic communications media – e-mail, voice mail, cellular telephones, laptops with wireless Internet connections, hand-held organizers, video conferencing, and interactive pagers – makes teamwork and mobility a reality. Not only is work becoming seamless as it moves between home, office, and phone, but it also is becoming endless as it rolls through a 24-hour day. To be viable, virtual offices require four types of information: (1) Online materials that can be downloaded and printed. (2) Databases on products and customers that are accessible from remote locations. (3) Well-indexed, automated central files that are accessible from remote locations. (4) A way to track the location of mobile workers. As an example of the technology that enables virtual work arrangements, consider “groupware.” “Groupware” refers to computer-based systems that are designed explicitly to support groups of people working together. This is what enables virtual interactions (Ishii, Kobayashi & Arita, 1994). Sometimes groupware is known as collaborative software. Groupware includes components from simple to sophisticated. The simplest forms are E-mail and newsgroups. In the middle are forms routing, and document management. Sophisticated groupware includes interactive systems that link employees with one another and with customers. Interactive video conferencing that incorporates document cameras with zoom features using WYSIWIS technology (“what you see is what I see”) is an example of this. Corporate intranets, which contain upto-the-minute information on everything from the company’s stock price to benefits options, afford some of the highest gains now available from groupware. The goal of groupware technology is simple: to promote and improve interaction among individuals (Aanestad & Hooper, 1997). This is collaborative empowerment. Groupware facilitates the operations of virtual teams. In a virtual team, members are dispersed geographically or organizationally. Their primary interaction is through some combination of electronic communication systems. They may never “meet” in the traditional sense. Further, team membership is often fluid, evolving according to changing task requirements (Aanestad & Hooper,

4260 Ch01 4/12/02 11:06 am Page 5

How Technology Facilities Virtual Work Arrangements 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

5

1997). A key advantage of such an arrangement is that team communications and work reports are available online to facilitate swift responses to the demands of a global market. For example, Veriphone, like some other software developers, uses a “relay race” speed up development. Here is how it works. Software engineers at Dallas headquarters work a full day on a project, then, using groupware, they put their work product online on the company’s intranet. As the Dallas employees are leaving work, their Veriphone counterparts in Honolulu are arriving. The Honolulu engineers begin working where their Dallas counterparts left off. They then work a full day, and hand off their work product to their Veriphone counterparts in Bombay, who are just coming to work. As the Bombay software engineers are leaving work, they transmit their work product electronically back to headquarters in Dallas, where their counterparts are just arriving for the next day’s work. Electronic communications media make the relay race possible. Clients benefit from the firm’s speedy response to their needs. These are just a few illustrations of the impact of technology on virtual work arrangements, and they are by no means exhaustive.

17 18

PEER-TO-PEER (P2P) TECHNOLOGIES

19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Peer-to-peer technology became the buzz of the technology world as millions of people downloaded free music from Napster. However, P2P is much more than simply allowing people to exchange music files without permission of the copyright holders. It is computers talking to each other, and, although many regard it as a hot new technology, the ideas behind it have been around for years. Thus, the original personal computer networks were based on file-sharing, peer-to-peer architectures. The new peer-to-peer model abandons the networking notions of separate clients and servers. Instead it allows each networked machine to connect to every other networked machine (“What is P2P?” 2000; “The Power of Peer,” 2000). NetMeeting, a product from Microsoft that facilitates real-time collaboration among the members of a work group, is one example of a P2P product. MSN Messenger and AOL Instant Messenger are other examples. In fact, peerto-peer applications cover at least six areas (McEwan, Curtis, & Christopherson, 2001): • File sharing (protected distribution of the contents of files). • Instant messaging (which enables real-time communication with other users). • Distributed computing (which reduces computation costs, for example, among engineering firms that process massive amounts of data). • Collaboration (secure file sharing in ad hoc groups). • Distributed storage sharing (which reduces the need for file servers). • Intelligent agents (cooperative search engines). 5

4260 Ch01 4/12/02 11:06 am Page 6

6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

WAYNE F. CASCIO

While the upside of peer-to-peer technologies is bright, there are also several potential disadvantages to consider. From the standpoint of organizations, a relevant consideration is the security of the data or information transferred. Information that companies would like to keep secure should not be exposed to some forms of P2P, such as instant messaging. Built for convenience and not security, most instant-messaging software provides more points of security vulnerability. Says the chief executive officer of software company Mercury Prime, which makes a secure instant-messaging product: “When they designed those products it was in the infancy of instant, real-time communication. It was the next generation of email” (Devin, in “IM Vulnerable,” 2001). Another potential downside occurs when organizations require centralized control or authorization of information, but that information has been distributed to the individual personal computers (PCs) of employees. The organization can no longer control the versions of information that are available. This is a relevant consideration in the area of employee training and development. Using distributed computing, a company can allow each employee’s PC to act as an “edge server.” An employee could host training materials from his or her own PC. This would allow each employee to monitor his or her own use of the training information. While distributed computing has undeniable advantages, because the files are stored on individual PCs, there is no control of versions of programs or authorization levels as would be the case if the files were stored on a central file server (“Not Just for Music Anymore,” 2001). Concerns like these are clearly more problematic in very large organizations than in small ones. We noted earlier that NetMeeting is one example of a P2P technology that facilitates virtual workplaces. Raindance Web and phone conference solutions is another (Raindance, 2001). To illustrate how this technology facilitates virtual work arrangements it is necessary to describe some of its features in more detail. We will use NetMeeting as an example.

30 31

NETMEETING

32 33 34 35 36 37 38 39 40

Microsoft’s NetMeeting is a powerful tool that allows real-time communication and collaboration over the Internet or corporate intranet. NetMeeting 3.01 is the most recent product release (Microsoft, 2002). From a computer running the Windows operating system (Windows 95 or higher), users can communicate over a network with two or more participants and with real-time voice and video technology. In short, NetMeeting provides multi-point data conferencing. Users can work together on virtually any Windows-based program. They can exchange graphics or draw diagrams with the electronic whiteboard, send

4260 Ch01 4/12/02 11:06 am Page 7

How Technology Facilities Virtual Work Arrangements 1 2 3 4

7

messages, or record meeting notes and action items with the text-based chat program. They also can send files to other meeting participants. Finally, a “whisper” feature allows a user to have a separate, private conversation with another person during a group Chat session.

5 6 7 8 9 10 11 12 13 14 15

Program sharing. A user can share any program running on one computer with other participants in a conference. Participants can watch as the person sharing the program works, or the person sharing the program can shift program control to other meeting participants. Only the person sharing the program needs to have the program installed on his or her computer (Microsoft, 2002). Individuals receiving the shared program can minimize the shared-program window to work on other things. In addition, if more than one program is shared, they are layered on one another. Meeting participants can navigate between programs using buttons on the NetMeeting shared-program window taskbar (Microsoft, 2002).

16 17 18 19 20 21 22

The whiteboard. Using the NetMeeting whiteboard, multiple users can simultaneously review, create, and update graphic information. In addition, since the whiteboard is object-oriented, not pixel-oriented, participants can manipulate its contents by clicking and dragging with the mouse. They can also use a remote pointer or highlighting tool to emphasize specific contents or sections of shared pages (Microsoft, 2002).

23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Conferencing servers, remote desktop sharing, and security. These are three additional features of NetMeeting 3. Using Outlook® 98, users can schedule a virtual conference, which is similar to creating meetings in a physical conference room. Users can invite attendees, reserve conference space on the server, and call the participants when the conference is due to start. As long as a remote computer is running Remote Desktop Sharing, users can access that computer and work in any of its programs. This feature allows people to access their work computers from home or while traveling. Finally, NetMeeting incorporates three desirable security features. It enables users to participate in an encrypted data-only conference, to authenticate meeting participants, and to conduct a password-protected conference (Microsoft, 2001). NetMeeting also supports Internet telephony. With a sound card, microphone, and speakers, participants can talk to business associates over the Internet or corporate intranet in real time. With a video-capture card and video camera they can send and receive video images for face-to-face communication during a meeting. Participants who do not have a video camera connected to their computers can still receive video images. 7

4260 Ch01 4/12/02 11:06 am Page 8

8 1

WAYNE F. CASCIO

WHAT VIRTUAL WORK ARRANGEMENTS REQUIRE

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

At a minimum, virtual work arrangements require technical support that is available 24 hours a day, seven days a week. As is well known, “Gee whiz” technology does not invariably perform up to expectations. When it does not, and geographically dispersed individuals or teams are involved, minutes can seem much longer, and immediate technical assistance is essential to maintaining confidence in the audio and video systems that make collaboration possible. A second requirement is for knowledge-management software. Knowledge workers plan, organize, and execute their own work, either alone or in selfmanaging work teams. For most people today, information is the most important raw material they need to do their jobs. However, if the people are dispersed geographically, they need ways to organize and share that information. For example, consider an engineering consulting team outside of Houston that has just solved a knotty safety problem at an oil refinery. To be of maximum use to that team and others from the same firm, the solution needs to be available to other consulting teams regardless of where they are located. Knowledge-management software enables human capital (the knowledge, skills, abilities, and other characteristics that are put to use to solve problems that are important to customers) to be transformed into structural capital (databases, customer files, manuals, and other structures that remain even after employees leave). Certainly the goal of knowledge management is ambitious: to enable every person in an organization to be able to access the collected know-how, experience, and wisdom of his or her colleagues (Cascio, 1998). Big consulting firms are leading the way. Thus Accenture developed its Knowledge Exchange, Booz, Allen & Hamilton set up its Knowledge Online, KPMG Peat Marwick installed a “knowledge manager,” and Price Waterhouse Coopers its “Knowledge View.” Corporate interest remains high as the proportion of corporate assets defined as intellectual capital increases.

33 34 35

SMALL BUSINESS AND VIRTUAL WORK ARRANGEMENTS

36 37 38 39 40

Telework is especially popular in small businesses. According to technology consulting company IDC in Framingham, Massachusetts, more than half of all teleworkers are employed by small businesses, and fully 25% of all U.S. small businesses employ at least one teleworker (Wells, 2001).

4260 Ch01 4/12/02 11:06 am Page 9

How Technology Facilities Virtual Work Arrangements 1 2 3 4 5 6 7 8 9 10

9

One way small businesses are supporting teleworkers is by offering remote access to the corporate local area network. These are known as virtual private networks (VPNs). VPNs allow remote workers to stay connected to company servers while safeguarding the information and data at both ends with firewalls and other security tools. Recent research reported by InfoTech, a Parsippany, New Jersey-based telecommunications and data-network consulting firm, shows that investment in such technology is rising. Thus the market for VPNs is projected to grow in the United States from $1.5 billion in 2001 to more than $11 billion in 2005. That will open the door for more companies to subscribe to network-hosted applications, such as unified messaging and real-time remote access for teleworking.

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Telework at Putnam Investments. Putnam is an investment-management company located in Boston. Scarce office space at locations where the company identified its talent pools led it to create virtual, at-home jobs. This significantly expanded an existing telework program. Called Work@Home, the expanded program targets residents in New England states for full-time jobs in customer service, financial services, systems, and management (Wells, 2001). Through partnerships with four colleges in Massachusetts, Maine, and Vermont, the company offers job training and practice sessions – either on-campus or online – for the work-at-home arrangements. Putnam instructors lead the employee training. The company then sets up home offices, providing employees with a computer, and installing high-speed Internet access – either Integrated Services Digital Network (ISDN) or Digital Subscriber Lines (DSL) – even in rural areas. Putnam co-workers stay connected to teleworkers by means of hosted online chats. All employees receive electronic newsletters, and when they log into Putnam’s intranet each morning, they are greeted with updates on company events. Periodically the workers have opportunities to meet each other faceto-face. For example, the company rents buses to pick up teleworkers and their families who want to attend the annual holiday party in Boston. Putnam has 714 people working at home in five New England states. That is nearly 12% of the company’s 6,000 employees. According to the company, its work-at-home staff has one-tenth the attrition rate of its in-office workers, and productivity has increased so substantially that the company has added telework positions in three more divisions. So why don’t more companies encourage telework? According to a recent study, the top four reasons, in order, are: managerial beliefs that workers need supervision, security concerns, conflict between work life and home life, and beliefs that the enabling technology still is not fast enough or cheap enough (Wells, 2001). 9

4260 Ch01 4/12/02 11:06 am Page 10

10 1

WAYNE F. CASCIO

LEARNING TO WORK IN A VIRTUAL ENVIRONMENT

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

As they make the transition from office-bound to virtual work arrangements, most people, even those who are adept technologically, need help in settling into a high-performance work style when working remotely. This is particularly true if it means losing a private office and sharing space (“hoteling”), or continually changing work styles to accommodate business needs, such as home office to telework center to mobile office. To be sure, the types and levels of information technology that each worker needs will vary by job. At the outset of any virtual work arrangement, therefore, it is important to analyze information usage (access, storage, inputs, outputs, sharing, plus security) and communications (internal and external customers, co-workers, managers). For example, consider the results of a work-based information and communication analysis by a human resources-information technology (HR-IT) team for three different jobs that need the same types and levels of voice, video, and data telecommunications support (Pritchard, 2001):

18

General Voice, Video, and Data Requirements: Sales Agent, Field Service Technician, Labor Relations Specialist

19 20 21

Heavy

22 23 24 25 26 27 28 29 30

Voice

Medium

Light

None

x

Sophistication low

Video

x

Data

x

medium

Specific Voice, Video, and Data Requirements: Sales Agent, Field Service Technician, Labor Relations Specialist Voice

Video

Data

None

Office Suite

31 32

Telephone (open and secure), Fax (open)

33

Groupware

34

Internet/Intranet

35 36 37 38 39 40

Once this type of analysis is complete, the next step is to identify gaps in required skills among the workers in these jobs. For example, do they all know how to use a secure telephone. Do they all know how to use collaborative software (groupware)? Do they all have the word processing, presentation software, and spreadsheet skills necessary to work effectively in their jobs? This is just the

4260 Ch01 4/12/02 11:06 am Page 11

How Technology Facilities Virtual Work Arrangements 1 2 3 4 5 6 7

11

beginning of a training agenda that should include the worker (“teleworker”), the immediate supervisor (“telemanager”), co-workers, and team training. Team training should focus on the behavioral issues (etiquette in virtual work), as well as functional (remote collaboration) issues. For example, workers who are assigned to multiple projects need to learn how to use email aliases to keep project-specific communications separate. For more on training and supervision issues in the virtual workplace, see Pritchard (2001), Tarken (2001), or Grensing-Pophal (2001).

8 9

CONCLUSION

10 11 12 13 14 15 16 17 18 19 20

The purpose of this article was to highlight some important technology that enables virtual work arrangements. Emails, Web casts, telephone calls, faxes, video conferences, electronic memoranda, chat rooms, instant messaging, and collaborative software are just some of the strategies in the tool kit of the virtual manager. Experiment to determine which ones work best in given situations. Learn to appreciate the power, the gains in efficiency, and the challenges that each tool presents. Use the technology that is currently available. Virtual work arrangements will become more, not less, popular in the future. Today’s technology can generate stunning gains in efficiency and productivity. The potential for future improvements is even greater.

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

REFERENCES Aannestad, B., & Hooper, J. (1997, Nov.). The future of groupware in the interactive workplace. HRMagazine, 37–42. Business Week (2000, Jan. 10). The new world of work: Flexibility is the watchword (p. 36). Cascio, W. F. (1998, Feb.). Valuing and costing intellectual capital. HR Monthly, (Australia), 12–16. CIO Magazine (2001, March 1). Not just for music anymore (p. 3). Conlin, M. (1999, Sept. 20). 9 to 5 isn’t working anymore. Business Week, 94–98. Dess, G. G., Rasheed, A. M. A., McLaughlin, K. J., & Priem, R. L. (1995). The new corporate architecture. Academy of Management Executive, 9(3), 7–18. Devin, P. (2001, April 17). IM vulnerable. Business Week, 76. Grensing-Pophal, L. (2001). 10 tips for managing telecommuters (http://www.shrm.org). Retrieved December 17, 2001. Gupta, Y., Karimi, J., & Somers, T. M. (1995). Telecommuting: Problems associated with communications technologies and their capabilities. IEEE Transactions on Engineering Management, 42(4), 305–318. Hedberg, B. (2000, Sept.). Organizing in the new economy, between inside and outside. Proceedings of the 5th annual telework workshop, Stockholm, Sweden. Igbaria, M., & Tan, M. (Eds) (1998). The virtual workplace. Hershey, PA: Idea Group Publishing. Information Week (2000, Aug. 28). The power of peer (p 1). Ishii, H., Kobayashi, M., & Arita, K. (1994, Aug.). Interactive design of seamless collaboration media. Communications of the ACM, 37(8), 83–97.

11

4260 Ch01 4/12/02 11:06 am Page 12

12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

WAYNE F. CASCIO

McEwan, A., Curtis, C., & Christopherson, J. (2001, Dec. 15). Peer-to-peer technologies. Unpublished manuscript, University of Colorado E-Business MBA program, Denver, CO. Microsoft Corporation. What’s new in NetMeeting 3 (http://www.microsoft.com). Retrieved October 29, 2002. Pritchard, K. H. (2001, April). Telework: Training issues (http://www.shrm.org). Retrieved December 17, 2001. Raindance Corporation. Web and phone conference solutions (http://www.raindance.com). Retrieved December 18, 2001. Snow, C. C., Lipnack, J., & Stamps, J. (1999). The virtual organization: Promises and payoffs, large and small. In: C. L. Cooper & D. M. Rousseau (Eds), The Virtual Organization (pp. 15–30). New York: Wiley. Tarken, W. (2001). Supervising the virtual workplace: Develop new strategies to manage off-site workers (http://www.shrm.org). Retrieved December 17, 2001. Townsend, A. M., DeMarie, S. M., & Hendrickson, A. R. (1998). Virtual teams: Technology and the workplace of the future. Academy of Management Executive, 12(3), 17–29. Wells, S. J. (2001, Oct.). Making telecommuting work. HRMagazine, 34–45. www.openP2P.com (2000, Nov. 24). What is P2P and what isn’t?

4260 Ch02 4/12/02 11:07 am Page 13

1 2 3 4

2. THE BRAVE NEW WORLD OF eHR

5 6 7 8

Hal G. Gueutal

9 10 11 12

INTRODUCTION

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

Life as a human resource manager used to be simple. Not anymore. The rate of change in HR practice is increasing at a pace never seen before. HR practices that were state-of-the-art five years ago are hopelessly out-of-date today. For example, let’s look at the recruiting process. A few years ago, virtually all applicants forwarded resumes to organizations by traditional mail (snail mail). It typically took several days for the resume to arrive, another day for it to be routed to HR, and another two or three days for it to be processed and sent to a potential hiring manager. Each hiring manager evaluated the resume using whatever criteria he/she thought appropriate. The decision was then routed back to HR and eventually to the applicant. The entire process often took weeks. Contrast that scenario with today’s. In 1997, 11% of large U.S. firms used the web to assist with recruiting. In 2001, that number had risen to 80%, and it is projected to reach 100% by 2003 (2000 Hunter HR Self Service Survey). Indeed, it is difficult to find a corporate website without an option to learn about job opportunities and submit resumes. The change, however, has gone far beyond simple electronic submission of resumes. Today resumes are electronically scored and input into sophisticated ERP (enterprise resource planning) systems. Applicants are screened based on predetermined skill requirements of jobs, and a determination made as to which applicants will move to the next step in the recruiting process. Applicants are notified of the outcome of the application, and the appropriate hiring manager electronically notified of a

35 36 37 38 39 40

Advances in Human Performance and Cognitive Engineering Research, Volume 3, pages 13–36. Copyright © 2003 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0986-5

13

4260 Ch02 4/12/02 11:07 am Page 14

14 1 2 3 4 5 6 7 8 9

HAL G. GUEUTAL

potential applicant with needed job skills. This process occurs in a few seconds, or milliseconds, rather than weeks. Today, recruiting is typically the most highly automated of traditional HR practices. Recruiting is but one example of the new world of eHR. In this chapter, we will examine the major trends driving change in HR practice and look to the future in terms of both the technologies on the horizon and the changing skill sets that HR professionals will need to support ebusiness processes. In addition, we will examine some of the opportunities and risks to human resources management as a profession.

10 11

A SHORT HISTORY OF HR SYSTEMS

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Some of the earliest uses of information systems technology were in human resource management. When computers were first developed, two of their first tasks were HR-related. The military quickly became a major user and applied early systems to match skills with work needs. These systems used relatively crude information about military personnel to assign service men and women to military jobs. Shortly after that, systems became very popular for payroll processing. Early systems were well suited for cyclic tasks like payroll. They required clear rules and handled numbers much more easily than text. From the 1950s through the mid-1970s, payroll systems served as early HR systems. These systems were primarily designed to support the tax reporting and accounting needs of the organization. They were heavily constrained by limitations on computer power and systems design constraints. For example, most of these systems were limited in the number of variables they could consider. Often this meant limiting programs to no more than 80 variables and these were often fully utilized for accounting needs. Payroll systems were never designed to support the reporting needs of HR departments. Each new report required sophisticated programming skills and often required lengthy lead times and significant expense. Ad hoc inquiries were not possible. These systems were typically “owned” by the accounting function and operated by the data processing department. HR professionals typically did not have direct access to the system and HR needs often were not a high priority. In the mid-1970s, demands on HR information began to increase. Federal and state legislation dealing with discrimination in the workplace required employers to collect and report a great deal of information about employees. HR executives began to consider using information systems to assist in HR decision making. These new information demands quickly overwhelmed existing payroll systems. To meet this need, organizations began to modify their payroll systems. Computer technology had advanced to the point that

4260 Ch02 4/12/02 11:07 am Page 15

The Brave New World of eHR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

15

additional information could be maintained by these mainframe-based systems. Payroll vendors began to augment their systems with greater numbers of standard HR-oriented reports. This improved HR information support to a limited extent. However, these systems were still designed as accounting systems and did not have the flexibility needed to truly support HR. HR staffs had only very limited direct access to data and were still limited in terms of the amount and type of employee information that could be stored. For example, none of these systems could support storage of graphic information such as an employee photograph. Systems were batch-oriented and data was often days or weeks out-of-date. By the early 1980s, these payroll systems had been so completely edited, added-onto, revised, fixed and changed that they became a potential liability to the organization. Many vendors, as well as payroll managers, could no longer support these systems. Often given the change in staff and programmers, no one really knew how the payroll system really worked anymore! Errors mounted and organizations became concerned that they would soon no longer be able to pay employees if the system went down. This set the stage for the first information systems specifically designed to support the HR function. In the mid-1980s, the first true HR systems came into being. These systems were made possible by the development of personal computers and gave HR control over personnel data for the first time. Much of the power of these systems stemmed from the advent of relational database technology that allowed much greater flexibility in linking data elements to one another. This technology also easily handled text information and included early versions of SQL reporting tools. For the first time, systems could answer meaningful inquiries in real-time. HR managers were able to ask questions like, “How many women do we have on the staff of the northeast division with three or more years experience in sales?” About this time, the first large scale HR systems appeared on the market. These systems, also based on relational database technology, gave large firms the same type of information access. In 1987, PeopleSoft was formed and soon offered the first widely used true HR system. These large-scale systems were revolutionary for several reasons. First, they gave HR professionals control over data. HR became the system “owner.” Key HR staff members had access to their data . . . on their desktop! This caused a revolution in HR thinking. Managers could ask questions, conduct analyses, and make decisions based on accurate, up-to-date information. This capability gave HR the ability to support strategic business processes and accelerated the move to a “strategic HR” focus. By the early 1990s, virtually all major firms had implemented first-generation human resource information systems (HRIS). 15

4260 Ch02 4/12/02 11:07 am Page 16

16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

HAL G. GUEUTAL

Advances in HRIS systems over the past ten years have been rapid. HR systems moved from focusing only on HR, to being part of more comprehensive Enterprise Resource Planning (ERP) systems. These systems allowed HR data to be integrated with information from other areas of the organization (marketing, supply chain, manufacturing, sales, etc.). In addition, ERP systems, especially those based on client-server technology, gave access to a much broader range of HR staff members. Now virtually all HR specialists had realtime access to data relevant to their jobs. In addition, these systems included workflow technology, which automated a wide range of manual tasks. Transaction processing (e.g. inputting benefit changes), in many companies the bulk of HR work, virtually disappeared – along with substantial numbers of lower level HR staff members. Companies embraced client-server technology and invested heavily in products based on this approach. By the late 1990s many firms had finished implementing this latest technological solution . . . and then the IT world changed.

16 17 18

CURRENT TRENDS IN HR TECHNOLOGY

19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Today, client-server based systems, state-of-the-art two years ago, are now yesterdays’ technology. Today organizations are moving quickly to deliver HR products and services via the web. Web-based HR, or eHR, is radically changing both the face of HR as well as HR practice. New terms such as “Employee Self-Service” (ESS), “Managerial Self Service” (MSS), “HR portals”, “ASP’s” (application service providers), and “self-reliant employees” (SRE) have become part of the HR lexicon. The move to the web means that virtually all employees have access to their HR data 24/7 from anywhere in the world. Figure 1 shows this increase in access to HR data over time. Contrast this with the situation just a few years ago, when only a limited number of HR staff members had access to the HR database. Likewise, the amount of information about employees has increased dramatically. ERP and newer CRM (customer relationship management) systems can monitor and collect great volumes of information about employee performance and related information in external databases. Let’s look at some of the major technological trends in HR systems today.

36 37 38 39 40

HR Systems Larger organizations implemented first generation HRIS systems in the 1980s and early 1990s. These systems, from vendors such as PeopleSoft, SAP, and Lawson, laid much of the groundwork for today’s systems. These systems

4260 Ch02 4/12/02 11:07 am Page 17

The Brave New World of eHR

17

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Fig. 1.

Percentage of Employees with Access to HR Data.

20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

caused HR departments to re-think how work was accomplished. Many HR processes were re-engineered and streamlined. These systems provided users with some of the first workflow tools. Workflow tools allow organizations to map the flow of information and key decision points and identify redundancies and inefficiencies. Based on this information, new processes can be developed, and data, electronic forms, etc. can be automatically routed to the appropriate decision makers. What once took days can be reduced to hours or even minutes. Firms are now moving to capture even greater efficiencies, streamlining processes even further by bypassing HR altogether and asking employees, and even applicants, to process their own HR data. All major vendors are re-designing their systems to support web-based delivery of HR information. For example, PeopleSoft version 8.0 is a complete re-writing of the base code to make it completely internet-native. This represents a major change in software design. Prior ERP systems all worked differently and each had unique navigation requirements. For example, in order to save work or edit an employee record, the end user (typically an HR staff member) required vendor-specific training. This training was quite expensive, averaging $500 per day per participant. As a result, only a small percentage of the workforce could be given access to the system. Contrast this with web-based systems. Virtually all potential users have already been trained. 17

4260 Ch02 4/12/02 11:07 am Page 18

18 1 2 3 4 5

HAL G. GUEUTAL

Web-based HR applications allow users to navigate using familiar browserbased tools. A well-designed web page should be intuitive and allow the user to find information with ease. Users require little if any additional training and even that can be delivered via the web. Now new HR applications can be delivered to employees at low cost and much more quickly. And everyone has access.

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Employee Self-Service Employee self-service (ESS) is the fastest growing trend in the delivery of HR information. As of the year 2000, almost 80% of large companies deliver some HR information to employees via ESS systems. This represents more than a 100% increase over 1999, when only 35% of firms used this technology (2000 Hunter HR Self Service Survey). ESS applications give employees the ability to access and maintain HR information about themselves via the web. Employees are directed to a website where customized information relevant to them is available. Each employee becomes responsible for maintaining his/her personal data. ESS systems provide employees with a range of HR services 24 hours a day, 7 days a week. Many firms are now talking about the “self-reliant” employee. That means using information technology to empower employees to manage their employee information, and career development. They can now choose the HR services that will best enable them to develop their skills and be successful at work. Traditionally, employees were not given direct access to HR information. For example, employees who wanted to check their available vacation days typically had to call the HR Department and speak with a representative. Such calls were often inconvenient for the employee and consumed a large amount of HR resources. Personal employment information was only available during regular business hours and often after a considerable delay. According to Towers-Perrin, as much as 50% of HR staff time is consumed answering relatively simple HR questions and processing personnel data changes (Zampetti & Adamson, 2001). This “non-value added” use of HR time is a major reason cited by firms for moving to ESS delivery. Indeed, the top reasons cited for implementing ESS include: service improvement (85%), process improvement (65%), cost reduction (60%), enabling strategic HR (59%), and increasing information access (55%) (2000 Hunter HR Self Service Survey). Walker adds several additional reasons to this list. He points out that data quality, employee empowerment, and HR integration at the employee level are also important reasons for the attractiveness of these systems. Data quality is improved, since companies are going directly to the source for HR data. This quickly eliminates inaccuracies in personal data, as it is input and verified by the employee. Ownership of the data shifts from HR to the employee. Empowerment refers to the increased

4260 Ch02 4/12/02 11:07 am Page 19

The Brave New World of eHR 1 2 3 4 5 6 7 8 9 10 11 12 13 14

19

ability of employees to control information about them and to use that information to enhance their careers. For example, access to career planning information and training options can give employees more control over their learning and career options. Access to corporate information can make it easier for employees to align their actions with the goals of the company. Finally, HR integration refers to providing employees with a single unified view of HR services. Information is available on a wide range of topics, including compensation and benefit options, job openings, training opportunities, and employee assistance services, to name just a few. For most employees, this is the first time that the full range of HR services available to them has been made this transparent. As systems have become more sophisticated, the number of services available to employees has increased. Listed below is a summary of some of the services offered via ESS systems today.

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

• Input and edit personal information such as address, phone, emergency contact, etc. • Model retirement options, varying key factors such as contribution rates, investment return, etc. • Provide a key channel for the company to communicate with employees. • Review and change allocation of new and existing retirement investments (may be via a link to a vendor website; link may be transparent). • View a current or past paycheck. • Change a W-4 form. • Enroll in benefits programs, including flex-benefits, healthcare, childcare and cafeteria plans. • Research various benefit options (e.g. the site might link to various HMO vendors and allow employees to compare plan costs, services, review the credentials of physicians associated with the plan). • Select benefits where choices are allowed (e.g. cafeteria plans). • Enroll in training. • View internal job postings based on selection criteria established by the employee (e.g. what jobs are available that meet these criteria: located in California, electrical engineering, software engineering, managerial level 3, R&D division). • Time entry, including recording time off. • Review and plan individual development activities. • Participate in 360 degree feedback programs. • Receive customized information relevant at the individual or job level (e.g. at the individual level, workflow systems may route important “paperwork” 19

4260 Ch02 4/12/02 11:07 am Page 20

20 1 2 3

•

4 5 6 7

• •

8 9 10 11 12

• • • •

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

• •

HAL G. GUEUTAL

to the individual automatically. At the job level, the system may deliver similar “paperwork” to all “team leaders”). Access HR policy manuals and use natural language interfaces to ask HR questions (e.g. “How many weeks vacation do I get after four years of employment?”). Complete employee surveys. View the skill requirements of jobs and compare those skills requirements with the individual’s skill profile. Review personal performance appraisal records and schedules. Order services or purchase company and other products. Participate in training delivered via the web. Link to other sites (e.g. some firms allow employees to customize their ESS homepage with information from other sites. For example, an employee might place a stock ticker or his/her portfolio on the ESS homepage). Take diagnostic tests to identify training/development needs. Submit and track expense reports.

Clearly, few companies currently offer all these options to employees. However, many firms are planning to move quickly in this direction. This move is the result of both the desire to improve service and control costs, as well as meet increasing employee information demands. Companies implementing ESS systems report highly positive feedback from employees. For example, Microsoft’s ESS site is accessed over 1.2 million times a year. General Motors’ site receives millions of visits per month! Indeed, often the most difficult part of managing an ESS portal is keeping up with employee demand for new services. Table 1 shows the results of a recent survey regarding the types of applications that companies are planning to deliver in the near term. Table 1.

ESS Services – Today and Tomorrow.

29 30

Application or Service

31

Employee Data Maintenance Employee Communication Benefits Inquiry Open Enrollment Family Status Change Pension Training Registration Withholding Time Entry Electronic Pay Stub

32 33 34 35 36 37 38 39 40

In Use Today

Planned

18% 62% 28% 32% 14% 52% 28% 11% 34% 13%

92% 93% 89% 89% 87% 85% 75% 72% 69% 65%

Source: The Hunter Group, 2000 Human Resources Self Service Survey.

4260 Ch02 4/12/02 11:07 am Page 21

The Brave New World of eHR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

21

ESS systems offer the potential of both greater convenience for employees and cost effectiveness for organizations. For example, Microsoft saves over $600,000 per year by allowing employees to handle payroll tasks such as viewing pay stubs, making direct deposit decisions, and changing W-4 forms over the web (Mecham, 2001). Table 2 shows the experience of one company that recently converted from traditional HR delivery methods to ESS delivery. Savings such as the ones cited have become a powerful driver for companies looking for cost effective methodology. In addition to economic drivers, some companies believe that ESS portals can increase employee productivity. PeopleSoft estimates that employees spend between 50 and 90 minutes per day surfing the web on personal business. Some ESS portals are trying to recapture some of this time by providing personal services through the ESS website. For example, Novell, Fujitsu and AT&T work with a company called RewardsPlus to give employees easy and efficient access to services such as loan applications and insurance. Employees can identify the types of services they are interested in and the vendor provides links to firms supplying those products or services. The employee can complete transactions over the web and have the cost of the purchases deducted from his or her pay (Tillett, 2000 – Internetweek). Major ERP vendors such as PeopleSoft are partnering with a firm called YouDecide.com to establish rosters of product and service providers to offer PeopleSoft’s clients. By giving employees access to such information at work, the firms hope to reduce “personal surf-time” as well as add services of value to employees. Companies also report anecdotal evidence of the value of ESS systems in increasing productivity and, in at least one case, sales. A large HMO in

28 29

Table 2.

30 31

Sample Cost Savings Using ESS Delivery.

Task

Manual Cost

ESS Cost

% Saved

$6.00 $4.00 $10.00 $50.00 $3.00 $8.00 $1.50 $12.00

$0.50 $1.00 $2.00 $0.60 $0.50 $0.50 $0.50 $4.00

92% 75% 80% 99% 83% 94% 67% 67%

32 33 34 35 36 37 38 39 40

View Benefit Profile Access Policy Handbook Change Home Address Provide Current 401k Statement View Paycheck Job Posting View Skill Profile Employee Change Action

Source: The Hunter Group, 1999 Human Resources Self Service Survey.

21

4260 Ch02 4/12/02 11:07 am Page 22

22 1 2 3 4 5 6 7 8 9 10 11

HAL G. GUEUTAL

California recently introduced ESS for all employees and found that the majority of visits to the website occurred after 10:00 p.m. It appears that employees are using personal time after work to managing their HR data. Considering the amount of visits, the HMO believes it has captured a significant amount of new work time during the workday. Another interesting observation comes from a major Canadian bank. On their ESS site, employees receive not only HR information, but also advertisements for bank products. This organization also views its employees as customers. Each employee has an account with the bank and is a potential customer for the range of products the bank sells. With over 22,000 employees, the ESS portal is now a revenue source and a part of the marketing strategy of the organization.

12 13

Managerial Self-Service

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Managerial self-service (MSS) provides a variety of HR tools and information at the manager’s desktop. These systems provide managers with access to information about their direct reports and the ability to conduct analyses to increase managerial effectiveness. As with ESS, information and HR tools are available at all times and can be delivered to the manager as the information is needed. These systems also integrate with workflow technology (discussed later in this chapter), speeding the decision-making process across a variety of managerial tasks. MSS applications tend to mirror the major human-resource-related tasks of managers. These include processing “paperwork” related to personnel transactions such as promotions, separations, authorization for time-off, salary actions, etc. For these tasks, the MSS system provides not only historical information (e.g. performance appraisal data for the last several years), but also advice and something as simple as on-line forms to make the “paperwork” less onerous. Probably of greater value is the availability of support and analytic tools to assist with complex managerial responsibilities such as pay administration, performance management, staffing, and employee development. Each area of responsibility is discussed briefly below.

33 34 35 36 37 38 39 40

Pay Administration/Compensation This application is one of the most commonly implemented MSS tools. These systems allow managers to track compensation, model costs, and compare their recommendations with company guidelines. These systems range in sophistication from fairly basic applications that simply track salary history and budget to those with sophisticated support tools. More complex systems provide the manager with a great deal of information about his/her unit as well as about

4260 Ch02 4/12/02 11:07 am Page 23

The Brave New World of eHR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

23

individuals. For example, the system might provide a “reliability check” by comparing recommended raises with performance appraisal ratings. In addition, the system can flag patterns in the data about which the supervisor might not be aware. For example, the percentage raise for minorities versus non-minorities, men versus women, etc. can be presented. Employee eligibility for compensation and benefit programs can be monitored. The system may provide access to salary survey data or comparative data for other similar units in terms of the distribution of raises. On the organizational level, these systems assist compensation managers to aggregate data and communicate organizational policy on compensation. Indeed, use of MSS compensation systems can greatly speed up the compensation administration process. For example, Dell cut their salary planning process from eight weeks to three weeks using MSS technology (Gherson & Jackson, 2001). It is likely that compensation management will continue to be a major MSS priority.

16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Performance Management Performance management is often an area that managers find difficult to do well. They often complain of inadequate, incomplete information and a lack of tools to effectively support corporate performance management systems. MSS applications offer an opportunity to give managers the tools and information they lack. As with compensation, performance management applications range from those focusing primarily on data retrieval and forms delivery to those with greater emphasis on the analysis of performance management data. Basic systems can represent a significant increase in support for managers. These systems give managers access to historical data for individuals and work units. They may provide access to supporting performance data for use in the appraisal process. They typically are also linked into workflow systems so that managers receive notification of the need for appraisal meetings and information to consider in that meeting. More sophisticated systems provide greatly enhanced tools for performance management. Many MSS systems will support and summarize 360 feedback systems, delivering surveys to appropriate parties and summarizing the data across units and for individuals. Other MSS systems go beyond traditional views of performance management and link into training and development as well as compensation management applications. These systems allow managers to make sure they are consistent in their role as performance managers. For example, these systems help ensure that compensation is a reward for superior performance, and link training opportunities to performance reviews in a way that targets specific performance deficiencies. In some companies, participation in 23

4260 Ch02 4/12/02 11:07 am Page 24

24 1 2

HAL G. GUEUTAL

professional development activities may be a factor influencing performance ratings and compensation decisions.

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Staffing Staffing tools and support are included in virtually all MSS applications. These applications include assistance in completing employee requisitions, monitoring staffing levels, tracking the status of applicants in the system, and completing the hiring process. These systems usually allow managers to specify skill requirements and screen both internal and external applicants. They may also allow the manager to review skill inventories, and identify existing employees who have the needed skills but who have not applied for the position. Staffing modules can provide advice on company policy and monitor hiring patterns for groups or individual managers, to identify possible discrimination. On a more mundane level, staffing systems utilize workflow technology to ensure that hiring paperwork goes to the correct individuals and that applicants are not “lost” in the system. These systems supply electronic forms and ensure that corporate hiring policies are followed.

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

Employee Development In the knowledge-based economy, employee training and development has become a much more critical managerial responsibility. MSS systems provide a number of support tools to assist managers in developing employees. Typical employee development modules track skills for individual employees, analyze existing skills against job requirements and identify gaps. These systems can also track the training and development history for individuals or groups and help identify which training options seem to provide the greatest value for the investment. Training budgets can be monitored to ensure that the training being purchased is job-related and being delivered in the most cost-effective manner. For example, a manager can assess if on-line training courses are effective relative to more traditional training modalities. This has become a topic of great interest, as online training may cost $15 to $50 per person per hour, as compared with several times this amount for traditional classroom training (Connors, 2001). Systems can track the skill mix for a group, help monitor the timeliness of the current skill set of employees, and project training needs in the future.

35 36

Call Centers and Knowledge Bases

37 38 39 40

Call centers represent another key technology for delivering HR services. Call centers emerged as a delivery modality in the late-1980s. They allow organizations to centralize and upgrade the delivery of HR information. Prior practice was to

4260 Ch02 4/12/02 11:07 am Page 25

The Brave New World of eHR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

25

distribute HR information at the worksite via an HR representative. As HR services became more complex and elaborate, it became apparent that few companies could maintain a sufficient expertise base at all worksites. Call centers became a common solution to the need for high quality delivery at lower cost. In many ways, they represent the first generation of employee self-service technology. These centers can provide employees with accurate information delivered by knowledgeable HR staff members supported by sophisticated knowledge bases. Many firms use the term “center of excellence” as they concentrate their HR knowledge at the call center. Virtually all major corporations currently use call centers to deliver HR services. Indeed, a recent survey of over 340 corporations including mediumsized firms showed that 69% currently use call centers and an additional 7% plan to establish them (2000 Hunter HR Self Service Survey). Call centers increasingly rely on the use of sophisticated knowledge bases to support call center operations. Towers-Perrin 2000 Service Center Survey reports that 57% of 100 large companies currently use knowledge bases to support their call centers and that another 42% would like to implement knowledge bases. The Hunter Group reports similar results, finding that 75% of respondents in their 2000 Human Resource Self Service Survey either currently use knowledge bases or plan to in the future. Knowledge bases collect, store, organize and make information available to end-users. They are based on robust database designs that typically allow users to navigate with web-like ease to find information. Usually theses databases are web-enabled and allow the call center staff member to quickly search for information and answer questions. They are much more than simply HR manuals placed on the web. They contain information on processes, policy, best practices, external resources, and sources of expertise within the company. All this is bundled in a fashion to ease access via natural language interfaces, frequently-asked questions, and advanced artificial intelligence technology. In call center settings the knowledge base may also be linked to the employee database in order to allow the representative to customize the answer to the individual employee. When an employee calls the center, the HR representative taking the call will access a knowledge base and/or employee database to address the questions. He or she often employs a branching logic tree similar to those used by technology support call centers (e.g. if you call a computer vendor with a hardware problem, you typically go through a structured set of questions to diagnosis the problem). While these knowledge bases have enabled call centers to provide a relatively high level of service, they may also contribute to the downsizing of call centers. The same knowledge bases that support call centers can, with 25

4260 Ch02 4/12/02 11:07 am Page 26

26 1 2 3 4 5 6 7 8 9

HAL G. GUEUTAL

moderate effort, be modified to provide support to ESS systems. This allows employees to answer their own HR questions and reduces the demands (and required staffing levels) of call centers. Over time, it is likely that only the most complex questions will go to the call center and the staff at the call center will be smaller, but even more highly skilled. They will need to have a great deal of expertise to handle complex questions that often cut across HR knowledge sets. Call centers may well evolve to knowledge management centers where the HR knowledge base is maintained to support both the call center and the ESS.

10 11

HR Data Warehouse and Data Marts

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

The rapid growth in HR systems has greatly increased the amount and quality of data collected about employees. The challenge facing organizations is to use that information to increase organizational effectiveness. In the past it was common for HR-related information to reside on multiple databases. Each database was related to a separate application. For example, it was not uncommon to have a general HR database, a cobra-related database, an applicant tracking database, a payroll database, and more recently customer relationship-management (CRM) databases. This led to data redundancy, data inconsistency, and the inability to integrate information to answer HR needs. In addition, the sheer volume of HR data available has increased geometrically. Today systems can collect performance data in real-time for some jobs (e.g. those using telephony or manufacturing settings); companies have included 360 review as part of performance management; new benefit programs have been added with their associated data requirements (e.g. flex spending accounts, dependent care accounts); applicant tracking is almost universal for medium and larger companies; and on-line training data and enrollment packages are available. The challenge is to find ways to integrate these databases/sources as well as external data sources (e.g. a retirement services vendor managing a 401k plan) to enhance managerial decision making and provide services to employees. Data warehouses and data marts represent one solution to integrating disparate data sources. Data warehouses “collect” and integrate information from various databases to allow HR managers and end users to answer complex questions and support decision-making. Major HR systems and ERP vendors now include data warehouse capabilities and statistical/analytic tools that enable users to conduct sophisticated analyses. For example, PeopleSoft users implementing the Workforce Analytic application can access a variety of advanced HR metrics based on the integrated data warehouse included in the PeopleSoft package.

4260 Ch02 4/12/02 11:07 am Page 27

The Brave New World of eHR 1 2 3 4 5 6 7

27

This module provides a variety of metrics about a company’s workforce. For example, companies can make retention predictions for groups and even individuals based on historical performance and turnover data. As the amount of data collected about employees continues to mushroom, HR data warehousing will continue to grow. Increasingly, these HR data warehouses are a part of larger corporate data warehouses being driven by the growth of ERP and CRM systems.

8 9

ASPs and HR Outsourcing

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Application Service Providers (ASP) represent a relatively new trend in providing services to employees. It is a trend made possible by technology, especially the growth of the internet. ASP’s provide an alternative to companyby-company installation and maintenance of large-scale ERP systems. ASP in essence “rent” customers use of a sophisticated HRIS/ERP system that the ASP maintains and supports. The ASP market is growing very quickly and includes more than just HR-related services. Depending on the source, the ASP market is projected to grow to $7.8 billion by 2004 (IDC research, cited in Greengard, 2001) or to $48.5 billion by 2003 (Deloitte Research, cited in Keebler, 2001). Clearly, this is a fast growing service that is, and will, have dramatic impact on the delivery of HR services. ASP’s come in various forms, but can be grouped into three general categories. These are: Technology Support ASP’s, Business Process ASP’s and Full Outsourcing ASP’s. Each of these is discussed below. Technology Support ASPs assist companies by providing and maintaining the technological infrastructure for HR data management. That is, they maintain and keep updated, the complex ERP systems that HR relies on. Providers give users access to either a single or a choice of ERP systems for HR management. For example, PeopleSoft, Lawson, and Oracle all provide ASP services to clients. Rather than purchase or licence the ERP package, users subscribe to the system. The ASP vendor is responsible for all the software, security and backup of the system. The subscriber avoids the rather large task of installing, maintaining, and updating the software. Clients are responsible for HR processing tasks, and to the end user in HR, the use of a Technology Support ASP may be transparent. Business Process ASPs provide the services included in technology support ASP’s, but in addition, handle the processing of HR transactions. These firms may provide services such as data input/acquisition, reporting, processing, verification, and other management services. An ASP, via an ESS interface, may handle all basic employee transactions without the involvement of the client 27

4260 Ch02 4/12/02 11:07 am Page 28

28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

HAL G. GUEUTAL

organization. Depending on the level of service chosen, the ASP may become the primary point of contact with employees, offering additional services such as call centers and managerial support. The client becomes a consumer of services from the ASP, but retains all HR policy decisions and maintains a significant internal HR capacity. Full Outsourcing ASPs offer to handle all the HR functions for the organization. The organization only retains senior policy HR staff members who set the direction for HR policy and review the programs and performance of the ASP. The ASP is the HR department for the firm. They handle all HR services from recruiting and selection, to employee relations, performance management, and compensation and benefits. Currently this option is not widely used; however, several major Fortune 500 companies have chosen this option. For example, British Petroleum and Bank of America recently contracted with a company named EXULT to outsource HR services. Many organizations are watching the progress of this new option. Mid-sized firms may find this option very attractive as they try to manage the information demands and range of HR programs they need to offer in order to remain competitive. As a result, many HR staffs are nervous.

19 20 21

IMPACTS OF TECHNOLOGICAL CHANGE ON THE FIELD OF HUMAN RESOURCE MANAGEMENT

22 23 24 25 26 27 28 29

The impact of the web is causing and will cause dramatic changes in HR services, the manner in which those services are delivered, and the skill sets that HR professionals will need in the future. Technology is creating both opportunities for HR to increase its visibility and role as a business partner, as well as creating new risks for HR departments and professionals. This section will discuss these opportunities and risks, and take a look at the skills HR professionals will need to succeed in the brave new world of eHR.

30 31

Opportunities for HR

32 33 34 35 36 37 38 39 40

Maximizing the Potential of HR Portals Probably the greatest opportunity for HR lies in effectively using HR portals to deliver a broad range of HR services. HR portals provide employees, managers, as well as those outside the organization with “one stop shopping” for HR services. Indeed, HR departments are racing to make the HR portal the “front-door” of the company. These portals are often the first point of contact for those outside, as well as inside, the organization. Those inside the organizations use the HR portal as their corporate home page. From the HR site they

4260 Ch02 4/12/02 11:07 am Page 29

The Brave New World of eHR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

29

find links to ESS, MSS and external sites of relevance to their job. Corporate news and communication is delivered via the portal and it becomes the primary communication vehicle for much of the corporate information, including nonHR communication. Externally, the HR portal becomes the primary source for information about jobs and the culture of the company. Indeed, eRecruiting is the fastest growing HR application. For most knowledge workers today, the first step in finding a new job is a visit to the company via the web. Virtually all HR portals include increasingly sophisticated recruiting approaches. Positive “first impressions” of the organization are critical to attracting new employees. For many applicants, the company’s website creates that “first impression.” These portals provide much more than just the ability to submit a resume. They provide the firm with an opportunity to sell the firm to applicants on the value of working for the company. Early recruiting web applications offered little more than the ability to submit an on-line application or resume. Today, however, these applications have become much more sophisticated. Applicants may be able to use web-type navigation to access a wide variety of information such as:

18 19 20 21 22 23 24

• • • • • •

25 26 27 28 29 30 31 32

• • • • • •

Determining the types of positions that are open. Reviewing skill requirements. Hearing an interview with a job incumbent. Hearing a discussion of the company’s values from senior executives. Reviewing HR policies such as the hiring or affirmative action policy. Examining the financial strength of the firm via a link to other parts of the corporate web site. Reviewing the steps in the hiring process. Taking, and sometimes receiving feedback on, selection tests. Reviewing the status of an application. Seeing live views of the workplace. Finding out times for chat sessions with new employees. Learning about the ways in which the company supports the community or charities.

33 34 35 36

Much of this information will also be of interest to existing employees seeking opportunities within the organization. As noted above, current employees often start at the HR portal to access corporate news, MSS or ESS sites.

37 38 39 40

HR Branding HR branding refers to developing an image, impression, or feeling of what it is like to work for a given employer. Branding has a long history in marketing, 29

4260 Ch02 4/12/02 11:07 am Page 30

30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

HAL G. GUEUTAL

but is a relatively new concept for HR professionals. As labor markets become increasingly competitive, companies seek to develop an employment image in the mind of the public. This HR brand can be a powerful driver and competitive advantage in attracting qualified staff. HR brands have been established by some of the most competitive firms in the U.S. For example, when we think of Southwest Airlines, what comes to mind? Teamwork? Fun place to work? Successful organization? Loyal employees? Employee-centered? How about when we think of General Electric? Competitive, technically oriented? Good managerial training? Well-paid? Up-or-out (succeed or leave)? The web presents HR managers the opportunity to establish and market an HR brand. This is especially attractive to firms that may have a local or regional presence, but need to recruit on a much broader scale. The web gives them the chance to present their employment brand globally, and attract potential employees who fit with the culture of the firm. Branding can also have value for retention and even layoff situations. As a retention tool, branding gives the employer a chance to differentiate its employment package and highlight the positives that go along with being a “[company name]” employee. In terms of downsizing, branding can assist the organization in helping laid off employees to make a smooth transition out of the firm. For example, Dell has established a brand for its employees. Recently they announced layoffs and were able to use their “brand” to help place former employees. Dell placed ads on various websites including the Society for Human Resource Management (SHRM.org), suggesting that companies consider hiring Dell brand former employees. The idea was that these “alumni” of Dell would be highly desirable because of their experience at Dell. By assisting former employees in finding jobs, Dell is able to assist former staff members, reduce ill-will and potential lawsuits, and hopefully turn former employees into new customers at their new companies.

28 29 30 31 32 33 34 35 36 37 38 39 40

Increasing the Visibility of HR eHR represents an opportunity for HR functions to gain visibility and influence in the organization. In many companies, the HR function had previously been almost invisible. HR programs went unused and HR’s reputation in the firm was not the highest. The HR portal gives HR the chance to market its range of services and to demonstrate to everyone how its services add value. It is a chance to show the technical prowess of the HR group and how HR is embracing eCommerce. While many HR groups have talked a great deal about being customer-oriented, the web allows them to deliver. HR services are available 24/7, 365 days a year. Employees see HR “products” on a daily basis, as the HR portal becomes the employee’s primary source of company information, on-line training, personal employment information, etc. The portal can also be

4260 Ch02 4/12/02 11:07 am Page 31

The Brave New World of eHR 1 2 3 4

31

used to market the value of HR services to the firm and show how HR is in alignment with other functional areas and corporate strategy. It can show employees at all levels (but especially senior management) how HR is a “strategic business partner.”

5 6

Risks of eHR

7 8 9 10 11

The technological revolution in HR service delivery also carries with it potential risks. As HR groups rush to embrace the web, there are a number of concerns that they should recognize and take steps to minimize. These are discussed below.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Depersonalization of HR A few years ago, every large organizational unit had an HR representative on site. Questions were often answered in person and employees and managers could meet with the HR representative to discuss performance issues and receive advice. HR had a face and a name. Today, employees and managers have much less contact with HR professionals. No longer is there a local HR person on site. Questions are answered by call center personnel located at unknown remote locations. Indeed, the call center representatives may not even be employees of the company. The employee may also access information via an IVR (interactive voice response) where he/she never speaks with a human being; even the voice is computer generated. Now companies are introducing ESS systems backed-up by knowledge bases as the primary point of contact for employees, with a call center serving to handle only the more complex questions. As the knowledge bases associated with ESS systems continue to improve in answering employee and managerial questions, call center contact will decrease. HR risks becoming a website and IVR voice, nothing more. HR staffs are shrinking with the implementation of new technology. Traditional transaction processing tasks are automated or outsourced. Local expertise is lost while company-wide consistency is improved. The Hunter Group in the 2000 Human Resources Self Service Survey notes that companies implementing ESS systems report they can significantly reduce the HR staff size needed to serve employees. Non-ESS companies reported a ratio of 1 HR representative per 99 employees, compared with a ratio of 1 to 151 for companies implementing ESS delivery methods. The challenge for HR is to use these new and powerful tools while simultaneously avoiding the depersonalization of HR services. Few HR executives want HR to be viewed as merely a computer voice, a website, or an electronic “big brother.” HR executives will need to explicitly plan ways of maintaining 31

4260 Ch02 4/12/02 11:07 am Page 32

32 1

HAL G. GUEUTAL

personal contact with employees.

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Outsourcing of HR Services As noted earlier, web-based technology solutions make it feasible to outsource HR transaction processing and service delivery. Outsourcing has become an increasingly popular method of delivering HR services. Almost all organizations outsource some HR services. For example, virtually all firms look to financial institutions to manage 401k plans and provide information to employees on fund values. Likewise, most organizations refer employees to HMOs for information on insurance coverage. Payroll processing is also often outsourced today. New firms are entering the outsourcing market. For example, Hewitt Associates and PeopleSoft will now offer ASP outsourcing services. According to the Gartner Group, the HR outsourcing market was $26 billion in 2001 and is expected to grow to $76 billion by 2005. This suggests that a great deal of HR work currently done “in-house” will soon be transferred to external organizations. Organizations will need to carefully consider the scope of services they want to outsource and which HR services need to stay in-house for strategic business reasons. While outsourcing may be attractive to many organizations, there is a significant risk in losing internal expertise. For example, if an organization outsources its benefits processing, and the outsource provider goes out of business, the company may be left with no internal expertise and the daunting task of shifting to a new vendor. Organizations should consider the business risk of losing key HR competencies and very carefully consider the stability of outsourcing vendors.

27 28

Other Risks of eHR

29 30 31 32 33 34 35 36 37 38 39 40

• Many vendors now supply “best-practices” as part of their technology solution. In many, if not most, cases these processes represent an improvement over existing practices. This is especially true when existing practices have not been reviewed and streamlined in many years and have become inefficient by today’s standards. The risk is that assuming that these vendorsupplied “best-practices” fit every company and every corporate culture. Organizations should be sure that the vendor’s view of the best way to handle a particular HR activity fits with the view of the senior management of the company. • Employee expectations increase quickly when they are provided with ESS technology. Most companies report a large increase in demand for HR information

4260 Ch02 4/12/02 11:07 am Page 33

The Brave New World of eHR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

33

from both employees and managers when the ESS/MSS system goes on-line. Once employees realize the ease with which they can access and use HR data, they demand to be able to do increasingly more on-line. Organizations implementing ESS/MSS systems should plan a relatively aggressive rollout to follow on the original version of the HR portal. Failure to do so will result in employee dissatisfaction, and can reduce the effectiveness of the portal as well as the potential return on the company’s investment. • The temptation to drastically reduce HR staffs once ESS/MSS is implemented can lead to negative consequences for the organization. ESS systems cannot answer all HR questions and websites do go down. Organizations need to retain a sufficient human capability to handle complex questions as well as to provide a backup for the web portal. • Information privacy and accuracy are also issues for HR. As more employees turn to the web for HR information, privacy and accuracy become critical. Organizations need to ensure that information is current as well as correct. They must develop adequate security procedures to guard the privacy of HR data. Failure to address either of these critical issues will lead to damage to employees and liability for the organization.

19 20

SKILL SETS FOR THE FUTURE

21 22 23 24 25 26

eHR is rapidly changing the manner in which HR services are delivered. As with any paradigm shift, the skills sets required to succeed are also changing. HR professionals of the future will find much different demands placed upon them and need different skills to be effective. In general, it is likely that the field will split into two broad career tracks. These tracks are described below.

27 28

Track 1: Organizational Development Generalist

29 30 31 32 33 34 35 36 37 38 39 40

Organizational Effectiveness Generalists (OEG) will largely replace the current generation of HR generalists in most on-site roles. In the past, on-site HR staff members spent the majority of their time answering employee and managerial questions and processing HR transactions. In the very near future, those tasks will be automated, outsourced, or both. This leaves traditional HR generalists with a much different, more value added, role. Freed of transaction processing, OEG professionals will be much more involved in working with managers, individual employees, and teams to increase productivity and support the business objective of the organization. This will require new skill sets, while not abandoning a core HR knowledge base. For example, the OEG professional will still need to have a thorough working understanding of legal issues, 33

4260 Ch02 4/12/02 11:07 am Page 34

34 1 2 3 4 5

HAL G. GUEUTAL

selection technologies, compensation policy, etc., but will spend most of his/her time working with a range of employees on performance management, team effectiveness, change management issues, etc. This suggests that OEG professionals will need to develop skill sets relevant to this new role. These include skills in:

6 7 8 9 10 11 12 13 14

• • • • • • • •

team building and coaching; mentoring; individual training; change management; general business; project management; implementation; diagnosing training needs.

15 16 17 18 19

This new focus presents HR professionals with new challenges, as many of these activities are difficult to link directly to bottom line improvements. OEG professionals will need to “market” their services and look for opportunities for demonstrating the “value-added” nature of their work.

20 21

Track 2: Super Content Specialist

22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Super Content Specialists (SCS) will be highly specialized in one or more specific areas of HR content. They will be the biological knowledge base for the organization. SCS professionals will have extensive knowledge beyond that contained in the knowledge base associated with the ESS or call center. They will have both specific knowledge about their area of expertise and knowledge about how that is applied in the organization. For example, a pension specialist would have in-depth knowledge of pension plans, legal and tax issues, and company policy regarding the pensions offered by the organization. A staffing specialist would have extensive knowledge of the hiring process, legal issues and best practices related to hiring and on-boarding staff. This track will develop along with the sophistication of knowledge base technology. Today, pioneers in this track may be answering employee questions in call centers. As technology improves and knowledge bases become more sophisticated, ESS/MSS systems will be able to answer increasingly complicated questions – without human intervention. This will change the role of SCS professionals. They will increasingly become responsible for developing, customizing, and maintaining HR knowledge bases. They will become true knowledge managers.

4260 Ch02 4/12/02 11:07 am Page 35

The Brave New World of eHR 1 2 3 4 5 6 7 8

35

This developing role will also require new skill sets. These individuals will need a moderate level of technical skills in addition to detailed content knowledge. They will need to understand the structure of knowledge-base systems and the use of web-based technology to deliver that knowledge. They will need a significant level of information systems knowledge to best manage their knowledge bases. Another challenge for these new-age knowledge managers will be maintaining enough cross-functional knowledge to be able to understand how their content domain fits into the overall HR service model.

9 10

eHR AND THE FUTURE OF HR

11 12 13 14 15 16 17 18 19 20 21 22 23 24

The next few years will bring more change in the delivery of HR products and services than has occurred in the history of the field to date. The traditional model of the friendly HR professional located at each major worksite will not survive. HR services and information will increasingly be delivered via the web. Employees will be expected to become “self-reliant” in terms of many HR processes. Contacts with HR staff members will become fewer, but more important as they will typically be about more difficult or complicated issues. The on-site HR professionals will focus less on traditional HR processes and will transition to more value-added organizational effectiveness work. The visibility and contribution of HR to the business will become more apparent. At the same time, organizations will need to make rather critical decisions as to which HR services they will support internally and which services they will outsource. In any case, HR in the year 2010 will look very different than it does today.

25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

REFERENCES 2000 Human Resources Self Service Survey, The Hunter Group, 2000, p. 14. 1999 Human Resources Self Service Survey, The Hunter Group, 1999, p. 20. Connors, K. (2001). Online learning can be a cost-effective alternative to traditional training. Managed Healthcare Executive, 11(7/8)(July/August), 45. Gherson, D., & Jackson, A. (2001). Web-Based Compensation Planning. In: A. J. Walker (Ed.), Web-Based Human Resources (pp. 83–95). New York: McGraw-Hill. Gilster, P. (2001). Making Online Self-Service Work. Workforce, 80(1)(January), 54–63. Greengard, S. (2001). 10 HR Technology Trends for 2001. Workforce, 80(1)(January), 20–21. Keebler, T. (2001). HR Outsourcing in the Internet Era. In: A. J. Walker (Ed.), Web-Based Human Resources (pp. 259–276). New York: McGraw-Hill. Mecham, K. (2001). How Microsoft Built a Cost-effective HR Portal. HR Focus, 78(8)(August), 4–5. PeopleSoft (2001). Hewitt Associates form Human Resource Outsourcing Alliance, Society for Human Resource Management web site: SHRM.org, October 16. Stanley, B., & Pope, D. (2000). Self-Service Lessons. HRMagazine, 45(5)(May), 155–164.

35

4260 Ch02 4/12/02 11:07 am Page 36

36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

HAL G. GUEUTAL

Tillett, L. (2000). Net Perk: Errand Portals – Companies Provide Tools for Personal Business. Internetweek, (814)(May), 82. Towers Perrin HR Service Center Survey, Towers Perrin LLP, September 2000, p. 7. Zampetti, R., & Adamson, L. (2001). Web-Based Manager Self-Service: Adding Value to the Work. In: A. J. Walker (Ed.), Web-Based Human Resources (pp. 24–35). New York: McGraw-Hill.

4260 Ch03 4/12/02 11:07 am Page 37

1 2 3 4 5 6 7 8 9 10 11 12 13 14

3. THE FUNCTIONAL AND DYSFUNCTIONAL CONSEQUENCES OF HUMAN RESOURCE INFORMATION TECHNOLOGY FOR ORGANIZATIONS AND THEIR EMPLOYEES

15 16 17 18 19 20

Dianna L. Stone, Eugene F. Stone-Romero and Kimberly Lukaszewski

21 22 23 24

INTRODUCTION

25 26 27 28 29 30 31 32 33 34

In recent years there has been a rise in the use of technology in the field of human resources (HR) management. For example, surveys show that 70% of large firms now use HR information systems, 80% conduct online recruiting, 67% post job openings online, and 40% use web-based portals as a means of communicating organizational policies and practices to actual and potential employees (Cedar, 2001; Towers Perrin, 2001). The primary reason for the increased use of human resources information technology (HRIT) is that organizations believe that automating labor intensive HR functions will help them streamline processes, utilize employees talents and skills more effectively,

35 36 37 38 39 40

Advances in Human Performance and Cognitive Engineering Research, Volume 3, pages 37–68. Copyright © 2003 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0986-5

37

4260 Ch03 4/12/02 11:07 am Page 38

38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

and achieve their strategic objectives (Bloom, 2001). Similarly, organizations contend that the use of HRIT can help attract, retain, and improve the productivity of non-managerial and managerial workers. Consistent with these views, results of recent research (Cedar, 2001; Towers Perrin, 2001) revealed that HRIT systems have reduced administrative costs, and improved the accuracy and timeliness of many HR transactions. Although there are numerous benefits of using HRIT systems in organizations, some researchers (e.g. Bloom, 2001, Stone & Stone-Romero, 1998) have argued that there also may be a number of dysfunctional or unintended consequences of such systems. For example, replacing traditional HR representatives with computerized information systems may actually decrease the satisfaction levels of an organization’s internal customers, i.e. their managerial and nonmanagerial employees (Gutek, 1995; Lukaszewski & Stone, 2001), increase the workload of the same customers (Gutek, 1995), and have the potential to invade personal privacy (Stone & Stone-Romero, 1998). Despite the increased use of technology in the field of HR management, little empirical research has examined the effectiveness of using HRIT systems to achieve HR system goals, and only a few studies have examined employee reactions to HRIT systems (e.g. Eddy, Stone & Stone-Romero, 1999; Stone, Lukaszewski & Stone-Romero, 1998). Interestingly, some research has examined the impact of other types of technologies, including manufacturing technologies and total quality management technologies, on HR practices (e.g. Snell & Dean, 1992; Jackson, Schuler & Rivero, 1989; Stone & Eddy, 1998). The results of that research have shown that technology influences the way that organizations implement various HR processes (e.g. job analysis, recruitment, selection, performance appraisal and compensation). However, to our knowledge, little or no research has assessed the effects of using HRIT systems on the effectiveness of HR practices or the degree to which such systems affect the satisfaction levels of various stakeholders in organizations (e.g. managerial workers, nonmanagerial workers). Therefore, the primary purposes of this paper are to: (a) present a model of the goals and consequences of HRIT systems; (b) describe the role of such systems in achieving HR systems goals; (c) consider the ways in which such systems’ facilitate the achievement of such goals; (d) describe the functional and dysfunctional consequences of using such systems for various organizational stakeholders (i.e. the overall organization, nonmanagerial employees, managerial employees); (e) offer a set of testable hypotheses on such systems; and (f ) suggest a strategy for reducing the dysfunctional consequences of such systems.

4260 Ch03 4/12/02 11:07 am Page 39

Human Resources Information Technology 1 2 3

39

MODEL OF THE FUNCTIONAL AND DYSFUNCTIONAL CONSEQUENCES OF USING HUMAN RESOURCES INFORMATION TECHNOLOGY SYSTEMS

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Figure 1 shows a model dealing with the goals and consequences of using HRIT systems to achieve HR system goals. Several points related to the model deserve noting: First, it suggests that there are a number of goals of the HR system in most organizations. Typically, these include: (a) attracting highly qualified workers; (b) improving productivity by ensuring that there is a match between worker capabilities and the changing nature of work requirements; (c) increasing worker commitment and retention; (d) communicating HR policies and knowledge throughout the organization; (e) minimizing administrative and labor costs; and (f) ensuring that the HR system meets the needs of internal customers. Second, the model suggests that organizations now use HRIT systems to achieve the just noted goals, and that such systems typically entail the use of human resources information systems (HRIS). However, HRIT systems may also include a variety of other technologies including voice response systems, computer-assisted testing, web-based employee self-service systems, and company web-based portals designed to disseminate knowledge and communicate organizational policies and practices. Third, the model indicates that the use of HRIT systems may result in both functional and dysfunctional consequences for the organization and its members. In the paragraphs that follow, we consider each of the elements in the model. In addition, in a subsequent section, we present a number of testable hypotheses stemming from the model that can be used to guide future research on HRIT systems.

27 28

GOALS OF THE HUMAN RESOURCES SYSTEM

29 30 31 32 33 34 35 36 37 38 39

As noted above, the primary purpose of the HR system in organizations is to attract, retain, and motivate the role performance of organizational members (Katz & Kahn, 1978). Furthermore, research on HR strategy suggests that today’s HR systems should also be designed to meet the organization’s strategic objectives, including its ability to adapt to an ever changing environment (Huselid, 1995; Jackson & Schuler, 1987). In order to achieve these and other relevant goals, HR systems must be designed with an appreciation for several important objectives: First they need to facilitate the attraction of highly qualified people to the organization through effective recruitment strategies. Second, they should be designed so as to improve worker productivity by

40

39

4260 Ch03 4/12/02 11:07 am Page 40

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

The Functional and Dysfunctional Consequences of Using Human Resources Information Technology for Organizations and their Employees.

1

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

Fig. 1.

40

4260 Ch03 4/12/02 11:07 am Page 41

Human Resources Information Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

41

ensuring that employee selection techniques maximize the correspondence between worker knowledge, skill, and ability levels and the corresponding requirements of jobs. Third, HR systems should ensure that employee capabilities are developed and continually upgraded as work requirements change. Fourth, HR systems should be designed to increase the retention of workers through the use of soundly-conceived compensation and reward systems. Not surprisingly, research suggests that the ability to attract and retain highly talented employees gives some organizations (e.g. innovative or quality enhancement organizations) a competitive advantage in the marketplace. Fifth, HR systems should be designed so as to control administrative and labor costs. As might be expected, as organizations grow in size, HR systems become quite labor intensive and administrative responsibilities increase (e.g. record keeping and reporting requirements). Thus, organizations are increasingly concerned with reducing labor costs by effectively managing the costs of performing HR functions. Sixth, HR systems should be capable of meeting the needs of an organization’s internal customers. Seventh, and finally, HR systems should be responsive to the needs of a diverse workforce, ensuring that organizational policies are fair, providing equal opportunities to diverse types of job applicants and job incumbents (e.g. in terms of race, age, sex).

20 21 22 23

THE ROLE OF HUMAN RESOURCES INFORMATION TECHNOLOGY SYSTEMS IN ACHIEVING HUMAN RESOURCE SYSTEM GOALS

24 25 26 27 28 29 30 31

In this section we consider how HRIT systems can be used to achieve various HR system goals. In particular, we specify how such systems may be used to facilitate: (a) recruitment; (b) selection; (c) performance appraisal; (d) administration of compensation and benefits; and (e) HR planning. Note that we do not consider the use of HRIT for training and development purposes because a detailed consideration of this issue appears elsewhere in this volume (see paper by Kosarzycki, Salas, DeRouin & Fiore, 2003).

32 33

Recruitment

34 35 36 37 38 39 40

One of the primary goals of the HR function is to attract highly talented individuals to an organization. In fact, some researchers (Ulrich, 2001) argue that recruitment practices are critical because in today’s economy, worker knowledge, and intellectual abilities may matter more than traditional forms of capital (e.g. machines, physical plant). Furthermore, in order to remain competitive, as organizations increase their focus on knowledge, they must 41

4260 Ch03 4/12/02 11:07 am Page 42

42 1 2 3 4 5 6 7

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

attract, motivate, and retain the best workers (Ulrich, 2001). For example, the most prestigious universities in the U.S. (e.g. University of Michigan, University of California at Berkeley, University of California at Los Angeles) are those that can attract and retain the most knowledgeable and productive faculty. Similarly, one of the key success factors of high technology firms (e.g. Cisco Systems, Microsoft, Sun Microsystems) is their ability to amass a cadre of highly knowledgeable software and systems engineers.

8 9 10 11 12 13 14 15 16 17 18

Internet-Based Recruiting In order to attract highly talented individuals worldwide, organizations are increasingly using the internet as a means of recruiting. Some estimates indicate that 53% of large firms used internet recruiting in 1997, 80% of organizations use it now, and it is expected to rise to approximately 100% by the year 2003 (Cedar, 2001). Furthermore, research shows that 82% of North American firms allow applicants to apply for jobs online, and many large firms use intranet systems to post current job openings (Cedar, 2001). As a result, current employees are given increased opportunities for advancement in the organization, which may increase their job satisfaction and commitment levels.

19 20 21 22 23 24 25 26 27 28 29 30 31 32

Establishing a Firm’s Brand Identity Interestingly, some high technology firms (e.g. Cisco) hire only through the internet, and internet recruiting is increasingly being used as a means of helping firms establish a “brand identity” that distinguishes them from their competitors (Ulrich, 2001). Firms such as Disney or Cisco identify the image that they want to portray to their customers, and attempt to infuse that image (brand identity) in their employees. For example, the Disney brand identity entails high levels of customer satisfaction and a quality entertainment experience. This identity is fostered in the organization, becomes part of its culture, and plays a key role in attracting workers to the firm. Thus, individuals who share the core values and goals of the organization are more likely to both join and maintain their membership in it. In short, the use of HRIT systems is an important means of helping an organization to establish a brand identity and attract talented workers.

33 34 35 36 37 38 39 40

Job Applicant Tracking HRIT systems are often used to assist the recruitment process by tracking applicants and analyzing the effectiveness of an organization’s recruitment strategy (Kavanagh, Gueutal & Tannenbaum, 1990). In particular, applicant tracking involves monitoring the costs of recruiting workers, and establishing a data base of job applicants who can be contacted when appropriate positions become available.

4260 Ch03 4/12/02 11:07 am Page 43

Human Resources Information Technology 1 2 3 4 5

43

Analyzing the Effectiveness of Recruitment Activities HRIT systems can be used to help analyze the time, costs, and effectiveness of varying recruiting sources. They can also be used to help an organization decrease its recruiting costs and increase the effectiveness of recruiting by helping to maximize the number of successful placements made via the recruitment process.

6 7

Selection

8 9 10 11 12 13 14

A primary goal of the HR system is to improve the match between employee capabilities and the requirements of jobs. Thus, selecting the right employees is critical to maximizing the capabilities of workers, and, thus, enhancing both individual and organizational performance. HRIT systems have been used in three major ways to provide assistance to managers and HR professionals in the selection process. We next consider these.

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

Applicant Screening and Personnel Selection HRIT systems have been used to help managers in the screening of job applicants. For example, resume scanning systems have been used to streamline the screening process, and eliminate candidates who do not fit the basic job requirements (e.g. training and education requirements; Kavanagh et al., 1990). Similarly, voice response systems (e.g. Wonderlic systems) can be used to conduct online testing or screen applicants when there are large numbers of job applicants. Such systems typically ask applicants to respond to a series of job-related questions. The same systems can eliminate the need for personally interviewing large numbers of job applicants, a process that can be very labor intensive and expensive. Some firms (e.g. Sprint) even conduct situational interviews using electronic voice response systems. In recent years HR analysts (e.g. Ulrich, 2001) have argued that intelligent web-based systems can assist managers in the selection process. For example, the same systems might be used to generate both: (a) a profile of an applicant’s strengths and weakness prior to an interview; and (b) a set of interview questions that is based upon the profile. Likewise, virtual systems might be used to conduct assessment centers, and to assess applicants’ reactions and behavior in computer-simulated situations.

35 36 37 38 39 40

Providing Previews of Organizations HRIT systems can be used to provide job applicants with a virtual preview of an organization. For example, web-based systems can provide job applicants with an opportunity to observe what it is like to work for the organization on a daily basis. 43

4260 Ch03 4/12/02 11:07 am Page 44

44 1 2 3 4 5 6 7 8

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

Personalized Job Offers Because firms often have to compete for the most qualified workers, some analysts (e.g. Bloom, 2001; Ulrich, 2001) have argued that organizations should use intelligent web-based systems to help “personalize job offers” and entice applicants with unique talents and skills to join an organization. These personalized systems can help to ensure that the needs of job applicants are identified and met by an organization. This may help the organization to gain a competitive advantage in attracting workers with specialized talent.

9 10 11 12 13 14 15 16 17 18 19 20 21 22

Evaluation of the Selection Process HRIT systems can be used to assist with the evaluation of selection procedures and the overall selection process (Kavanagh et al., 1990). For example, an HRIS can be designed to monitor the criterion-related validity of various selection procedures (e.g. interviews, tests, assessment centers). It can also be used to analyze both the costs and the utility of various selection methods. In addition, online surveys can be used to measure applicants’ reactions to selection procedures and improve the overall selection process. In summary, HRIT systems can be used to support the employee selection process by: (a) aiding with both employee recruitment and selection; (b) providing a virtual preview for job applicants; (c) ensuring that organizations are effectively utilizing the skills of workers; and (c) assessing the effectiveness of the selection system.

23 24

Performance Appraisal

25 26 27 28 29 30 31 32 33 34 35 36

An important goal of the HR function is to ensure that employees are performing properly in their roles (Cascio, 1998; Katz & Kahn, 1978). As a result, HR is responsible for helping managers control worker behavior, and, thereby, improve worker performance. The performance management process typically entails: (a) defining performance standards; (b) appraising worker performance; (c) providing appraisal-based feedback to workers; and (d) facilitating and motivating worker performance. As should be evident from the above, performance appraisal is only one element in the overall performance management process, and is primarily designed to assess performance and provide information for a number of administrative decision-making purposes (e.g, decisions about merit pay increases, job reassignments, training, promotions, transfers, and termination).

37 38 39 40

Appraisal and Tracking of Performance HRIT systems assist organizations with the management of performance in a variety of ways, one of which is the tracking of both individual and unit

4260 Ch03 4/12/02 11:07 am Page 45

Human Resources Information Technology 1 2 3 4 5 6 7 8

45

performance levels for specific time intervals (Kavanagh et al., 1990). Furthermore, as noted below, HRIT systems-based information can be used to provide performance feedback to both workers and their workgroups. As a consequence, online systems may enable organizations to help overcome a number of basic problems with the performance appraisal process in organizations, one of which is the fact that in most organizations, performance appraisal is conducted on a very infrequent (e.g. yearly) basis. As a result, appraisals are often biased by data on the most recently measured level of performance.

9 10 11 12 13 14 15 16 17

360 Degree Feedback HRIT systems can also be used to provide employees with 360 degree performance feedback, using input from managers, subordinates, peers, and customers to provide a multi-source perspective on employee performance. Not surprisingly, a web-based HRIT system may be an especially useful means of ensuring that feedback flows directly from customers to employees (Ulrich, 2001). As a consequence, employees may be able to improve their responsiveness to customers and fine-tune relationships with their clients.

18 19 20 21 22 23 24

Analysis of Raters and Rating Process HRIT systems can be used to improve the performance appraisal process by analyzing the overall rating process or the ratings of various raters (Kavanagh et al., 1990). For example, the HRIS may be used to identify common rating errors (e.g. central tendency, leniency, halo) and provide feedback to raters in order to improve the overall accuracy of their ratings.

25 26 27 28 29 30 31 32 33 34 35

Other Purposes Apart from the just noted uses, HRIT systems can be used to assist managers with employee attendance records, disciplinary procedures, and grievances (Kavanagh et al., 1990). For example, HRIT systems can be used to identify employee-related tardiness problems or patterns of absence. Similarly, the frequency of disciplinary actions or grievances can be tracked for each manager over any given period of time. For example, frequent grievances against some managers can be used to identify supervisory problems, and, thereby suggest that they may be in need of additional managerial training. Likewise, the identification of high grievance rates may help to decrease voluntary turnover rates.

36 37

Compensation and Benefits

38 39 40

A key objective of most compensation and benefit plans is to motivate employees to achieve organizational goals. In order to accomplish this end, an 45

4260 Ch03 4/12/02 11:07 am Page 46

46 1 2 3 4 5

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

organization must align its compensation and benefits systems with the strategic goals of the organization and the needs of its employees. For example, most successful compensation systems are designed to: (a) attract, retain, and encourage employee performance; (b) achieve internal and external equity; and (c) balance direct and indirect (e.g. benefits) forms of compensation.

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Management of Employee Benefits Research shows that, in recent years, benefits comprise about 40% of the total cost of employee compensation (Cascio, 1998). Thus, the effective management of benefits has become a key means of controlling labor costs in organizations. As a result, one of the major uses of HRIT systems is to help manage compensation and benefits. Results of a recent study (Cedar, 2001) suggest that 85 to 95% of most HRIT system applications focus on benefits, 401K or pension services, and the communication of HR policies. Furthermore, other research (Towers Perrin, 2001) indicates that 60% of companies allow employees to complete benefits enrollment online. This is double the percentage providing online benefit services in the year 2000. HRIT systems assist with the management of compensation and benefit systems in a variety of ways. First, such systems help manage compensation by enabling managers to better plan or model the costs associated with various incentive systems. For example, in order to choose the most effective incentive system, managers can model the impact of changes in merit pay, gainsharing, or skill-based pay on both pay levels and overall labor costs. Likewise, compensation planning systems can be used to help organizations maintain a competitive edge in the external labor market and ensure that the organization is in compliance with extant laws, regulations, and union contracts. For example, incentive systems can be set up so as to ensure that incentives are fair and do not have an adverse impact on protected groups (e.g. women, members of various racial or ethnic groups).

31 32 33 34 35 36 37 38 39 40

Providing Information to Employees HRIT systems can assist with compensation and benefits by providing workers with information about benefits. For example, although benefits are often over 40% of total compensation costs, employees are not always aware of the benefits offered by an organization and may not know the worth of its benefit package. Thus, technology can be used to communicate benefits information to employees or job applicants in an effective and timely manner. Recent research (Cedar, 2001) shows that 57% of the firms surveyed in North America use “enterprise information portals” to provide benefits and other HR

4260 Ch03 4/12/02 11:07 am Page 47

Human Resources Information Technology 1 2 3 4 5

47

policy information to employees. However, the technologies used for this purpose differ across organizations: 82% use toll free phone systems, 82% use interactive voice response systems, 70% use call centers, 65% use HR representatives, and 42% use employee self-service systems to communicate benefits information (Cedar, 2001).

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Flexible Benefit Plans In recent years, organizations have begun to use cafeteria style (flexible benefit) plans in order to meet the diverse needs of their employees. For example, flexible benefit plans allow employees to choose from among alternative benefit options, and change those options during a yearly open enrollment period. HRIT systems can facilitate the use of cafeteria benefit systems by allowing employees to select or change their benefit options online. In fact, one of the primary advantages of employee self service systems is giving employees greater control over their benefit options. In summary, HR technology has enabled organizations to improve their compensation and benefit systems by: (a) giving managers the opportunity to model the use of various incentive systems; (b) providing information to employees about benefit packages; and (c) allowing employees to directly select and alter their benefit packages online.

21 22

Human Resources Planning

23 24 25 26 27 28 29 30

Another critical function of HRIT systems is HR planning, which involves an analysis of the current jobs, workers, and the organizational environment in order to help support the firm’s strategic goals. Not surprisingly, HRIT is often a key support tool for HR planning, and typical planning applications include workforce profiles, organizational charting, succession planning, turnover analysis, and the assessment of compliance with laws or regulations (e.g. EEO, OSHA; Kavanagh et al., 1990).

31 32 33 34 35 36 37 38 39 40

Forecasting Staffing Needs The purpose of a workforce profile is to examine the makeup of the workforce and forecast human resources supply and demand. In large organizations, HRIT systems are often used to help managers forecast staffing needs, and develop inventories of in-house talent and skills. Such systems enable the organization to provide advancement opportunities to current members, utilize the skills of current employees, and create greater levels of commitment to the organization. In fact, recent surveys (e.g. Cedar, 2001; Towers Perrin, 2001) have revealed that managers primarily use HRIT systems for workforce 47

4260 Ch03 4/12/02 11:07 am Page 48

48 1 2 3 4

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

utilization analysis and staffing. However, HRIT systems can also help organizations maintain flexibility or adapt to changing goals by identifying staff capabilities, and reassigning workers to roles that maximize the utilization of their knowledge, skills, and abilities.

5 6 7 8 9 10 11 12 13 14

Succession Planning HRIT systems also provide managers with assistance in succession planning, which involves the identification of replacements for managerial positions. For example, a HRIS can be used to identify and track “high potential” employees, and help the organization transfer them to key positions (Kavanagh et al., 1990). In addition, HRIT can be used to facilitate turnover analyses by revealing the nature and extent of turnover within the organization. Such analyses help identify potential problem areas and are used to help formulate solutions to turnover problems.

15 16 17 18 19 20 21 22 23 24

Government Reporting In organizations, HRIT systems are frequently used for reporting required information to government agencies. Organizations must comply with numerous federal and state laws and regulations (e.g. Equal Employment Opportunity, Affirmative Action, Occupational Health and Safety). As a result, organizations are required to file periodic reports to show their compliance with such laws and regulations. However, the same reports may also be useful for organizations because they often help identify potential problem areas (e.g. adverse impact, unequal pay rates).

25 26 27 28 29 30 31 32

Summary As should be evident from the foregoing, HRIT systems are used in a variety of ways to help achieve a number of important HR goals, including recruitment, selection, performance appraisal, compensation, and HR planning. Furthermore, as the model in Fig. 1 shows, there are a number of potential functional and dysfunctional consequences of using such systems. Thus, in the following sections we consider both types of consequences.

33 34 35

FUNCTIONAL CONSEQUENCES OF HUMAN RESOURCES INFORMATION TECHNOLOGY SYSTEMS

36 37 38 39 40

As should be clear from the above, HRIT systems are widely used to both support HR system goals and to monitor and improve the effectiveness of HR systems. As a result, in this section we provide a brief overview of the functional consequences of using HR technology in organizations with respect

4260 Ch03 4/12/02 11:07 am Page 49

Human Resources Information Technology 1 2

49

to three key stakeholders in organizations, i.e. the overall organization, nonmanagerial employees, and managerial employees.

3 4

Consequences for the Organization

5 6 7 8 9

We believe that several of the characteristics of bureaucratic organizations (Katz & Kahn, 1978; March & Simon, 1958; Weber, 1947) provide a useful framework for understanding the functional aspects of using HRIT systems in organizations. Thus, the analysis that follows is based loosely on such characteristics.

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Division of Labor One of the primary assumptions of the bureaucratic model is that efficiency can be achieved through economies of scale and subdividing tasks into their elements. Not surprisingly, the use of HRIT systems is thought to enable organizations to achieve greater efficiency by automating many of the transactions (e.g. job requisitions, benefits enrollment, recruiting, resume scanning) that are typically performed by HR representatives. Consistent with this view, recent research revealed that the use of HR technology has reduced the cycle time of HR processes by 50% and decreased transaction costs by the same percentage (Cedar, 2001). Similarly, organizations have argued that the use of HRIT systems can decrease costs by reducing the size of an organization’s HR staff. In this regard, survey research shows that, on average, the size of the HR staff in an organization is reduced by about 25% when HRIT systems are implemented (Cedar, 2001). Not surprisingly, as organizations grow, the sheer volume of HR-related transactions increases. Furthermore, in recent years, HR processes have become more complex because of changes in benefit options (e.g. cafeteria style benefit plans), and the use of deferred compensation systems (e.g. 401k or 403b plans) rather than traditional pension plans. As a result, HRIT systems may be especially useful in large organizations that use flexible benefit or compensation systems, and the results of survey research support this contention (Cedar, 2001; Towers Perrin, 2001).

33 34 35 36 37 38 39 40

Uniform Policies and Practices In bureaucratic organizations, employee behavior is controlled, at least in part, by a reliance on uniform practices and policies. Toward this end, the use of HRIT systems helps to: (a) standardized HR policies and practices in organizations; and (b) to ensure that information about the same policies and practices is communicated to all members through the use of online portals or intranet systems. 49

4260 Ch03 4/12/02 11:07 am Page 50

50 1 2 3 4 5 6 7 8 9 10 11

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

One advantage of HRIT systems is that is increased uniformity or standardization in HR-related decision-making. The primary reason for this is that HRIT systems allow for managers to be held accountable for their decisions and ensure that their decisions (e.g. pay raises, promotions) are based upon company policies rather than their personal or political goals. Apart from increased managerial accountability, another advantage of HRIT systems is that HR functions (e.g, recruitment, selection, performance appraisal) can be monitored, and areas can be identified that are in need of improvement. Interestingly, research reviewed by Kavanagh et al. (1990) shows that despite the high costs associated with many HR functions, organizations rarely monitor the effectiveness of their HR systems.

12 13 14 15 16 17 18 19 20 21 22

Merit as a Basis for Decision Making In an ideal bureaucracy, decisions about hiring, promotion, etc., are based on merit, not ascribed status or friendship. Thus, the use of HRIT systems (e.g. for resume screening systems and online assessment) may help organizations ensure that decisions are based on merit rather than factors that are unrelated to a person’s potential or actual job performance. As a result, through the use of HRIT systems, organizations may improve the fairness of various personnel decisions (e.g. selection, promotion, demotion, termination, transfer, salary increases) and, thereby, the overall performance of the organization.

23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Depersonalization of Roles In an ideal bureaucracy organizational offices or roles are depersonalized; that is, they are independent of any given role incumbent. However, in many organizations, individuals in HR positions exercise virtually complete control over key HR processes (e.g. incentive systems, benefit systems), and organizations have become very dependent on the knowledge and expertise of these individuals. As a result, if a particular HR professional leaves the organization, much of the knowledge surrounding HR processes leaves with him or her. As a result of this loss, the effectiveness of the organization may decrease. In view of the above, we believe that one advantage of HRIT systems is that their use may lead organizations to become less dependent on the knowledge of the specific individuals who hold HR positions. Morever, the depersonalization of the offices held by HR professionals may enable the organization to better manage information within the organization and adapt to changes in HR personnel (e.g. their turnover or retirement).

4260 Ch03 4/12/02 11:07 am Page 51

Human Resources Information Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

51

Needed Research As noted above, the use of HRIT systems may lead to a number of functional consequences for organizations, including: (a) increased standardization and efficiency of HR processes; (b) greater uniformity of HR policies and practices; (c) more rational or merit-based HR decision-making; and (d) the depersonalization of HR-related offices. Although some research (Cedar, 2001; Towers Perrin, 2001) provides support for the benefits of using HRIT systems, as far as we know, little or no empirical research has provided a thorough assessment of the many functional consequences that may result from using HRIT systems. Thus, we offer several testable hypotheses in order to: (a) generate increased interest in research on the consequences of using HRIT systems; and (b) provide a useful guide for conducting future research on the topic. Hypothesis 1: The use of HRIT systems in organizations will be positively related to the efficiency of HR processes. Hypothesis 2: HR-related decisions (e.g. pay raises, promotions) will be more likely to be based on merit or performance when the organization uses a HRIT system than when it uses a traditional HR system. Hypothesis 3: Organizations will have greater levels of control over HR knowledge when they use HRIT systems than when they use traditional HR systems. Hypothesis 4: The use of HRIT systems will have a greater impact on the efficiency levels of the HR function in large organizations than in small organizations.

25 26

Consequences for Non-managerial Employees

27 28 29 30 31 32

As noted above, one of the primary goals of using an HRIT systems is to improve service to an organization’s internal customers (Bloom, 2001; Ulrich, 2001). For example, results of a survey by the Cedar Corporation (2001) revealed that 100% of the 304 companies surveyed reported that they use HRIT systems in the hopes of improving service to employees.

33 34 35 36 37 38 39

Management of Information by Employees Through the use of HRIT systems, it is often possible for employees to gain access to HR information at any time of the day or night. Thus, with HRIT systems they can better manage their benefits or employment records (e.g. submit changes in their address, telephone number, or marital status) than they can with traditional HR systems. In addition, Ulrich (2001) contends that

40

51

4260 Ch03 4/12/02 11:07 am Page 52

52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

HRIT systems help organizations create unique relationships with their employees, and facilitate dialogues between employees and organizations. Moreover, an HRIT system is beneficial because it creates a direct communication link between employees and customers, allowing employees to use external customer feedback to improve service (Ulrich, 2001). Therefore, some HR analysts (e.g. Gueutal, 2003) have argued that employees may be more satisfied with the HR service provided by an HRIT system than a traditional HR system. However, results of recent research by Lukaszewski and Stone (2001) suggest that employee satisfaction with an HRIT system may depend on a number of factors. For example, the study showed that employees were no more satisfied with a web-based HRIS than with a traditional HR system. However, they were more satisfied when they had the freedom to change benefit information by contacting an HR representative or using a web-based system. Furthermore, results of the study suggest that the type of information dealt with by the system may affect employee satisfaction with the system. In particular, employees were more satisfied when the system required them to reveal employment data than when it required the disclosure of medical data. In view of these results, it appears that employee satisfaction with HRIT systems may depend on such factors as: (a) the sensitivity of information that employees must supply to the system; (b) the ability of employees to use the computer or internet; and (c) the degree to which employees believe that they have a choice between contacting an HR representative or using an automated HR system.

23 24 25 26 27 28 29 30 31 32 33 34 35

Productivity Improvement Some HR researchers (Gueutal, 2003) have argued that one of the key benefits of using an HRIT systems is that it may actually increase employee productivity. One of the primary reasons for this is that HRIT systems eliminate the need for employees to spend time contacting HR representatives to make changes in their records. In addition, the same systems may substantially reduce the time that employees spend searching the internet for benefits and other employment-related information (e.g. retirement planning systems, medical insurance information). Research reviewed by Gueutal (2003) shows that employees often spend several hours per day searching the internet for information. As a result, an HRIT system may increase productivity by allowing employees to concentrate on their work rather than searching the internet for HR-related of information.

36 37 38 39 40

Needed Research Despite the potential benefits that may accrue to employees from using HRIT systems, little empirical research has directly examined the impact of such systems on employee satisfaction levels, and virtually no research has

4260 Ch03 4/12/02 11:07 am Page 53

Human Resources Information Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

53

assessed the effects of HRIT systems on productivity rates. As a result, we present the following hypotheses to guide future research: Hypotheses 5a–d: Employees will be more satisfied with an HRIT systems than a traditional HR system when: • they have high levels of computer skill than when they do not (5a), • the purpose of using the system is routine as opposed to unusual (5b), • the type of data they must reveal to the system is not sensitive rather than sensitive (5c), and • they have a choice over the type of system they use (HRIT system versus a traditional HR system; 5d). Hypothesis 6: When organizations use HRIT systems, employees will spend less time searching the internet for employment information than when organizations do not use such systems.

16 17

Consequences for Managers

18 19 20 21 22 23 24 25 26 27

Productivity One of the key reasons for using HRIT systems is to provide managers with data, reports or decision support system tools that enable them to perform their jobs more effectively. For example, HRIT systems can provide managers with reports that facilitate their work on various tasks (e.g. tracking employee attendance, making salary recommendations, conducting performance appraisals, and evaluating employee skill levels). HRIT systems can also provide managers with decision support system tools that improve their ability to model various phenomena (e.g. changes in compensation or turnover).

28 29 30 31 32 33 34 35

Job Satisfaction HRIT systems may streamline many of the tedious processes that are inherent in the jobs of managers. To the degree that they do, the job satisfaction levels of managers should increase. At least one reason for this is that less time will be spent on repetitive tasks that are better completed by computers (e.g. the preparation of reports). Note, however, that managers’ reactions to HRIT systems will probably be a function of their ability to use such systems.

36 37 38 39 40

Needed Research To our knowledge, no empirical research has directly examined managerial reactions to HRIT systems. Thus, we offer the following hypotheses to guide future research. 53

4260 Ch03 4/12/02 11:07 am Page 54

54 1 2 3 4 5 6 7

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

Hypothesis 7: Managers will report higher levels of satisfaction with their jobs when using HRIT systems to provide them with important decision making tools than when using traditional HR systems. Hypothesis 8: Managers will report higher levels of satisfaction with HRIT systems when they perceive that they have the ability to use the system effectively than when they do not perceive they can use the system effectively.

8 9 10

DYSFUNCTIONAL CONSEQUENCES OF HRIT SYSTEMS

11 12 13 14 15 16 17 18

Although there are a number of functional consequences of using HRIT systems in organizations, our model (see Fig. 1) suggests that such systems may also produce some dysfunctional consequences. Therefore, in this section we consider such consequences for the overall organization, non-managerial employees, and managerial employees. We base our analysis of the dysfunctional consequences of HRIT systems on theory and research on bureaucracy (e.g. Katz & Kahn, 1978).

19 20

Consequences for the Organization

21 22 23 24 25 26 27 28 29 30 31 32 33 34

Rigidity Although the use of HRIT systems may standardize HR processes and increase efficiency, the standardization of such processes may be problematic because the emphasis on standard rules and operating procedures may result in system rigidity. Rigid HR systems can create problems because they are not capable of dealing with the inevitable exceptions or special issues that arise in organizations. As a result, standardized HRIT systems may not meet the needs of internal customers. In addition, such systems may not be capable of easily being adapted to either: (a) changes in HR policies and practices; or (b) modifications in technology. Technology changes quite rapidly (i.e. has a very short “half life”) and becomes quickly outdated. As a result, organizations may need to spend a great deal of time and money updating both the hardware and software of HRIT systems to ensure that they remain functional (Bloom, 2001).

35 36 37 38 39 40

Increased Costs Although automation may result in cost savings (e.g. through HR staff reductions), HRIT systems do not always lead to such savings (Walker, 2001). In fact, the average cost of such a system is now over $1.5 million. Moreover, it often takes more than a year to make such a system operational (Cedar, 2001).

4260 Ch03 4/12/02 11:07 am Page 55

Human Resources Information Technology 1 2 3 4 5

55

Thus, the cost of purchasing and implementing HRIT systems may often be far greater than the savings that result from HR staff reductions when such systems are implemented. Worse yet, some analysts (e.g. Bloom, 2001) have argued that few HRIT systems have achieved sufficient levels of operating excellence to free HR representatives from their traditional roles.

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Decreased Satisfaction of Internal Customers Despite the fact that the depersonalization of HR offices can help manage HR knowledge in organizations, it may also have a negative impact on internal customer satisfaction. In particular, the automation of the HR function appears to have resulted in fewer and less knowledgeable HR representatives (Bloom, 2001). As a result, internal customers may experience poorer quality HR-related service. In companies with traditional HR systems, representatives can be very attentive to their internal customers, ensuring that their HR-related needs are met. However, with HRIT systems, HR representatives are typically replaced by a call center or website containing frequently asked questions about such matters as benefits or HR policies. As a consequence: (a) nonmanagerial and managerial employees often have no one to help them with their employmentrelated questions; and (b) managers may not receive needed assistance with important HR-related issues (e.g. employee requisitions, promotions, transfers, terminations).

24 25 26 27 28 29

Needed Research In spite of these and other potential problems associated with the use of HRIT systems, to our knowledge no empirical research has directly examined the degree to which such systems result in dysfunctional consequences. Thus, we offer the following hypotheses in order to guide research on the issue:

30 31 32 33 34 35 36 37 38 39 40

Hypotheses 9a–c: Compared to a traditional HR systems, HRIT systems will be perceived as: • more inflexible (9a), • less likely to meet the needs of managers (9b), and • less likely to meet the needs of non-managerial workers (9c). Hypotheses 10a-b: Compared to traditional HR systems, HRIT systems will: • be more costly for organizations (10a), and • take greater time to implement or change (10b). 55

4260 Ch03 4/12/02 11:07 am Page 56

56 1

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

Consequences for Non-managerial Employees

2 3 4 5 6 7 8 9 10 11 12

Because the use of HRIT systems results in the depersonalization of many HR functions, there may a number of dysfunctional consequences for nonmanagerial employees of organizations. More specifically, HRIT systems may: (a) negatively affect employee satisfaction with HRIT system service; (b) reduce the flexibility of HR systems; (c) increase the knowledge demands of workers; (d) produce discomfort among users of HRIT systems; (e) increase the difficulty of using HR systems; (f) increase the workload of employees; (g) have an adverse impact on members of minority groups; and (h) be invasive of privacy. Each of these consequences is considered below, after which testable hypotheses are presented.

13 14 15 16 17 18 19 20 21 22 23

Satisfaction with HRIT System Service Recent theory and research by Gutek and her colleagues (Gutek, 1995; Gutek, Bhappu, Liao-Troth & Cherry, 1999; Gutek, Cherry, Bhappu, Schneider & Woolf, 2000) provides an important framework for understanding employee reactions to the use of HRIT systems, and serves as the basis for the following analysis. First, consistent with Gutek’s (1995) model, the use of HRIT systems leads to impersonal encounters with a computerized system. Such encounters replace the relationship-based HR service that is normally provided by an employee’s HR professional. As such, satisfaction with HRIT-based services is likely to be lower than that with traditional HR services.

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Lack of System Flexibility One of the many problems stemming from the replacement of HR professional with a computerized encounter system (i.e. HRIT system) is that the new system may not be flexible enough to tailor service to the needs of employees. One reason for this is that HRIT systems typically provide users with menus that entail a set of standardized options for dealing with questions, concerns, or problems. However, the standardized options may not be capable of addressing the needs of employees with non-standard problems. In addition, in computerized systems, the number of options is typically quite limited, and employees are expected to be knowledgeable about the options. For example, assume that an employee is using a self-service HRIT system to choose a health insurance provider. The system may assume that the employee is aware that providers place different limits on the total amount of health insurance coverage. However, all employees may not aware of these limits. As a result, they may not be able to choose the best health insurance plan for their families. This situation can be contrasted with that of an employee dealing with an HR specialist who is knowledgeable about

4260 Ch03 4/12/02 11:07 am Page 57

Human Resources Information Technology 1 2 3

57

benefit systems, and can, thus, provide the employee with information about the advantages and disadvantages of various insurance plans. As a result, the employee can make an informed choice about a plan.

4 5 6 7 8 9 10 11 12 13 14 15 16

Increased Knowledge Demands As should be apparent, a key problem with HRIT systems is that they place the burden on the employee to be knowledgeable about various options encountered in the system. As such, HRIT systems may be more difficult for employees to use than a traditional HR system. Consequently, compared to a traditional HR system, HRIT systems may lead to poorer quality service, and employees may report that they are less satisfied with the service offered by the system. For example, if employees do not fully understand the benefit options presented to them by the HRIT system, they may not be able to select benefit plans that meet their needs. As a result, the HRIT-based system may not achieve its intended purpose; that is, the use of HRIT systems may undermine the effectiveness of an organization’s benefit or compensation system.

17 18 19 20 21 22 23 24 25 26 27 28

Lack of Comfort with the HR System The use of HRIT systems may result in decreased comfort with the HR system and the organization. For example, employees may perceive that the use of a depersonalized HRIT system reflects the overall values of the organization, and they may infer that the organization does not care about them. As a result they may be less likely to trust the organization when it uses an impersonal HRIT system than a traditional HR system. Thus, they may be less willing to help the organization achieve its goals. Lowered employee commitment may also result in a number of dysfunctional consequences for the organization, including increased turnover, lowered job acceptance rates, and fewer organizational citizenship behaviors.

29 30 31 32 33 34 35 36 37 38 39 40

Difficulties in Using the System Another potential problem with HRIT systems is that they often make it more difficult for employees to deal with problems or mistakes (e.g. an incorrect address or social security number). One reason for this is that employees may not have the computer skills or expertise that are needed to correct errors in an HRIT-based system. In fact, some analysts (Bloom, 2001) have argued that employee self-service systems may result in a greater number of errors than traditional systems. For example, in many self-service systems, if employees enter incorrect data, there may be no mechanism for recognizing this and correcting the problem. In contrast, with traditional HR systems there may be several ways of detecting and correcting errors. 57

4260 Ch03 4/12/02 11:07 am Page 58

58 1 2 3 4 5 6

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

As a result of inaccurate or incorrect data in computerized systems, employees may experience one or more negative outcomes (e.g. denial of benefits, lowered pay). Moreover, employees may have neither the motivation nor the ability needed to provide the type of feedback to the organization that would lead to the improvement of the HRIT system. As a result, problems within the system may go uncorrected for long periods of time.

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Added Workload and Productivity Self-service HRIT-based systems also may be dysfunctional because employees actually have to perform some of the HR-related work within the system; that is, such systems may transfer some of the work previously performed by support staff to production employees. Gutek (1995) labels this phenomenon as “co-producing,” which implies that employees become co-producers of the services provided. For example, employees have to ensure that their employment data are up-to-date, and they are often responsible for changing their benefits when benefit options change. One negative consequence of HRIT systems is that coproduction problems may actually have a negative effect on employee productivity. For example, Gutek (1995) argues that employees spend a great deal of time gathering information about products and services online (approximately nine hours per week), and this may be particularly costly when the employees are highly paid professionals or managers. Furthermore, as noted above, when employees spend a great deal of time searching for employment information (e.g. retirement information, benefits, training information) on company web sites, they may be less satisfied with the organization than when the organization provides that service through traditional HR systems.

27 28 29 30 31 32 33 34 35 36 37 38 39 40

Potential for Adverse Impact Although the use of the internet to recruit and hire job applicants may have a number of advantages for organizations, some researchers (Hogler, Henle & Beamus, 2001) have argued that it may have an adverse impact on members of several ethnic minority groups (e.g. African-Americans, Hispanic-Americans, Native Americans). One reason for this is that there is a “racial divide” in access to and use of computers; whites are much more likely to own and use computers than are African Americans or other ethnic minorities (Hogler et al., 2001). In addition, individuals who come from low socioeconomic status backgrounds (e.g. those in rural areas, inner cities, or on Native American reservations) often have less access to computers than those who are more economically advantaged. Furthermore, some reports indicate there are fewer

4260 Ch03 4/12/02 11:07 am Page 59

Human Resources Information Technology 1 2 3 4 5 6 7 8 9 10

59

computers in schools that have a large percentage of minorities than those that are primarily white (Hogler et al., 2001). As a result of these and other factors, the widespread use of internet recruiting and hiring may place some individuals at a considerable disadvantage in the job market; that is, internet-based recruiting may have an adverse impact on some protected groups (Hogler et al., 2001). Thus, organizations that only use internet recruiting may be subject to charges of unfair discrimination under Title VII of the Civil Rights Act (1964, 1991). Furthermore, internet recruiting may not reach all segments of the labor market. As a result, it may not help the organization achieve its recruitment goals.

11 12 13 14 15 16 17 18

Perceptions of Invasion of Privacy Another potential dysfunctional consequence of using HRIT systems in organizations is that employees may perceive that such systems are invasive of privacy. Previous research (e.g. Linowes, 1989; Pillar, 1993; Stone & Stone, 1990) has shown that employees have a number of concerns about using computerized HR systems in organizations. Thus, we now consider some of these concerns.

19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Data security problems and invasion of privacy. Employees are often concerned about the use of HRIT systems, especially web-based systems, because the same systems permit knowledgeable users (both inside and outside of the organization) to access to a wide array of personal information (e.g. medical information, credit information, family or domestic partner information) about them. As a result, employees may feel that, if accessed by others, their personal information may stigmatize them, and result in their experiencing one or more negative outcomes (e.g. denial of a job or a promotion, lower pay raises). Interestingly, results of survey research suggest that this concern may be well founded. For example, one study found that 34% of firms collect and store medical and prescription drug information about employees (Society for Human Resources Management, 2000). In addition, the same study revealed that the same information is often released to insurance companies and potential employers. Furthermore, in some cases, employees have been terminated because organizations discovered they were using AZT drugs to control AIDS. Not surprisingly, charges of unfair termination based on the use of AZT have been settled out of court. Several recent studies have examined the extent to which HRIT systems are perceived as unfair or invasive of privacy (e.g. Eddy et al., 1999; Lukaszewski & Stone, 2001; Stone, Lukaszewski & Stone-Romero, 2001). In particular, results of research by Eddy et al. (1999) found that individuals were more likely 59

4260 Ch03 4/12/02 11:07 am Page 60

60 1 2 3 4 5 6 7 8 9 10 11 12 13

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

to perceive that a HRIS was invasive of privacy and unfair when they were unable to control the release of information, and the information was released outside the organization than when they were able to authorize the release of data. Similarly, findings of a study by Stone et al. (2001) indicated that a HRIS was considered most invasive of privacy when: (a) employment data were disclosed to supervisors rather than just the HR staff; (b) the same data were used for HR planning purposes; and (c) the employees had no ability to check the accuracy of data in the HRIS. Furthermore, research by Lukaszewski and Stone (2001) revealed that employees were more likely to perceive their privacy had been invaded when medical data were collected and stored in a HRIS, and they had no choice about whether to use a web-based HR system or a traditional HR system to provide data than when they had choice about the type of system to use.

14 15 16 17 18 19 20 21 22 23 24 25 26 27

Unauthorized data disclosure problems. Employees are often concerned about the use of HRIT systems because such systems may allow for the unauthorized disclosure of information about them to others. In this regard, research (Linowes, 2000) shows that 70% of employers regularly disclose employment data to creditors, 47% give information to landlords, and 19% disclose employee data to charitable organizations. Furthermore, 60% of employers do not inform employees when they disclose information within or outside the organization (Society for Human Resources Management, 2000). Thus, the use of HRIT systems may allow employers to release employee data with ease, and there are presently no legal restrictions on access or disclosure of employee information in private sector firms. As a result, employees may be justifiably concerned that the use of an HRIT systems may give the organization the ability to release personal information about them.

28 29 30 31 32 33 34 35 36

Lack of information privacy policies. Despite the widespread use of HRIT systems and growing employee concerns about the privacy of their employment-related information, most companies have not established policies to protect employee privacy (Linowes, 2000). However, results of surveys show that most Americans (76%) are concerned about the use and dissemination of personal information via computerized networks, and 62% want increased restrictions on an organization’s ability to collect, store, and release data about employees (Pew Internet and American Life, 2001).

37 38 39 40

Data accuracy problems. Employees also report that they are concerned with the use of HRIT systems because such systems often contain inaccurate data about them, and they are typically unaware of this and/or unable to correct the

4260 Ch03 4/12/02 11:07 am Page 61

Human Resources Information Technology 1 2 3 4 5 6 7 8

61

data. Interestingly, the results of research (Pillar, 1995) show that 48% of credit reports are inaccurate, yet employers often use credit data to make employment-related decisions (e.g. selection or promotion). Likewise, Linowes (2000) noted that 72% of the firms considered by his research do not allow employees access to records, and 24% do not give them the opportunity to correct their records. Thus, employee concerns about the degree to which inaccurate data may unfairly stigmatize them or affect their outcomes in organizations appear quite justified.

9 10 11 12 13 14 15 16 17 18 19 20

Stigmatization problems. Employees are often troubled by the use of computerized HR systems because networked data may lead to their stigmatization (Stone & Stone-Romero, 1998). As a result of such stigmatization, they may not be able to overcome past mistakes. In particular, computerized systems often provide for the permanent storage of employee information which can be easily accessed and disseminated within and outside the organization. For example, an employee who had credit-related problems very early in his or her life may have difficulty purging various computerized systems of the negative information. As a result, the employee’s advancement and career development opportunities may be negatively affected by data that have no bearing on his or her current performance.

21 22 23 24 25 26 27 28

Minimizing negative reactions. Taken together, the above-described studies suggest that negative reactions to the use of HR systems (including HRIT-based systems) can be lessened by the use of information management policies that: (a) restrict the release of information; (b) provide employees with the ability to correct inaccurate data; (c) limit the types of data stored in such systems; and (d) provide employees with a choice over the type of HR system that is used to manage their data.

29 30 31 32 33 34 35 36 37 38 39 40

Needed Research Above, we argued that the use of HRIT systems may have a number of negative consequences for employees, including: (a) poorer quality service than traditional HR systems; (b) lowered employee satisfaction levels with the service provided by the system, the benefits received from system use, and the overall organization; (c) greater difficulty dealing with problems or mistakes within the system which may result in one or more negative outcomes; and (d) increased work for employees, which may decrease their productivity. Although these factors may create a number of problems for employees, little research has examined the impact of HRIT system use on employee reactions. However, research by Gutek and her colleagues (Gutek et al., 1999; Gutek et al., 2000) 61

4260 Ch03 4/12/02 11:07 am Page 62

62 1 2 3 4 5 6 7 8 9 10

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

has shown that customers who are external to an organization are typically less satisfied and experience lower levels of trust with encounters than with relationships. It merits noting that this research did not explicitly examine reactions to HRIT systems. Instead, it assessed customer reactions to service provided by: (a) hairstylists; (b) physicians; (c) academic advisors; (d) auto mechanics; (e) travel agents; (f) insurance agents; and (g) bankers. In contrast, the research by Lukaszewski and Stone (2001) examined reactions to HRIT systems, and found that compared to a traditional HR system, employees were less satisfied with an online benefit system when they did not have a choice of using the online system.

11 12 13 14

Hypotheses on reactions to HRIT systems. Given the paucity of research on employee reactions to HRIT systems and the growing use of such systems in HR, we offer the following hypotheses to guide research:

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Hypotheses 11a–b: When employees do not have a choice over the type of HR system used in organizations, compared with a traditional HR system, a HRIT system will result in: • less comfort with the system (11a), and • less satisfaction with the service provided by the system (11b). Hypotheses 12a-b: Compared to organizations that offer employees a choice over the type of HR system used (traditional vs. HRIT), employees that are not offered a choice of systems will be: • less satisfied with the system (12a), and • less committed to the organization (12b). Hypothesis 13: Employees who use HRIT systems to handle mistakes and problems will report greater difficulty of system use than employees who use a traditional HR system.

31 32 33 34 35 36 37 38 39 40

Hypotheses on adverse impact. Given the potential problems with internet recruiting, organizations may want to consider using internet recruiting in conjunction with traditional recruitment sources (e.g, newspaper ads, public employment agencies) to reach all segments of the labor market. Despite the growing controversy about the use of internet recruiting, we know of no empirical research on the extent to which internet recruiting has an adverse impact on members of protected groups or the degree to which internet recruiting reaches broad segments of the labor market. Thus, we present the following hypotheses to foster research on the issue:

4260 Ch03 4/12/02 11:07 am Page 63

Human Resources Information Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

63

Hypotheses 14a–b: Compared to organizations that use only internet recruiting, those that use both internet recruiting and traditional forms of recruiting will: • attract more members of minority groups (14a), and • reach broader segments of the labor market (14b). Hypotheses on invasion of privacy. Although some research has examined the extent to which employees perceive that an HRIT systems is invasive of privacy, additional research is needed to assess employee reactions to various types of HR technology. Thus, we present the following hypotheses that can be tested in future research: Hypothesis 15: Web-based HR systems that allow for the networking of employee data will be viewed as more invasive of privacy than stand-alone HR systems that do not allow for the networking of data. Hypothesis 16: The greater the use of security systems (e.g, firewalls, special passwords), the lesser will be the degree to which employees perceive that their privacy has been invaded. Hypothesis 17a-c: Employees will react more positively to HRIT systems that: • limit the types of information collected and stored within an specific system (e.g, employment data not medical or credit data) than those that don’t impose such limits (17a), • limit a supervisor’s access to personal data about employees (e.g. medical, prescription, domestic partner or family data) than those that don’t impose such limits (17b), and • allow employees the ability to determine whether data about them will be released to others than those that do not allow employees this ability (17c).

30 31

Consequences for Managers

32 33 34 35 36 37 38 39 40

Increased Workload Another potential problem with HRIT systems systems is that their use may require more coordination and managerial control than traditional HR systems. The primary reason for this is that in the past, HR professionals controlled most HR systems. However, the use of HR technology has resulted in the downsizing of HR staff. In addition, the use of HRIT systems has required that managers take over the control of such systems, and this can be very costly in organizations. Oftentimes, the ratio of managers to employees in organizations 63

4260 Ch03 4/12/02 11:07 am Page 64

64 1 2 3

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

that use HR technology is higher than when traditional systems are used (Bloom, 2001). Thus, the use of HR technology often adds to overhead costs and may actually increase the workload of some managers.

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Services Provided to Managers Although providing service to managers is an important goal of HRIT systems, surveys (e.g. Cedar, 2001) show that specialized managerial applications of HRIT systems have not been as prevalent as self-service applications for managerial and non-managerial employees. Thus, some analysts (Bloom, 2001) have argued that even though managers like the concept of self-service HRIT systems, they prefer having the assistance of a really good HR professional. One reason for this is that either managers may be too overloaded to use the tools and reports provided by HRIT systems, or they may not have the training or ability to use HRIT systems effectively. Therefore, as noted above, research is needed to examine the extent to which managers: (a) perceive that HRIT systems provide useful decision-making tools; and (b) are satisfied with HRIT systems. Likewise, research is needed to examine ways of improving the degree to which HRIT systems provide needed service to managers. It merits noting that we presented several hypotheses above on managerial reactions to HRIT systems. Thus, the same hypotheses are not repeated here. In summary, in the foregoing we presented a number of potential dysfunctional consequences of using HR technology in organizations. More specifically, we argued that the use of HRIT systems may: (a) create an inflexible system that does not meet the needs of internal customers; (b) be quite costly; (c) reduce employee satisfaction levels; (d) have an adverse impact on members of minority groups; (e) be invasive of employee privacy; and (f) require more coordination or control on the part of managers, which may reduce their satisfaction levels. Given these and other potential problems with using HRIT systems in organizations, we next consider a strategy that may prove useful in averting these dysfunctional consequences.

33 34 35

A STRATEGY FOR REDUCING THE DYSFUNCTIONAL CONSEQUENCES OF HRIT SYSTEMS

36 37 38 39 40

One potential strategy for reducing the dysfunctional consequences of using HRIT systems in organizations is to design such systems using a sociotechnical systems approach (Trist, Higgin, Murray & Pollock, 1963). This approach is based on two fundamental assumptions: First, that all systems consist of two

4260 Ch03 4/12/02 11:07 am Page 65

Human Resources Information Technology 1 2 3 4 5

65

independent yet related parts, a social part that includes the people performing or affected by the task, and a technical part consisting of the tools, techniques, and methods of task performance. Second, that the social and technical parts are related and must both be considered for the system to be effective (Cummings & Worley, 1993).

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Operation of Sociotechnical Systems The social component operates according to psychological and biological principles, and the technical component operates according to mechanical and physical laws. Given that organizational systems are composed of these two parts, it follows that systems will produce two types of outcomes, i.e. (a) goods and services; and (b) psychological consequences for the people in the system (e.g. satisfaction, commitment). For example, as noted above, most computerized HR systems have been designed to increase efficiency and the flow of HR information. However, the same systems are often inflexible and do not meet the needs of internal customers. Thus, the key issue is that of designing the HR information system so that both the social and technical parts work well together, producing efficiencies in the storage of and access to HR information, while at the same time satisfying the needs of internal customers.

22 23

Designing Effective Sociotechnical Systems

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

The sociotechnical systems approach suggests that effective HRIT systems should jointly optimize the relationship between their social and technical parts (Cummings & Worley, 1993). The design of such systems involves the following steps (Cummings & Worley, 1993). First, the design should involve all those who have a stake in it (e.g, nonmanagerial employees, line managers, HR managers, system designers). Second, the existing manual HR system should be diagnosed to identify problems and improvements that are needed. Third, a sociotechnical systems design team should generate an appropriate design for the new HRIT system which considers: (a) the joint optimization of social and technical components; and (b) identifies only minimal critical specifications to ensure there is some flexibility and freedom for users of the system. Fourth, the team should implement and evaluate the design of the new HRIT system. Fifth, and finally, effort should be devoted to continually improving the HRIT system. In the interest of doing so, the sociotechnical systems design team should regularly seek feedback from systems users and internal customers to ensure that the system is meeting both social and technical requirements. 65

4260 Ch03 4/12/02 11:07 am Page 66

66 1

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

Research on Sociotechnical Systems

2 3 4 5 6 7 8 9

Previous Research Previous research has shown that sociotechnical systems approaches to designing work have been effective in improving the quality of products produced and decreasing production costs in organizations (Cummings & Worley, 1993). Furthermore, such approaches have proven effective in enhancing employee satisfaction levels and reducing turnover rates (e.g. Gyllenhammer, 1977; Tichy & Nisberg, 1976).

10 11 12 13 14 15 16 17 18 19 20 21

Needed Research To our knowledge, no empirical research has examined the effects of using a sociotechnical systems approach for HRIT systems design. In addition, no research has examined the impact of the sociotechnical systems approach to designing HRIT systems on internal customer satisfaction levels. Therefore, we offer the following hypotheses: Hypothesis 18a–b: Relative to non-sociotechnical approaches to HRIT systems design, sociotechnical systems-based design will lead to: • greater system effectiveness (18a), and • higher levels of internal customer satisfaction (18b).

22 23

A FINAL WORD

24 25 26 27 28 29 30 31 32 33 34 35

Given the increased use of HRIT systems in organizations, we presented a model of the functional and dysfunctional consequences of using such systems to achieve HR system goals. In addition, we offered a number of testable hypotheses based on the model that can be used to guide future research on HRIT systems. Furthermore, in order to help overcome some of the potentially dysfunctional consequences of using HRIT systems, we proposed a sociotechnical systems approach to their design. We hope that our paper generates increased interest in research on HRIT systems. In addition, we hope that it leads organizations to develop such systems in ways that satisfy the needs of not only organizations, but also their internal customers.

36 37

REFERENCES

38 39 40

Bloom, N. (2001). In search of intelligent self-service. International Human Resources Information Management Journal, 5, 53–61.

4260 Ch03 4/12/02 11:07 am Page 67

Human Resources Information Technology 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

67

Cascio, W. F. (1998). Managing human resources: Productivity, quality of work life, and profits (5th ed.). Boston: Irwin/McGraw Hill. Cedar (2001). Cedar 2001 Human resources self service/portal survey: Fourth annual survey. Baltimore, MD: Cedar. Cummings, T. G., & Worley, C. G. (1993). Organization development and change (6th ed.). Cincinnati, OH: Southwestern. Eddy, E. R., Stone, D. L., & Stone-Romero, E. F. (1999). The effects of information management policies on reactions to human resource information systems: An integration of privacy and procedural justice perspectives. Personnel Psychology, 52, 335–358. Gueutal, H. G. (2003). The brave new world of eHR. In: D. Stone (Ed.) Research in Human Performance and Cognitive Engineering Research (Vol. 3, pp. 13–36). Greenwich, CT: JAI Press. Gutek, B. A. (1995). The dynamics of service: Reflections on the changing nature of customer/provider interactions. San Francisco: Jossey-Bass. Gutek, B. A., Bhappu, A. D., Liao-Troth, M. A., & Cherry, B. (1999). Distinguishing between service relationships and encounters. Journal of Applied Psychology, 84, 218–233. Gutek, B. A., Cherry, B., Bhappu, A. D., Schneider, S., & Woolfe, L. (2000). Features of service relationships and encounters. Work and occupations, 27, 319–352. Gyllenhammer, P. (1977). People at work. Reading, MA: Addison Wesley. Hogler, R., Henle, C., & Beamus, C. (2001). Internet recruiting and employment discrimination: A legal perspective. http://www.biz.colostate.edu/faculty/rayh/netantrev.html – retrieved February, 25, 2001. Huselid, M. A. (1995). The impact of human resource management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal, 38, 635–672. Jackson, S. E., Schuler, R. S., & Rivero, J. C. (1989). Organizational characteristics as predictors of personnel practices. Personnel Psychology, 42, 727–786. Katz, D., & Kahn, R. (1978). The social psychology of organizations (2nd ed). New York: John Wiley. Kavanagh, M., Gueutal, H. G., & Tannenbaum, S. (1990). Human resource information systems: Development and application. Boston: Kent. Kosarzyki, M., Salas, E., DeRouin, R., & Fiore, S. (2003). Distance learning in organizations: A review and future needs. In: D. Stone (Ed.), Research in Human Performance and Cognitive Engineering Research (Vol. 3, pp. 69–98). Greenwich, CT: JAI Press. Linowes, D. (2000). Many companies fail to protect confidential employee data. http://www.Epic.org/ privacy/workplace/kinowesPR.html – retrieved April 5, 2001. Lukaszewski, K., & Stone, D. L. (2001). The effects of the type of data and choice of using a web-based or traditional HR system on reactions to human resources information systems. Unpublished manuscript. State University of New York at New Paltz. Pillar, C. (1993). Privacy in peril. MacWorld, 10, 124–130. Schuler, R. S., & Jackson, S. E. (1987). Linking competitive strategies with human resource management practices. The Academy of Management Executive, 1, 207–219. Snell, S., & Dean, J. W., Jr. (1992). Integrated manufacturing and human resource management: A human capital perspective. Academy of Management Journal, 35, 467–504. Society for Human Resources Management (2000). 2000 Workplace privacy survey. Washington, D.C.: Author. Stone, D. L., & Eddy, E. R. (1996). A model of individual and organizational factors affecting quality-related outcomes. Journal of Quality Management, 1, 21–48.

67

4260 Ch03 4/12/02 11:07 am Page 68

68 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

D. L. STONE, E. F. STONE-ROMERO AND K. LUKASZEWSKI

Stone, D. L., Lukaszewski, K., & Stone-Romero, E. F. (2001, April). Privacy and HRIS. Paper presented at the meeting of the Society for Industrial and Organizational Psychology, San Diego, CA. Stone, D. L., & Stone-Romero, E. F. (1998). A multiple stakeholder model of privacy in organizations. In: M. Schminke (Ed.), Managerial Ethics: Moral Management of People and Processes (pp. 35–59). Mahwah, NJ: Lawrence Erlbaum. Stone, E. F., & Stone, D. L. (1990). Privacy in organizations: Theoretical issues, research findings, and protection mechanisms. In: K. Rowland & G. R. Ferris (Eds), Research in Personnel/Human Resources Management (pp. 349–471). Greenwich, CT: JAI Press. Tichy, N., & Nisberg, J. (1976). When does work restructuring work: Organizational innovations at Volvo and GM. Organizational Dynamics, 5, 73. Towers Perrin (2001). http://www.towers.com/towers/servicesproducts/TowersPerrin/hrsurvey2001. htm – retrieved November, 2001. Trist, E., Higgin, B., Murray, H., & Pollock, A. (1963). Organizational choice. London: Tavistock Institute. Ulrich, D. (2001). From e-Business to e-HR. International Human Resources Information Management Journal, 5, 90–97. Walker, A. J. (2001). The state of HR technology: Is it time for a measurement system? International Human Resources Information Management Journal, 5, 49–52. Weber, M. (1947). The theory of social and economic organization. T. Parsons (Ed.), A. M. Henderson & T Parsons (Trans.). New York: Free Press.

4260 Ch04 4/12/02 11:08 am Page 69

1 2 3 4 5 6 7 8

4. DISTANCE LEARNING IN ORGANIZATIONS: A REVIEW AND ASSESSMENT OF FUTURE NEEDS

9 10 11 12 13 14

Mary P. Kosarzycki, Eduardo Salas, Renée DeRouin and Stephen M. Fiore

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

ABSTRACT Many organizations have implemented distance-learning (DL) courses and programs as an economical, efficient way to deliver training. The purpose of this chapter is to summarize some of the major considerations that are associated with distance-learning programs. We describe a number of the issues surrounding DL, ranging from how organizations use DL to the differing forms of training being delivered and how organizations are reacting to DL. We close with a discussion of issues in practice and suggest directions for future research.

INTRODUCTION Over the past decade, the training environment has changed so radically that many suggest distance learning (DL) is here to stay (e.g. Peterson, Marostica & Callahan, 1999; Wells, 2000). Given this shift, the question is no longer, “Should we deliver training via distance learning?” rather, it is “How can we better deliver training via distance learning?” It has become a viable training

36 37 38 39 40

Advances in Human Performance and Cognitive Engineering Research, Volume 3, pages 69–98. © 2003 Published by Elsevier Science Ltd. ISBN: 0-7623-0986-5

69

4260 Ch04 4/12/02 11:08 am Page 70

70 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

option due to the convergence of two trends. First is the increasing importance of the Internet to business and personal life, and second is the realization that training and education are critical to continued economic success in the United States (Peterson et al., 1999). Concurrent with the use and acceptance of distance learning, is the increased availability of scientific and business resources for those who want to learn more about distance learning. These sources range from books and edited volumes (see Berge, 2001; Driscoll, 1999; Mantyla, 2000), to journal articles to websites (e.g. American Society for Training and Development: www.astd.org; Advanced Distributed Learning: www.adlnet.org). These resources cover every aspect of distance learning, including promoting it for pedagogical reasons or profit, as well as reviewing it and offering advice on how to design and best use it. The purpose of this chapter is to summarize some of the major considerations that are associated with distance-learning programs. We describe a number of the issues surrounding DL, ranging from how organizations use DL, to the differing forms of training being delivered, to how organizations are reacting to DL. Because the publication cycle for empirically driven training research includes such a substantial lag between program implementation, evaluation, and journal publication, we chose instead to rely on a cutting-edge analysis of the current trends in distance learning. Specifically, we provide a qualitative analysis of the state of the art in distance learning in organizations by summarizing the findings from non-traditional publication outlets that are able to present more current methods and ideas. Previously we have summarized the research literature in order to describe the current themes arising from the DL scientific community (see Salas, Kosarzycki, Burke, Fiore & Stone, 2002). Our overall goal with this chapter is to provide practitioners with a better understanding of not only the present issues facing those who work with distance learning, but also the future needs that industry will face as distance learning continues to grow. Because of the tremendous variety of training environments and methodologies that the term “distance learning” encompasses, we next briefly define distance learning, describe the size of the distance learning market, and present the trends that make distance learning a viable option for delivering training.

33 34

Definitions

35 36 37 38 39 40

What is distance learning? The e-learning glossary of the American Society for Training and Development (ASTD) (Kaplan-Leiserson, 2001) states that distance education is the educational situation in which the instructor and students are separated by time, location, or both. Education or training courses are delivered to remote locations via synchronous

4260 Ch04 4/12/02 11:08 am Page 71

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11 12 13 14

71

or asynchronous means of instruction, including written correspondence, text, graphics, audio- and videotape, CD-ROM, online learning, audio- and videoconferencing, interactive TV, and facsimile. Distance learning does not preclude the use of the traditional classroom. The definition of distance education is broader than and entails the definition of e-learning.

Distance learning is the preferred outcome that results from distance education. Distance education and distance learning are used interchangeably. E-learning is a broad term that covers many applications and processes, including Webbased learning, virtual classrooms, computer-based learning, and digital collaboration. It also includes content delivery via the Internet, intranet/extranet (LAN/WAN), CD-ROM, satellite broadcast, audio- and videotape, and interactive TV. And finally, computer-based training (CBT) describes the use of computers to both teach and manage the instruction and learning process. For ease of discussion, in this chapter we use the term “distance learning” to describe these methods.

15 16

Market Size

17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Analysts projected that U.S. organizations would spend almost $57 billion on formal training in 2001 (Galvin, 2001). Investment in e-learning is included in formal training projections (Adkins, 2002). In fact, analysts have forecasted spending on corporate e-learning to grow from $1.1 billion in 1999 to over $11 billion in 2003 (Moe & Blodget, 2000). The growth in e-learning comes at the expense of instructor-led learning (ILT). For example, in 2000, more than 70% of training was delivered by ILT, but that percentage is expected to decrease to 35–40% by the year 2004 (Ruttenbur, Spickler & Lurie, 2000). According to Adkins (2002), U.S. corporate and military sectors sponsor the bulk of distance-learning programs. At this time, demand for distance learning is weak in small and medium-sized businesses, probably because “the enterprise prices that characterize the industry are out of reach and inhibiting growth in those sectors” (Adkins, p. 5). Moreover, small-to-mid-size firms are finding it difficult to overcome technology-based training obstacles (“Summary: ASTD 2001 State,” 2001). Organizations that lack bandwidth (i.e. the amount of data that a computer network can carry in a given time), an infrastructure that supports video or audio files, an intranet, or firewall or security protection are less likely to use e-learning (Anderson, 2002).

36 37

Trends That Drive Distance Learning

38 39 40

A number of economic and social trends are driving the growth of the distancelearning industry. These trends include a knowledge-based economy, the 71

4260 Ch04 4/12/02 11:08 am Page 72

72 1 2 3 4 5 6 7 8 9 10

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

recognition that people are the principal source of competitive advantage, an increasing shift to a skilled workforce and the projected skills shortage, a highly competitive global marketplace, and the speed of technological change (English, Scotford, Robinson & Phelps, 2001). Furthermore, because increasing product complexity and shorter product life cycles affect market specialization and global competition, the need for fast, accessible training becomes more imperative for an organization’s economic survival (Peterson et al., 1999). Indeed, many researchers suggest that distance learning can offer strategic advantages to organizations (e.g. Driscoll, 1999). In the following section, we elaborate on the trends that promote the use of distance learning.

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

Importance of Knowledge Training can have a powerful impact on an organization’s bottom-line performance. Researchers have shown that training dollars invested in one year will affect an organization’s total shareholder return (TSR) the following year (Bassi, Ludwig, McMurrer & Van Buren, 2000). Note that TSR includes annual change in stock price as well as dividends issued. The researchers used a sophisticated statistical model to account for various individual firm characteristics (e.g. industry, prior financial performance and earnings, company size, and other financial factors). Their results indicated that increasing a firm’s training expenditures by $680 per employee in one year generated an average improvement of six percentage points in TSR the following year (Bassi et al., 2000). According to Motorola, for every $1 it spent on training, the organization experienced productivity gains of $30 within three years. The company reported that by training its employees to reduce waste and simplify processes it had reduced costs by $3.3 billion in under five years. Motorola reported that five years after they had initiated their effort, profits increased by 47% and sales per employee doubled (Henkoff & Erdman, 1993). Another indication of the importance of knowledge and learning to organizations is the increase in the number of corporate universities, which grew from 400 in 1988 to over 1,600 in 2000 (Moe & Blodget, 2000). Of the Fortune 500 companies, 40% have corporate universities (Moe & Blodget, 2000). Forwardthinking corporations recognize that dollars spent on corporate learning are not merely an operating cost that reduces profit, but are better construed as an investment in the corporation’s ability to compete and, ultimately, to survive (Moe & Blodget).

37 38 39 40

Shortage of Skilled Labor Along with the recognition that training can directly improve financial performance is a growing awareness in the U.S. of the need for qualified workers.

4260 Ch04 4/12/02 11:08 am Page 73

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

73

Employers are not always able to hire and retain enough workers to accomplish production goals; in fact, one of the most critical business issues is the shortage of skilled IT workers (“The IT Skill Gap,” 2000). Specifically, demand is greater than the supply of such technical workers as network engineers, programmers, and other computer professionals (Driscoll, 1999). Furthermore, some researchers (see Driscoll, 1999) have noted that distance learning can be more than just a means by which workers may acquire deficient skills; it may also be an important tool for recruiting and/or retaining workers who wish to keep their skills current. However, not only IT skills are lacking in today’s workforce. Many workers are also deficient in basic skills. According to the National Association of Manufacturers (2001), survey respondents identified the following skill deficiencies in their current hourly production employees: poor basic employability skills (attendance, timeliness, etc.), reported by 59% of respondents; poor reading/writing skills, 32%; inadequate math skills, 26%; inability to verbally communicate, 25%; and poor English language skills, 24%. Skill deficiencies extended beyond hourly to salaried employees, although the areas of skill deficiency differed. Lack of innovation/creativity, 40%; poor supervisory/managerial skills, 37%; inability to work in a team environment, 31%; poor project management skills, 28%; and failure to update skills/education, 23%, were reported by respondents to be the top five skill deficiencies of salaried professionals. As the skill gap here suggests, many manufacturing organizations believe their employees are deficient in skill areas that are highly requisite for job success (National Association of Manufacturers, 2001). A particularly troublesome trend associated with skill deficiencies is that 85% of all new jobs will require higher skill levels by 2005 (Moe & Blodget, 2000). One consequence will be an increasing wage gap between high school and college graduates (Moe & Blodget). PricewaterhouseCoopers regularly surveys CEOs of service and product organizations that are identified by the media “as the fastest growing U.S. businesses over the last five years”. In 2001, 74% of the surveyed organizations, whose sales and revenue ranged from $1 million to $50 million, identified the shortage of skilled, trained workers as the greatest prospective barrier to revenue growth in the next year (Trendsetter Barometer, April 10, 2002). In short, U.S. industry needs better-skilled workers.

35 36 37 38 39 40

Workplace Changes Distance learning can be an economical means by which to train contingency workers, who are typically hired to even out workloads during peak demand. Driscoll (1999) suggested that DL offers organizations the following advantages. First, with DL, organizations avoid the need to schedule classroom facilities. 73

4260 Ch04 4/12/02 11:08 am Page 74

74 1 2 3 4 5 6 7 8 9 10 11 12 13

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

Second, DL gives contingent workers the ability to train from home at their convenience. Third, DL is also a viable means by which organizations can provide training to workers who survived organizational downsizing. Fourth, managers of restructured organizations, who frequently have little time to provide on-the-job training and mentoring, can use DL to supplement the training gap. Fifth, because of the increased implementation of telecommuting and flexible work schedules, DL can be a strategic means by which facility costs can be reduced for this workforce segment. Finally, organizations are increasingly focusing on their core competencies and outsourcing other activities. Currently, 25% of corporate learning is outsourced (Moe & Blodget, 2000). The plethora of distance learning programs and the ability to customize programs means that organizations can readily supplement their training programs with distance-learning options.

14 15 16 17 18 19 20 21 22 23

Global Competition Many Fortune 500 companies operate in the highly competitive global marketplace. In fact, an estimated 30% of their revenue is earned outside the United States (Moe & Blodget, 2000). Distance learning can help organizations compete globally by dealing with the shorter time frames that characterize today’s product development and launch cycles (Driscoll, 1999; Moore, 2001). Instead of spending months to train international sales representatives, engineering groups, and service staff about new products, distance learning permits simultaneous training of all members of the global workforce (Driscoll).

24 25 26

WHAT ARE THE ADVANTAGES OF USING DISTANCE LEARNING IN ORGANIZATIONS?

27 28 29 30 31 32 33 34 35 36 37 38 39 40

Because organizations can deliver training anytime, anywhere, and anyplace with distance learning (Peterson et al., 1999), it offers many potential benefits to both corporations and employees. Driscoll (1999) identified the following advantages for corporations. Distance learning can reduce travel costs by eliminating airline tickets, rental cars, meals, and hotel rooms, which can amount to an average savings of $1,500 per employee. Another savings to employers comes in the form of opportunity costs, which is the lost income that results when one option is chosen over another. For example, sales representatives who attend training are not selling. Opportunity costs for salespeople or consultants who generate billable hours can be very high in terms of lost income. Distance learning can also make class scheduling more flexible for organizations that traditionally experience high rates of turnover for entry-level positions (e.g. call center representatives). Such organizations

4260 Ch04 4/12/02 11:08 am Page 75

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

75

typically conduct new-hire training only when demand reaches a certain level. As a result of this scheduling inflexibility, managers wait up to six weeks before filling open positions. There are additional benefits associated with training via distance learning. For organizations that have invested heavily in a technical infrastructure (i.e. computers, servers, and networks), distance learning is an application that helps justify the spending (Driscoll, 1999). In addition, distance-learning systems also offer automated tracking of trainee registration and test scores. The data from the systems can provide legal documentation, assist training planning, and feed into the performance-review system. Automated features also reduce the administrative load of training departments. The ability to measure learning and accountability is an important feature of such systems (Peterson et al., 1999). The data from distance-learning systems can aid corporations when they are analyzing changes in the workforce (e.g. due to turnover or downsizing) (Weidner, 1999). Peterson et al. elaborated on the theme that distance learning allows training to be delivered efficiently. They argued that distance learning allows segmented content to be delivered. Training can be reduced to bite-size chunks that trainees can absorb in 10- to 15-minute sessions (Weidner, 1999). As a result, trainees can fit training in between other job activities. Weidner points out that when information on an important topic is too small to be given in classroom sessions, it often is tagged on to the end of unrelated material for the sake of convenience and consequently loses its distinctiveness as a separate topic. Short training segments disseminated through distance-learning methods can resolve this problem. In addition to updating content quickly and efficiently, organizations can also immediately deliver the changed content worldwide. Distance-learning systems support the consistent delivery of uniform content. Moreover, distance-learning systems make it relatively easy to personalize material. Content can be customized for different trainee needs (e.g. functionality, such as for salespeople and technical support employees, and experience, such as for novices and experts). Trainees can interact with other trainees (e.g. through e-mail, listservs). Distance-learning can provide cost advantages as well. For example, organizations realize economies of scale when content is delivered to large numbers of trainees. Once development costs of training material have been recovered, content distribution is relatively inexpensive, especially if the costs of shipping CD-ROMs or paper manuals can be avoided. Employees are also beneficiaries of distance learning (e.g. Anderson, 2002; Peterson et al., 1999). Not only do employees enjoy the convenience and flexibility of anytime, anywhere access to training, but sophisticated distance-learning systems add value to the learning experience; trainees are provided with 75

4260 Ch04 4/12/02 11:08 am Page 76

76 1 2

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

feedback on skills assessment which enables them to diagnose career needs and actively pursue career-enhancement opportunities (Anderson, 2002).

3 4

WHAT IS THE STATE OF DISTANCE LEARNING?

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Evidence that distance learning has become widely accepted and implemented is reflected in the availability of distance-learning systems. Corporate trainers who evaluate distance-learning systems will find that system functionality varies widely (e.g. some robust systems offer collaboration tools and competency frameworks) (English et al., 2001). Longer buying cycles are also common, which reflects both buyers’ sophistication and their unwillingness to invest in suboptimal systems (Barron, July, 2001). Barron also reports that the price of distance learning systems has become a bigger factor in system decisions, which probably indicates that early market adopters are being replaced by more priceconscious late adopters. In any case, savvy purchasers are likely to require vendors to demonstrate cost savings (Adkins, 2002). Analysts believe that the highly fragmented distance learning industry is entering a stage of consolidation and maturation (Adkins, 2002; Moe & Blodget, 2000). Quality products are extensively available and prices are falling (Adkins). Along with market consolidation has come branding, which provides corporate buyers with a sense of security and relieves fears of supplier bankruptcy (Moe & Blodget, 2000).

23 24

Standards and Interoperability

25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Corporate buyers are concerned about obsolescence, standards, and interoperability between distance learning system elements (Adkins, 2002; Barron, July, 2001). Interoperability is an important issue given the number of system providers and the fragmented nature of the industry. Without interoperability, revisions are expensive and time consuming (Dobbs, 2000). The U.S. Department of Defense (DoD) is working together with the White House Office of Science and Technology Policy (OSTP) in an Advanced Distributed Learning (ADL) initiative intended to foster interoperability of learning courseware. The initiative focuses mainly on asynchronous technologies that use the following computer technologies: computer-based instruction, networked tutorial simulation, interactive multimedia instruction, Web-based training, and intelligent tutoring systems (Fletcher & Dodds, 2000). A set of standards known as the Sharable Content Object Reference Model (SCORM) has been developed (e.g. Book, 2001; Hamel & Ryan-Jones, 2001). The standards are a universal language that describes when and by whom a data set was collected and how it was formatted

4260 Ch04 4/12/02 11:08 am Page 77

Distance Learning in Organizations 1 2 3 4

77

(Dobbs, 2000). SCORM formatting transforms course content into small, reusable learning objects (Kaplan-Leiserson, 2001). SCORM learning objects can be combined into a modular training-materials repository from which separate components can be extracted at need (Kaplan-Leiserson, 2001).

5 6

Integrated Solutions

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Corporate buyers are interested in integrated solutions to their distance learning needs (Barron, July, 2001). They have watched early adopters of distance learning technologies struggle with the difficulty of integrating separate components (see Adkins, 2002; Barron, 2001). Today’s buyers want the flexibility of combining elements from multiple vendors (Adkins, 2002). They are demanding systems that combine content, management capabilities, and authoring tools (Barron). In response, vendors are now offering a new category of distance learning technology known as Learning Management Systems (LMS), the purpose of which is to manage learning content and to deliver it systematically to users (e.g. Barron, July, 2001; English et al., 2001). An LMS is designed to manage courses from multiple providers (Kaplan-Leiserson, 2001). LMS has the following basic features: it registers users, tracks cataloged courses, records learner data, and provides reports to management (Kaplan-Leiserson, 2001). In addition, an LMS can identify learning requirements and skill gaps, assign appropriate content to address these gaps, deliver online assessments, and measure use and performance improvement (English et al., 2001). Although it usually does not include an authoring tool (Kaplan-Leiserson, 2001), an LMS provides a framework for authoring learning objects and adapting existing material into a learning object format (Barron, July, 2001). As a result, learning content can be tailored to the learner based on needs assessment and reused for different audiences, such as sales, technical, and executive staff (Barron, July, 2001). Learning management systems make courseware more accessible by simplifying learning delivery and management (Barron, January, 2001).

32 33

Tracking Capabilities

34 35 36 37 38 39 40

As mentioned previously, a desirable feature in distance-learning systems is the ability to track course attendance. The feature is almost a requirement for organizations that need to prove that their employees have received training in such areas as confidentiality, sexual harassment, and compliance with new laws and regulations (Connors, 2001). Tracking features can provide documentation that employees did attend such training (Connors, 2001). Because most distance 77

4260 Ch04 4/12/02 11:08 am Page 78

78 1 2 3 4 5 6 7

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

learning courses require employees to log on using a password, the system can document the time and date of the training, whether the employees completed the training, and the employees’ post-test scores (Connors, 2001). Distancelearning systems can also provide information about which training materials were accessed, how often various sites were visited, and the amount of time spent at each site (Barron, 1999). The tracking feature provides data that allows the training department to diagnose the effectiveness of individual courses.

8 9 10 11 12 13 14 15 16 17

Learning Portals Learning portals that provide access to e-learning resources are becoming more common. A learning portal is a website that offers consolidated access to training and learning resources from multiple sources. Mantyla (2000) defines it as a single source for content, a gateway to learning information, courses, and specific knowledge pieces. Learning portal operators are also known as content aggregators, distributors, or hosts (Kaplan-Leiserson, 2001).

18 19

Blended Learning

20 21 22 23 24 25 26 27 28 29 30 31 32

Organizations are aware that not all training is most effectively delivered via e-learning. In some cases, learning is maximized when the delivery method is a hybrid approach that combines instructor-led teaching with distance learning (“E-learning: The Secret,” n.d.). When classroom and online learning are combined in either a virtual or a real classroom, the result is known as “blended learning” (e.g. Barron, January, 2001; Kaplan-Leiserson, 2001; Parkin, 2001). Such an approach is especially applicable for teaching soft-skills (i.e. behaviorrelated learning), because it allows instructors to illustrate the subtle nuances of social behaviors and to teach social skills, such as teamwork (Barron, 2001). The blended approach can include “desktop support in the classroom, instant access to training content after classes are finished and enhanced helpdesk-style support when back on the job” (“E-learning: The Secret”).

33 34

The Role of Live Instructors and Tutors

35 36 37 38 39 40

Even though the number of instructor-led traditional classrooms is expected to decline as distance learning becomes more widespread (Peterson et al., 1999), classes taught by live instructors will probably always be available. Some learners prefer live instructors. For example, Vaas (2001) recounts how the IRS School of Information Technology became responsible in 1995 for training

4260 Ch04 4/12/02 11:08 am Page 79

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

79

150,000 IRS employees and employees from smaller government agencies. Many of the trainees were not satisfied with only self-paced materials (asynchronous learning). They also wanted access to live instructors. The IRS School of IT responded with a program that uses live distance learning classroom software to teach classes online. Students meet in virtual classes three times a week to ask questions and discuss the material. There are advantages to having online instructors, tutors and mentors present in synchronous delivery (e.g. their presence can encourage students to attend classes) (Vaas, 2001). They can answer questions, provide feedback, keep students involved, and motivate students to complete the course (Moe & Blodget, 2000). When Sun Microsystems gave trainees in a self-paced course access to tutors through telephone, email, or online discussion groups, completion rates rose from 25% to 75% (Moe & Blodget, 2000). Because self-paced distance learning can be expensive and require the combined efforts of graphic designers, programmers, subject-matter experts, and instructional designers, in some instances it may be more economical to train using distance learning with live instructors (Vaas, 2001).

18 19 20

Why Do Organizations Still Offer Live Training?

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Organizations will probably always continue to offer live, classroom training. As we will discuss in a later section, some topics are more suitable for classroom learning because skill development in certain content areas requires face-to-face interaction (e.g. negotiation skills). Another reason that classroom training may be preferable to online learning is that it promotes the emotional aspects of training. For example, tractor company John Deere employs a diverse sales force that must manage tremendous amounts of product information (Powell, 2001). But more importantly, it has a corporate culture that encourages intense loyalty from its small mom-and-pop dealers and its large distributors. Although the company offered product information to its sales force through dealer web portals, it also implemented a learning management system using a blended approach. As a result, the company formatted content into learning objects in a web-based training program and reduced the length of the training course from five days to two. However, even though cost savings would have been substantial, the company chose not to eliminate its live classroom sales training. The company wanted the salespeople to experience the pride of workmanship displayed by assembly line workers. Company management believed that the emotional impact on salespeople was more important than cost savings. 79

4260 Ch04 4/12/02 11:08 am Page 80

80 1 2

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

HOW MUCH TRAINING IS BEING DELIVERED VIA DISTANCE LEARNING?

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

As much as 27% of all training is not delivered in a traditional classroom setting. Of total training delivered in 1999, instructor-led classroom training accounted for 73%, Web-based training accounted for 14%, and the other 13% represented self-study programs using manuals, videotapes, audiocassettes or books (Peterson et al., 1999). In 2001, Galvin reported that instructor-led classroom training accounted for 77% of delivered training, training led by instructors in remote locations represented 5%, computer-based training represented 11%, and other training, such as on-the-job and self-study accounted for 7% of delivered training. Of the computer-delivered training, 39% was delivered by CD-ROM, 30% was delivered on corporate internal computer networks (intranets), 22% was delivered online via the World Wide Web/Internet, and 5% was delivered by computer in some other means. The proportion of intranetvs. Internet-delivered training appears to be a function of a corporation’s size. Specifically, organizations with less than 500 employees deliver 24% of training over the intranet and 14% over the Internet, whereas organizations with more than 10,000 employees deliver 38% of training over the intranet and 9% over the Internet (Training Magazine, October 1999, as cited in Peterson et al., 1999).

21 22 23

HOW IS DISTANCE LEARNING BEING USED STRATEGICALLY?

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Like traditional classroom training, distance learning can be used to deliver any amount of employee training, from a single topic for a single class to a corporation-wide program that supports strategic business goals (Anderson, 2002). In its early stages, distance-learning was used to post lecture materials to a website for download or to email class materials to students that they could review at their convenience. Today, distance-learning can be a sophisticated solution that gives organizations an edge against increased competition by promoting greater productivity (Anderson, 2002). Nonetheless, Galagan (2001) argues that employee learning must be tied to organizational goals and that a learning plan is as crucial as a marketing or financial plan. According to Schreiber and Berge (1998), organizations go through distinct stages of distance learning technology capability. In the first fragmented stage when the organization begins to employ distance learning, learning events are delivered separately by different departments. The second stage is characterized by an interdisciplinary curriculum development team and repeated distance-learning events, indicating that distance-learning efforts are becoming institutionalized.

4260 Ch04 4/12/02 11:08 am Page 81

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

81

Then, distance-learning is expected to contribute strategically to meet business needs. Finally, at the mature stage, the organization’s strategic planning is linked to distance-learning events. Schreiber and Berge point out that implementation of an distance-learning system may be used to support strategic plans that call for an organizational transformation and culture change. Distance learning can support strategic goals in a number of ways. It can provide training in e-business, customer service (where high attrition makes fast skill development critical), project management, diversity, and leadership and management for non-managers (Ritze, as cited in Barron, January, 2001). Distance learning can be offered to employees as a retention incentive or as part of their compensation packages (Barron, January, 2001). Distance learning can be extended beyond employee training to training customers (Ruttenbur et al., 2000). Ruttenbur et al. explain that customers who are informed about complex products or services may be more likely to buy them. Moreover, customers may be more willing to learn about the product if the training is free. Among the organizations that offer online training are Dell Computer and Charles Schwab. Another advantage of free online training is that it strengthens brand recognition and maintains goodwill (Ruttenbur et al., 2000).

19 20 21

WHICH ORGANIZATIONS ARE USING DISTANCE LEARNING?

22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Even though distance learning is not yet replacing traditional classroom learning, its recent growth as a training mechanism is remarkable. From technology companies to the Defense Department to service-based organizations, businesses around the world are adopting and adapting distance learning to meet their unique needs. For example, while General Motors University hopes to conduct 10–20% of its training online by 2002, Motorola University hopes to do so with 50% of its training (Brayton, 2001). Using a case study approach, Berge (2001) recounted the efforts of organizations that employed distance-learning tools. Among them were the U.S. Army Intelligence Corps for 3,000 soldier trainees; U.S. General Accounting Office for 4,500 trainees; U.S. Internal Revenue Service for 105,000 trainees; UAW-Daimler Chrysler for 77,000 trainees; First Union for 70,000 trainees, Nortel for 13,000 trainees; HewletttPackard for 16,000 trainees; NYNEX for 100,000 trainees; U.S. Postal Service for 800,000 trainees, and the American Red Cross for over 1.3 million trainees. Why have these organizations switched to distance learning? One answer is in the cost savings. Through distance learning, more people can be trained at the same time and in the same way without having to travel to a company training site three states away. The travel expenses associated with traditional 81

4260 Ch04 4/12/02 11:08 am Page 82

82 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

classroom training as well as the costs associated with having an employee away from the office for a few days quickly add up as more and more employees attend training (e.g. Hein, 1999). Having a training system that is accessible from one’s personal computer and that is available at any time allows employees the convenience of choosing when to brush up on current skills or learn new ones. For example, the Defense Department maintains that training costs are reduced by one third with the substitution of a Web-based class in place of a traditional one (Book, 2001). Wachovia found that their previous classroom training method was resulting in both inconsistently conducted training and steadily increasing costs. By providing online training, Wachovia significantly reduced its overhead training costs (Levin, 2001). Depending on the cost, distance learning can be customized to the individual trainee. Thus, trainees can both select the courses they need, as well as complete them when convenient. An interesting finding by Ernst and Young was that employees being trained online asked seven-to-ten times more questions than they asked in a typical classroom setting. Ernst and Young attributes the increased participation to lowered employee inhibition resulting from employees being allowed to post their questions anonymously (Hein, 1999). However, distance learning may not be ideal for all trainees. Applying it to all types of skills (Totty, 2001) as well as to all employees (Hein, 1999) may be neither practical nor desirable. For example, 3Com, which uses an online training system, finds that some employees still prefer the traditional classroom setting because, in addition to facilitating networking, it builds camaraderie (Hein). Instead, online training may be more easily applied to certain types or characteristics of jobs. For example, McDonald’s uses distance learning to train employees in standardized skills such as food preparation and customer service (e.g. Vaas, 2001).

29 30 31

WHAT TOPICS ARE BEING TRAINED BY DISTANCE LEARNING?

32 33 34 35 36 37 38 39 40

In its early days, distance learning was used to deliver training on factual topics (e.g. IT topics) (Barron, January, 2001). Since then, technology advancements, including animations, bandwidth-heavy graphics, and streaming video (Barron, 2001) as well as simulations, satellite technologies, and increased bandwidth, make it feasible to offer topics that include facts, procedures, attitude changes, and soft-skills training (Moe & Blodget, 2000; Power of the Internet for Learning, n.d.). Some proponents of distance learning see it as a ubiquitous training tool. For example, Schreiber & Berge (1998, p. 400) conclude that

4260 Ch04 4/12/02 11:08 am Page 83

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11

83

no topic is unteachable at a distance. Whether it is increasing knowledge and understanding, building skills (such as creative thinking skills or mechanical skills) or changing attitudes, all types of learning may be facilitated by distance training events or processes.

Others are not as sanguine about the total applicability of distance learning and argue that for some content areas, distance learning is better employed in conjunction with live classroom training. For example, Anderson (2002) suggests that although online simulations, role plays, online coaching, and case studies can facilitate learning, traditional classroom teaching still maintains a role in skill instruction. In any case, experts agree that effective distance learning is a function of aligning content with the desired type of learning (Schreiber & Berge, 1998).

12 13

Delivering Factual Knowledge

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Researchers in the behavioral and social sciences generally identify three main types of knowledge as targets for training (see Salas & Cannon-Bowers, 2001). First is declarative knowledge, which comprises general topic information and is composed primarily of facts. Second is procedural knowledge, which requires declarative knowledge, but additionally requires trainees to apply their knowledge. Third is strategic or integrative knowledge, which requires trainees to apply declarative and procedural knowledge strategically to solve problems. Declarative knowledge is clearly suitable for distance learning delivery. To develop declarative knowledge, trainees must memorize information, evaluate it, and then apply the learned information (Duckworth, 2001). Distance learning is particularly effective at teaching in well-structured domains in which problems have clear right or wrong answers, topics are well defined, and assignments have clear parameters (Anderson, 2002). Examples of subjects that require declarative knowledge learning are foreign languages, new-hire orientation, and software training (Duckworth, 2001). Another feasible application is teaching trainees how to complete forms, such as benefits enrollment forms (Anderson) or product information (Allen, 2001). Other examples of topics suitable for distance learning delivery are administrative training (e.g. procedures), human resources training, clinical training, compliance training (Connors, 2001), and business-writing classes (Duckworth, 2001). Distance learning is also appropriate for teaching such skill areas as marketing, management, administration, and strategy (Parkin, 2001). Schreiber and Berge (1998) recommend the use of distance-learning to distribute information when time is limited and application is critical (e.g. marketing information, new business regulations, operational processes, and life-saving techniques). For example, NYNEX delivers information about the 83

4260 Ch04 4/12/02 11:08 am Page 84

84 1 2 3 4

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

company’s operational systems, including order-entry, accounts inquiry, and maintenance scheduling (Schreiber & Berge, 1998). The American Red Cross uses distance learning to deliver time-sensitive information about FDA-regulated procedures regarding blood (Schreiber & Berge, 1998).

5 6

Delivering Intellectual Skills Training

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Anderson (2002) argues that corporations may need to combine distance learning with collaborative strategies to help trainees solve poorly structured problems. High-level cognitive skills are necessary to solve such problems (Anderson, 2002). Trainees may be called upon to recall, understand, and even apply information to problems that lack clear right or wrong answers (Anderson, 2002). Furthermore, they must develop critical thinking skills so that they can analyze, synthesize, and evaluate data that is often unclear (Schreiber & Berge, 1998). Representative topics include performance management, project management, and customer service (Barron, January, 2001), as well as programming languages, and organizational management strategies (Schreiber & Berge, 1998). Anderson presents examples of unclear situations such as “evaluating the merits of outsourcing work, developing a comprehensive marketing strategy that incorporates diverse data, or evaluating the merits of a strategic business acquisition” (Anderson, 2002).

22 23

Delivering Soft-skill Training

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Some argue that because many people now work in a virtual world, they have a reduced need for interpersonal skills (Parkin, 2001). However, there are still many jobs that require strong interpersonal and communication skills for effective performance. Even though most soft skills are procedural or conceptual in nature, much of the theory that underlies the skills can be provided online and many of the elements can be taught via distance learning (Parkin, 2001). Distance learning can be used to present concepts, test understanding, provide examples and practice, and give performance feedback. Distance learning can use multimedia methods to teach basic steps and processes, model communication skills, and allow learners to record and play back their own voices (Allen, 2001). Parkin points out that if learners prepare themselves online, they will be better able to focus on the live classroom work. However, although some soft skills can be taught online, some are most efficiently taught in a live setting (Parkin, 2001). For example, Schreiber and Berge (1998, p. 400) believe that distance learning can also be used to increase motivation and change attitudes, which they defined as a “personal or emotional

4260 Ch04 4/12/02 11:08 am Page 85

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

85

perspective, preference or value.” Attitudes are important because they guide social and organizational interactions and affect performance. Attitudinal skill development requires expert modeling and reinforcement (Anderson, 2002). Trainees must evaluate values, consider alternative values, and contemplate different perspectives (Duckworth, 2001). Duckworth suggests that live online forums can be used to foster such skills. Hofmann (2001) reports how one organization developed a blended training program to deliver soft-skills training. The management development program was aimed at improving interaction skills. Because employees used the skills over the telephone and email more than in face-to-face settings, the organization developed synchronous (real time) practice opportunities for trainees, although the core content of the class was delivered asynchronously over the Web. The organization also offered follow-up courses, which were delivered live, asynchronously, to allow trainees to practice their skills. Universities have shown that they can successfully teach interpersonal skills via distance learning. Schreiber and Berge (1998) offered the example of Malaysia’s Virtual University, which partnered with an educational technology firm in the U.S. to develop a program that would build students’ interpersonal skills so that they would have the skills to participate in a global environment. Communication, cultural procedures, and protocol language were taught. Another academic example is that of Loyola Marymount University, which is using a Web-based course to teach interviewing skills to LMU students in a course that includes video and simulation segments (Barron, January, 2001) (see: http://careers.lmu.edu). Corporations are also training interpersonal skills via distance learning. IBM and Bank of America are among the organizations that have developed in-house systems that can simulate human interaction. For example, the Bank of America program uses streaming video and audio to permit a loan officer trainee to experience interaction with a prospective client. The trainee asks questions to determine the patron’s loan eligibility. If the trainee makes illegal inquiries, a lawyer emerges in a video segment and reprimands the trainee. The course is designed to proceed based upon the nature of the interactions between the trainee and the prospective client (Dobbs, 2000).

33 34

Is Distance Learning Suitable for Developing Psychomotor Skills?

35 36 37 38 39 40

Clearly, distance learning is suitable for delivering facts about a variety of topics. However, not everyone believes that distance learning is appropriate for every instructional content area. Duckworth (2001) suggests that for some topics, like CPR certification, hands-on training needs to be supplemented with practical exercises. In such cases, distance learning can still play a role 85

4260 Ch04 4/12/02 11:08 am Page 86

86 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

by delivering pre-work materials. For example, distance training that uses multimedia is a viable method to teach activities that require “hands-on” training, such as touching and handling equipment, because it prepares trainees to use equipment by teaching the functions, components, and hazards before the trainees actually use the equipment (Allen, 2001). To master psychomotor skills, trainees require hands-on practice and interactive demonstrations. For example, teaching swimming online may seem like a far-fetched example of teaching psychomotor skills via DL. Nevertheless, through distance learning, trainees can read about the basic principles online, watch slide and video presentations, take quizzes, or engage in online discussions about how to swim (Anderson, 2002; Duckworth, 2001). Schreiber and Berge (1998) presented case studies to demonstrate that psychomotor skills can be taught successfully via distance learning. For example, the Federal Aviation Administration converted a course in cockpit route inspection to a distance learning class. Another example they gave was that of an organization in a public health setting that provided an interactive video to administer “clinical training in physical assessment for patient screening and referral” (p. xxii).

19 20 21

WHAT PRINCIPLES ARE GUIDING THE DESIGN OF DISTANCE LEARNING?

22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

In its early days, distance learning was often “somebody’s classroom notes on the Web” (Dobbs, 2000, p. 86). Since then, Instructional System Design (ISD) guidelines, based on a growing body of empirical research findings (Price & von Schlag, 2002), are increasingly being incorporated into distance-learning programs. In their recent review of the DL literature, Salas et al. (2002) concluded that many researchers believe that, in terms of relative importance, technology considerations are subsumed under the instructional-design umbrella of topics that must be considered when creating effective DL programs (see Lawless & Brown, 1997; Ricketts, Wolfe, Norvelle & Carpenter, 2000). Guidelines can cover such topics as training system fidelity, role of the instructor (see Webster & Hackley, 1997), interface design (see Federico, 1999), and team training (see Salas & Cannon-Bowers, 2000). For example, the use of reality-based experiences and simulations provides a high-fidelity environment, which enhances training transfer back to the job (e.g. Schreiber & Berge, 1998). Indeed, professional organizations involved in training are encouraging their members to incorporate ISD guidelines into distance training programs (e.g. American Society for Training and Development, www.astd.org). According to Schreiber and Berge (1998, p. 398), “Deciding

4260 Ch04 4/12/02 11:08 am Page 87

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

87

what technology to use and how to use it effectively probably rank as the two biggest questions faced by organizations as they attempt to design delivery of distance learning.” Corporations have also recognized that distance learning and instructor-led instruction require different approaches to course development (Price & von Schlag, 2002). Although the quality and amount of interactions between online learners and instructors are necessarily limited by the media used, corporations have figured out how to incorporate feedback and mentoring into the program (Peterson et al., 1999). Distance-learning programs are typically designed by curriculum-development teams consisting of functional subject matter experts (SMEs), desktop publishers who know how to use content management systems and authoring software, instructional designers who know the capabilities of different delivery methods, graphic designers who understand formatting differences between delivery options and who are familiar with Web programming, and editors (Price & von Schlag, 2002). Factors that should influence the selection of a delivery method include learners’ technical proficiency, the subject matter, and the time sensitivity of the content (Peterson et al., 1999). In addition, Schreiber and Berge (1998) recommend that teams should include representatives from senior management, network services, information technology, broadcasting and communications, and performance consulting areas. They point out that such interdisciplinary teams not only help foster crosscompany integration but also serve to leverage expertise across functions. Team members can be internal staff members, external contractors, or a combination of the two (Schreiber & Berge, 1998). A survey of over 1,600 internal training professionals reveals the tools curriculum developers use when developing distance learning content: “74.1% use document creation tools, e.g. PowerPoint or Word; 53.9% use Web development tools, e.g. Dreamweaver or FrontPage; 32.5% use learning-specific authoring tools such as Authorware or Toolbook; 24.5% use programming tools, e.g. Visual Basic or C++; and 22.7% use authoring tools within a Learning Management System” (“The Nuts and Bolts,” 2001).

33 34 35

WHAT TECHNOLOGIES ARE BEING USED TO DELIVER DISTANCE LEARNING?

36 37 38 39 40

Due to the tremendous variety of training topics being delivered via DL, “no one technology is a silver bullet” that can meet all of the various needs that arise (Schreiber & Berge, 1998, p. 403). Because each technology has its own strengths and weaknesses, the best solution is to use various forms of 87

4260 Ch04 4/12/02 11:08 am Page 88

88 1 2 3 4 5 6 7 8 9 10 11

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

electronically mediated instruction and training technology based on instructional goals and performance objectives. A description of the many technology delivery permutations is beyond the scope of this chapter. Generally, though, distance training can be delivered via the following DL tools: WBT, videoconferencing, CBT, electronic performance support systems (EPSS), in-person delivery, audio, graphics, satellite, the Public Broadcasting system, videotapes, CD-ROMS, the Internet and intranets, satellitebased interactive television, CBT accessed via the Web, interactive CD-ROMs, synchronous and asynchronous virtual classrooms, Web audio and videos, Web-based videoconferencing, instructional television, e-mails, desktop videoconferencing, print, and instructor-led classrooms (Berge, 2001).

12 13

Technology Both Constrains and Enables

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Technology continues to evolve and is now characterized by broadband capability, multimodal connectivity, wireless access and technology that adapts to the user (The power of the Internet, n.d.). Large corporations and Web-reliant smaller firms have greater bandwidth (i.e. the amount of data that computer network can carry in a given time) capacity than do most medium- and small-sized organizations (Dobbs, 2000). Greater bandwidth is required for multimedia-intensive applications, such as live video streaming. When bandwidth is limited, distance-learning designers must either reduce the amount of multimedia in the training program or combine technologies (Evans, 2000). The combination of wireless access and small chunks of information enables users of handheld appliances (e.g. PDAs, laptops, and Wireless Application Protocol-enabled cell phones) to access training anywhere (Murray, 2001). Such technology is particularly useful for sales representatives, who use this technology to brush up on product information immediately before making sales calls (Powell, 2001). For example, Monsanto sales representatives are issued Palm handhelds that allow access to information-filled websites. When designing training programs, corporations that deliver global distance learning must take into account users’ technology limitations. Distant learners may have different types of Internet access, reduced access speed, and less bandwidth than that which is available to learners in the corporate headquarters (Galagan, 2001).

36 37

Enhancing Collaboration

38 39 40

Interest is high in fostering interaction among learners. Synchronous (e.g. chat rooms) and asynchronous (e.g. threaded discussions) methods permit different

4260 Ch04 4/12/02 11:08 am Page 89

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11

89

levels of interactivity among learners (Barron, 1999; Peterson et al., 1999). Tools that facilitate collaboration are widespread (Duckworth, 2001). Technologies are available that allow users two-way interactivity via dial-up connections (Barron, 1999). For example, application sharing allows instructors to employ multiple resources simultaneously, and many students can explore the same webpage together (Duckworth, 2001). In addition to interaction among learners, interaction between learners and instructors has generated increased attention as well. For example, Aetna U.S. Healthcare values interaction between trainees and instructors. As a result, it has implemented a distance-learning system that combines live audio and multimedia training content that travel over the same data network (Barron, 1999).

12 13 14

HOW DO ORGANIZATIONS EVALUATE THE EFFECTIVENESS OF DISTANCE LEARNING?

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

In many of the articles on distance learning that appear in business publications, return on investment (ROI) is used as the most important (and sometimes, only) measure of distance learning success. Because an organization’s survival is intimately linked to its financial performance, corporations must consider bottom-line results when making technology-investment decisions. Moreover, ROI is often the preferred metric because organizations find it much simpler to gather cost-reduction information than to conduct performance-improvement studies (Barron, March, 2001). However, corporations that invest in distancelearning technology without some kind of expected-returns analysis may experience sub-optimal returns (Schreiber & Berge, 1998). Nonetheless, to assess the impact of distance learning programs in any meaningful way, corporations must use a broader approach than cost savings alone. The evaluation of a distance-learning program must also consider (see Kirkpatrick, 1975) such variables as trainee reactions, actual learning as measured by tests, changes in behavior, and the impact of performance improvement on organizational performance. Unfortunately, while most organizations collect data on trainee reactions, and some measure learning with post-tests, the majority of organizations do not assess on-the-job behavior changes or the strategic impact of distance learning on organizational performance. Furthermore, most evaluations are anecdotal (Champagne & Wisher 2001; Galagan, 2001).

36 37

What’s the Return on Investment?

38 39 40

While it is beyond the scope of this chapter to provide formulas and worksheets for evaluating cost savings, a brief discussion of how corporations use 89

4260 Ch04 4/12/02 11:08 am Page 90

90 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

cost-reduction information to justify implementing distance-learning programs is useful to help the reader understand why cost-savings data is so often used. Case studies have demonstrated repeatedly that distance learning can lead to savings. In fact, a major selling point used by distance-learning vendors is the cost-savings rationale (Brayton, October 1, 2001). Commercially available distance-learning systems run the gamut from courses and programs that cost hundreds of dollars to full-scale knowledge management systems that cost thousands of dollars. Corporations can choose to outsource the design and development of courses or perform the work internally using proprietary or off-the-shelf authoring tools, which range in cost from $400 to $2900 (Anderson, 2002). To produce a simple instructional video costs about $1,000 per minute (Anderson, 2002). A major cost associated with implementing a distance-learning system is development time. The ASTD provides guidelines on the number of hours of development needed to create an hour of instruction: traditional classroom training requires 40 hours of development, computer-based training requires 200, video-based training requires 40–120 hours, and Web/Internet-based training requires the same development times as the other media (“Training Industry FAQ,” n.d.). The cost of courseware development can be high when it includes re-formatting existing programs by videotaping or digitizing them (Anderson, 2002). A less-expensive alternative is to buy existing programs from vendors, in which case per-user prices range from $10 to $100 (Anderson, 2002). Traditional classroom instruction typically costs less to develop than distancelearning instruction (Peterson et al., 1999). Nonetheless, as previously mentioned, DL reduces travel expenses (hotel, transportation, meals) and lost productivity from being away from the job (e.g. Barron, March, 2001; Brayton, 2001). Other savings come from eliminating printing and distribution costs for paper products, such as manuals and workbooks (Driscoll, 1999). Some organizations have achieved significant cost savings by implementing distance-learning programs. For example, the return on investment for IBM’s Basic Blue management-training project was more than 20 times the investment (Vaas, 2001). Horton (2000) provided the following examples of company cost and time savings due to distance learning training techniques: Buckman Laboratories saved $2 million; Hewlett-Packard provided training to 700 engineers in 30 days (11 months less than planned) and saved $5.5 million; Eli Lilly & Company saved $800,000 in salary and travel costs during the first year; MCI WorldCom saved $5.6 million in 1998; and Aetna saved $3 million by providing online training to 3,000 trainees. IBM saved $200 million in 2000 by using distance learning to train its sales representatives (Evans, 2001). Dow Chemical saved $34 million, a 20-fold ROI (Brayton, 2001). Cisco’s

4260 Ch04 4/12/02 11:08 am Page 91

Distance Learning in Organizations 1 2 3 4 5 6

91

assembly-line workers have had access to training on the factory floor since 1999; Cisco saved $4 million annually in improved processes (Galagan, 2001). Cisco was able to reduce the time to train a manufacturing facility employee from three months to four weeks (Hall & LeCavalier, 2000). GE saved almost $1 million a year by using distance learning to train its globally distributed corporate audit staff (Lohr, 2002).

7 8

How Much Learning Occurred?

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

As was mentioned earlier, the success of a distance-learning program can be measured on a variety of dimensions. For example, increased revenues may result when the sales force and channel partners become knowledgeable more quickly about new products and services, leading in turn to a shortened sales cycle. That same products-and-services training may offer a competitive advantage if it is offered to customers. DL success can also be measured by customer satisfaction and retention levels, which may improve if employees can answer technical questions about product functionality more comprehensively and if service and support levels are higher. Furthermore, the average number of calls processed by call-center representatives may increase if they receive training on how to handle calls quickly and effectively. Employee productivity can be enhanced if DL quickly educates employees about new or modified business processes and applications (“E-learning: The Secret,” n.d.). Additional training outcomes that can be expressed in financial terms include the following: increased quality, accuracy, and direct access to information, as well as decreased recalls, classroom time, sexual harassment cases, and employee turnover (Geisman, 2001). Organizations can evaluate distance-learning outcomes with Kirkpatrick’s four-level training evaluation model. One characteristic of the model is that assessment becomes increasingly difficult as higher levels of evaluation are attempted. Level 1 is an assessment of trainee reactions, a somewhat superficial measure because employee liking for training has not been tied to changes in performance (Alliger & Janek, 1989, as cited in Goldstein, 1993). Level 2 measures, which assess actual learning via posttests, are common and well accepted (Hall & LeCavalier, 2000). Moreover, Level 2 evaluation is supported by many distance-learning systems, which have built-in knowledge tests. Changes in behavior back on the job (Level 3) are more difficult to measure, and include competencies, job performance, and intellectual capital (Hall & LeCavalier). A number of organizations have implemented certification strategies (e.g. Rockwell Collins) and some organizations are even requiring supervisors to complete online job assessments (e.g. Ernst & Young) (Hall & 91

4260 Ch04 4/12/02 11:08 am Page 92

92 1 2 3 4 5 6 7 8 9 10

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

LeCavalier, 2000). Only large corporations, such as IBM, have the resources required to conduct Level 4 evaluations, which assess training success on a number of dimensions. For example, IBM measures the effectiveness of its Basic Blue program by tracking website hits, subject-matter-expert support levels, delivery costs, team exercise completions, organizational linkage, climate improvement, and customer satisfaction (Hall & LeCavalier, 2000). In conclusion, most organizations are focusing on the cost savings that can be realized from implementing a distance-learning program, but few are measuring the degree to which learning is being transferred back to the job and how organizational outcomes are being affected (e.g. Schreiber & Berge, 1998).

11 12 13

SUMMARY: HOW ARE ORGANIZATIONS USING DISTANCE LEARNING?

14 15 16 17 18 19 20

This chapter has presented an overview of how corporations are using DL to meet short-term training needs and long-term strategic goals. Clearly, the overarching conclusion that can be drawn at this point is that distance learning is now an established means by which to deliver training. Furthermore, projections by industry analysts indicate that the use of distance learning will continue to grow (Moe & Blodget, 2000).

21 22

So What Do We Know About Distance Learning?

23 24 25

At this point, we summarize the material that has been presented and offer key points about the current state of DL. We know the following:

26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

(1) That the distance-learning market is huge and will continue to grow as technology evolves and prices drop (see Adkins, 2002). (2) That the use of DL is driven by changes in the workplace and the need to increase the supply of skilled labor. (3) That the advantages of DL are manifold, including reduced travel time, travel and other costs (e.g. training space), and immediate, low-cost worldwide delivery. (4) That DL has been widely accepted by industry and the federal government and is especially useful because it supports strategic goals. (5) That DL can effectively teach facts, attitudes, and soft skills, as well as prepare trainees for psychomotor training. (6) That the most effective DL programs are based on empirically proven instructional-design principles and are developed by teams of functional experts.

4260 Ch04 4/12/02 11:08 am Page 93

Distance Learning in Organizations 1 2 3 4 5 6 7 8

93

(7) That DL can easily incorporate important elements of training like feedback and mentoring. (8) That no single technology is a panacea and that the best solution may well be a combination of technologies. (9) That DL tools can support instructor-learner interaction as well as collaboration among learners. (10) That DL can lead to large returns on investment and other financial and strategic measures of corporate performance.

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

What Don’t We Know About Distance Learning? Even though distance learning is widely used, researchers and practitioners must confront the issues associated with it. These issues concern the fundamental purpose of distance learning: to increase a learner’s knowledge so that it can be applied to improve job performance. To that end, some researchers believe that more theory-based research is needed to identify additional DL principles and guidelines (Salas & Cannon-Bowers, 2001). In spite of some research that has been conducted, we still don’t know enough about the following issues: (1) We need to know more about how to train higher-order skills (e.g. problem solving) and soft skills (such as negotiation) via DL. Can even the bestdesigned interactive software compensate for the lack of face-to-face feedback? (2) We need to know more about social interaction during DL. For example, does DL foster collaboration and teamwork and can it be used to train teams who are in distant locations? (3) We need to know more about how individual differences among learners affect the degree to which they learn in a DL setting. When and how in the training process should interventions occur? Can we help trainees who prefer live instruction to bridge to DL-only instruction? (4) We need to know more about the effects of DL on the typical criteria used to evaluate training (reactions, learning, behavior, outcomes).

34 35

Where Should We Go From Here?

36 37 38 39 40

Salas et al. (2002) conducted a literature search with the intention of identifying the main research themes of recent DL studies. From the findings of that review as well as the issues raised in this article, we propose that more research is needed in certain critical areas. From that research, principles can be derived 93

4260 Ch04 4/12/02 11:08 am Page 94

94 1 2

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

that will maximize the effectiveness of training delivered via DL technologies. Specifically, we urge researchers to focus on the following topics:

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

(1) Learner control. Researchers have already determined that individual differences between trainees (motivation, metacognitive skills, etc.) can significantly impact learning outcomes (see Salas et al., 2002). What skills do learners need to be successful (Driscoll, 1999)? Can those skills be taught via distance learning? For example, distance-learning systems can support individual differences by offering varying degrees of control to learners. How much learner control is too much (e.g. Schreiber & Berge, 1998)? When should trainees be given structured training and when should they have the option of unguided learning? (2) Motivation. Learner motivation is a powerful predictor of learning outcomes (see Colquitt, LePine, & Noe, 2000). When training (e.g. sexual harassment training) must be delivered to individuals who may not be strongly motivated to learn, how can distance-learning courses be designed to ensure that less-motivated students or students working alone will complete the course (“State of Online,” 2000)? (3) Impact of culture. The U.S. workforce is changing as it reflects broader changes in the demographic makeup of the U.S. As a result, employees who are expected to work on multicultural project teams must learn the requisite interpersonal skills. Furthermore, organizations that conduct global operations must train employees in foreign operations. How can training content (e.g. interpersonal skills) best be adapted for international audiences (Barron, January, 2001)? (4) Collaboration. According to Alavi (1994), “Collaborative activities enhance learning by allowing individuals to exercise, verify, solidify, and improve their mental models through discussions and information sharing during the problem-solving process (i.e. while working on the assigned academic task).” However, very little is known about the best ways to foster interaction or what minimal level of interaction is required to keep trainees engaged (e.g. Peterson et al., 1999). (5) The ISD model. If no current ISD models address how the dimensions of technology relate to learning outcomes (Jones & Paolucci, 1999), then the models are inadequate for designing distance learning programs. How can the ISD model be changed to incorporate technology considerations? (6) Evaluation. Most organizations evaluate DL by measuring trainee reactions and immediate learning via post-tests. However, we argue that more and better evaluations must be conducted. At what point must organizations move beyond reveling in cost savings to determine if distance learning is

4260 Ch04 4/12/02 11:08 am Page 95

Distance Learning in Organizations 1 2

95

really supporting strategic organizational goals? (e.g. Schreiber & Berge, 1998).

3 4 5 6 7 8 9 10 11

By the time researchers have begun to answer these questions, new questions will have arisen in response to technological advances. In short, the cycle is continuous. Therefore, only by working together, with practitioners asking questions and incorporating empirically validated principles developed by the research community, will distance learning truly reach its potential of effectively bringing learning to trainees, anytime, anywhere, and anyplace.

REFERENCES

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Adkins, S. (2002). Market analysis of the 2002 U.S. e-learning industry: Convergence, consolidation and commoditization. Brandon-hall.com 2002 Market Analysis Series. Retrieved January 30, 2002 from: http://www.brandon-hall.com/ Alavi, M. (1994). Computer-mediated collaborative learning: An empirical evaluation. MIS Quarterly, 18(2), 159–175. Allen, R. J. (2001). Step right up! Real results for real people! Computer-based, multimedia training can make a big difference, IF it is done right. Mentergy. Retrieved February 20, 2002, from: http://www.mentergy.com/user/authoring_design/quest/papers/rexroi.html Anderson, T. (2002). Is e-learning right for your organization? Learning Circuits. Retrieved February 4, 2002, from: http://www.learningcirucits.org/2002/jan2002/anderson.html Barron, T. (2001, January). Trend watch: E-learning goes soft. Learning Circuits, ASTD. Retrieved December 12, 2001, from http://www.astd.org/learningcircuits/2001/jan2001/ barron.html Barron, T. (2001, July). An e-learning industry update. Learning Circuits. Retrieved December 31, 2001, from: http://www.learningcircuits.org/2001/jul2001/barron.html Barron, T. (2001, March). E-learning weathers a bear market. Learning Circuits. Retrieved December 12, 2001, from: http://www.learningcirucits.org/2001/mar2001/barron.html Barron, T. (1999). Harnessing online learning. Training & Development, 53(9), 28–34. Retrieved January 31, 2002, from: http://ehostvgw10.epnet.com/ehost.asp?key=204.179.122.140_8000 _921437230&site=ehost&return=n&custid=current&ip=yes&profile=web Bassi, L. J., Ludwig, J., McMurrer, D. P., & Van Buren, M. (2000). Profiting from learning: Do firms’ investments in education and training pay off? ASTD/Saba white paper. American Society for Training and Development. Retrieved January 30, 2002, from: www.astd.org/ virtual_community/research/PFLWhitePaper.pdf Berge, Z. (2001). Sustaining distance training: Integrating learning technologies into the fabric of the enterprise. San Francisco: Jossey-Bass, Inc. Book, E. G. (2001, December 20) ‘Plugfests’ help standardize online learning technology. National Defense Magazine. Retrieved March 11, 2002, from: http://www.adlnet.org/news_events/ news/full_story_w_close.cfm?News_Id=110&News_Type=3&Filter=1,2,4,5 Brayton, C. (2001, October 1). The fragmented e-learning industry rallies around a new business case: The value chain. The Learning Curve. Retrieved January 30, 2002 from: http:// internetworld.news.emailthis.clickability.com/et/emailThis Champagne, M. V., & Wisher, R. A. (2001). Design considerations for distance learning evaluations. In K. Mantyla (Ed.), The 2000/2001 ASTD Distance Learning Yearbook (pp. 261–286). New York: McGraw-Hill.

95

4260 Ch04 4/12/02 11:08 am Page 96

96 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

Colquitt, J. A., LePine, J. A., & Noe, R. (2000). Toward an integrative theory of trainng motivation: A meta-analytic path analysis of 20 years of research. Journal of Applied Psychology, 85(5), 678–707. Connors, K. (2001, July/August). Online learning can be a cost-effective alternative to traditional training. Managed Healthcare Executive, 11(7), 45–46. Retrieved January 30, 2001, from: http://ehostvgw10.epnet.com/ehost.asp?key=204.179.122.140_8000_921437230&site=ehost &return=n&custid=current&ip=yes&profile=web Dobbs, K. (2000). What the online world needs now: Quality. Training, 37(9), 84–94. Driscoll, M. (1999). Web-based training in the workplace. Adult Learning, 10(4), 21–25. Retrieved January 30, 2002, from: http://ehostvgw20.epnet.com/ehost.asp?key=204.179.122.140_8000 _046345863&site=ehost&return=n&custid=current&ip=yes&profile=web Duckworth, C. L. (2001, April). ISD for live e-learning. Learning Circuits. Retrieved December 12, 2001, from: http://www.learningcircuits.org/2001/apr2001/duckworth.html E-learning: The secret to profitability in a stumbling economy. CIO. Retrieved December 13, 2001, from: http://www.cio.com/sponsors/100101_xhlp/approach.html English, P., Scotford, L., Robinson, C., & Phelps, K. (2001, April 3). Your guide to e-learning. Retrieved December 12, 2001, from: http://www.futuremedia.co.uk/Fmsite3/Html/ e_learing1.htm Evans, S. (2000, May 15). Net-Based Training Goes The Distance. Washington Post. Retrieved March 13, 2002, from: http://www.newsbytes.com/news/00/149019.html Federico, P.-A. (1999). Hypermedia environments and adaptive instruction. Computers in Human Behavior, 15, 653–692. Fletcher, J. D., & Dodds, P. (2000, May). All about ADL. Learning Circuits. Retrieved December 12, 2001, from: http://www.learningcircuits.org/may2000/fletcher.html Galagan, P A. (2001, February). Mission e-possible. Training & Development, 55(2), 46–57. Retrieved January 31, 2002, from: http://ehostvgw2.epnet.com/ehost.asp?key=204.179.122.140_8000_ 305644538&site=ehost&return=n&custid=current&ip=yes&profile=web Galvin, T. (2001, October). Industry report 2001. Training. Retrieved January 30, 2001, from: http://209.11.43.229/training/images/pdf/2001_industry_report.pdf Geisman, J. (2001, March). If you build it, will they come? Overcoming human obstacles to e-learning. Learning Circuits. Retrieved December 12, 2001, from: http://www.learningcircuits.org/2001/ mar2001/elearn.html Goldstein, I. L. (1993). Training in organizations. Pacific Grove, CA: Brooks/Cole Publishing Company. Hall, B., & LeCavalier, J. (2000, November). The case for level 3. Learning Circuits. Retrieved December 12, 2001, from: http://www.learningcircuits.org/nov2000/hall.html Hamel, C. J., & Ryan-Jones, D. (2001). Instructional Design in the Context of the Shareable Content Object Reference Model (SCORM). Professional Paper, Institute for Simulation and Training, IST-PF-01-02, Orlando, FL. Hein, K. (1999). Face-to-face training: Un-PC. Incentive, 173(4), 22–24. Retrieved January 31, 2002, from: http://ehostvgw2.epnet.com/ehost.asp?key=204.179.122.129_8000_1706071059 &site=ehost&return=n&custid=current&ip=yes&profile=web Henkoff, R., & Erdman, A. (1993, March 22). Companies that train best. Fortune, 127(6), 62–69. (Full text through EBSCO business services premier.) Hofmann, J. (2001). Blended Learning Case Study. Learning Circuits. Retrieved February 21, 2002, from: http://www.learningcircuits.org/2001/apr2001/hofmann.html Horton, W. (2000). Designing web-based training: How to teach anyone anything anywhere anytime. New York: John Wiley & Sons, Inc.

4260 Ch04 4/12/02 11:08 am Page 97

Distance Learning in Organizations 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

97

ITForecaster (2000, May 23). The IT skill gap: Price and source of success. Retrieved February 4, 2002, from: http://www.idc.com/getdoc.jhtml?containerId=itf20000523 Jones, T. H., & Paolucci, R. (1999). Research framework and dimensions for evaluating the effectiveness of educational technology systems on learning outcomes. Journal of Research on Computing in Education, 32(1), 17–28. Kaplan-Leiserson, E. (2001). E-learning Glossary. Retrieved February 21, 2002, from: http://www.learningcircuits.org/glossary.html#P Kirkpatrick, D. L. (1975). Techniques for evaluating training programs. Evaluating training programs, 5, 1–17. Alexandria, VA: ASTD. Lawless, K. A., & Brown, S. W. (1997). Multimedia learning environments: Issues of learner control and navigation. Instructional Science, 25, 117–131. Levin, C. (2001). Banking on the virtual classroom. PC Magazine, 20(22), 5–6. Lohr, G. A. (2002, January 24). Learning the Value of Online Training. Washington Business Journal 20(38), 37. Retrieved from: http://www.astd.org/virtual_community/daily_news/ dailynews_fulltext.shtml#story3 Mantyla, K. (2000). Learning portals: Online e-learning options. In: K. Mantyla (Ed.), The 2000/2001 ASTD Distance Learning Yearbook (pp. 15–18). New York: McGraw-Hill. Moe, M. T., & Blodget, H. (2000). The knowledge web. Merrill Lynch & Co. Merrill Lynch – eLearning: The Knowledge Web Part 4 Corporate e-learning – Feeding Hungry Minds. Retrieved December 12, 2001, from: http://www.internettime.com/itimegroup/ MOE4.PDF Moore, R. (2001). In fast business cycle, e-learning brings marketing up to speed. B to B, 86(3), 17. Retrieved January 31, 2002, from: http://ehostvgw10.epnet.com/ehost.asp?key=204. 179.122.140_8000_921437230&site=ehost&return=n&custid=current&ip=yes&profile=web Murray, S. (2001, December 3). A realistic approach now prevails: E-learning. Financial Times, p. 2. Retrieved March 11, 2002, from: http://globalarchive.ft.com/globalarchive/article.html ?id=011203000812&query=Element+K#docAnchor01120300812 National Association of Manufacturers (2001). The skills gap 2001. Retrieved December 21, 2001, from: http://www.nam.org/tertiary.asp?TrackID=&CategoryID=107&DocumentID =23973 Parkin, G. (2001, September). Answer Geek. Learning Circuits. American Society for Training and Development. Retrieved December 12, 2001, from: http://www.learningcircuits.org/ 2001/sep2001/geek2.html Peterson, R. W., Marostica, M. A., & Callahan, L. M. (1999). e-learning: Helping investors climb the e-learning curve. U.S. Bancorp Piper Jaffray Equity Research. Retrieved December 12, 2001 from: http://www.eoskl.it/papers/piper-elearning.pdf Powell, W. (2001). Train today, sell tomorrow. Training & Development, 55(9), 40–49. Retrieved January 31, 2002, from: http://ehostvgw20.epnet.com/ehost.asp?key=204.179.122.140_8000 _1046345863&site=ehost&return=n&custid=current&ip=yes&profile=web Price, D., & von Schlag, P. (2002). Bringing classroom curriculum up to E-speed. Retrieved February 21, 2002, from: http://www.learningcircuits.org/2001/sep2001/price.html Ricketts, J., Wolfe, F. H., Norvelle, E., & Carpenter, E. H. (2000). Asynchronous distributed education – A review and case study. Social Science Computer Review, 18(2), 132–146. Ruttenbur, B. W., Spickler, G., & Lurie, S. (2000). eLearning: The engine of the knowledge economy. Morgan Keegan & Co, Inc. Retrieved December 12, 2001, from http://www. internettime.com/itimegroup/information.htm Salas, E., & Cannon-Bowers, J. A. (2001). The science of training: A decade of progress. Annual Review of Psychology, 52, 471–499. Salas, E., & Cannon-Bowers, J. A. (2000). The anatomy of team training. In: S. Tobias & J. D. Fletcher (Eds), Training & Retraining: A Handbook for Business, Industry, Government, and the Military (pp. 312–335). New York: MacMillan Reference USA.

97

4260 Ch04 4/12/02 11:08 am Page 98

98 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

M. P. KOSARZYCKI, E. SALAS, R. DEROUIN AND S. M. FIORE

Salas, E., Kosarzycki, M. P., Burke, C. S., Fiore, S. M., & Stone, D. L. (2002). Emerging themes in distance learning research and practice: Some food for thought. International Journal of Management Reviews. Schreiber, D. A., & Berge, Z. L. (1998). Distance training: How innovative organizations are using technology to maximize learning and meet business objectives. San Francisco: Jossey-Bass Publishers. Summary: The 2001 ASTD State of the Industry Report. (2001, March 26). American Society for Training & Development. [Press release.] Alexandria, VA: Author. Retrieved January 31, 2002, from: the World Wide Web: http://www.astd.org/virtual_community/research/ 2001_state_of_the_industry_report_summary.pdf The nuts and bolts of making e-learning (2001, January). Learning Decisions Interactive Newsletter. Retrieved February 20, 2002, from: http://www.masie.com/masie/researchreports/fromLD/ LDJan01.htm The state of online learning: A virtual roundtable (2000, September). Training, 37(9), 63–77. Web-based Education Commission. (2000). The power of the Internet for learning. Office of Postsecondary Education (ED), Washington, D.C. Office of Policy, Planning, and Innovation. (ERIC Document Reproduction Service No. ED 444 603). Retrieved February 20, 2002, from: http://www.edrs.com/Webstore/Download.cfm?ID=469921&CFID=481983&CFTOKEN =56679364 Totty, P. (2001, February). Anywhere, anytime instruction. Credit Union Magazine, 67(2), 44–47. Retrieved January 31, 2002, from: http://ehostvgw2.epnet.com/ehost.asp?key=204.179.122. 140_8000_305644538&site=ehost&return=n&custid=current&ip=yes&profile=web Training industry FAQ: How many hours does it take to develop one hour of training? (n.d.) American Society for Training and Development. Retrieved January 30, 2002, from: http://www.astd.org/virtual_community/library/tfaq.html Trendsetter Barometer (2001, April 10). PricewaterhouseCoopers. Retrieved February 15, 2002, from: http://www.barometersurveys.com/pr/tb010410.html Trendsetter Barometer. (2002, January 22). PricewaterhouseCoopers. Retrieved February 15, 2002, from: http://www.barometersurveys.com/pr/tb020122.html Vaas, L. (2001). The e-training of America. PC Magazine, 20(22), 1–5. Retrieved January 31, 2002, from: http://ehostvgw1.epnet.com/fulltext.asp?resultSetId=R00000000&hitNum=1& booleanTerm=Vaas%20and%20e%2dtraining&fuzzyTerm=#FullText Webster, J., & Hackley, P. (1997). Teaching effectiveness in technology-mediated distance learning. Academy of Management Journal, 40(6), 1282–1309. Weidner, G. (1999). Interactive training: Is it in your future? Plant Engineering, 53(7), 50–54. Retrieved January 31, 2002, from: http://ehostvgw2.epnet.com/ehost.asp?key=204.179.122. 129_8000_1706071059&site=ehost&return=n&custid=current&ip=yes&profile=web Wells, R. C. (2000). Back to the (Internet) classroom. In: J. A. Woods & J. W. Cortada (Eds), The 2000 ASTD Training and Performance Yearbook (pp. 25–29). New York: McGraw-Hill.

4260 Ch05 4/12/02 11:09 am Page 99

1 2 3 4 5 6

5. TECHNOLOGY: IMPLICATIONS FOR HRM

7 8 9 10

Robert L. Cardy and Janice S. Miller

11 12 13 14

ABSTRACT

15 16 17 18 19 20 21

Technology has had a dramatic impact on organizational environments. The changes necessitate that Human Resource Management (HRM) take aggressive steps to adapt and to add value to organizations. This chapter focuses on implications for HRM, particularly in the areas of job analysis, selection, and performance management. Directions for both research and practice are discussed.

22 23

INTRODUCTION

24 25 26 27 28 29 30 31 32 33 34 35

Technology is ubiquitous. It has infiltrated our daily lives and intertwined itself into organizations and society in general. Technologically-aided interaction is now simply a matter of course and something that is typically taken for granted. While technology has become an integral and almost unnoticed feature in our daily tasks, the impact of technology in organizations has been dramatic. What is possible, how quickly it can be done, and how it can be done, are all fundamental characteristics of work that technology has changed. The purpose of this chapter is to examine implications of technology for the effective management of people. We will not review specific technologies in any detail here. Rather, we identify some of the general organizational realities that have resulted – or have the potential to result – from extant technology.

36 37 38 39 40

Advances in Human Performance and Cognitive Engineering Research, Volume 3, pages 99–117. Copyright © 2003 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0986-5

99

4260 Ch05 4/12/02 11:09 am Page 100

100 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

ROBERT L. CARDY AND JANICE S. MILLER

Given these characteristics, the thrust of the chapter will be on implications for HRM research and practice. We will particularly focus on the staple HRM functions of job analysis, selection, and performance management. To what are we referring when we use the term “technology?” As a generic description, we offer that technology consists of mechanical, electrical, and other extra human structures, processes, and phenomena that are used to aid or enhance performance. Given this broad description, what we are referring to as technology can range from mechanical tools to virtual connections among workers. Of course, it is computer hardware and software that has recently had broad sweeping impact on performance in organizations. The pace of change, due in large part to technology, is now quicker than ever before. Communication capability, adaptability in structure and process, and global competition, all made possible through technology, change possibilities, expectations, and criteria at ever increasing speed. Whatever the particular type of technology, we think there are some generic influences that result from its increased presence in organizations.

16

INFLUENCES OF TECHNOLOGY

17 18 19 20 21 22 23 24 25

The influence of technology can, at a very general level, be classified as being in the domain of either content or process. That is, technology can influence the content of an activity as well as the way it is carried out. Table 1 presents a description of some of the major facets of the influence of technology and examples of how these features of technology affect the content and process of work. Our purpose in presenting this typology is not to be exhaustive, but to broadly capture some of technology’s major impacts on the workplace.

26 27

Table 1.

Impact of Technology in the Workplace.

28 Work Characteristics

29 30

Facets of Technology

Content

Process

31 32

Shortened Completion Times

• Changed nature of tasks • Pace of work

Speed of Change

• Uncertain task life • Constant training

Communication Capability

• Involvement • Decentralized decision making

33 34 35 36 37 38 39 40

• Interaction/integration with other functions • Quicker interactions • Less formality • Team structure • Emphasis on process skills • Empowerment • Quick access to information • Telecommunication • Virtual connections

4260 Ch05 4/12/02 11:09 am Page 101

Technology: Implications for HRM 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

101

As Table 1 demonstrates, we emphasize three noteworthy facets of technology. One facet is shortened completion time. Technological advancements frequently yield shortened cycle times and reduce the amount of time needed to complete tasks. Time reduction does not usually, however, occur in a vacuum. Quicker completion times can affect both the content and process of work. Indeed, the very nature of tasks is often changed due to technology. For example, computerization of an operation can lead to some tasks becoming obsolete and eliminated while other tasks, even though they may have the same name, are fundamentally different. A project with a tool manufacturer provides an illustration of technology’s influence on the nature of tasks (Cardy, 1993). Computerization of the manufacturing process resulted in the elimination of some tasks since they would henceforward be automated. However, other tasks, such as shop floor control, were changed since they involved much more interaction with the computer system. The increased speed with which tools could be manufactured was a positive change, but it brought with it additional changes in the nature of the tasks. Beyond the nature of tasks, the sheer pace of work can be influenced by shortened completion times as well. The impact of technology may not, for example, be even across all tasks. Some tasks may therefore have to be compressed or somehow completed more quickly in order to keep pace with the shortened cycle time. Further, simply the potential of shortened completion time that a technology offers can lead to performance expectations that increase the pace of work. In other words, if it is possible to do a task in a short amount of time, then it becomes an expectation that it had better be done quickly. Anything less is an annoyance. Consider, for example, our expectations regarding typing or conducting a literature review. Given technology, quick completion is now simply expected. Shortened completion times can also influence the process of work. A significant reduction in the cycle time needed to, for example, produce a product, typically brings with it changes in how the work is carried out. Perhaps most fundamentally, the work process changes to include interaction or even integration among functions that might otherwise have been separate. The change in auto production from a functional “silo” approach to an integrated team is an example of a change in work process that occurred under the pressure of shortened cycle times. Shorter completion times can also influence the work process by promoting interactions that are quicker and less formal. For instance, shorter completion times may require quicker interactions among workers, such as requests for input, suggestions, feedback, and so on. Decreasing completion times can lead to adoption of a team structure, since shortened time frames can force collaboration. The team structure can yield greater efficiency and can 101

4260 Ch05 4/12/02 11:09 am Page 102

102 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

ROBERT L. CARDY AND JANICE S. MILLER

replace a traditional emphasis on individual performance. Further, time pressure can lead to a priority being placed on performance accomplishments that can produce less regard for position in the organization and greater regard for expertise. Another important facet of technology is speed of change. Technological advancements are more a stream of events than unitary phenomena. Technology improves and changes and can do so at a surprising rate. The speed of change can easily become a critical factor in the domain of high technology where firms wrestle with the rate at which they must confront change and obsolescence. In terms of the content of work, rapid change can be expected to lead to uncertainty in the life of tasks. In the face of change, it is unknown how long a particular task will remain relevant. Along with the change in tasks comes change in skills needed to perform in the no longer stable environment. Rapid change means constant training for employees to update and replace obsolete skills. The speed of change that technology induces can also have important influences on the process of work. Perhaps most importantly, a high rate of change can lead to an emphasis on process skills, since specific content of work may be in flux, but the process can remain stable. For example, team work, information sharing, and providing input and feedback may be process skills that are stable and important even though the work content is changing. Further, the rate of change that technology fosters often necessitates a shift toward an empowered workforce in which decision-making is pushed down into the lowest ranks of the organization. Empowerment is needed for rapid adaptation to changed conditions. In addition, successful adaptation to rapid change may require that employees have quick access to information. Communication capability is another aspect of technology that we have selected as a critical facet. While technological advancements do not always include a communication component, in recent times technology has dramatically influenced communication capability. Increased communication capability can alter the content of work. Ease of communication that technology provides can permit greater input and involvement by a wider range of people. Further, increased communication capability can make possible decentralization in decision making. With enhanced communication capability, management can be easily kept informed and provide input, thus reducing a need to exercise their formal decision making authority. These types of changes due to increased communication capability can bring new dimensions to employees’ work. For example, the more widespread the information sharing that a new level of communication capability brings may mean that more people are in a position to offer creative and collaborative solutions to a firm’s problems and challenges.

4260 Ch05 4/12/02 11:09 am Page 103

Technology: Implications for HRM 1 2 3 4 5 6 7 8

103

This may allow them to derive increased organizational commitment or greater job satisfaction because enhanced communication capability provides the opportunity for individual empowerment. The process of work can be radically altered due to increased communication capability that technology affords. Telecommuting, meetings via teleconferencing, even the more mundane e-mail, phone, and fax all can quickly become new methods for getting things done. In general, technology produces greater capability for virtual connections among organizational members.

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

IMPLICATIONS FOR HRM RESEARCH AND PRACTICE Consideration of the examples of technological influences presented in Table 1 leads to the conclusion that, due to technology, organizational life is no longer what it used to be. Technology has fundamentally influenced both the content and process of work. It is our contention that to remain a value added function in organizations, HRM must recognize the changed organizational environment and adapt to the new reality. To persist with traditional approaches to HRM risks the relevance and very survival of the profession. The following sections examine implications of the influence of technology on the effective management of people. In focusing on the principal HRM areas of job analysis, selection, and performance management our intent is to identify directions for improved practice and for relevant research. Some of the changes that we suggest may already be occurring, but only in an isolated fashion. Professionals in HRM need to more broadly recognize and embrace the influences of technology. Complacency in the field of HRM will lead to questioning of the value of the function (e.g. Cardy, Gove & DeMatteo, 2000), and small pockets of innovation within an otherwise business-as-usual approach will not be sufficient. The impact of technology is so broad sweeping and integral to work itself that extensive management changes are necessary in order to maintain value and effectiveness.

32 33

JOB ANALYSIS

34 35 36 37 38 39 40

Job analysis is a staple of effective HRM. It is fundamental to a rational and defensible approach to the field. The systematic description of work tasks and conditions dates back at least to the work of Frederick Taylor (1911) who stated that scientific analysis should specify “not only what is to be done, but how it is to be done and the exact time allowed for doing it” (p. 39). The essential rationale underlying job analysis is that the management of people should be 103

4260 Ch05 4/12/02 11:09 am Page 104

104 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

ROBERT L. CARDY AND JANICE S. MILLER

based on the job. For example, people should be hired based on how well they match the requirements of the job, not based on job irrelevant characteristics such at attractiveness, gender, age, and so on. Further, performance management and compensation should be driven by performance on objective aspects of the job, not by job irrelevant characteristics. Job analysis research has focused on developing and refining methods that accurately capture the bundles of tasks called jobs (Harvey, l991). Studies have, for example, examined the validity and utility of various job analysis methods and the effect of job analyst characteristics (Butler & Harvey, l988; DeNisi, Cornelius & Blencoe, l987; Harvey, Hakel, Friedman & Cornelius, l988; Landy & Vassey, l991; Mullins & Kimbrough, l988; Sanchez & Fraser, l992). This research and the very practice of job analysis rests on the simple assumption that the work activities of individual employees are mostly fixed and repetitive and can be fairly objectively measured. Increasingly, the assumption of a fixed set of tasks for individuals is becoming a difficult fit with organizational reality. Less hierarchical control and greater empowerment provide workers the authority to alter operating procedures in order to maximize productivity, sales, and/or customer satisfaction. Various customer and production demands may impose unique challenges that are best met through unique solutions. Trying to force a standardized description of tasks may have a negative impact on performance. However, the empowered and team-based structure that technology engenders creates a situation that does not mesh well with a traditional approach to job analysis. Further, other influences of technology on work content and process also lead to the conclusion that fixed individual tasks are no longer a safe assumption. Characteristics such as task uncertainty due to the speed of change, changing and broadened tasks due to shortened completion times, and virtual connections brought about by increased communication capability indicate that tasks may be better thought of as more fluid and emergent than fixed. Technology is making the old assumption of fixed individual tasks a thing of the past. The reality in many organizations today is that narrow job descriptions are being replaced by dynamic relationships that define individual contribution. For example, team members are often provided cross-training so that the team has “depth on the bench” and individuals can serve in a variety of roles. A team may physically meet and function as a long-standing group, or team members may be virtually connected. A team may focus on short-term projects and membership may be internal to the organization or cut across organizations and even include customers or suppliers. Whatever the nature of the team, it is often the team itself, rather than a manager, that decides who will do what at any given time. This dynamic team-level control is particularly adaptive when considering the

4260 Ch05 4/12/02 11:09 am Page 105

Technology: Implications for HRM 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

105

uncertainty and change that technology imposes. The contribution someone makes at any point in time would depend on factors such as the particular project, the person’s relative strengths and weaknesses, the team they are on, and the relative strengths and weaknesses of other members of the team (Stewart & Carson, l997) among other things. Further, individuals may serve on multiple project teams simultaneously and their contributions may be dynamic and interdependent rather than being defined by a set of fixed and repetitive tasks. The above discussion leads to the conclusion that the impact of technology in organizations necessitates a change in job analysis. A change in job analysis should not be taken lightly. Job analysis is often described as the bedrock of HRM since it is the basis for almost all HRM functions. Thus, alteration in job analysis has far reaching effects that include, for example, selection standards, performance criteria, and bases for compensation. We next review possible alternatives to the traditional task-based approach to job analysis. At the outset we would like to clarify that we are not recommending doing away with job analysis altogether. We do believe, however, that job analysis needs to change in order to be relevant and contribute to today’s organizations. In the following sections we identify and briefly describe potential alternatives to the task-based approach to job analysis. These alternatives are not mutually exclusive, and they could be combined to effectively meet the needs of an organization.

22 23

Broad Descriptions

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Given rapid change, uncertainty, and dynamic determination of duties, one approach to accommodate this variance would be to broaden the typically narrow job description. A broad description could include a generic analysis of general duties but would not specify particular tasks and behaviors. This broad approach would allow room for employee discretion and for change in tasks. However, such a broad approach may be so generic that it does not provide an adequate basis for developing solid HRM programs, such as selection, training, performance management, and compensation (Cardy & Stewart, l998). Although broad descriptions could provide needed latitude for adaptation and change, breadth may also lack direction. Furthermore, it is possible that insufficient direction and excessive breadth could further contribute to uncertainty and ambiguity, or even conflict over reward practices: just the thing that isn’t needed in the face of technological impact on the workplace. These competing approaches to job analysis certainly deserve systematic testing and empirical follow-up. One way this might occur is by exploring the following Research Issue: 105

4260 Ch05 4/12/02 11:09 am Page 106

106 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

ROBERT L. CARDY AND JANICE S. MILLER

Research Issue 1a: As the breadth of job descriptions increase, the effectiveness of HRM programs (e.g. selection, training, performance management, compensation) decrease. Research Issue 1b: As the breadth of job descriptions increase, employee feelings of role conflict and ambiguity increase.

WORKER CHARACTERISTICS If tasks are in flux due to technology, a stable underlying base may exist in person characteristics important for success in the organization. Tasks may be changing and any description of them may be outdated by the time the analysis is completed. However, person characteristics needed to succeed in an organization’s environment may be more enduring. For example, even though specific tasks may change, being innovative, a team player, being supportive, reliable, and taking initiative have been found to be important characteristics for success in dynamic organizational environments (Cardy, l993). Interestingly, these characteristics all relate to the process of work, not to work content. This process emphasis makes sense in a situation in which the content is continually in flux. There may be person characteristics that are quite stable in their centrality to effective performance, even though technology makes the work environment highly dynamic. A focus on person characteristics can uncover the stable characteristics that are the needed outcome of a job analysis. However, there are issues that must be addressed concerning this approach. Is identification of person characteristics sufficiently detailed as a basis for HRM functions? Perhaps the worker characteristic approach to job analysis could provide useful detail if an approach such as critical incident technique (Flanagan, 1954) is used to behaviorally describe each personal characteristic. Explicating personal characteristics with behavioral descriptions can yield a job analysis with rich detail, even in a dynamic organizational environment. It would be helpful for research to examine the potential for a behavioral approach to defining worker characteristics. Research Issue Two addresses one aspect of this issue: Research Issue 2: A personal characteristics approach to job analysis will yield process gains in terms of greater teamwork, flexibility, and innovation.

36 37

Value-Based Job Analysis

38 39 40

Another alternative job analysis approach is to focus on the values in the organization. With the values-based approach, an organization’s core values are used

4260 Ch05 4/12/02 11:09 am Page 107

Technology: Implications for HRM 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

107

to define desirable job behavior. For example, a values-based approach was used to develop a job analysis for a rehabilitation agency (Henry, Keys & Schaumann-Reese, 2001). A values-based approach identifies organizational values and the behaviors associated with them. The case study by Henry et al. (2001) found that use of the values-based approach as basis for recruitment, selection, training, and performance evaluation led to performance improvements and decreased turnover. The values-based approach may prove to be a particularly useful and worthwhile approach for dynamic organizational environments. Organizations that are virtual have gone through rapid change due to technological advancement, or have rapidly grown on a technological wave and can have difficulty in establishing their culture and values (Cardy, 2001). For example, a virtual organization may have difficulty in getting people to work effectively together, not just because of physical distance among its members, but because of a lack of agreement over priorities, goals, and how to proceed. A shared sense of values can reduce these problems and the values-based job analysis has the potential for helping develop and maintain this common sense of purpose. The value-based approach of necessity assumes that a stable set of values underlies an organization. This may not be true of all organizations, particularly those driven solely by a profit motive. Another possible limitation of the values-based approach is the uncovering of competing values systems within an organization. In such a case, making the competing values explicit through job analysis may prove divisive and dysfunctional. These and other issues must be addressed in regard to his promising approach. The following Research Issues suggest some avenues for exploring the effectiveness of a value-based approach to job analysis: Research Issue 3a: Given a dynamic organizational environment, value-based job analysis will increase the sense of a shared framework or culture among workers relative to a traditional job analysis. Research Issue 3b: All else equal, value-based job analysis will be associated with a lower level of conflict in organizations than traditional job analysis.

34 35

SELECTION

36 37 38 39 40

Employee selection is a critical HRM function. Hiring the best employees can make a substantial impact on bottom-line performance of the firm and, in the case of smaller operations, can make the difference between survival and bankruptcy. In order to maximize performance, selection systems have been 107

4260 Ch05 4/12/02 11:09 am Page 108

108 1 2 3 4 5 6 7 8

ROBERT L. CARDY AND JANICE S. MILLER

tightly tied to the job. Specifically, assessment of job applicants is focused on the tasks and person characteristics identified in the job analysis. The closer the selection activities are based on and measure job-relevant skills and characteristics, the better or more valid it is assumed that the selection test will be. Individuals who exhibit the greatest performance or skills on the selection assessments are hired for a job. However, as presented previously, technology is changing the nature of work. These changes have implications for job analysis and, in turn, for employee selection.

9 10

Technology and the Selection Process

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Technology has the potential for altering the process of selection. For example, computerized testing techniques have been available for some time. Computerized testing can provide for much quicker assessments and streamlining of the selection process through creation of databases that can generate weighted scores across various assessments. Further, technology has the potential for significantly reducing the cost of selection. For example, assessment centers can be costly and time-consuming activities, but numerous studies have shown them to be valid (Bray, Campbell & Grant, 1979). The cost of this technique can be reduced by computerizing assessment center exercises and scoring, and by administering the process using technologies identical to those employed for distance learning. Perhaps the most revolutionary process change affecting employee selection has been the greater presence of Web technology and online recruiting. Organizations have the option of disseminating hiring information and applications over the Web and thus potentially reaching a much wider audience than via using traditional means. Meanwhile, various sites such as Monster.com, HotJobs and others have become key ingredients in the job search process, both from the standpoint of employers and potential employees (Greengard, 2000). In HR departments that implement selection technology to the fullest extent, there are genuine process gains to be made by integrating online searching with résumé tracking and database management. For example, HR departments using this technology have a greater potential to find qualified candidates, interview, evaluate, and hire them in a timely manner. HR may add value to a firm by filling positions quickly and appropriately, avoiding the productivity losses that occur when key positions are left open. Selection technologies are revolutionizing this aspect of HR practice, but research is not keeping pace. More remains to be done from a research standpoint in terms of discovering what types of applicants are attracted to the online application process, and how they later perform in the organizations that

4260 Ch05 4/12/02 11:09 am Page 109

Technology: Implications for HRM 1 2 3 4 5 6 7 8 9 10 11 12

109

hire them, versus individuals recruited and selected in more traditional ways. Furthermore, while a great deal is known about the extent to which organizations use Internet recruiting, little is understood about the long-term success of these practices. It is possible that contingency factors such as industry type, applicant demographic characteristics, organizational culture, or the general economic outlook might influence Internet recruiting effectiveness in significant ways. The following Research Issue suggests a direction for research on this topic. Research Issue 4: Enhancing selection with technology results in process gains, such as faster and more effective selection, relative to traditional, nontechnology enhanced selection.

13 14

Technology and Selection Content

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

As Table 1 summarizes, work is changing in terms of both content and process. For example, content implications of shortened completion times include that tasks are changeable and worker responsibilities can be broader than otherwise. Focusing on these aspects leads to the conclusion that selection should, therefore, be focused on breadth of skills. For example, rather than focusing on narrow skills that may soon be obsolete, the breadth of skills and/or the capacity to learn other skills may be important ability assessments. In other words, a broad utility player may prove a more valuable hire than a specialist. In addition, to the extent that the ability to adapt and learn new skills is critical in the work environment, general ability would be expected to be an important selection assessment. The specific abilities important to a job, of course, depend on the particular job. However a reliable HRM finding is that general cognitive ability (g) appears to generalize and be important for job performance across all jobs (see e.g. Hunter, l986). General cognitive ability is typically measured by summing the verbal and quantitative scores on a standard ability test. The degree of “g” possessed by workers is related to job performance, regardless of the type of job. In other words, people who can learn more and faster and can adapt quickly to changing conditions tend to be better performers Workers with higher levels of g should be quickest to learn additional skills and should most easily adapt and make necessary transitions when changing from one task or role to another. In contrast, workers with low levels of g should be expected to have more difficulty learning, adapting, and making transitions. Workers with lower levels of g may best add to organizational performance by focusing on a fixed task. An explanation for this effect is that greater general ability provides the capacity to successfully adapt to changing 109

4260 Ch05 4/12/02 11:09 am Page 110

110 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

ROBERT L. CARDY AND JANICE S. MILLER

conditions. This is just the type of characteristic that would be expected to be a crucial ability in today’s technology driven workplace. It appears that g may be an important characteristic to assess in selection. Before g is viewed as a panacea, limitations need to be recognized. For instance, general ability cannot be measured without error. Thus, any measure of g is imperfect. Further the correlation between g and performance is certainly less than perfect and, while found to be statistically significant, may be less than one might expect. Additionally, ability does not imply motivation. Simply stated, being capable of learning and adapting doesn’t necessarily mean there is willingness to learn and adapt. A fair summation concerning g in a technologically driven workplace is that it should be a positive but not necessarily sufficient characteristic for effective performance. Similar to the rationale for general cognitive ability, the impact of technology on the workplace also suggests the desirability of a high level of emotional intelligence. Emotional intelligence is most often defined as an ability to recognize and manage emotion in oneself and in others (Goleman, 1995). The ability to handle the stress brought about by shortened completion times and speed of change – the changing of tasks, uncertainty, the pace of work – should be greater among people with higher levels of emotional intelligence. Attributes that contribute to emotional intelligence include self-awareness, impulse control, persistence, confidence, empathy, and social skills (Goleman, 1998). While the concept of emotional intelligence can be viewed as a popular culture fad, there is evidence that it can have important influences on performance (see e.g. Stuller, 1997). For example, Salopek and Goleman (1998) reported that a training program designed to instill emotional intelligence competencies in stressful environments was responsible for an 18% increase in sales following training. Instruments are available for measuring emotional intelligence, and the incremental impact of this individual difference characteristic on performance in today’s technologically driven work environments needs to be examined. As with the above discussion of limitations concerning g, emotional intelligence is also not a stand-alone answer to workplace changes brought about by technology. At an operational level, the construct is measured with error. Further, smoothing of processes with higher emotional intelligence can only go so far if content capability isn’t also present. The speed of change introduced by technology leads to work content changes such as uncertain task life and constant training. In addition to breadth and adaptability mentioned above, tolerance for ambiguity and willingness to learn are two qualities that may be critical in fast, paced environments. Increased communication capability offered by technology increases the importance of communication skills as an employee selection criterion. Further,

4260 Ch05 4/12/02 11:09 am Page 111

Technology: Implications for HRM 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

111

greater communication capability may often mean that employees are able to take a broader view of decision factors and alternative perspectives. For example, incorporating a variety of opinions, operational constraints and strategic factors may come into play with increased communication capability. Rather than being focused on narrow technical issues, increased communication capability can broaden the scope of relevant issues for workers. The impact of technology on the process of work also suggests needed employee characteristics. Work process features such as team structures, empowerment, and cross-functional integration underscore the importance of interpersonal skills. The ability to listen and to express, both in verbal and written form, are crucial to successfully conducting the work process in a technologically assisted work environment. In addition to interpersonal skills, the work process requires people who can work well with little structure. Today’s work process calls for people who can set goals and structure work for themselves. The following Research Issue is suggestive of the type of selection investigations that may be fruitful in regard to the technologically driven workplace: Research Issue 5: Greater breadth and more mature interaction capability, as reflected in selection measures such as g and emotional intelligence, will yield improved performance effectiveness in terms of both process and outcomes.

23 24

PERFORMANCE MANAGEMENT

25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Workplace technology has changed both the process and content of performance management. In terms of process, managers now have the option of turning delivery of performance feedback into yet another opportunity to implement technology. Online, paperless, and off-the-shelf (or “shrink wrapped”) performance appraisal packages have the potential to revolutionize performance appraisal practice. Meanwhile, doing work itself can provide the actual content of performance management by allowing employers to electronically monitor and track worker productivity. Indeed, the growing ability to generate computerized performance reports raises timely questions about what is humane, benevolent, and ethical in the many work settings where electronic performance monitoring is the practice. Finally, the existence of virtual teams and the growing popularity of telecommuting introduce additional challenges for performance management. We believe these challenges provide HR researchers with an opportunity to generate prescriptions for practice that are both theory-based and will be a roadmap for managers in the high technology environment both now 111

4260 Ch05 4/12/02 11:09 am Page 112

112 1 2

ROBERT L. CARDY AND JANICE S. MILLER

and in the future. In this case, research can address both process and content issues. The next sections reflect our assessment of these topics.

3 4

Technology and the Performance Management Process

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Today’s manager has the option of using computer software to generate both performance appraisals and the narrative that accompanies them (Meyer, 2000). For example, managers can complete an online evaluation form on a firm’s intranet, forward it to the employee for comments, and then submit the form to a compensation professional for processing. Along the way, someone completing an evaluation may also, depending on the software package, have the luxury of merely pointing and clicking to generate appropriate text for the appraisal. Clearly, this kind of technology is appealing to managers who would rather be solving problems on the line than writing prose for the purpose of their employees’ career development. The appeal of appraisal technology is undeniable, particularly when it is possible to upgrade to more positive or downgrade to more negative narrative comments with only a mouse click. A particular benefit of technology in the performance management process is the sheer magnitude of the databases available for generating prewritten text. One may conclude that an employee need not be shortchanged in the appraisal process merely because his/her manager has mediocre literary skills. Thus, one positive outcome of appraisal technology may be that employees will receive more complete, richly developed and detailed feedback that will enable them to improve their performance. Research is needed to help answer whether this is the case, and whether individuals indeed perceive a difference between “canned” reports and human-generated ones. Obviously, if the distinction between custom and computer-generated feedback matters to some kinds of workers, or in some circumstances, then research should help define when and for whom this technology is most useful and when it might actually be detrimental. There are other positive features inherent in appraisal technology. Aside from the potential for more descriptive narrative, many appraisal packages include a legal/language review that can evaluate the appraisal document for words that could lead to charges of discrimination or harassment. Some also allow for training needs to be pinpointed, creating valuable documentation in case of contested personnel actions (Slattery, 1991). Appraisal software packages can also determine whether protected classes of employees are being evaluated more harshly or more leniently than others. Ultimately, however, we caution that the bells, whistles, and attractive features of technology-enhanced appraisal programs will only be useful to the degree that their users are willing to follow

4260 Ch05 4/12/02 11:09 am Page 113

Technology: Implications for HRM 1 2 3 4 5 6 7 8

113

through with individual feedback sessions, high-quality coaching, and commitment to take action to remedy any evidence of adverse impact. The following Research Issue captures an important facet of automated appraisal: Research Issue 6: Appraisal effectiveness, such as satisfaction with appraisal and perceived usefulness of feedback, is more a function of the capability and commitment of the rater, than of the degree of technological support for appraisal.

9 10

Technology and Performance Management Content

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Estimates vary regarding how many workers in the U.S. have some or all of their work evaluated through computerized performance monitoring (CPM). Recently, researchers have reported totals ranging from 6 million (Hawk, 1994) up to greater than 26 million (Staunton & Barnes-Farrell, 1996). These systems perform activities like listening in on sales or customer service calls, counting the number of work units or keystrokes completed per time period, the number and length of times a terminal is idle, and an individual’s error rates. The possibilities for evaluating and controlling performance that CPM provides are obvious, and researchers, managers, and government entities have only begun to consider the human relations and ethical aspects of CPM systems. While CPM may be a benefit to employees because of increased objectivity of performance appraisal and increased potential for feedback (Earley, 1988), there is growing acknowledgement that it may also be questionable on ethical grounds. The objectivity inherent in reporting performance data is only useful to the degree that an organization provides an equal playing field for workers. In cases where individuals may benefit from better training and materials, more advantageous office environments, or more collegial co-workers, one might assume that all else being held equal, their productivity would also be greater. There is no evidence that CPM systems as they are presently configured take these “system” issues into account. Indeed, reliance on CPM data may be unfair unless workplace situational constraints are measured and somehow appropriately weighted. Likewise, CPM systems often do not discriminate between work quantity and work quality or the process by which employees achieve results. This is analogous to discussions of a result orientation vs. a process orientation. CPM ignores the contributions of positive interpersonal relations and worker collegiality, characteristics that may be completely distinct from productivity, but are nonetheless worth acknowledging. Another problem that can arise with CPM adoption is that workers may feel over-watched and over-supervised, and that their privacy is invaded. Some 113

4260 Ch05 4/12/02 11:09 am Page 114

114 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

ROBERT L. CARDY AND JANICE S. MILLER

researchers have suggested that this may result in a dehumanizing and unsatisfying work environment that can lead to increased stress and health problems in those being monitored (Howard, 1985). Evidence for these outcomes appears to be equivocal, however, and this area is one that deserves more research attention. Perhaps one solution to the potential drawbacks of CPM as a performance management technique is a commitment to providing an opportunity to discuss monitoring output with managers and providing workers a chance to explain their results. Hawk (1994) and others have suggested that this may be one way to ensure that these techniques also promote an overall sense of procedural justice and fairness in the performance appraisal process. The following Research Issue may be an initial step in clarifying some of these issues: Research Issue 7: Computerized performance monitoring will be associated with high performance only in situations where firms consider the impact of workplace situational constraints.

16 17

Performance Management in Virtual and Telecommuting Environments

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Performance management presents special challenges when individuals work in non-traditional virtual team environments and/or telecommute. For example, distance workers who do not engage in face-to-face interactions with managers on a daily basis run an increased risk of not receiving feedback that could help them elevate work performance (Miller & Cardy, 2000; Shamir & Salomon, 1985). Absence or reduction in mentoring activities may also inhibit professional development and achievement (Cooper, Kurland & Bailey, 1999). Furthermore, managers may focus on outcome orientation at the expense of quality and process concerns when evaluating workers in these settings, since process observations are more difficult to come by or non-existent. Lack of attention to process issues is especially problematic when jobs include a strong customer interaction component. Cooper et al. (1999) found that supervisors who were unable to observe telecommuters in action were less able to coach, counsel, and develop them for long-term organizational success. In a recent review, Cascio (2000) suggested that a critical factor in the performance management of distance workers is an understanding of their responsibilities and objectives, and the chain of command. The next important step is development of specific, challenging and measurable goals so distance workers can stay focused on what is important. In his view, the ultimate objective of goals, measures, and assessment is to reduce uncertainty and allow telecommuters and virtual workers to know where they stand at all times.

4260 Ch05 4/12/02 11:09 am Page 115

Technology: Implications for HRM 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

115

If an individual’s status as a virtual team member/telecommuter undermines the interpersonal network and psychosocial support that comes from on-site interactions, then it might seem rational that a commitment to more continuous performance management would help reduce this isolation. For example, more frequent telephone contact or on-site visits may be useful in elevating the quality of feedback that managers deliver. Managers who replace an annual performance review with ongoing and timely feedback may not only alleviate the physical and social remoteness of virtual/distance work, but also enhance progress toward goals, acceptance of the performance evaluation, and satisfaction with the appraisal process in general. Although the above approach of more frequent contact and feedback may seem to be the rational approach to maintaining and improving performance and commitment, it may be dysfunctional. Specifically, a focus on specifying tasks and increased contact and feedback can be perceived as a constraining force and can produce negative reactance. Increased task specification and closer monitoring are the means used in a traditional approach to performance management. In the empowered setting of a virtual workplace, managers may not be able to identify, with any great specificity, all of the tasks that a worker needs to perform. To pursue this traditional approach to performance management could easily be seen by a telecommuter or virtual worker as encumbering micromanagement. Indeed, in the marketing literature it has been demonstrated that activity control, focusing on the process, can actually degrade performance (see e.g. Cardy, 1997). What may be more effective in a virtual or telecommuting environment is a clear focus on outcomes. Explicit goals and timetables can make performance expectation clear, but not train the worker in how the goals are accomplished. This approach is consistent with an empowerment approach to workers and conveys trust in workers’ abilities to manage the work process. Of course, if a worker demonstrates that she/he cannot achieve the goals, then a focus on activity control may be appropriate. The above discussion leads to the following Research Issue.

31 32 33 34

Research Issue 8: A performance management focus on process control will result in lower performance and commitment in a virtual and telecommuting environments, relative to a focus on results.

35 36 37

CONCLUSION

38 39 40

Twenty-first century technology makes it possible to be increasingly productive while at the same time using fewer and fewer workers to accomplish the 115

4260 Ch05 4/12/02 11:09 am Page 116

116 1 2 3 4 5 6 7 8 9 10

ROBERT L. CARDY AND JANICE S. MILLER

same tasks. Technology can have enormous influence not only on the content but also the process of work, as we have discussed here. This review has addressed some implications of technology for HRM, however we urge readers to remember the message underlying these ideas is one of strengthening and maintaining human resources as the unique competitive advantage firms possess. Technologies that are today both widely available and easily copied will not by themselves impart the unique advantage that an organization’s human resources can provide. However, we believe an adept combination of advanced technology and a talent for managing people within its context is a robust prescription for organizational success.

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

REFERENCES Bray, D. W., Campbell, R. J., & Grant, D. L. (1979). Formative years in business: A long-term AT&T study of managerial lives. Huntington, NY: Robert E. Kriegor Publishing Company. Butler, S. K., & Harvey, H. J. (l988). A comparison of holistic vs. decomposed rating of position analysis questionnaire work dimensions. Personnel Psychology, 41, 761–772. Cardy, R. L. (l993). Future-oriented and organizational level approaches to job analysis. In: K. P. Carson (Chair), Future directions in job analysis. Symposium presented at the Annual Conference of the Society of Industrial and Organizational Psychology, San Francisco. Cardy, R. L. (1997). Process & outcomes: A performance management paradox. Human Resources Dixvision of the Academy of Management Newsletter, XXI(Summer), 12–14. Cardy, R. L. (2001). HRM in a virtual world: Some conclusions and future directions. In: R. L. Heneman & D. B. Greenberger (Eds), Human Resource Management in Virtual Organizations. Cardy, R. L., & Stewart, G. L. (l998). Quality and teams: implications for HRM theory and research. In: S. Ghosh & D. B. Fedor (Eds), Advances in the Management of Organization Quality (Vol. 2, pp. 89–120). Greenwich, CT: JAI Press. Cardy, R. L., Gove, S., & DeMatteo, J. (2000). Dynamic and customer-oriented workplaces: Implications for HRM practice and research. Journal of Quality Management, 5, 159–186. Cascio, W. F. (2000). Managing a virtual workplace. Academy of Management Executive, 14(3), 81–90. Cooper, C., Kurland, N. B., & Bailey, D. (1999). Telecommuting: Manager control and employee development in one public and two private organizations. Paper presented at the annual meeting of the Academy of Management, Chicago. DeNisi, A. S., Cornelius, E. T., & Blencoe, A. G. (l987). Further investigation of common knowledge effects of job analysis ratings. Journal of Applied Psychology, 72, 262–268. Earley, P. C. (1988). Computer-generated performance feedback in the magazine subscription industry. Organizational Behavior and Human Decision Processes, 41, 50–64. Flanagan, J. C. (1954). The critical incident technique. Psychological Bulletin, 51, 327–358. Goleman, D. (1998). Working with emotional intelligence. New York: Bantam Books. Goleman, D. (1995). Emotional intelligence. New York: Bantam Books. Greengard, S. (2000). Technology finally advances HR. Workforce, 79(1), 38–41. Harvey, R. (l991). Job analysis. In: M. S. Dunnette & L. M. Hough (Eds), Handbook of Industrial and Organizational Psychology (pp. 71–163). Palo Alto, CA: Consulting Psychologists Press.

4260 Ch05 4/12/02 11:09 am Page 117

Technology: Implications for HRM 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

117

Harvey, J. R., Hakel, D. Friedman, L. Cornelius, T. E. (l988). Dimensionality of the job element inventory, a simplified worker-oriented job analysis questionnaire. Journal of Applied Psychology, 73, 639–646. Hawk, S. R. (1994). The effects of computerized performance monitoring: An ethical perspective. Journal of Business Ethics, 13(12), 949–957. Henry, D., Keys, C., & Schaumann-Reese, L. (2001). Value-based job analysis: An approach to human resource management in rehabilitation agencies serving people with developmental disabilities. Journal of Rehabilitation Administration, 25, 1–17. Howard. R. (1985). Brave new workplace. New York: Viking-Penguin, Inc. Hunter, J. E. (l986). Cognitive ability, cognitive aptitudes, job knowledge, and job performance. Journal of Vocational Behavior, 29, 340–362. Landy, F. J., & Vasey, J. (l991). Job analysis. The composition of SME samples. Personnel Psychology, 44, 27–50. Meyer, G. (2000). Performance reviews made easy, paperless. HRMagazine, 45(10), 181–184. Miller, J. S., & Cardy, R. L. (2000). Technology and managing people: Keeping the “human” in human resources. Journal of Labor Research, 21(3), 447–461. Mullins, C. W., & Kimbrough, W. W. (l988). Group composition as a determinant of job analysis outcomes. Journal of Applied Psychology, 73, 657–664. Salopek, J. J., & Goleman, D. (1998). Train your brain. Training and Development, 52, 293–298. Sanchez, J. I., & Fraser, S. L. (l992). On the choice of scales for task analysis. Journal of Applied Psychology, 77, 545–553. Shamir, B., & Saloman, I. (1985). Work-at-home and the quality of working life. Academy of Management Review, 10(3), 455–464. Slattery, P. (1991). A new way to appraise. HRMagazine, 36(10), 27–31. Stewart, G. L., & Carson, K. P. (l997). Moving beyond the mechanistic model: An alternative approach to staffing for comtemporary organizations. Human Resource Management Review, 7, 157–184. Staunton, J. M, & Barnes-Farrell, J. L. (1996). Effects of electronic performance monitoring on personal control, task satisfaction, and task performance. Journal of Applied Psychology, 81(6), 738–745. Stuller, J. (1997). Edging toward responsibility. Training, 34, 43–48. Taylor, F. W. (l911). The principles of scientific management. New York: Harper & Brothers.

28 29 30 31 32 33 34 35 36 37 38 39 40

117

4260 Ch06 4/12/02 11:10 am Page 119

1 2 3 4 5 6 7 8

6. CHANGING THE RULES? HUMAN RESOURCES IN THE 21st CENTURY VIRTUAL ORGANIZATION

9 10 11 12

Richard D. Johnson and Linda C. Isenhour

13 14 15 16

ABSTRACT

17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

To compete in an increasingly volatile global business environment, many firms are choosing to partner with multiple firms, creating a series of independent alliances which have been called virtual organizations. Enabled by the advances in information and communication technologies, these virtual organizations often utilize a different organization structure than traditional organizations. With this new structure comes a need for a deeper understanding of the impacts this structure has on the human resource concerns within the virtual organization. Although much research has focused on the technological and communication requirements for virtual organizations, limited research has been conducted focusing on the broader managerial issues facing these organizations. Using the organizational framework developed by Galbraith (1973), this chapter outlines some of the changes in human resource management that a virtual organization both enables and necessitates and the implications this has for the role and responsibility of managers in the 21st century virtual organization.

34 35 36 37 38 39 40

Advances in Human Performance and Cognitive Engineering Research, Volume 3, pages 119–152. Copyright © 2003 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0986-5

119

4260 Ch06 4/12/02 11:10 am Page 120

120 1

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

INTRODUCTION

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

To compete in an increasingly volatile business environment, many firms are choosing to operate as virtual organizations. A virtual organization is “a collection of geographically distributed, functionally and/or culturally diverse entities that are linked by electronic forms of communication and rely on lateral, dynamic relationships for coordination” (DeSanctis & Monge, 1999, p. 693). Examples of this include companies such as Nike and Reebok, who partner with small hubs of designers to coordinate the manufacture and distribution of products, and companies such as IKEA, Benetton, and Ford who focus on core processes while partnering with multiple organizations to act as one firm in the collection, manufacture, distribution, and sales of an array of products. Several factors contribute to the decision to create or partner in a virtual organization: the increasing pace of business, the reduction of costs required to enter new markets, personalization of products to meet the needs of a variety of customers, and increasing globalization (Bleeker, 1994; Lockett & Holland, 1996; Kim, 1998). Virtual organizations are most often structured as dynamic network forms with flat hierarchies, project-based departmentalization, broad versus narrow division of labor, and horizontal power distribution, with its emphasis on knowledge/skills rather than management level. Virtual organizations are characterized by the transcendence of traditional organizational boundaries (Coyle & Schnarr, 1995; Grabowski & Roberts, 1999), flexible, evolving partnerships and teams with shared assets (Jarillo, 1993; Dess, Rasheed, McLaughlin & Priem, 1995; Grenier & Metes, 1995; Boudreau, Loch, Robey, & Straub, 1998), geographic dispersion (Bleeker, 1994; Boudreau et al., 1998; DeSanctis & Monge, 1999), heavy utilization of virtual teams (Grenier & Metes, 1995; Lipnack & Stamps, 1999) and heavy use of information and communications technologies (Palmer, 1998; Ahuja & Carley, 1999; Staples, Hulland & Higgins, 1999). An excellent example of a virtual organization can be seen in the Usability Group within Reuters, Holdings, PLC (Grimshaw & Kwok, 1998). The usability group was charged with the development of a standardized electronic support system to support Reuters’ mission of providing computerized information in a variety of media. To accomplish this, the group would require expertise in ergonomics, artificial intelligence, psychology, market research, interface design, customer training, and software design. Estimates suggested that this team would need 24 individuals to complete the project, but only two were made available within Reuters. Therefore, the majority of the expertise came from sources external to Reuters such as Microsoft, Logica U.K. Ltd, and the University of Loughborogh. The team size ranged from six to 83 depending on project need,

4260 Ch06 4/12/02 11:10 am Page 121

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

121

with a core group of 12–24. Technology was an integral part of this arrangement. With the expertise coming not only from multiple partners, but from different locations, this team relied heavily on traditional videoconferencing, as well as also on computer-based conferencing. The use of these conferencing techniques allowed them to increase customer involvement at their remote usability centers in locations such as New York, Singapore, and Cyprus. Ultimately the team gained increased expertise by reaching outside the organization, increasing integration and collaboration, while not requiring members to relocate regularly. Similarly, software developer Veriphone has found a unique way of improving its time to market for customers by employing teams of programmers globally (including Dallas, Honolulu and Bombay) in a working relay. Dallas workers complete their workday and hand-off their product through groupware to the Honolulu group, which is just beginning its shift. Using the same groupware at the end of their shift, the Honolulu workers hand-off to Bombay. Thus, by using a global workforce, information technology and the multiple time zones associated with the various locations, Veriphone can reduce its production time significantly (Casio, in press). However one defines the virtual organization, and whatever characteristics enable the virtual organization, the unique nature of the virtual organization should give us pause to reflect on how to best utilize human capabilities and potential (Wigand, Pico & Reichwald, 1997). Although recent scholars have sought to outline key issues associated with both virtual organizations and human resource management, this research has been limited in focus and is in need of a framework for understanding how the issues fit within the broader organizational context (cf. Boudreau et al., 1998; DeSanctis & Monge, 1999; Sparrow & Daniels, 1999). A good framework for investigating this issue is Galbraith’s (1973) “star” model of organizational design. Thus, we utilize this model as the reference point for discussing the human resource issues that emerge as a result of virtual organizing. Our ultimate goal is to use this framework to discuss the key issues facing human resources (HR) research in virtual organizations along with a discussion of how researchers might proceed to address these key issues.

34 35

RESEARCH FRAMEWORK

36 37 38 39 40

Although early management scholars sought to identify the “best” way to structure the organization (Weber, 1946; Barnard, 1968), other researchers have suggested that the way in which a firm structures itself emerges from the strategies that firm is pursuing (cf. Chandler, 1962). This suggests that when a 121

4260 Ch06 4/12/02 11:10 am Page 122

122 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

firm chooses to participate in virtual initiatives it does so in response to market conditions and in support of the organization’s key strategies. Once a decision is made to organize virtually, firms must still synchronize multiple components of the firm to implement their strategies within the chosen structure (Galbraith, 1973; Galbraith & Nathanson, 1978, Fig. 1). As the model indicates, a firm’s ultimate performance depends upon the organization of the firm’s resources along five dimensions of design: its strategies, its structure, its information and decision processes (IDPs), its people, and its reward systems. It is important to note that the model also suggests the key importance of reciprocal relationships. Since all of a firm’s organizational design factors are interdependent, a change in one aspect has the potential to impact other aspects of organization design. For a virtual organization, this suggests that once a decision has been made to organize virtually, new information systems and processes must be designed and implemented to support the new direction of the firm. Along with these IDP changes, the firm must begin to

16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Fig. 1.

The Star Model of Organization Design.

Source: Galbraith (1995, p. 12).

4260 Ch06 4/12/02 11:10 am Page 123

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12

123

address the potential for changes in human resource recruitment, selection, performance evaluation and reward systems. Although the human resources literature traditionally views HR research as focusing on the processes of recruiting, selecting, evaluating and rewarding individuals, we are going to organize the discussion of issues to be consistent with the dimensions as outlined by Galbraith. Many topics associated with HR research will be included within the dimensions proposed by Galbraith, but space limitations preclude extensive detail. The challenge is to align all of these components to ensure effective fulfillment of an organization’s goals. After a brief discussion of some of the key characteristics of the information and decision processes and key structural issues, we turn to a discussion of the key people and rewards issues facing human resources in the virtual organization.

13 14

INFORMATION AND DECISION PROCESSES

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Information and decision processes refer to the technologies and processes through which information is derived and products are made. For the virtual organization, these technologies are a key enabler (Davidow & Malone, 1993) because it is through these mechanisms that firms are able to coordinate and share information among multiple constituencies. Without these technologies, the virtual organization is impossible; and with them the organization faces the need to rethink and develop management policies that fit with the new organizational form. “The key to understanding the virtual corporation is the profound effect that information technology has as it distorts traditional relationships of management and work to time and space” (Coates, 1994, p. 7). Although some authors have discussed how advanced technologies such as groupware, desktop video conferencing and other technologies enable virtual collaboration (cf. Strader, Lin & Shaw, 1998), others have found that it is not necessarily advanced tools on which these virtual organizations depend, but continued use of traditional tools such as fax and voice mail (Palmer, 1998). Still others have found that while advanced tools may be provided, all people won’t use them with equal frequency or necessarily in the manner anticipated (DeSanctis & Poole, 1994; Jarvenpaa & Leidner, 1999). What this suggests is that it is not necessarily the technology that makes the changes, but instead the manner in which it is appropriated within the organization. As we know, the manner in which a technology is deployed and utilized within an organization can have a dramatic impact on, and lead to dramatic changes in, how work is accomplished, how relationships are formed and how power is distributed (cf. Barley, 1986; Orlikowski, 1992; DeSanctis & Poole, 1994). Technology not only changes the way in which people get information, but who has access 123

4260 Ch06 4/12/02 11:10 am Page 124

124 1 2 3 4 5 6

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

to information and when (Dutton, 1999). This enables new ways for people to meet, work, and interact by ultimately creating a new network of peers. Virtual organizations are able to coordinate global activities and teams in ways which traditional firms were unable to do. Thus, these information and decision processes enable the organization to utilize more structural options than were available before. It is these structures that we now briefly discuss.

7 8

STRUCTURE

9 10 11 12 13 14 15 16 17 18

Structure refers to the issues relating to the distribution of power and authority within an organization. Aspects of this include the layout of the organization’s reporting structure, specialization, and how power is distributed in the organization. As we have discussed earlier, virtual organizations result in networked relationships, flatter hierarchies, greater geographic dispersion and more tenuous internal and external relations. These key structural changes are magnified by the use of virtual teams and remote workers (Sparrow & Daniels, 1999). Thus, we briefly discuss the salient characteristics of these so that we can better understand and discuss the human resource issues facing virtual organizations.

19 20

Virtual Teams

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Given the networked, flat structure of virtual organizations, the firm’s effective use of its human resources becomes more critical. One key mechanism used by virtual organizations is the virtual team. Unlike face-to-face teams, who conduct the majority of their work in the same place and time, the virtual team conducts most of its work in geographically distributed locations, separated by time and space (cf. Grenier & Metes, 1995; Jarvenpaa, Knoll & Leidner, 1998; Lipnack & Stamps, 2000; Saunders & Ahuja, 2001). The virtual team depends heavily upon advanced information technologies, such as e-mail, groupware, and videoconferencing (Jarvenpaa et al., 1998; Knoll & Jarvenpaa, 1998), and faces the challenges of fluid membership, with team members joining and leaving projects throughout the life of the team (Kristoff, Brown, Sims & Smith, 1995). The use of electronic communication channels, geographic dispersion, and project focus of virtual teams provides interesting management and staffing issues for the virtual organization. In a sense, a virtual team within a virtual organization becomes a microcosm of the issues associated with the virtual organization. Thus, the importance of understanding human resource issues within a virtual organization is magnified by its heavy reliance on virtual teams. Key issues become how to manage, staff, evaluate, and reward virtual teams (Saunders & Ahuja, 2001).

4260 Ch06 4/12/02 11:10 am Page 125

Human Resources in the 21st Century Virtual Organization 1

125

Remote Work

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

A second major structural characteristic of the virtual organization is the need to rely on remote workers (Sparrow & Daniels, 1999; Cascio, 2000). Remote work is defined as “working away from the traditional office using computers and telecommunications facilities to maintain a link to the office” (Belanger, 1999, p. 139), and has been suggested as a way to reduce corporate costs (cf. Mokhtarian, 1994; Bernardino, 1996; Hobbs, 1998), to compete globally (Davies, 1996) and to recruit and retain workers (Igbaria & Guimaraes, 1999; Thompson, Lim & Har, 1999). Although limited research has been conducted on remote work, the existing research suggests that certain types of individuals may be better suited to remote work than others (Belanger & Collins, 1998; Falaleeva & Johnson, 2001). Furthermore, it is not simply providing technology alone that makes a remote work arrangement successful, but more importantly, establishing the fit between the requirements of the job, the technology provided and the knowledge, skills and abilities of individuals (Belanger, Collins & Cheney, 2001). One of the biggest issues facing those involved in remote work arrangements is that managers have yet to determine how to best manage employees within a remote work setting (Pearlson & Saunders, 2001). Given the temporal and geographic dispersion inherent with remote work and the heavy utilization of remote workers in virtual organizations, researchers can further explore remote work to better understand management requirements in virtual organizations. For example, individuals involved in remote work may be more likely to be able to work independently and autonomously, have higher levels of conscientiousness and self-monitoring and exhibit lower needs for affiliation than those working in traditional settings. Likewise, supervisors of remote workers may need to have higher levels of trust, be highly skilled in a variety of communication technologies and exhibit excellent organization and planning abilities, when compared to more traditional work environments. Certainly all individuals would require superior skills in using information technology on a daily basis. To our knowledge, no research has directly examined the knowledge, skills, abilities and other characteristics (KSAO) needed by those involved in remote work. Job analysis is the means by which such requirements have been determined in traditional environments (Cascio, 1998), and researchers may find that job analysis is also a good source to begin identifying KSAO’s required by workers in virtual organizations. Comparisons between similar jobs carried out in both traditional and virtual workplaces can provide additional insight into the differences associated with each context. 125

4260 Ch06 4/12/02 11:10 am Page 126

126 1

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

Control Mechanisms

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Although the previous portions of this chapter have outlined the characteristics of the virtual organization and the factors that contribute to the potential changes in the structure of the virtual organization, this section begins to investigate how human resources processes may change. One of the major potential areas for change revolves around the mechanisms of control within the virtual organization. By control we refer to “the necessity of individuals to subordinate, to an extent, their own desires to the collective will of the organization” (Barnard, 1968, p.17). Although there are multiple ways in which controls have been instituted in organizations, including organizational culture (cf. Schein, 1985) clan control (Wilkins & Ouchi, 1983), self-control (or regulation: cf. Bandura, 1986) simple control, bureaucratic control, technological control (Edwards, 1981) and concertive control (Tompkins & Cheney, 1983; Barker, 1993), we are especially interested in changes in the use of concertive and technological controls.1 As with traditional organizations, virtual organizations are not free of the need to focus member behaviors on achieving desired outcomes. However, its characteristics of rapid change, geographical dispersion, and transitory relationships may render traditional control mechanisms ineffective. When managers and subordinates are dispersed across the globe, interacting with subordinates via electronic media, the opportunities for simple control are limited; and with the virtual organization’s flat organization structure and multiple participating partners, hierarchical control mechanisms are likely to be much less effective than in traditional organizations. Thus, concertive and technological approaches are likely to be more important to understanding control in the virtual organization. Concertive controls reflect social rules and meanings shared and agreed upon by the collaborative interactions of the organization’s members. With the frequent requirement to re-form based on changing business needs, virtual organizations may end up relying heavily on concertive controls. In effect, individuals within the organization would be “redesigning” the controls to fit each newly defined project/need, rather than depending on an entrenched process which constrains flexibility and, ultimately, organizational success. By necessity, teams would develop what Barker (1993, p. 408) refers to as a “system of value-based normative rules that control their [the group or organization] actions.” Virtual organizations have neither the time nor the ability to develop a unique set of controls that draw from the myriad of controls utilized in the original organizations. Instead, as Jarvenpaa & Leidner (1999) have illustrated with virtual teams, one of the important aspects is the development of a shared

4260 Ch06 4/12/02 11:10 am Page 127

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

127

understanding about the communication, performance, and other social norms within the group (in some sense, this is the beginning of concertive controls). Teams don’t have time to develop a set of codified rules; instead, successful teams create and utilize a set of agreed upon normative rules through which the team accomplishes its work. Although it is easy to suggest that the virtual organization will rely on concertive controls, we believe there is a need for further research into how these controls are constituted within the virtual organization. Research questions include: What is the process through which concertive controls are constituted within the virtual organization? What are the difficulties facing the development of these concertive controls in the virtual organization? For example, research has shown that organizational members have certain shared understandings and uses (also called genres) of communication technologies on which they rely (Orlikowski & Yates, 1994). How then do these individuals with diverse backgrounds come together to create a shared meaning and constitute shared rules and norms for the group? Another area of change in the mechanism of control is through the use of technological controls. Technological controls stem from the technology that, by virtue of its logical progression, determines how individuals must perform in relation to the technology in completing tasks. Control is constituted through the use of physical or information technology. Common examples of this are the assembly line or other technologies that physically control the pace and rate at which work is completed. Interestingly, changes in technology actually can have multiple impacts upon how work is controlled, sometimes creating more autonomy and freedom, but other times creating less of each (cf. Buchanan & Boddy, 1983; Barley, 1986). One of the concerns that managers have when managing subordinates is the lack of face-time with employees. This suggests that simple control is actually an important mechanism of managerial control in traditional organizations that is lost when work is done distally. In virtual organizations, managers can rely on technology, in conjunction with team policies, to develop controls that meet team needs. For example, Pearlson and Saunders (2001) have suggested that one way in which managers can better manage is to create structured communications policies (through e-mails, corporate Intranets, etc.), as well as regular meetings (which could be face-to-face or via video conferencing). This structured communication, made possible through technology, creates a balance between the flexibility inherent in virtual organizations with the necessity to focus employee energy toward completion of organization goals. Although this section has discussed the changing structural nature of the virtual organization, especially as related to issues of control, the rest of the chapter will discuss 127

4260 Ch06 4/12/02 11:10 am Page 128

128 1 2 3

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

more detailed information on how the people and reward components of an organization’s design change. The first area of this research revolves around the people issues.

4 5

PEOPLE

6 7 8 9 10 11 12 13 14 15

As Galbraith’s model suggests, the decision to structure virtually will have a dramatic impact on how the organization manages its employees. People issues refer to issues associated with the relationship between the employee and the job/organization and how those relationships are managed. Key aspects of the structure of a virtual organization which will impact people issues include: geographic dispersion, flat hierarchies, heavy utilization of knowledge workers and highly skilled professionals, and its organizational boundary spanning nature. This will impact the nature of recruitment, selection, and socialization of employees. The impact on each of these are discussed in turn.

16 17

Recruitment

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

One of the important issues in a virtual organization is how to attract individuals to these unique jobs. Breaugh and Starke (2000) suggest that there are five major components of this multi-stage process: establishment of recruitment objectives, recruitment strategy development, actual recruitment activities, targeting candidate responses, and a post-recruitment review. We suggest that the process may differ in several ways for virtual organizations when compared to more traditional environments. For example, strategy development and recruitment activities may be impacted since recruiting in a virtual organization is likely to become more ongoing as opposed to episodic. One of the hallmarks of the virtual organization is its existence at the intersection of multiple companies’ needs, most often around a specific project or collection of projects. Thus, as projects open and close, the staffing needs of the organization will become more fluid, with people constantly entering and exiting the virtual organization to work on specific projects. Given this likelihood, traditional recruiting cycles may no longer be appropriate. The virtual organization will have neither the time nor the staffing capabilities to dramatically focus resources on a prolonged recruiting process. Instead, they may have to utilize their internal resources to a greater extent or to develop new and unique plans to adjust for the unique nature of virtual organizations. This is an area ripe with research questions. For example, how do you undertake and manage recruiting when there is not a traditional cycle, but instead a series of overlapping and intertwined mini-cycles in an ongoing process? How should recruiting strategies change when utilizing ongoing recruiting?

4260 Ch06 4/12/02 11:10 am Page 129

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

129

In addition, virtual organizations will need to adapt their recruiting processes to the changing skill base and nature of the labor pool from which they are recruiting. It has been suggested that the employees of the virtual organization will be characterized by a series of contingent professionals who will move from task to task. Staffing will more likely be skill or project-based than division or functionally-based, with only a minimal number of full-time organization employees (Cascio 2000). In essence, many of the organizations’ employees may potentially become free agents, plying their skills on multiple projects across organizational boundaries as projects form and reform. To best manage the recruiting process through this environment, the organization cannot depend exclusively upon external or even local departmental recruiting. Instead, it must adapt its processes to this new reality. For example we feel that organizations will have to find a way to maintain internal skills inventories, across organizations, for employees (e.g. use of Human Resource Information Systems: HRIS), thus creating an internal pool of labor from which to choose. Otherwise the costs to maintain ongoing recruiting will become prohibitive. As a result, researchers must begin to address the issues associated with the use of internal recruiting and identify optimal recruiting strategies for this type of labor pool. Potential research questions include: What aspects of the recruiting process change when you are recruiting internally? How does the recruiting process change when recruiting “free agents”? Finally, what type of ethical and legal issues must be considered when potentially cannibalizing the skills from one partnering organization in the virtual organization to another partnering organization? Along with the changing nature of the skills and labor pool base, actual methods of recruiting may need to change to support ongoing recruiting. While traditional recruiting outlets such as newspaper advertisements, college campuses and commercial recruiting businesses will continue to be utilized, their value is likely to diminish especially to the virtual organization (Sparrow & Daniels, 1999). Technology will enable novel ways to conduct recruiting. For example, the Internet has become a strong outlet for recruiting. Recruiting websites have increased dramatically in the last 10 years, and experts estimate that 95% of all technical jobs and 70% of all other entry level positions will be filled based on Internet recruiting by 2015 (Bartram, 2000). The types of workers being sought by virtual organizations are, highly skilled professional knowledge workers, who should be more likely to utilize technology in their recruiting process and be involved electronically with professionals globally. This raises some very interesting questions for researchers to begin investigating. First, if the virtual organization does not take advantage of these new recruiting outlets, will they actually miss out on the actual audience they are seeking? 129

4260 Ch06 4/12/02 11:10 am Page 130

130 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

Also, how does the use of these technologies impact the diversity of the labor pool, and does it place minorities at a disadvantage in hiring? It has been shown that professionals are found within broad communities of practice where they share and receive important work-related and social connections (Brown & Duguid, 1991; Mclure-Wasko & Faraj, 2000; Wellman, Salaff & Dimitrova, 1996). Given these connections, we suggest that there are actually informal recruiting networks ready and available for the virtual organization. How then can virtual organizations utilize these networks, while respecting the social norms and accepted behaviors of these virtual communities, without being a member of these communities? Ultimately these global linkages and advances in technology raise the opportunity for employees themselves to recruit within their professional circle, a method utilized for years in the academic field. For virtual organizations, this suggests the potential for recruiting to reflect more of an academic model used by universities. In conjunction with ongoing recruiting, what does this mean to the traditional methods and processes of recruiting? What is the role of the traditional recruiter, and how should the HR practices associated with recruiting be changed and adjusted? If, for example, HR professionals become less involved in recruiting, while line managers become more involved, what are the skills and knowledge the manager should have if she is now the actual locus of the recruiting process? Finally, HR practices differ widely across cultures (Choi & Kelemen, 1995). How then do we adapt the recruiting message and process to account for these differences? Given its ongoing recruiting and staffing requirements, the virtual organization will need to constantly scan the internal and external environments for potential employees. Technology can also support this phase of the recruiting process through the use of decision support tools focused on the scanning and analysis of potential candidate resumes. The difficult issues associated with these tools are how they should be developed and utilized. If a decision support system (DSS) is used to scan resumes for certain skills, how should the sorting and ranking criteria be developed? The ultimate design of a DSS can have broad impacts on the recruiting process through its impact on the diversity, quality of applicants, acceptance ratios, long-term retention, etc. Research should be undertaken to better understand not only how to design such support technologies, but how to design them in such a way that a diverse and effective labor pool can be presented.

36 37

Selection

38 39 40

Selection is defined as the process of gathering information, evaluating, and deciding who should be employed in particular jobs (Dowling & Schuler, 1990).

4260 Ch06 4/12/02 11:10 am Page 131

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

131

However, traditional selection practices have been questioned in terms of their application to virtual organizations (Cascio, 2000). Indeed, the emphasis in virtual organizations on speed and flexibility seems to preclude the time required for traditional selection screening, testing and interviewing. Three areas in human resource selection for virtual organizations offer intriguing research opportunities: person-job fit and person-organization fit, the evolution of jobs into roles, and the impact of the use of technology in selecting a geographically dispersed global workforce. Extensive research on selection has suggested that achieving optimal performance involves matching the knowledge, skills, abilities, and other (KSAO) personal characteristics to the job (cf. Campbell, McCloy, Oppler, & Sager, 1993; Organ & Ryan, 1995; Motowidlo & Van Scotter, 1994; Van Scotter & Motowidlo, 1996). However, some scholars propose that the historically narrow definition of jobs will have less value in the future. Thus, the need to select an individual to match a job may be reduced in importance (Sparrow & Daniels, 1999). Given the more episodic nature of individual-organization psychological contracts in virtual firms, the reduced ability to socialize new individuals over time, the more emergent nature of corporate culture and the physical dispersion of individuals geographically (Sparrow & Daniels, 1999), we suggest that person-job fit, associated with basic job analysis to ascertain required knowledge, skills and abilities (e.g. use technology, work in teams, demonstrate flexibility, work autonomously) be supplemented with personorganization fit. Herriot and Anderson (1997) propose that the entire study of person-job fit must be reoriented to one of person-organization or person-role fit, such that the individual’s skill sets, personality and values complement the organization’s values and climate at a particular time for a particular project. Indeed, research into person-organization fit has identified positive outcomes from such an approach in traditional organizations including increased job satisfaction and commitment (Bowen, Ledford, & Nathan, 1991; Chatman, 1991). Furthermore, research on remote workers has suggested that there should be a fit between the personality of the person and the characteristics of the remote work environment, not simply the tasks involved in the job (Belanger & Collins, 1998; Falaleeva & Johnson, 2001). However, the possibility that adverse impacts may result from such a move suggests that researchers investigate how individuals with differing personality characteristics (ex. conscientiousness, proactive self-monitoring, core self-evaluations, etc.) perform in the virtual organization and how the organization can resolve conflicts which may arise when the skills needed by the virtual organization for a specific project at a specific time reside in an individual whose temperament may not be well-suited 131

4260 Ch06 4/12/02 11:10 am Page 132

132 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

to a virtual environment. Such research can enhance both the selection literature and provide guidance to practitioners. Furthermore, such research can illuminate the legal pitfalls associated with using personality types/characteristics to “screen out” individuals, providing information about adverse outcomes associated with such an approach. This inquiry is essential since current labor pools of females and minorities skilled in information technology are minimal at present and not projected to improve based on current college enrollments in information technology programs. A second area for investigation revolves around Ilgen’s (1994) view that jobs are rapidly evolving into roles. Casio (2000) and Sparrow and Daniels (1999) suggest this phenomenon will be especially evident in virtual organizations where jobs will give way to a broader role (principal, professional, apprentice) perspective of employment. In turn, employees would be expected to expand the knowledge, skills, abilities and other characteristics necessary for successful performance. We suggest that research is needed to confirm how the balance and collection of selection factors is impacted by the nature of working in a virtual organization. One approach that might be pursued would begin with three of the eight KSAO factors that Campbell et al. (1993) suggest span all jobs (job specific task proficiency, demonstrating effort and maintaining personal discipline) to see if they do indeed increase in importance as employees in virtual organizations span jobs through their expanded role identity. Beyond that, we believe that there should be a systematic research program aimed at developing a job analysis of the competencies and capabilities associated with successful performers in a virtual environment. This could include skills and abilities as diverse as goal setting, self-control, problem/conflict resolution, selfmonitoring, computer skills, etc. Finally, researchers have an opportunity to explore how selection processes can ensure the availability of a flexible, geographically dispersed, global labor pool, as well as the impact of available information and communication technologies on selection instrumentation and processes. While reliable and valid instrumentation exists (Bobko, Roth & Potosky, 1999), much of the instrumentation has been validated using U.S. based workers only. Research is needed to determine whether it is possible to expand these instruments to a broader candidate pool from highly diverse international cultures, since virtual organizations will most certainly have such needs. In addition, various cultures have different institutional selection requirements, further complicating the process of rapidly and fairly meeting selection needs. For example, handwriting (graphology) is a preferred selection instrument in France, which may not be employed legally as a selection decision tool in the U.S. (Bobko et al., 1999). Given the inherently global, diverse nature of virtual organizations, we must

4260 Ch06 4/12/02 11:10 am Page 133

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

133

begin to initiate research focusing not only on the use of these instruments, but also the broader issues associated with potential employee perceptions of these processes. The prevalence of information technology is likely to offer opportunities to change some of the processes currently employed in selection activities (Cascio, 2000). Scholars have already begun to investigate the impact of technology on selection practices. Straus, Miles and Levesque (2001) compared the effectiveness of interviews by telephone and videoconference with more traditional face-to-face practices, finding that telephone interviewees are perceived more favorably than face-to-face interviewees, with videoconference interviewees perceived least favorably. For the virtual organization, with its geographically dispersed, global labor pools, the traditional idea of candidates having onsite testing batteries and interviews is not practical because of both their time and monetary expense. We suggest that organizations will heavily utilize technology in support of their selection practices. Thus, research into expanded use of such tools is vital to the virtual firm. Areas that can be researched include candidate attitudes toward remote test battery administration via the Internet, how to improve the effectiveness of videoconferencing interviewing techniques and processes, and/or the use of job simulations remotely via computer. As with any selection technique, researchers should investigate how these processes impact different segments of the population.

22 23

Socialization

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Research has suggested that the more an employee knows about the goals, values, history, language, performance, tasks, knowledge, and politics of an organization (i.e. content knowledge), the more successful she will be in the organization and the longer her organizational tenure (Chao, O’Leary-Kelly, Wolf, Klein & Gardner, 1994). One of the key ways in which employees gain this content knowledge is through the use of socialization techniques. While multiple theories have been proposed to investigate the role and purpose of socialization in organizations (cf. Louis, 1980; Bandura, 1986; Falcione & Wilson, 1988; Weick, 1995), for purposes of this chapter, we view socialization through the lens of the Socialization Typology (Van Maanen & Schein, 1977). We choose this lens because it is best suited to comparing the potential differences between socialization in traditional organizations and virtual organizations. This typology suggests that socialization can best be viewed by considering six bipolar tactics (Collective/Institutional versus Individual, Formal/Training versus Informal, Sequential versus Random, Fixed versus Variable, Serial versus Disjunctive, Investiture versus Divestiture). In a 133

4260 Ch06 4/12/02 11:10 am Page 134

134 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

summary of the research, Jones (1986) found that each of these tactics was significantly related to organizational outcomes including satisfaction, retention attitudes, role clarity and performance. Of these tactics, two are particularly impacted when a virtual organization structure is chosen: the use of institutionalized (group) compared to individual socialization and the use of formal (training) compared to informal socialization. Institutionalized socialization refers to the collective, sequential, fixed, serial tactics that are used to provide information to reduce uncertainty/anxiety in initial experiences and to mold the new hire into the job. Research has shown that this type of socialization is significantly related to increased perceptions of supervision quality, lower stress, higher organizational commitment, as well as employee autonomy and skill use (Baker, 1992; Mignerey, Rubin & Gorden, 1995; Ashforth & Saks, 1996). Conversely individualized socialization refers to individual, informal, random socialization in which individuals absorb and process behavioral cues as they go about their daily activities and through which individuals adapt the job to their skills. This type of socialization has been linked to increased organizational commitment, job satisfaction, and the successful adaptation of the job to the individual (Laker & Steffy, 1995). Formal training has also been suggested as a means of socialization (Feldman, 1989). Studies have shown that formal training has led to higher job satisfaction and lower turnover (Waung, 1995), as well as an increased understanding of the goals, values, and history of the organization, but not the language (or informal) aspects of the job (Klein & Weaver, 2000). Informal socialization, or the basic informal observation and experimentation of individuals as they enter the job, has been shown to be significantly related to the understanding of job tasks, group & task role, but less to an understanding of the organization and organization issues (Ostroff & Kozlowski, 1992). It has been suggested that because the socialization process moves through multiple phases, including the development of ongoing relationships with other group members, development of feelings of commitment, and role transition (where the individual understands her role in the organization), it is unlikely that duplication of this process through formal training programs would be successful (Moreland & Levine, 1982). In the virtual organization, time schedules are compressed and employees have reduced time for “learning” how things are done in the group and in the organization. This presents a tension for those managing in the virtual organization. Since there is likely to be less capability and less time for individual and informal training, the initial response of most managers would be to create a more formalized and structured process. However, it is difficult, if not impossible, for managers to bring together these employees for any face-to-face, formal training programs. In fact, to do this would reduce the

4260 Ch06 4/12/02 11:10 am Page 135

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

135

advantage of the flat, flexible, geographically dispersed nature of virtual organizations. Just as Pearlson and Saunders (2001) have suggested that research needs to be conducted on managing paradoxes in telecommuting, we propose that research needs to be conducted on how to best design socialization programs that balance the different socialization approaches and tactics. While we believe that in a virtual organization informal socialization is going to become a much more integral aspect of socialization, how this will happen may dramatically change. No longer will employees be able to be informally socialized in the traditional “water cooler” fashion. Instead, they may find themselves being socialized through the technology enabled electronic “water coolers” such as instant messaging and chat rooms. Researchers should begin to explore how these new, grassroots technologies may be used to supplement the socialization process. With the transition to more of a role-based identity as opposed to a job-based identity, researchers can look at how socialization programs can be designed to more effectively communicate organization context information, instead of simply job skills. What then is the key role knowledge the employee needs to obtain, and from where can it be obtained? Given the professional nature of virtual organization employees, an interesting research program could investigate how much the professional communities within which individuals are embedded socialize them to their role and how, or if, that socialization should be balanced with organizational socialization. After all, while they work for the organization, much of their professional identity may not be tied to the organization or current job, but to the broader professional communities in which they are members. With respect to informal training, researchers can investigate how to develop more rapid informal socialization and how technology can be used to support this. Technology is the backbone of the virtual organization, and it may also become the backbone of socialization techniques. One of the issues associated with socialization of employees via technology is how to best deliver the message to multiple recipients who have diverse organizational and cultural backgrounds. Research has suggested that it is critical that employees gain a shared understanding of the norms and expectations (Zack, 1993; Zack & McKenney, 1995), which essentially is a goal of socialization. For some teams this socialization may come naturally, while with others it is more difficult (Jarvenpaa & Leidner, 1999). Much research is still needed focusing on how to support informal socialization. This research can be well informed by the current work on electronic communication and electronic communities of practice (cf. Walther, 1995; Fulk, 1993; Mclure-Wasko & Faraj, 2000). With respect to formal training programs, researchers can investigate how training can best be distributed to a geographically dispersed workforce. Given 135

4260 Ch06 4/12/02 11:10 am Page 136

136 1 2 3 4 5 6 7 8 9 10 11 12

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

the temporal and geographic constraints, it becomes difficult to deliver formal training in a traditional classroom setting. Thus, we believe that another fruitful avenue of research is to investigate how to best deliver socialization training in a virtual environment. One of the key methods of delivering training is through the use of behavioral modeling techniques (cf. Latham & Saari, 1979; Manz & Sims, 1986; Johnson & Marakas, 2000). A key question to be addressed is how behavioral modeling training techniques can be delivered and executed via electronic channels.2 Researchers should investigate how to best utilize technology when developing formal socialization programs. While we have illustrated some examples of how socialization changes in a virtual organization, we have only begun to scratch the surface of potential research programs on the nature of socialization in virtual organizations.

13 14

REWARDS

15 16 17 18 19 20 21 22 23 24 25 26 27 28

The final aspects of organization design that will potentially change in the virtual organization are rewards. Reward issues are associated with an organization’s use of salaries, promotions, profit sharing, bonuses, and other types of rewards within the organization. Rewards also revolve around aspects of the organization that are used to align the individual’s goals with those of the organization, including such diverse processes as performance appraisal and leadership. As Galbraith has suggested, the organization’s reward design must be congruent with all other aspects of the organization design. For the virtual organization, we discuss three key areas to which researchers should address their investigations of how the virtual organization’s reward systems may be impacted. These include performance appraisal, promotion and compensation, and leadership (specifically emergent leadership). We begin this by discussing potential changes in performance appraisal

29 30

Performance Appraisal

31 32 33 34 35 36 37 38 39 40

Performance appraisal is seen as a pivotal human resource practice linking business performance, personal and organizational development, organizational strategy and culture. When properly implemented, performance appraisal has been found to be the primary control mechanism leading to increased firm performance (Becker, Huselid, Pickus & Spratt, 1997). It has been suggested that organizations use performance appraisal for organization control and improvement and as a basis for reward decisions, while individuals view performance appraisal as a way to receive performance feedback and extrinsic rewards (Lawler, 1990). This can lead to conflicting perceptions of the effectiveness of

4260 Ch06 4/12/02 11:10 am Page 137

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

137

performance appraisal outcomes, which is one of the reasons why performance appraisal is often seen as failing to meet the expectations of its multiple constituencies (Flynn, 1995). Although such conflicting views of performance appraisal are important issues in traditional organizations, they become even more critical in the virtual organization where rapid changes in work functions and employment relationships occur, geographic separations of supervisor from subordinates and peers are the norm, and utilization of information technology and communication systems abound. Each of these characteristics impacts the performance appraisal process. Human capital theory (Becker et al., 1997) suggests that individuals in organizations are valued assets based on their knowledge, skills and abilities. Just as a physical asset like land can be improved and increase in value, so too can human assets be improved through development of new or improved knowledge, skills or abilities. Developmental performance appraisal feedback has generally been viewed as a means of improving individual performance in a specific job and, thus, increasing the value to the firm’s human capital. Indeed, meta-analytic research has shown that performance appraisal feedback can be effectively used to enhance performance (Kluger & DeNisi, 1996). We propose that developmental performance appraisal feedback may have less value in the virtual organization, however, where individuals are envisioned as moving in and out of roles and organizations with a much higher frequency than in traditional organizations. Because virtual organizations may have less incentive to “invest” in human assets who are expected to have short-lived relationships, they may be less willing to expend the substantial necessary effort described by Squires and Adler (1998) to develop the individualized, comprehensive model required to identify knowledge structures and executive control processes for effective performance improvement. Thus, an excellent area for research is in the exploration of whether virtual firms will, indeed, be less willing to invest in human capital through developmental performance appraisal and the resulting impact of this on group and organization performance. Furthermore, researchers should also investigate the impact of any reductions in developmental use of performance appraisals on individual attitudes and commitment to the organization. A second area for investigation is the impact that geographically dispersed workforce and remote supervision have on the performance appraisal process. In particular, researchers should investigate how a supervisor can monitor and assess remote subordinate performance effectively. Bernardin, Hagan, Kane and Villanova (1998) suggest that the key is to define and measure performance dimensions precisely and to focus on valued outcomes. In the virtual organization, there are likely to be limited opportunities for face-to-face 137

4260 Ch06 4/12/02 11:10 am Page 138

138 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

supervisor-subordinate interaction. Recent efforts in remote work research have suggested that managers have yet to adapt to the structural change of physical separation and its resulting impact on performance evaluation (cf. Cascio, 2000). This makes the ideas of Bernadin et al. (1998) even more important, with managers in virtual organizations having fewer opportunities to “see” the appraisee on a daily basis. It is our contention that increased utilization of outcome-based appraisal objectives and decreased reliance on process or behavior-based objectives is critical to the performance appraisal process in the virtual organization. Researchers should seek to investigate how to better prepare managers to define and measure performance dimensions as well as better managing the performance appraisal process on a remote basis. In addition to objective task goals, however, the project and team-based activities prevalent in virtual organizations will require specific types of behaviors from members to successfully meet goals, beyond simply fulfilling individual task requirements. These extra-task, or organizational citizenship, behaviors have been shown to be positively related to job satisfaction and organizational commitment (Organ, 1988). However, supervisors who are not able to have regular face-to-face interactions with their subordinates may not have all of the appropriate information needed to make critical performance evaluations on these types of behaviors. It will also be more difficult for them to identify situational constraints that limit an individual’s performance, even though such constraints might be obvious in collocated arrangement where informal observations and discussions with other organization members aid in modifying the supervisor’s view of a subordinate’s performance. We suggest that researchers investigate the application and effectiveness of the 360-degree performance model (London & Smither, 1995) in the virtual organization. While this technique has been used primarily for developmental purposes based on concerns of inflated ratings, the virtual organization’s geographically dispersed supervisors, peers and subordinates offer a unique environment for understanding the performance evaluation capabilities of this approach. Researchers could assess the reliability and validity of existing instruments in such a context, gather information on subordinate and supervisor attitudes toward using this technique for contextual goals and ultimately compare this approach with a more traditional performance appraisal processes. A related technique that might be investigated is the use of portfolios, supported by automated project management schedules and activity reports, as a means of informing supervisors of the employee’s outputs during a given appraisal period as compared to the more traditional annual appraisal cycle used in traditional organizations. The third area for additional research is the impact of geographic dispersion and separation from the supervisor on the subordinate’s ability to influence the

4260 Ch06 4/12/02 11:10 am Page 139

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

139

supervisor’s performance ratings. Impression management has served as a theoretical basis for understanding the political environment that surrounds the performance appraisal process in many traditional organizations. Defined as behaviors used by individuals to project a certain image or influence others’ perceptions, impression management includes a number of techniques to achieve tactical and strategic goals through assertive or defensive behaviors (Tedeschi & Melburg, 1984). Empirical studies have found that subordinate ingratiation tactics lead to inflated performance ratings regardless of objective performance levels (Wayne & Kacmar, 1991; Wayne & Liden, 1995). In a virtual organization, a subordinate’s abilities to effectively use impression management techniques to increase performance appraisal ratings may be negatively impacted by geographic dispersion. This would suggest the potential for increased objectivity in performance appraisals as a result of the lessening of the negative impacts of impression management techniques. An excellent research agenda might investigate if or how various communications technologies, including videoconferencing and email, limit impression management efforts. At the same time, individuals are creative and adaptable. It is our contention (although research should be undertaken to investigate our claims) that individuals will adapt to the remote environment and appropriate the electronic channels to engage in impression management techniques. Research efforts should focus on how the nature and content of impression management changes in the virtual environment.

23 24

Compensation and Promotion

25 26 27 28 29 30 31 32 33 34 35

March and Simon (1958) proposed that organizations must offer inducements to participants to join, remain and contribute sufficiently to achieve and maintain organization survival. They discuss pay and promotions as two important inducements that the organization can provide its participants. Furthermore, Gerhart and Milkovich (1992, p. 482) suggest, “To elicit contributions, organizations must provide inducements of value to members. This exchange or transaction process is at the core of the employment relationship and can be viewed as a type of contract, explicit or implicit, that imposes reciprocal obligations on the parties.” The following sections describe opportunities for research in both compensation and promotion as they relate to virtual organizations.

36 37

Compensation

38 39 40

Defined as any direct or indirect payments to organization members, compensation may include benefits, such as health care, vacations and tuition assistance, 139

4260 Ch06 4/12/02 11:10 am Page 140

140 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

as well as the more traditional salaries and wages, bonuses or stock options (Gerhart & Milkovich, 1992). Lawler (1995) suggests that we need to rethink compensation, not in terms of revamping compensation structures or procedures, but instead seeing how it fits within the larger organization strategy. Since we are arguing that any changes in the organization’s structure or strategy provide opportunities for modifying rewards, it is important that we address how compensation changes within a virtual organization. First, virtual organizations have relatively flat hierarchies. Second, employees within a virtual organization are likely to be spending less time in distinct jobs and more time fulfilling organizational roles. Third, virtual organizations are viewed as having an increased frequency of organization entry and exit as goals of speeding innovative offerings to market are pursued through project teams. Thus, the traditional view of compensation as tied to an individual’s progression through jobs within a primary discipline, with multiple salary levels and larger increases associated with promotions that move an individual up the hierarchy and into a new salary band, may not fit well with the virtual organization structure. Crandall and Wallace (1997) propose that automatic annual raises and pay hierarchies must be discarded in a virtual environment. We concur and suggest that researchers investigate whether the prevalence of flat hierarchies and broader roles do indeed require a different salary approach. As individuals move toward broader roles instead of specific jobs, we suggest that researchers study the effectiveness of tying non-traditional compensation approaches, such as broad-banding salary ranges, to the types of role competencies most crucial to organization success. Second, in keeping with the view of pay as an inducement to individuals to join, remain and contribute to organizations (March & Simon, 1958; Gerhart & Milkovich, 1992), we suggest that researchers investigate how compensation policy is impacted by the frequent entry and exit of employees in the virtual organization. One such issue is that compensation may have to increase, since virtual organizations will likely be replacing staff on a regular basis. Research has shown that higher pay reduces the length of time required for filling vacancies for service workers (Williams & Dreher, 1992). However, given the nature of the professionals who are participating in the virtual organization, traditional ideas of monetary or monetary equivalent compensation may not be appropriate. Instead, it has been suggested that information technology professionals are less motivated purely by financial compensation, but are highly motivated by the opportunity to broaden their skills, to work on new and unique projects, or to have more autonomy in their jobs (Fitz-enz, 1978; Boehm, 1981). Thus, for virtual organizations, researchers should

4260 Ch06 4/12/02 11:10 am Page 141

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

141

investigate not only salary compensation issues, but also alternative nonmonetary substitutes for compensation. In addition, knowledge workers who fulfill role-based functions in virtual organizations will be able to assess in real time, via the Internet and other outlets, the market value of their skills. Such detailed and current salary information may have profound impacts on virtual organizations. We suggest that researchers investigate the impact of such “skill auctions” on compensation structure and the linkage to the preference of virtual firms for skill or competency-based pay vs. more traditional pay-for-performance compensation plans. Another important question is how virtual firms manage the variation in pay for existing vs. new employees in such a “skills auction” environment and the resulting impact on perceived compensation fairness by existing employees. Previous research has illustrated that team-based work should be rewarded by team-based rewards. We believe that those developing compensation systems for virtual organizations face the same challenges that organizations face when compensating virtual team members. Saunders & Ahuja (2001) have suggested three key challenges:

18 19 20 21 22 23 24

(1) Different members may be operating under different compensation structures (2) Team work is seldom included in formal evaluations of its members and is not directly observed by managers (3) Different cultural values and norms may limit system effectiveness.

25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

When the virtual team is part of a virtual organization, the complexity facing these teams is further increased. Not only are there different compensation structures, but questions arise as to which organization reward structure is operative for any particular team. Such complexities are especially evident where individuals serve on multiple teams with differing compensation plans. Although peer-based performance evaluations are more likely to be used in virtual teams (Furst, Blackburn & Rosen, 1999), the problem of which organization’s compensation system or performance system is adopted still exists. Further, questions as to the norms for performance and behavior must be addressed (i.e. What does good performance mean in this team context?). This is complicated by having to navigate multiple performance standards and expectations. For example, is it best to have individuals rewarded by their parent organization or by the virtual organization? If the parent organization is chosen, how are inequity and justice issues perceived by team members, where similarly performing team members may end up with vastly disparate 141

4260 Ch06 4/12/02 11:10 am Page 142

142 1 2

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

rewards? Thus, investigation of the changing nature of compensation structures and policies for virtual teams offers enormous research potential.

3 4

Promotion

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

A second type of reward that may differ in a virtual vs. traditional organization is promotion. Promotion refers to upward movement, or increase in rank, in the organizational hierarchy, usually indicated formally by a change in compensation grade, level and a corresponding increase in responsibility and status (Ruderman, Ohlott & Kram, 1996). Given the flat hierarchies and heavy representation of knowledge workers and professionals in virtual organizations, reward systems that rely on promotions may be problematic in comparison to more traditional organizations; so too are the “up or out” policies found in many professional service organizations (Malos & Campion, 1995). Instead, we suggest that research be conducted to assess whether organizational advancement or professional advancement might be more appealing to employees in the virtual organization. Such research can investigate what types of promotional opportunities employees desire. For example, in the information technology and engineering fields, promotions can either be into the management hierarchy or into more advanced technical positions, both within the organization and their profession. Understanding how knowledge workers view upward mobility may lead to alternative rewards that are more consistent with their more frequent movement into and out of team-based projects. This suggests the potential for researchers to investigate the relative importance of intrinsic vs. extrinsic rewards in the virtual organization. Scholars can draw on the extensive motivation research of Deci and Ryan (1980) to further our understanding of knowledge workers in the virtual environment. Such research might lead virtual firms to eschew promotions as a widespread form of reward, relegating it to more narrow situations appropriate for those seeking such upward mobility status. Whatever promotion or compensation structure is utilized, virtual organizations face a unique balancing act to manage the tension between traditionally accepted rewards and the new and creative rewards that may be most effective in the virtual organization.

34 35

Leadership

36 37 38 39 40

Given the flexibility, flat hierarchy and lateral power, and heavy reliance on communication technologies typical in virtual organizations, leadership will likely differ from traditional organizations. Those we expect to be leaders may in fact not end up exerting leadership within the virtual organization. Instead,

4260 Ch06 4/12/02 11:10 am Page 143

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

143

leaders will emerge as work is conducted, as they exert influence over group members, whether or not they have formal authority vested in them (Hollander, 1960; Lord, 1977; Schneier & Goktepe, 1983). Several factors have been shown to be associated with emergent leadership including individual traits such as gender and gender role (Lord, DeVader & Aliger, 1986; Moss & Kent, 1996; Zacarro, Foti & Kenny, 1991; Eagly, Kerau & Makhijani, 1995; Eagly & Kerau, 1991; Kent & Moss, 1994); selfmonitoring, an individual’s ability to monitor environmental cues and to control self-presentations (Snyder, 1974; Ellis & Cronshaw, 1992; Dobbins, Long, Dedrick & Clemons, 1990); and dominance, an individual’s propensity to be forceful, to take initiative, and to be capable of influencing others (cf. Carbonell, 1986; Megargee, 1969; Hegstrom & Griffith, 1992; Baker, 1992). Others, though, believe that situational factors such as interaction patterns determine who and how a person will emerge as the group leader (Sorrentino & Boutiller, 1975; Mullen, Salas & Driskell, 1989). The strongest and most consistent finding in emergent leadership research is that those who participate the most are the most likely to emerge as leaders (cf. Morris & Hackman, 1969; Mullen et al., 1989). Morris and Hackman (1969) found that once the effect of participation is removed, very few differences exist between leaders and followers. Quantity of participation alone will not ensure that a person will emerge as a leader. Instead, they must add value to the task before they are rewarded by a leadership position (cf. Stogdill, 1948; Gintner & Lindskold, 1975; Mullen et al., 1989). In fact, research has shown that it is not simply the quantity, but also the quality, of participation that is important (Mitchell, 1975; Sorrentino & Boutiller, 1975; Lord et al., 1986). Within the virtual organization, the lack of geographic and temporal proximity will likely reduce the importance of trait-based leadership. Instead, we believe that situational behaviors will become a stronger predictor of leader emergence. The disadvantages that females have historically faced may also be reduced, because any physical cues that may have contributed to stereotypical behavioral expectations are removed. With the need of virtual organizations to reach consensus quickly, traits such as dominance might be dysfunctional if they are not assisting the group in moving toward consensus. The tight time windows and geographic dispersion enhance the importance of the quality of participation. Thus, we believe that it is not simply the talking and participating that matter. Now, team members must quickly move together as a team, and the members that are able to move the team toward fulfillment of goals should be more likely to emerge as leaders. Evidence of this is starting to be seen in virtual teams, where successful teams appear to have a leader whose high quality contributions appear to make him the de-facto leader (Jarvenpaa & Leidner, 1999). 143

4260 Ch06 4/12/02 11:10 am Page 144

144 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

Leaders will also have to excel in managing computer-mediated forms of communication to be able to communicate and champion their ideas and work. Both skills and computer self-efficacy (Marakas, Yi, & Johnson, 1998) in the use of technologies will be important for those who wish to lead, suggesting that virtual organizations will become filled with technically-savvy leaders and managers. Not only will technical skill become an important predictor of leader emergence, but also the ability of the employee to maintain social identity, create shared meaning and effectively communicate ideas through electronic channels will be crucial. This suggests the potential for those without strong technical skills to fail to rise to positions of leadership within virtual organizations. Given the reliance on technology across all organizations, researchers should begin investigating how technical skills and efficacies contribute to leadership emergence. Past researchers have suggested that several aspects of organizational design can act as substitutes for leadership, including individual self-leadership, formalized rules, roles, plans, protocols, etc. (Kerr & Jernier, 1978). Although technology hasn’t necessarily been included in these substitutes, technology has been introduced to assist the organization in the formalization of work and organizational policies, tasks, and employee roles. One of the reasons that virtual organizations can be structured in a much more flat, flexible structure is that the technology has enabled the removal of the layers of organizational bureaucracy that had only existed to transfer information from point to point. “Information systems can alter many of the classic contingencies of the superior-subordinate relationship, providing certain information about subordinates’ behavior while eliminating the necessity of face-to-face engagement” (Zuboff, 1988, p. 323). The risk is that instead of using the technology for sharing information we use it for control (Drucker 1988, p. 46). Evidence has suggested that managers have, in fact, begun to utilize technology not only for control, but also as a way to spend less time leading, relinquishing many of their true responsibilities to the technology (Zuboff, 1988). For managers who are uncomfortable managing remote relationships, using the computer to control behaviors may actually give them a sense of relief in that it provides them with a higher sense of control. Ultimately, though, by utilizing technology to control their employees, they abdicate their managerial and leadership responsibilities. The risk is that over time managers stop providing leadership to their employees, relying instead on pervasive observation control of behavior through information technology. This pervasive observation creates what Zuboff calls an information panopticon, where behavior is controlled through information technology. “. . . the Panopticon produces the twin possibilities of observation and

4260 Ch06 4/12/02 11:10 am Page 145

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9

145

control. It functions independently of the observer . . . and is meant to function without an observing presence. It can achieve results independent of the motives, intentions, or ideologies of the observer (Zuboff, 1988, p. 321). As Barker (1993) would suggest, this creates the opportunity for tightening controls so much that employees are put into an “iron cage” within their environment. Such abuse of technology can undermine the very strengths of the virtual organization form – optimal use of human capital, speed and flexibility. Ultimately, further research is needed to better understand how and when technology can assist leaders as part of their job, instead of becoming a substitute for them.

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

CONCLUSION As this chapter illustrates, there is great potential for human resources to be impacted by the structural changes involved in virtual organizations. Although researchers have begun to investigate a few issues associated with human resources in the virtual organization, they have lacked an overall framework and agenda for research. Using the star model of organization design, we have offered a framework and proposed the beginnings of an agenda for research. Significant research is still needed to fully explicate the interactions among the various elements of the model. Moreover, as Orlikowski (1992) has suggested, technology changes do not occur in isolation from organizational changes; and the reciprocal relationship between the elements in the model will continue to evolve as organizations pursue new and unique strategies. Ultimately, virtual organizations in the 21st century will succeed or fail on the efficiency and effectiveness of human capital. It is essential, therefore, that we pursue full understanding of the management changes necessitated by these evolving organizational forms, made possible through advances in information technology, since, in turn, such changes point the direction toward future information technology innovations.

NOTES 1. While HR research does indeed focus on the use of performance appraisal systems as a form of control, we do not include it at this point in the discussion due to Galbraith’s inclusion of performance appraisal as an aspect of the reward system. The use of performance appraisal as an individual control mechanism will be discussed in the rewards section. 2. While training is a critical HR issue, a detailed discussion of this is beyond the scope of this chapter. For a detailed discussion of training issues facing the virtual organization, we encourage the reader to review the article by Eduardo Salas contained within this volume. 145

4260 Ch06 4/12/02 11:10 am Page 146

146 1

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

REFERENCES

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Ahuja, M. K., & Carley, K. M. (1999). Network structure in virtual organizations. Organization Science, 10, 741–757. Ashforth, B., & Saks, A. (1996). Socialization tactics: Longitudinal effects on newcomer adjustment. Academy of Management Journal, 39, 149–178. Baker, W. (1992). Employee socialization strategies and the presence of union representation. Labor Studies Journal, 17, 5–17. Bandura, A. (1986). Social foundations of thought and action: A social cognitive theory. Englewood Cliffs, NJ: Prentice-Hall. Barker, J. (1993). Tightening the iron cage: Concertive control in self-managing teams. Administrative Science Quarterly, 38, 408–437. Barley, S. R. (1986). Technology as occasion for structuring: Evidence from observations of CT scanners and social order of radiology departments. Administrative Science Quarterly, 31, 78–108. Barnard, C. (1968). The functions of the executive. Cambridge, MA: Harvard University Press. Bartram, D. (2000). Internet recruitment and selection: Kissing frogs to find princes. International Journal of Selection and Assessment, 8, 261–274. Becker, B., Huselid, M., Pickus, P., & Spratt, M. (1997). HR as a source of shareholder value: Research and recommendations. Human Resource Management, 36, 39–48. Belanger, F. (1999). Workers’ propensity to telecommute: An empirical study. Information and Management, 35, 139–153. Belanger, F., & Collins, W. R. (1998). Distributed work arrangements: A Research framework. The Information Society, 14, 137–152. Belanger, F., Collins, W. R., & Cheney, P. (2001). Technology requirements and work group communication for telecommuters. Information Systems Research, 11, 75–102. Bernardin, H., Hagan, C., Kane, J., & Villanova, P. (1998). Effective performance management: A focus on precision, customers and situational constraints. In: J. Smither (Ed.), Performance Appraisal (pp. 3–48). San Francisco: Jossey-Bass. Bernardino, A. (1996). Telecommuting: modeling the employer’s and the employee’s decision making process. New York: Garland. Bleeker, S. E. (1994, March-April). The virtual organization. The Futurist, 28, 9–14. Bobko, P., Roth, P., & Potosky, D. (1999). Derivation and implications of a meta-analytic matrix incorporating cognitive ability, alternative predictors and job performance. Personnel Psychology, 52, 561–589. Boehm, B. (1981). Software engineering economics. Englewood Cliffs, NJ: Prentice Hall. Boudreau, M.-C., Loch, K. D., Robey, D., & Straub, D. (1998). Going global: Using information technology to advance the competitiveness of the virtual transnational organization. Academy of Management Executive, 12(4), 120–128. Bowen, D., Ledford, G., & Nathan, B. (1991). Hiring for the organization, not the job. Academy of Management Executive, 5, 35–50. Breaugh, M., & Starke, M. (2000). Research on employee recruitment: so many studies, so many remaining questions. Journal of Management, 26, 403–435 Brown, J. S., & Duguid, P. (1991). Organizational learning and communities of practice: Toward a unified view of working, learning, and innovation. Organization Science, 2, 40–57. Buchanan, D. A., & Boddy, D. (1983). Advanced technology and the quality of working life: The effects of computerized controls on biscuit-making operators. Journal of Occupational Psychology, 56, 109–119.

4260 Ch06 4/12/02 11:10 am Page 147

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

147

Campbell, J., McCloy, R., Oppler, S., & Sager, C. (1993). A theory of performance. In: N. Schmitt & W. Borman (Eds), Personnel Selection in Organizations (pp. 35–71). San Francisco: Jossey-Bass. Carbonell, J. L. (1986). Sex roles and leadership revisited. Journal of Applied Psychology, 69, 44–49. Cascio, W. (1998). Applied psychology in human resource management. Upper Saddle River, NJ: Prentice Hall. Cascio, W. F. (2000). Managing a virtual workplace. Academy of Management Executive, 14(3), 81–90. Casio, W. (in press). How technology facilitates virtual work arrangements. In: E. Salas & D. Stone (Eds). Human Performance and Computer Engineering Technology. Chandler, A. (1962). Strategy and structure. Cambridge: MIT Press. Chao, G., O’Leary-Kelly, A., Wolf, S., Klein, H., & Gardner, P. (1994). Organizational socialization: Its content and consequences. Journal of Applied Psychology, 79, 730–743. Chatman, J. (1991). Matching people and organizations: selection and socialization in public accounting firms. Administrative Science Quarterly, 36, 459–484. Choi, C., & Kelemen, M. (1995). Cultural competences: Managing co-operatively across cultures. Brookfield, VT: Dartmouth. Coates, J. F. (1994). Managing scientists in the virtual corporation. Research Technology Management, 37(6), 7–8. Coyle, J., & Schnarr, N. (1995). The soft-side challenges of the “virtual corporation.” Human Resource Planning, 18, 41–42. Crandall, N., & Wallace, M. (1997, Jan./Feb.). Inside the virtual workplace: forging a new deal for work and rewards. Compensation and Benefits Review, 29, 27–36. Davidow, W. H., & Malone, M. S. (1993). The virtual corporation. New York: Harper Collins. Davies, R. (1996). Internet conference on telecommuting. Career Development International, 1(5), 29–37. Deci, E., & Ryan, R. (1980). The empirical exploration of intrinsic motivational processes. In: L. Berkowitz (Ed.), Advances in Experimental Social Psychology (Vol. 13, pp. 39–80). New York: Academic Press. DeSanctis, G., & Monge, P. (1999). Introduction to the special issue: Communication processes for virtual organizations. Organization Science, 10, 693–703. DeSanctis, G., & Poole, M. S. (1994). Capturing the complexity in advanced technology use: Adaptive structuration theory. Organization Science, 5, 121–147. Dess, G., G., Rasheed, A. M., McLaughlin, K. J., & Priem, R. L. (1995). The new corporate architecture. Academy of Management Executive, 9(3), 7–20. Dobbins, G. H., Long, W. S., Dedrick, E. J., & Clemons, T. C. (1990). The role of self-monitoring and gender on leader emergence: A laboratory and field study. Journal of Management, 16, 609–618. Dowling, P., & Schuler, R. (1990). International dimensions of human resource management. Boston: PWS-Kent. Drucker, P. F. (1988, Jan.–Feb.). The coming of the new organization. Harvard Business Review, 45–53. Dutton, W. H. (1999). The virtual organization: Tele-access in business and industry. In: G. DeSanctis & J. Fulk (Eds), Shaping Organizational Form: Communication, Connection, and Community (pp. 473–503). Newbury Park, CA: Sage. Eagly, A., Kerau, S., & Makhijani, M. (1995). Gender and the evaluation of leaders: A metaanalysis. Psychological Bulletin, 117, 125–145.

147

4260 Ch06 4/12/02 11:10 am Page 148

148 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

Eagly, A. H., & Karau, S. J. (1991). Gender and the emergence of leaders: A meta-analysis. Journal of Personality and Social Psychology, 60, 685–710. Edwards, R. (1981). Social relations of production at the point of production. In: M. Zey-Ferrell & M. Aiken (Eds), Complex Organizations: Cultural Perspectives (pp. 156–182). Glendale, IL: Forsman. Ellis, R. J., & Cronshaw, S. F. (1992). Self-monitoring and leader emergence: A test of moderator effects. Small Group Research, 23(1), 113–129. Falaleeva, N., & Johnson, R. D. (2001). Toward a deeper understanding of alternative work arrangements: The influence of core self-evaluations on remote work success. Paper presented at the American Conference on Information Systems, Boston, MA. Falcione, R., & Wilson, C. (1988). Socialization processes in organizations. In: G. Goldhaber & G. Barnett (Eds), Handbook of Organization Communication (pp. 151–169). Norwood, NJ: Ablex. Feldman, D. (1989). Socialization, resocialization and training: Reframing the research agenda. In: I. Goldstein (Ed.), Training and Development in Organizations. San Francisco: Jossey-Bass. Fitz-enz, J. (1978, Sept). Who is the DP professional? Datamation, 124–129. Flynn, G. (1995). Employee evaluations get so-so grades. Personnel Journal, 62, 21–23. Fulk, J. (1993). Social construction of communication technology. Academy of Management Journal, 36, 921–950. Furst, S., Blackburn, R., & Rosen, B. (1999). Virtual team effectiveness: A proposed research agenda. Information Systems Journal, 9, 249–269. Galbraith, J. R. (1973). Designing complex organizations. Reading, MA: Addison-Wesley. Galbraith, J. R. (1995). Designing organizations: An executive briefing on strategy, structure, and process. San Francisco: Jossey-Bass. Galbraith, J. R., & Nathanson, D. A. (1978). Strategy implementation: The role of structure and process. St. Paul, MN: West. Gerhart, B., & Milkovich, G. (1992). Employee compensation: research and practice. In: M. Dunnette & I. Hough (Eds), Handbook of Industrial and Organizational Psychology (2nd ed., pp. 481–569). Palo Alto, CA: Consulting Psychology Press. Gintner, G., & Lindskold, S. (1975). Rate of participation and expertise as factors influencing leader choice. Journal of Personality and Social Psychology, 32, 1085–1089. Grabowski, M., & Roberts, K. H. (1999). Risk mitigation in virtual organizations. Organization Science, 10, 704–721. Grenier, R. G., & Metes, G. (1995). Going virtual: Moving your organization into the 21st century. Englewood Cliffs, NJ: Prentice Hall. Grimshaw, D., & Kwok, F. (1998). The business benefit of the virtual organization. In: M. Igbaria & M. Tan (Eds), The Virtual Organization (pp. 45–70). Hershey, PA: Idea Group. Hegstrom, J. L., & Griffith, W. I. (1992). Dominance, sex, and leader emergence. Sex Roles, 27, 209–220. Herriot, P., & Anderson, N. (1997). Selecting for change: how will personnel and selection psychology survive? In: N. Anderson & P. Herriot (Eds), International Handbook of Selection and Assessment (pp. 1–38). Chichester: John Wiley & Sons LTD. Hobbs, D. (1998). An experimental study of social and psychological aspects of teleworking. Industrial Management and Data Systems, 98, 214–228. Hollander, E. P. (1960). Competence and conformity in the acceptance of influence. Journal of Abnormal and Social Psychology, 61, 365–369. Igbaria, M., & Guimaraes, T. (1999). Exploring differences in employee turnover intentions and its determinants among telecommuters and non-telecommuters. Journal of Management Information Systems, 16(1), 147–164.

4260 Ch06 4/12/02 11:10 am Page 149

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

149

Ilgen, D. (1994). Jobs and roles: Accepting and coping with the changing structure of organizations. In: M. Rumsey & C. Walker & J. Harris (Eds), Personnel Selection and Classification (pp. 13–32). Hillsdale, NJ: Earlbaum. Jarillo, J. (1993). Strategic networks: Creating the borderless organization. Oxford: ButterworthHeinemann. Jarvenpaa, S. L., Knoll, K., & Leidner, D. E. (1998). Is anybody out there? Antecedents of trust in global virtual teams. Journal of Management Information Systems, 14(4), 29–64. Jarvenpaa, S. L., & Leidner, D. E. (1999). Communication and trust in global virtual teams. Organization Science, 10, 791–815. Johnson, R. D., & Marakas, G. M. (2000). The role of behavioral modeling in computer skills acquisition: Toward refinement of the model. Information Systems Research, 11, 402–417. Jones, G. (1986). Socialization tactics, self-efficacy and newcomers’ adjustments to organizations. Academy of Management Journal, 29, 262–280. Kent, R., & Moss, S. (1994). Effects of sex and gender role on leader emergence. Academy of Management Journal, 37, 1335–1346. Kerr, S., & Jernier, J. (1978). Substitutes for leadership: Their meaning and measurement. Organizational Behavior and Human Performance, 22, 375–403. Kim, J. (1998). Hierarchical structure of Intranet functions and their relative importance: Using the analytic hierarchy process for virtual organizations. Decision Support Systems, 23, 59–74. Klein, H., & Weaver, N. (2000). The effectiveness of an organizational-level orientation training program in the socialization of new hires. Personnel Psychology, 53, 47–66. Kluger, A., & DeNisi, A. (1996). Effects of feedback interventions on performance: a historical review, a meta-analysis and a preliminary feedback intervention theory. Psychological Bulletin, 119, 254–284. Knoll, K., & Jarvenpaa, S. L. (1998). Working together in global virtual teams. In: M. Igbaria & M. Tan (Eds), The Virtual Workplace (pp. 2–23). Hershey, PA: Idea Group Publishing. Kristoff, A., Brown, K., Sims, H. J., & Smith, K. (1995). The virtual team: A case study and inductive model. In: D. Johnson & S. Beyerlein (Eds), Advances in interdisciplinary study of work teams: Knowledge work in teams. Greenwich, CT: JAI Press. Laker, D., & Steffy, B. (1995). The impact of alternative socialization tactics on self-managing behavior and organizational commitment. Journal of Social Behavior and Personality, 10, 645–660. Latham, G. P., & Saari, L. M. (1979). Application of social-learning theory to training supervisors through behavioral modeling. Journal of Applied Psychology, 64, 239–246. Lawler, E. E. (1990). Strategic pay. San Francisco: Jossey-Bass. Lawler, E. E. (1995). The new pay: A strategic approach. Compensation and Benefits Review, 27, 14–22. Lipnack, J., & Stamps, J. (1999). Virtual teams: The new way to work. Strategy and Leadership, 27, 14–19. Lipnack, J., & Stamps, J. (2000). Virtual teams: Reaching across space, time and organizations with technology. New York: John Wiley & Sons. Lockett, A., & Holland, C. (1996). The formation of a virtual global bank. European Journal of Information Systems, 5, 131–140. London, M., & Smither, J. (1995). Can multisource feedback change perceptions of goal accomplishment, self-evaluations and performance-related outcomes? Theory based applications and directions for research. Personnel Psychology, 48, 803–839. Lord, R. (1977). Functional leadership behavior: Measurement and relation to social power and leadership perceptions. Administrative Science Quarterly, 22, 114–123.

149

4260 Ch06 4/12/02 11:10 am Page 150

150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

Lord, R., DeVader, C., & Aliger, G. (1986). A meta-analysis of the relation between personality traits and leadership perceptions: An application of validity generalization procedures. Journal of Applied Psychology, 71, 402–410. Louis, M. (1980). Surprise and sense-making: What newcomers experience in entering unfamiliar organizational settings. Administrative Science Quarterly, 25, 226–251. Malos, S., & Campion, M. (1995). An options-based model of career mobility in professional service firms. Academy of Management Review, 20, 611–649. Manz, C. C., & Sims, H. P. (1986). Beyond imitation: Complex behavioral and affective linkages resulting from exposure to leadership training models. Journal of Applied Psychology, 71, 571–578. Marakas, G. M., Yi, M. Y., & Johnson, R. D. (1998). The multilevel and multifaceted character of computer self-efficacy: Toward clarification of the construct and an integrative framework for research. Information Systems Research, 9(2), 126–163. March, J., & Simon, H. (1958). Organizations. New York: John Wiley & Sons. Mclure-Wasko, M., & Faraj, S. (2000). “It is what one does”: Why people participate and help others in electronic communities of practice. Journal of Strategic Information Systems, 9(2–3), 155–173. Megargee, E. I. (1969). Influence of sex roles in the manifestation of leadership. Journal of Applied Psychology, 53, 377–382. Mignerey, J., Rubin, R., & Gorden, W. (1995). Organizational entry: An investigation of newcomer communication behavior and uncertainty. Communication Research, 22(1), 54–85. Mitchell, J. O. (1975). Assessment center validity: A longitudinal study. Journal of Applied Psychology, 60, 573–579. Mokhtarian, P. (1994). Modeling the choice of telecommuting: Setting the context. Environment and Planning, 26, 749–766. Moreland, R., & Levine, J. (1982). Socialization in small groups: Temporal changes in individualgroup relations. In: L. Berkowitz (Ed.), Advances in Experimental Social Psychology (Vol. 15, pp. 137–192). New York: Academic Press. Morris, C., & Hackman, J. (1969). Behavioral correlates of perceived leadership. Journal of Personality and Social Psychology, 19, 350–361. Moss, S. E., & Kent, R. L. (1996). Gender and gender-role categorization of emergent leaders: A critical review and analysis. Sex Roles, 35(1/2), 79–96. Motowidlo, S., & Van Scotter, J. (1994). Evidence that task performance should be distinguished form contextual performance. Journal of Applied Psychology, 79, 475–480. Mullen, B., Salas, E., & Driskell, J. (1989). Salience, motivation, and artifact as contributions to the relation between participation rate and leadership. Journal of Experimental and Social Psychology, 25, 545–559. Organ, D. (1988). Organizational citizenship behavior: The good soldier syndrome. Lexington, MA.: Lexington Books. Organ, D., & Ryan, K. (1995). A meta-analytic review of attitudinal and dispositional predictors of organizational citizenship behavior. Personnel Psychology, 48, 775–803. Orlikowski, W. J. (1992). The duality of technology: Rethinking the concept of technology in organizations. Organization Science, 3, 398–427. Orlikowski, W. J., & Yates, J. (1994). Genre repertoire: The structuring of communicative practices in organizations. Administrative Science Quarterly, 39, 541–574. Ostroff, C., & Kozlowski, S. (1992). Organization socialization as a learning process: The role of information acquisition. Personnel Psychology, 45, 849–874.

4260 Ch06 4/12/02 11:10 am Page 151

Human Resources in the 21st Century Virtual Organization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

151

Palmer, J. W. (1998). The use of information technology in virtual organizations. In: M. Igbaria & M. Tan (Eds), The Virtual Workplace (pp. 71–86). Hershey, PA: Idea Group. Pearlson, K. E., & Saunders, C. S. (2001). There’s no place like home: Managing telecommuting paradoxes. Academy of Management Executive, 15(2), 117–128. Ruderman, M., Ohlott, P., & Kram, K. (1996). Managerial promotion: the dynamics for men and women. Greensboro, NC: Center for Creative Leadership. Saunders, C. S., & Ahuja, M. K. (2001). A framework for understanding temporal issues in virtual teams. University of Central Florida Working Paper Series. Schein, E. (1985). Organizational culture and leadership. San Francisco: Jossey-Bass. Schneier, C., & Goktepe, J. (1983). Issues in emergent leadership: The contingency model of leadership, leader sex, leader behavior. Chicester, England: John Wiley. Snyder, M. (1974). The self-monitoring of expressive behavior. Journal of Personality and Social Psychology, 30, 526–537. Sorrentino, R. M., & Boutiller, R. G. (1975). The effect of quantity and quality of verbal interaction on ratings of leadership ability. Journal of Experimental and Social Psychology, 11, 403–411. Sparrow, P., & Daniels, K. (1999). Human Resource Management and the virtual organization: mapping the future research issues. In: C. Cooper & D. Rousseau (Eds), Trends in Organizational Behavior (Vol. 6, pp. 45–62). Chichester: John Wiley & Sons, LTD. Squires, P., & Adler, S. (1998). Linking appraisals to individual development and training. In: J. Smither (Ed.), Performance appraisal (pp. 445–495). San Francisco: Jossey-Bass. Staples, S. D., Hulland, J. S., & Higgins, C. A. (1999). A Self-efficacy theory explanation for the management of remote workers in virtual organizations. Organization Science, 10, 758–776. Stogdill, R. M. (1948). Personal factors associated with leadership: A survey of the literature. Journal of Psychology, 25, 35–71. Strader, T. J., Lin, F.-R., & Shaw, M. J. (1998). Information infrastructure for electronic virtual organization management. Decision Support Systems, 23, 75–94. Straus, S., Miles, J., & Levesque, L. (2001). The effects of videoconference, telephone, and face-toface media on interviewer and applicant judgments in employment interviews. Journal of Management, 27, 363–379. Tedeschi, J., & Melburg, V. (1984). Impression management and influence in the organization. Research in the Sociology of Organizations, 3, 31–58. Thompson, S., Lim, V., & Har, W. (1999). Assessing attitudes toward teleworking among information technology personnel. Singapore Management Review, 21(1), 33–46. Tompkins, P., & Cheney, G. (1983). Account analysis of organizations: decision-making and identification. In: L. Putnam & M. Pacanowsky (Eds), Communication and Organizations: An Integrative Approach. Beverly Hills, CA: Sage. Van Maanen, J., & Schein, E. (1977). Toward a theory of organizational socialization. Cambridge, MA: MIT Alfred P Sloan School of Management. Van Scotter, J., & Motowidlo, S. (1996). Interpersonal facilitation and job dedication as separate facets of contextual performance. Journal of Applied Psychology, 81, 525–531. Walther, J. B. (1995). Relational Aspects of Computer-mediated communication: Experimental Observations over Time. Organization Sciences, 6, 186–203. Waung, M. (1995). The effects of self-regulatory coping orientation on newcomer adjustment and job survival. Personnel Psychology, 48, 633–650. Wayne, S., & Kacmar, K. (1991). The effects of impression management on the performance appraisal process. Organizational Behavior and Human Decision Processes, 48, 70–88. Wayne, S., & Liden, R. (1995). Effects of impression management on performance ratings: A longitudinal study. Academy of Management Journal, 38, 232–260.

151

4260 Ch06 4/12/02 11:10 am Page 152

152 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

RICHARD D. JOHNSON AND LINDA C. ISENHOUR

Weber, J. (1946). From Max Weber: essays in sociology. In: J. S. Ott (Ed.), Classics of Organization Theory. New York: Wadsworth. Weick, C. (1995). Sensemaking in organizations. Thousand Oaks, CA: Sage. Wellman, B., Salaff, J., & Dimitrova, D. (1996). Computer networks as social networks: Collaborative work, telework and virtual community. Annual Review of Sociology, 22, 213–238. Wigand, R., Pico, A., & Reichwald, R. (1997). Information, organization and management: Expanding markets and corporate boundaries. Chichester: Wiley. Wilkins, A., & Ouchi, W. (1983). Efficient culture: Exploring the relationship between culture and organization performance. Administrative Sciences Quarterly, 28, 468–481. Williams, M., & Dreher, G. (1992). Compensation system attributes and applicant pool characteristics. Academy of Management Journal, 35, 571–591. Zacarro, S., Foti, R., & Kenny, D. (1991). Self-monitoring and trait-based variance in leadership: An investigation of leader flexibility across multiple group situations. Journal of Applied Psychology, 76, 308–315. Zack, M. H. (1993). Interactivity and communication mode choice in ongoing management groups. Information Systems Research, 4(3), 207–239. Zack, M. H., & McKenney, J. (1995). Social context and interaction in ongoing computer-supported management groups. Organization Science, 6, 394–422. Zuboff, S. (1988). In the age of the smart machine. New York: Basic Books.

4260 Ch07 4/12/02 11:11 am Page 153

1 2 3 4 5 6 7 8 9 10

7. INFORMATION TECHNOLOGY IMPLEMENTATION: THE NEED FOR COMPENSATION SYSTEM CONGRUENCY

11 12 13 14

James H. Dulebohn

15 16 17 18

ABSTRACT

19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

This paper examines the necessity of making compensation changes concurrently with information technology implementation that increases the requirements of incumbent jobs. The paper reviews several theoretical frameworks that highlight corollary effects of technology change on other organizational elements and underscore that organizational change programs do not occur in isolation. Following, organizational justice literature is reviewed as a theoretical background for assessing employee evaluations of, and reactions to, the absence of compensation adjustments in technology change. An organizational field study, utilizing a pretestposttest control group design, was conducted to test a number of hypothesized effects resulting from a failure to adjust compensation for affected jobs during the implementation of a new human resource information system. The results indicated increases in perceptions of procedural injustice, distributive injustice, and dissatisfaction with the structure and administration of the compensation system. A discussion of the results and implications of the study are presented.

36 37 38 39 40

Advances in Human Performance and Cognitive Engineering Research, Volume 3, pages 153–185. Copyright © 2003 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0986-5

153

4260 Ch07 4/12/02 11:11 am Page 154

154 1

JAMES H. DULEBOHN

INTRODUCTION

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

A good deal of the tension that invariably arises in major organizational change programs is the direct result of the disjunction between those directing and implementing change – both of whom are sufficiently involved to have at least a degree of control over the change – and those who are powerless, the passive recipients, as it were (Kanfer, Stein & Jick, 1992, p. 16).

Many organizational change efforts such as information technology implementation are managed top-down and are implemented without adequate consideration of how the change may impact other organizational elements, including the incumbents directly affected by the change program. Organizational change programs typically involve several participant roles (Kanfer et al., 1992). There are those who plan and execute the change, referred to as the change strategists and change implementers respectively. In addition, there are the change recipients who are strongly affected by the change and its implementation but who have little control over the process. The disjunction described above often results from a lack of consideration by the strategists and implementers regarding how the change program is going to affect the recipient employees. Researchers and practitioners have labeled the process that is followed in implementing a computer-based information system as the system development life cycle process (SDLC) (Cleland & King, 1983; Li, 1990). The process consists of a series of phases: planning, analysis, design, and implementation. The planning phase, generally viewed as the most critical, involves establishing a project team, defining system requirements, and performing feasibility and needs analysis. Activities during the analysis and design phases include documenting the processes and data of both the current and new systems. This process analysis often identifies inefficiencies and results in changes in business processes and job redesign. During the implementation phase, training is typically given to employees to prepare them to be able to use the new system. The primary employee-related concern during the SDLC process is end-user training needs; the primary foci during the system development life cycle is on systems, processes, data, and end-user functionality and not on other corollary effects of the system implementation on employee users whose jobs are affected by the change (c.f., McLeod, 1995). Organizational scientists assert that success in organizational change efforts, such as technology implementation, are often dependent on managing effects of the particular change on other organizational elements (Hackman & Lee, 1979). This is based on the premise that organizational change programs do not occur in isolation, but in turn affect other elements of the organization. For

4260 Ch07 4/12/02 11:11 am Page 155

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

155

example, in commenting on the success of job redesign, Hackman and Oldham (1980) stated “even well-conceived improvements in the jobs of individuals can be compromised if the reward system is incongruent with how the work is designed” (p. 193). This suggests that the benefits of a change program, such as technology implementation, may be compromised as a result of making systems and job redesign changes without making necessary changes in compensation or reward structures to support the changes brought about by the technology change. The purpose of this paper is to examine the effects of information technology implementation in an organizational setting where reward changes associated with affected jobs are not made. Specifically, this paper will test Hackman and Oldham’s contention of the need for reward system congruency in organizational change and job redesign. The following question will be addressed: Do technology implementation programs that result in process and job redesign changes, that increase the skill or job requirements of incumbents but are not accompanied by compensation adjustments, result in lower work and pay-related attitudes? This paper will examine the attitude changes that occurred among affected incumbents in an organization that implemented a new human resource information system (HRIS) but did not modify the supporting compensation system. Towards this end, longitudinal data were gathered at an organization prior to technology implementation and related job redesign and one year following the change program. It should be acknowledged that Hackman and Oldham’s contention of the need for adjusting rewards when making organizational change represents a recognized change management principle (e.g. Lawler, Mohrman & Ledford, 1998; Stolovitch & Keeps, 1999). This principle has been espoused by others, prior to and since Hackman and Oldham, including proponents of the sociotechnical school. In spite of this, a review of the general information management literature and the human resource information system literature reveals a noticeable absence of consideration given to the role of organizational support mechanisms (other than end-user training) in managing the information systems change and implementation process (e.g. Ceriello & Freeman, 1991; Lederer, 1991; Walker, 1982; Laudon & Laudon, 2001). Because of the importance of employees to the success of any organizational change program the need exists to examine whether the lack of attention on modifying support mechanisms is warranted. This study examined an organization that conducted a change program that involved implementing a new human resource management information system and redesigning affected jobs. As a public agency, this organization was unable to adjust the compensation to support the changes. Consequently, this situation provided a unique 155

4260 Ch07 4/12/02 11:11 am Page 156

156 1 2 3 4 5 6 7 8 9 10 11 12 13

JAMES H. DULEBOHN

opportunity to examine the effects of an absence of compensation change following an information technology implementation program. The organization of this paper is as follows. First the paper will present a brief discussion of organizational change, specifically information technology implementation and job redesign, and several approaches for identifying corollary effects. Two frameworks are described that specify inter-relationships of organizational elements; these may be used to examine the possible effects that change in one area may have on other organizational elements. Second, the paper will discuss organizational justice theory and research as a theoretical background for assessing employee reactions to organizational change in the absence of compensation changes. Third, the paper will present the results of the empirical study that examined the effects of technology implementation on employees.

14 15 16

BACKGROUND: TECHNOLOGY IMPLEMENTATION AND THE ROLE OF HUMAN RESOURCES

17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

During the twentieth century, the primary approach to technological implementation and systems change was one characterized by technological determinism. Technology was considered to be the independent, more or less autonomous, variable that human work and job design had to follow, given the technical structures (Noble, 1984). Job redesign was characterized by a machine model that was primarily concerned with the adaptation of humans to the organizational and technical framework of production (Davis & Wacker, 1987; Fox, 1995). This traditional approach involved implementing technology first, and then designing jobs to fit the technology, and finally expecting workers to adapt to the change. Technology was narrowly viewed as the solution to organizational production ills and was implemented with little consideration of its effects on human resources (Clegg & Kemp, 1986; Zimbalist, 1979). More recently approaches have emerged that reflect the need to consider both the technological side and human side of organizational change. For example, the socio-technical approach resulted from work in the 1950s by the Tavistock Institute that examined technological implementation in the coal industry (Trist & Bamforth, 1951). The approach described organizations as involving the interaction between two subsystems: the technical system representing all the technical equipment and task structure; and the social system representing the workers, their knowledge, skills, their needs, and their relationships to each other (Ropohl, 1999). While the primary focus of research in this area has been work teams, the socio-technical approach has demonstrated the general importance of optimizing

4260 Ch07 4/12/02 11:11 am Page 157

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

157

the relation between an organization’s technical system and social system (Scott, 1987). In general, this approach has highlighted the importance of considering the human factor in organizational change. Further, the socio-technical approach has identified ways to find a complementary match between the two systems, particularly in organizations where the technical system and jobs are altered (Emery & Trist, 1975). One of the guiding principles arising out of the approach is that support systems, including compensation, must be adapted to, and fit with, technological implementation and the structure of work (Davis & Wacker, 1987). This fit perspective is consistent with contemporary approaches to strategic human resource management. Specifically, management practice has increasingly reflected the realization that organizational success is dependent upon human resources and the effective management of the organization’s human resources (Schuler & Jackson, 1999). Increasingly, organizations have recognized that human resources represent a source of competitive advantage that is less easily emulated by competitors than other organizational resources (e.g. financial, capital, and technological). Strategic human resource management involves aligning human resource policy and practice with the organization’s goals and objectives by making appropriate human resource practice choices in the various human resource functions such as staffing, performance management and compensation to support the business strategy (Anthony, Perrewe & Kacmar, 1993). This planned approach to human resource management emphasizes the importance of considering, and appropriately supporting, human resources in order to realize the organization’s strategic objectives.

25 26

Change Frameworks

27 28 29 30 31 32 33 34 35 36

The complexity of organizational change processes, such as information technology implementation, has led researchers to produce a number of simplifying frameworks to assist in the analysis of organizations prior to and during change programs (Scott, 1987). The models provide insight into the essential elements of organizations and the relationships between the elements. Additionally, they provide an approach to use in order to conduct organizational diagnosis, through separating organizations into distinct elements, and a means to consider corollary effects that may occur from changing a particular organizational element. Two of the models are discussed below.

37 38 39 40

Leavitt’s Model First, Leavitt (1965) presented a seminal model of organizational and technology change that described organizations as comprised of four inter-related 157

4260 Ch07 4/12/02 11:11 am Page 158

158 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

JAMES H. DULEBOHN

elements: structure, task, technology, and actors. Structure refers to the systems of communication, systems of workflow, and systems of authority in organizations. Tasks represent the processes or activities that organizations engage in to produce goods and services. Technology represents the “direct problemsolving inventions like work measurement techniques or computers” used to complete work (Leavitt, 1965, p. 1144). Actors refer to those individuals who, in return for rewards, participate in and make contributions to the organization (Scott, 1987). The primary contribution of Leavitt’s model was to point out the inter-related aspect of organizational elements. With respect to organizational change, Leavitt asserted that a change in one of the four elements would cause change in the other elements. For example, when describing a change in technology Leavitt wrote: Similarly, the introduction of new technological tools – computers, for example – may cause changes in structure (e.g. in the communication system of decision map of the organization), changes in actors (their numbers, skills, attitudes, and activities), and changes in performance or even definition of task, since some tasks may now become feasible of accomplishment for the first time, and others may become unnecessary (p. 1145).

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

7-S Model Building on Leavitt’s model, the McKinsey Company introduced a more complex and descriptive framework called the 7-S model. The model describes seven important categories that comprise an organization: strategy, structure, systems, leadership, staffing, skills, and culture (Peters & Waterman, 1982). An adaptation of the model is portrayed in Fig. 1. In Fig. 1, strategy refers to the organization’s strategic management and strategic plan that defines the firm’s plan of action that will lead, over time, to the attainment of identified goals. Structure refers to the way in which tasks and employees are divided, the basic grouping of activities and reporting relationships. Systems include all formal systems and procedures such as management control systems, performance management, reward systems, information systems, planning and reporting systems, and budgeting systems. Leadership simply refers to the style of leadership used by management. Staffing represents the organization’s human resources as well as the approaches it uses to bring employees into the organization, move them through the organization, and move them out of the organization. Skills refer to the distinctive competencies, or intellectual capital of people, management practices, etc. in the organization. Culture represents the organization’s shared values. Peters and Waterman (1982) applied the 7-S model to analyze 43 organizations in their book In Search of Excellence (Peters, 2001). These authors concluded that most large companies at the time primarily focused on the harder

4260 Ch07 4/12/02 11:11 am Page 159

Compensation Congruency

159

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Fig. 1.

Model of Organizational Elements and Change.

Adapted from Peters and Waterman (1982).

29 30 31 32 33 34 35 36 37 38 39 40

elements (structure, strategy, systems) in their pursuit of success to the exclusion of focusing on the softer elements of organizations (style, staffing, skills, culture). In their research they found that companies that were the highest performers in their industries were those that placed greater emphasis on managing and adjusting, as needed, the softer elements of the organizations. Their study highlighted the critical nature of an organization’s human resources and the necessity of paying attention to and supporting the needs of the “real people with dirty fingernails” who do the work of the organization (Peters, 2001, p. 89). The 7-S model approach provides a distinct categorization of principle internal organizational elements and highlights their interdependencies and 159

4260 Ch07 4/12/02 11:11 am Page 160

160 1 2 3 4 5 6 7

JAMES H. DULEBOHN

inter-relationships. The 7-S model clearly portrays the fact that organizational change does not occur in isolation, but a change in one element is likely to set off changes or reactions within the particular element as well as in the other six organizational elements. The model may be used as a diagnostic tool in examining organizations and the elements that need change and as a guide to consider the areas in an organization where corollary changes may occur when implementing a change program.

8 9 10

An Application of the 7-S Model to an Information Technology Implementation Program

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

In the field study that will be presented below, the following changes were implemented by the organization. The particular organization was a state public agency that was responsible for administering retirement plans for the state’s college and university employees and retirees. Thirty-six employees of a total organizational staff of 82 employees worked in the organization’s member services department. The majority of the jobs prior to the change were specialist positions and involved performing a particular member service activity such as computing retirement benefits, computing death benefits, communicating benefit information to members, or providing pre- and or post-retirement counseling. The change program involved the implementation of a customized Oraclebased HRIS. The primary activity of the organization was to administer retirement programs to approximately 140,000 active and retired employees associated with 70 participating employer organizations. As such, the system had to perform a number of compensation and benefit administration functions including: estimating benefit payments under alternative benefit formulas, retrieving member account information, computing premium information, calculating survivor and death benefits, etc. The purpose of the new information system was to enable each member service employee to perform all these primary tasks. The systems design phase of the information technology implementation involved redesigning the affected jobs. The job redesign involved creating generalist positions; the new jobs required the member services employees to be able to perform all the member service activities. Second, the organization created four member service teams. Each team was responsible to provide member services to active and retired members living in one of four geographical regions in the state. Each team was staffed to operate as a functional unit and provide all of the member service activities to those in their particular region. In light of the 7-S model presented in Fig. 1, this organization implemented changes in the elements of systems, structure, and culture. The system changes involved

4260 Ch07 4/12/02 11:11 am Page 161

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

161

the adoption of a new HRIS system. The structure changes involved redesigning the jobs and reorganizing work around teams. These changes resulted in alterations with respect to tasks, task groupings, and role relationships. The implementation of teams represented culture change and the need to learn to focus on group coordination, job rotation, and group performance as opposed to the prior focus on single member services tasks and individual performance. The strategists and implementers of the change program recognized that there were corollary changes in the area of skills. The system, structure, and culture changes led to changes in the skill requirements of the affected employees. In response, the organization provided a large amount of training prior to and following the implementation of the information system. The training was provided to enable the incumbents to perform the various tasks, including those requiring team coordination, and to function as end users of the HRIS system. To cultivate team orientation and facilitate team functioning, training was provided on teamwork. A corollary change that was not addressed was the effect of the change program on the compensation system (part of the systems element). The adoption of the new HRIS system resulted in an upskilling of the member services jobs as well as an increase in the job requirements (i.e. number of tasks) affected employees had to perform. Unlike private organizations that are generally able to adjust their compensation system to support change programs, as a public organization the civil service compensation system precluded making changes in classification of the positions involved and consequently in the existing reward system.

24 25 26 27

ORGANIZATIONAL JUSTICE: JUSTIFICATION FOR THE NEED FOR COMPENSATION SYSTEM CONGRUENCY

28 29 30 31 32 33 34 35 36 37 38 39 40

Technology implementation that affects job structure and skill requirements necessitates the consideration of not only the organization’s needs and objectives, but also the needs of affected workers as well. Research has demonstrated that an organization’s compensation policies And practices represent one of the most influential factors affecting employee attitudes and behaviors (Gerhart, Minkoff & Olsen, 1995). The employment relationship represents an exchange relationship and compensation is at the heart of that relationship, particularly for employees, who typically depend on salary and wages for their livelihood. Further, compensation represents one of the most important tools management has at its disposal to elicit desired behaviors among employees, align employee behaviors with the organization’s strategy, and attain the organization’s goals and objectives. Davis and Wacker (1987) described the importance of adjusting 161

4260 Ch07 4/12/02 11:11 am Page 162

162 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

JAMES H. DULEBOHN

compensation systems when implementing organization change that affects employees and their jobs as follows: “By creating incentives for appropriate behaviors, reward systems help tie the needs of individuals to the needs of the organization. The behaviors that are rewarded must be congruent with other aspects of the job design” (p. 437). The question naturally arises: How will affected employees react to technology implementation and job redesign (such as occurred in the public agency described above) in the absence of changes in the organization’s compensation system? Organizational justice theories provide a basis for understanding employee personal concerns and needs, as well as typical reactions to compensation system incongruence following technology implementation. A review of the organizational justice literature underscores the need to consider employees’ compensation concerns when implementing information systems, that increase job requirements, and the basis for the hypotheses tested in this study. Organizational justice is concerned with the ways in which employees determine if they have been treated fairly in their jobs (Moorman, 1991), and therefore organizational justice research has been primarily directed at assessing subjects’ evaluative judgments. The importance given to organizational justice is based on the consistent research finding that employees’ fairness evaluations represent one of the primary determinants of their work-related attitudes and behaviors (Dulebohn, 1997; Greenberg, 1990). Organizational justice refers to the fairness of procedures used to determine outcomes (procedural justice), the fairness of outcomes received (distributive justice), and the fairness of interpersonal treatment during procedures (Bies & Shapiro, 1987; Tyler & Bies, 1990). Researchers have found that individual attitudes and reactions in organizations are affected by all three of these facets of justice (Lind & Tyler, 1988; Scher & Heise, 1993). A large number of studies have found fairness considerations to be ubiquitous in organizational life (Greenberg, 1990; Sheppard, Lewicki & Minton, 1992; Tyler & Lind, 1992; Lind, Kulik, Ambrose & de Vera Park, 1993; Lind & Tyler, 1988). Concerns about fairness have been found to affect individuals’ attitudes and reactions toward managerial authorities (Alexander & Ruderman, 1987; Tyler, 1994; Tyler & Schuller, 1990), grievance and appeal systems (Conlon, 1993; Gordon & Fryxell, 1993), drug testing programs (Konovsky & Cropanzano, 1991; 1993), pay outcomes (Dulebohn & Martocchio, 1998; Folger & Konovsky, 1989; Mowday, 1991; Sweeney & McFarlin, 1993), performance evaluations (Dulebohn & Ferris, 1999; Greenberg, 1986), job complexity and working conditions (Kulik & Ambrose, 1992) task assignment (Earley & Lind, 1987), and lay-offs (Konovsky & Folger, 1991; Konovsky & Brockner, 1993). Employee perceptions of unfairness in organizations have been found to

4260 Ch07 4/12/02 11:11 am Page 163

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

163

subsequently affect performance, turnover, pay satisfaction, job satisfaction, organizational commitment, attitudes toward superiors, and other important organizational and work-related attitudes and behaviors (c.f., Greenberg, 1990; Lind & Tyler, 1988). Employee evaluations of organizational justice are largely determined by comparisons employees make between their current situation and treatment (e.g. rewards) and the treatment experienced by other referent(s). Employees experiencing a change in their job or work requirements are expected to make comparisons between their current jobs and pay situation and other referents (Hills, 1980; Goodman, 1974). Organizational justice theory provides a theoretical framework for understanding how these comparisons are made. The organizational justice theories of distributive justice, procedural justice, and referent cognitions underscore the importance of supporting technological change through promoting fairness by modifying the supporting compensation system when job requirements are increased.

16 17 18

Distributive Justice and Equity Theory

19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Distributive justice theories refer to comparison-based theories, such as equity theory, that are based on the premise that individuals evaluate the outcomes they receive relative to some referent. In general, distributive justice theories assume that actors compare their inputs to the outcomes they receive with the inputs and outcomes of comparable others and utilize mathematical formulas to evaluate the fairness of those outcomes. Theoretical work in distributive justice began with Festinger (1957) and Homans (1961). According to Festinger’s (1957) theory of cognitive dissonance, individuals have a tendency to seek consistency among their cognitions (i.e. beliefs, opinions). When there is an inconsistency between attitudes or behaviors (dissonance), this imbalance leads to an unpleasant state of tension and cognitive or behavioral responses to correct the dissonance. Responses include reducing the importance of the conflicting beliefs, acquiring new beliefs, or removing the conflicting attitude or behavior to eliminate dissonance. Homans (1961) defined distributive justice in the context of an exchange relationship. He conceptualized individual evaluations of distributive justice employing “quasi-economic terms” (Adams, 1965, p. 272). Homans asserted that distributive justice results when an individual obtains profits that are proportional to his or her investments, less costs, when compared to the other party in the exchange relationship. Investments represent the relevant attributes brought by the individual to the exchange relationship. 163

4260 Ch07 4/12/02 11:11 am Page 164

164 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

JAMES H. DULEBOHN

Equity Theory The primary theory of distributive justice to be applied to organization and compensation research has been equity theory (Greenberg, 1990; Tyler & Lind, 1992). While distributive justice applies to an evaluation of the fairness of any organizational outcome, the focus of equity theory has been on the comparative fairness of pay outcomes. This theory is credited to Adams who developed a general theory of social inequity to explain causes and consequences of the absence of equity in human exchange relationships. Adams’ (1963; 1965) theory of inequity focused on the wage exchange relationship, more specifically the causes and effects of wage inequity. Adams referred to Homans’ investments as inputs and described them as including any attribute an individual brings to the job (e.g. education, experience, training, seniority, skills, tools, social status) and the effort the individual expends on the job. He referred to Homans’ profits as outcomes and described them as representing any rewards received (e.g. pay, benefits, job status) in exchange for inputs. Adams (1963) posited that individuals evaluate the fairness of their outcomes using an equity rule whereby they compare their own input-outcome ratios to a referent or comparable other. Individuals perceive equity or fairness when the ratio or balance of their outcomes to their inputs is equal (Adams, 1963; 1965; Walster, Walster, & Berscheid, 1978). In contrast, inequity exists when the ratios are perceived as unequal. Adam emphasized that evaluations of equity are in the eye of the beholder and therefore, perceptions of inputs and outcomes are subjective. Consequently, the objective characteristics of inputs and outcomes are less important than the individual’s perception of these factors (Mowday, 1991). Other researchers have reiterated the perceptual nature of fairness evaluations (cf. Beugré. 1998; Sheppard et al., 1992). Building on Festinger (1957), Adams asserted that perceptions of unequal ratios (resulting from either under or over payment) result in a state of inequity distress or psychological uneasiness that motivates individuals to engage in actions that will remove the dissonance and restore perceptions of equity. According to Adams (1965), “the presence of inequity will motivate [the] Person to achieve equity or to reduce inequity, and the strength of motivation to do so will vary directly with the magnitude of inequity experienced” (p. 283). Workers will attempt to achieve equity through actions such as altering inputs, altering outcomes, adjusting their evaluations of their inputs and outputs, using a different comparison other, by using psychological justifications, or by withdrawing from the organization (e.g. engaging in negative behavior) (Adams, 1965). In contrast, perceptions of a balance between input and output ratios result in evaluations

4260 Ch07 4/12/02 11:11 am Page 165

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

165

that an outcome distribution is equitable and this evaluation contributes to satisfaction. As a conceptualization of distributive justice, equity theory has been labeled a reactive content theory because of its focus on reactions to unfair distributions of outcomes (Greenberg, 1987). An abundance of research has been conducted on equity theory (e.g. Deutsch, 1985; Goodman & Friedman, 1971; Lawler, 1968; Prichard, 1969; Weick, 1966). The research has generally supported the theory’s predictions of employees taking action to restore equity (Gerhart et al. (1995). Research has found that when subjects perceived that they have been over-paid they have tried to improve their work and when they have been under-paid they have decreased their inputs or engaged in negative behavior (Cowherd & Levine, 1992; Pfeffer & Langton, 1993; Pfeffer & Davis-Blake, 1992). Research support for reactions to underpayment inequity has been more consistent than for reactions to overpayment inequity (Adams & Freeman, 1976; Mowday, 1991; Sweeney, 1990).

16 17

Equity Referents

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

Adams (1963; 1965) placed the referent as a primary factor in the evaluation of equity. Adams described the “referent other” as an individual or group that is “comparable to the comparer on one or more attributes” (1965, p. 281). Interestingly, Adams included the comparer, his or herself, as a possible referent. In that case, for example, an individual might compare his or her present and past situation, (i.e. past inputs and outcomes in another job with his or her present inputs and outcomes in his or her current job) to determine whether the current exchange situation is equitable. Goodman (1974) differentiated three classes of referents: others (both inside and outside of the organization), self-standards, and system referents. Self-standards represent the self-referent identified by Adams. System referents are implicit or explicit contractual expectations between the employee and employer. According to researchers, the referent does not need to be a specific individual or group, but may be a “compilation of a broad class of relevant others” (Werner & Mero, 1999, p. 1292). Researchers and practitioners in compensation system design have applied the term equity to describe the fairness of pay relative to three referents. Compensation system design has been described as the process of establishing internal, external, and individual equity (Milkovich & Newman, 1996). An examination of these three conceptualizations of compensation equity provides insight into the referents individuals may use when evaluating the fairness of the pay they receive following an organizational change program.

40

165

4260 Ch07 4/12/02 11:11 am Page 166

166 1 2 3 4 5 6 7 8

JAMES H. DULEBOHN

Individual Equity Individual equity represents comparisons individuals make relative to themselves, based on their contributions to the job (e.g. their skill, effort, responsibility), or others working the same job inside their organization. This term best reflects Adam’s description of equity since the referent represents a comparable other. With respect to compensation system design, effectively measuring and rewarding individual performance and contributions contributes to employee perceptions of individual equity.

9 10 11 12 13 14 15 16 17 18 19

External Equity External equity represents an organization’s pay relative to the external labor market. Organizations establish external equity in compensation system design through conducting wage and salary surveys whereby data are gathered on the amount competitors are paying for particular jobs. Salary survey data provide organizations with a basis for evaluating their rates of pay as compared to their competitors. Individuals evaluate the external equity of their pay when they compare the pay they are receiving for their job to what other organizations are paying for the same job (Finn & Lee, 1972; Hills, 1980).

20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Internal Equity Internal equity represents comparisons among jobs inside a single organization. Through the process of conducting job evaluation compensation designers rate the jobs in an organization using compensable factors (such as skill, effort, responsibility, experience) that the organization values and desires to pay for. The focus of job evaluation is to compare jobs with respect to their relative contributions to the organization’s objectives. The traditional approach for setting pay in most organizations is to evaluate the job, not the worker. As noted by Lawler (1987), “This approach is based on the assumption that job worth can be determined and that the person doing the job is worth only as much to the organization as the job itself is worth” (p. 213). The end result of the job evaluation process is a hierarchical ranking of an organization’s jobs, i.e. a job structure, based on the internal worth or value of each job to the particular organization. This ordering provides rationale for why particular jobs are paid more than others inside the organization and promotes pay equity within the organization. Individuals evaluate the internal equity of their jobs by comparing the pay of their particular jobs relative to the pay of other jobs within the organization (Hills, 1980).

4260 Ch07 4/12/02 11:11 am Page 167

Compensation Congruency 1

167

Equity Comparison of Jobs Following Technological Change

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Individual equity and internal equity evaluations are of particular relevance to technology implementation programs that result in job redesign. Researchers have pointed out that a social comparison process, that affects employees’ perceptions of their jobs and performance, occurs following job redesign (Hackman & Oldham, 1980; Oldham & Miller, 1979; Salancik & Pfeffer, 1977). Employees are expected to compare their current jobs with jobs that they have performed in the past (e.g. their jobs prior to redesign) or with co-workers’ jobs (e.g. whose jobs may or may have not changed). With respect to equity evaluations, Berlinger, Glick and Rodgers (1988) stated: “The strongest possible social comparison is an employee’s own experience with a different version of the same job before the change . . . The stronger the contrast between jobs in this social comparison, the stronger the effects on performance” (p. 227). Foundational to having an internally consistent and equitable compensation system is the need for organizations to periodically conduct job analysis and job evaluation. It is particularly important for organizations to re-evaluate jobs if their content (skills, tasks, duties, responsibilities, requirements, etc.) change substantially. Consequently, when an organization implements technological change any jobs affected by the change should be re-analyzed and re-evaluated. In an organization’s pay structure, an increase in the internal worth of a job could possibly move the job up the organization’s pay structure as well as into another pay grade. Job evaluation provides a systematic approach to adjusting the worth of a job and, according to researchers, job evaluation has proven to be an effective tool for reducing perceptions of pay inequity (Treiman, 1979).

26 27

Procedural Justice

28 29 30 31 32 33 34 35 36 37 38 39

Whereas distributive justice focuses on the need to examine pay outcomes relative to job requirements, procedural justice highlights the importance of promoting fairness throughout the information technology adoption process. Procedural justice represents a process-based framework, in contrast to the outcomebased framework of distributive justice (Lind & Tyler, 1988). Research on procedural justice began with Thibaut and Walker’s (1975; 1978) series of dispute resolution studies. Thibaut and Walker (1975) examined aspects of procedures and found that distribution of control is a primary determinant of procedural justice. They studied subjects’ reactions to simulated dispute resolution procedures and they made a distinction between control over the presentation of evidence and arguments, labeled process control or voice, and control over the verdict or outcome, labeled

40

167

4260 Ch07 4/12/02 11:11 am Page 168

168 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

JAMES H. DULEBOHN

decision control. Their primary finding was that procedures that provided individuals with an opportunity to have input into the process were perceived as more fair, and lead to a greater acceptance of unfavorable outcomes (Lind, Lissak & Conlon, 1983). The majority of procedural justice research that followed Thibaut and Walker (1975) examined distribution of control and confirmed their finding that process control enhances fairness perceptions, independent of the particular outcomes. Consequently, this process control effect has been described as the best-documented phenomenon in procedural justice research (Ambrose & Harland, 1995; Tyler & Lind, 1992). A number of studies conducted in a variety of settings have found that process control or input into procedures enhances evaluations of procedural fairness independent of decision control, and procedures that provide individuals with process control, are consistently viewed as fairer than those that limit voice (Tyler, Rasinski & Spodick, 1985; LaTour, 1978; Tyler, 1987). Next, Leventhal and colleagues (Leventhal, 1980; Leventhal, Karuza & Fry, 1980) contributed to the procedural justice literature by identifying structural components individuals use to evaluate the fairness of procedures. They proposed that procedures are fair to the extent that they are consistent, suppress bias, use accurate information, are correctable, represent the interests of the recipients, and are based on ethical standards. Empirical research has demonstrated the importance of procedural fairness in organizational activities including recruitment (Bies & Shapiro, 1987), performance appraisal (Dulebohn & Ferris, 1999; Folger & Konovsky, 1989; Greenberg, 1986; McFarlin & Sweeney, 1992; Sweeney & McFarlin, 1993), compensation (Greenberg, 1987; Scarpello & Jones, 1996), drug testing (Konovsky & Cropanzano, 1991), and dispute resolution contexts (Brett, 1986). Research has found that workers are concerned about process fairness and that they view process fairness and outcome fairness separately, and that procedures that include structural aspects such as those identified by Leventhal, contribute to workers’ perceptions of procedural fairness as well as the acceptance of outcomes (Greenberg, 1990; Lind & Tyler, 1988; Tyler, 1987). Together this research suggests that technology implementation efforts that consider employee needs, and provide them with a degree of input in the process, will lead to enhanced perceptions of the fairness and general acceptance of the change process.

35 36

Referent Cognitions Theory

37 38 39 40

Researchers have made efforts to explain the relationship between procedural and distributive justice and possible interactive effects. Folger’s (1986, 1987) referent cognitions theory (RCT) suggests that people generate referent

4260 Ch07 4/12/02 11:11 am Page 169

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

169

cognitions about outcomes that they experience. Referent cognitions are defined as mental simulations involving possible alternative circumstances or outcomes (Folger, 1986). According to the theory, individuals evaluate their work experience on the basis of what might have been under different circumstances and conditions, such as fairer procedures. Folger and colleagues (Folger, 1986; Cropanzano & Folger, 1989) have asserted that resentment is maximized in organizations when unfair procedures are used and the outcomes are lower than easily imagined alternative outcomes. In contrast, negative reactions are minimized when the outcomes are lower than imagined but the procedures are perceived as being fair. Depending on the context, organizational members may have more or less involvement in the change process. As noted earlier, the three primary roles in most change programs are change strategists, change implementers, and change recipients. The third group has been described as “those who are strongly affected by the change and its implementation, but without much opportunity to influence those affects” (Kanfer et al., 1992, p. 16). According to RCT, it is expected that when organizations provide recipients with a degree of influence, by providing process control, or implement change based on Leventhal’s criteria (e.g. to represent the interests of the recipients), such efforts will contribute to evaluations of procedural justice and will lessen evaluations of distributive injustice when concurrent compensation changes are not made. In contrast, when an organization does not provide recipients with a degree of influence, or implement structural components to enhance procedural fairness, this would be expected to contribute to perceptions of procedural injustice and exacerbate a sense of distributive injustice. Even in the instances when organizations provide recipients with influence (e.g. input) and promote procedural justice in the information technology implementation process, it is not expected that fair procedures will completely mitigate subsequent perceptions of pay inequity. This expectation is supported by evidence that suggests that evaluations of distributive justice are dominant and drive evaluations of the fairness of the procedures that generated the particular outcome (Lerner & Whitehead, 1980; Sweeney & McFarlin, 1993). This prediction is particularly reasonable when the outcome is pay, given the importance of pay to employees in the employment relationship. Further, this is consistent with the expectation employees may have when their job requirements increase as a result of a change program. For example, Hackman and Lee (1979) commented on possible employee expectations following job redesign, leading to increase requirements, as follows: [I]t appears that most employees will seek additional compensation after their jobs have been increased in complexity and responsibility. Little evidence is available to support the contention that a better job is a reward in its own right and that employees will be so

169

4260 Ch07 4/12/02 11:11 am Page 170

170 1 2

JAMES H. DULEBOHN

grateful for the job improvements that they will not seek to be paid more for their increased contributions to the organization (p. 11).

3 4 5

Attitudes and Behaviors Associated with Evaluations of Procedural and Distributive Justice

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

The relevance of organizational justice as an approach to examining the effects of organization change is demonstrated by research that has identified attitudes and reactions associated with evaluations of fairness in organizations. For example, with respect to attitudes, research (e.g. Alexander & Ruderman, 1987; Folger & Konovsky, 1989; Lind & Tyler, 1988; McFarlin & Sweeney, 1992; Scarpello & Jones, 1996) has demonstrated the following. First, evaluations of procedural justice tend to be more strongly related to organizational attitudes such as satisfaction with supervisors and organizational commitment than distributive justice. In contrast, evaluations of distributive justice tend to have a stronger relationship than procedural justice with personal attitudes such as job satisfaction and pay satisfaction. Based on this research, individuals who perceive pay inequity may also experience dissatisfaction with their pay and jobs. Further, employees who evaluate the procedures, associated with the change process, to be unfair may experience lower levels of organization commitment. Predictions of behavioral reactions to evaluations of underpayment inequity, listed above, include reductions in work performance and organizational withdraw. In addition, research has found that perceptions of injustice can generate moral outrage in employees (Bies, 1987), and can lead to acts of insubordination, theft, and other counter-productive and undesirable behaviors (Greenberg, 1987; 1990). Similarly, researchers have found that employees who perceive that they are treated unfairly are more likely to be involved in acts against the organization, as a mechanism to correct perceptions of inequity or injustice, than employees who do not perceive unfair treatment (Hollinger & Clark, 1983).

31 32

HYPOTHESES

33 34 35

In light of the prior discussion on organizational justice and description of the organization’s change program the following hypotheses are formulated:

36 37 38 39 40

H1: Organizational members who experience increased requirements in their jobs as a result of an information technology implementation program will report an increase in perceived workload while those who are not directly affected by the organizational change will not report an increase.

4260 Ch07 4/12/02 11:11 am Page 171

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

171

H2: Organizational members who experience increased requirements in their jobs in an information technology implementation program that does not adjust their compensation will report lower evaluations of the fairness of the organization’s procedures than those who are not directly affected by the organizational change. H3: Organizational members who experience increased requirements in their jobs and who receive no change in compensation, in an information technology implementation program, will report lower perceptions of the distributive justice of their pay than those who are not directly affected by the organizational change. H4: Organizational members who experience increased requirements in their jobs in an information technology implementation program and who receive no change in compensation will report lower satisfaction with the structure and administration of their pay than those who are not directly affected by the organizational change. H5: Organizational members who experience increased requirements in their jobs in an information technology implementation program and who receive no change in compensation will report lower organizational commitment, lower pay level satisfaction, and lower job satisfaction than those who are not directly affected by the organizational change.

23 24

METHOD

25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

A field survey was conducted at a state public organization responsible for administering the state’s college and university retirement programs. At the time of the study the organization administered a defined benefit plan pension program that covered approximately 145,000 active and retired members and served over sixty participating public colleges and university employers. Thirtysix of the organization’s eighty-two employees were employed in the member services area and were directly affected by the technology change. The other forty-six employees were employed in departments not directly affected by the change, including accounting, investments, administration, and support. Wanting to better serve its members, the organization implemented a new Oracle database HRIS that contained active and participant members’ account information and calculation tools. The organization provided the member services employees with training prior to implementing the teams and prior to bringing the new IT system online. Along with the implementation of the HRIS, the organization redesigned affected jobs. Previous to the change each job 171

4260 Ch07 4/12/02 11:11 am Page 172

172 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

JAMES H. DULEBOHN

involved a specialized member service task; the jobs were redesigned to be generalist jobs requiring performance of the separate tasks. Employees were trained so that they could perform their additional member services tasks. Finally, the organization placed its member services employees into four work groups, assigned to servicing four regions of the state. The study employed a pretest-posttest control-group design. The treatment group consisted of thirty-six employees that became members of the four teams who were directly affected by the changes. The control group consisted of forty-six other organization employees not directly affected by the change. The study participants were surveyed in May one month prior to the commencement of the training (Time 1). In September, the teams were implemented and the new HRIS system was brought online. The following May both groups were again surveyed (Time 2). All employees were asked to voluntarily complete a survey at Time 1 and at Time 2. The survey was part of a larger survey project that had the objectives of ascertaining employees’ overall satisfaction and work-related attitudes and identifying areas in which they felt they needed additional training. Participation was anonymous. Seventy-eight employees completed useable surveys at Time 1 representing a participation rate of approximately 95%. There was no attrition among survey participants and the seventy-eight employees completed surveys again at Time 2.

22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Measures Perceived Workload Employees’ perception of changes in their workload between Time 1 and Time 2 were assessed using two items created for this study. An example of an item is: “What is the amount of work that you have had on your job today compared to the amount you had a year ago?” Responses were assessed using a five point scale anchored from “much less work” to “much more work.” The coefficient alpha reliability was 0.78 (Time 2). Procedural Justice Employee evaluations of the procedural justice of primary organizational procedures were assessed using seven items from Dulebohn and Ferris (1999). The items focused on procedures such as determining compensation and work allocation. An example of an item is: “How fair are the procedures used to allocate work in the organization?” Responses were assessed using a four point scale anchored from “very unfair” to “very fair.” The coefficient alpha reliability estimates were 0.90 (Time 1), 0.86 (Time 2).

4260 Ch07 4/12/02 11:11 am Page 173

Compensation Congruency 1 2 3 4 5 6 7

173

Distributive Justice Subordinates’ evaluation of the distributive justice of their organizational rewards was assessed using five items adapted from Price and Mueller’s (1986) Distributive Justice Index. An example of an item is: “How fairly are you rewarded considering the amount of responsibility of your job?” Responses were assessed using a four point scale anchored from “very unfair” to “very fair.” The coefficient alpha reliability estimates were 0.94 (Time 1), 0.95 (Time 2).

8 9 10 11 12 13 14

Satisfaction with Structure/Administration of Pay Employees’ satisfaction with the structure and administration of their pay was assessed using three items from the Pay Satisfaction Questionnaire’s (Heneman & Schwab, 1985) structure and administration subscale. Responses were assessed using a five point scale anchored from “strongly disagree” to “strongly agree” and the coefficient alpha reliability estimates were 0.84 (Time 1), 0.85 (Time 2).

15 16 17 18 19 20 21 22

Organizational Commitment Subordinates’ organizational commitment was assessed using seven items from the Organizational Commitment Questionnaire (Mowday, Steers & Porter, 1979). A sample item is as follows: “I am willing to work extra hard in order for this organization be successful.” Responses were assessed using a four point scale anchored from “strongly disagree” to “strongly agree” and the coefficient alpha reliability estimates were 0.81 (Time 1), 0.85 (Time 2).

23 24 25 26 27 28 29

Pay Level Satisfaction Employees’ satisfaction with their pay level was assessed using the four item pay level satisfaction subscale from the Pay Satisfaction Questionnaire (Heneman & Schwab, 1985). Responses were assessed using a five point scale anchored from “strongly disagree” to “strongly agree” and the coefficient alpha reliability estimates were 0.96 (Time 1), 0.95 (Time 2).

30 31 32 33 34

Job Satisfaction Employees’ job satisfaction was assessed using the Job Descriptive Index’s (JDI) (Smith, Kendall & Hulin, 1969) satisfaction with job in general subscale. The coefficient alpha reliability estimates were 0.78 (Time 1), 0.81 (Time 2).

35 36

ANALYSIS AND RESULTS

37 38 39 40

The treatment group (employees directly affected by the HRIS implementation change program) and the control group (employees not directly affected) were equivalent; all survey participants completed both Time 1 and Time 2 surveys. 173

4260 Ch07 4/12/02 11:11 am Page 174

174 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

JAMES H. DULEBOHN

Because the surveys were anonymous it was not possible to employ a paired samples analysis approach. One-way analysis of variance (ANOVA) was used to compare the group means for each of the measures at Time 1 and Time 2. First, a comparison was made between the treatment group and the control group at Time 1. Table 1 presents the results. There were no significant differences found between the group means for any of the six measures as indicated by the F statistics. Next, a comparison was made between the Time 1 data (full sample), the control group, and the treatment group. Towards this end, the data from the Time 1 survey and the Time 2 survey were merged. The full sample data from Time 1 was coded as group 1; the Time 2 data for the control group was coded as group 2; and the Time 2 data for the treatment group was coded as group 3. One way ANOVA comparisons were made between the Time 1 full sample group and the Time 2 treatment and control groups for all the measures except that of perceived workload because only the Time 2 survey assessed respondents’ perceived workload. For all the other measures, post-hoc testing of the mean differences was conducted using the Tukey HSD method. Table 1 presents the results.

18 19

Table 1.

20

One Way ANOVAs Comparing Treatment and Control Groups at Time 1 and Time 2.

21 Time 1

22

Time 2

23 24 25

Measures

26

Perceived Workload Procedural Justice Distributive Justice Pay Structure Administration Satisfaction Organizational Commitment Pay Level Satisfaction General Job Satisfaction

27 28 29 30 31 32 33 34 35 36 37 38 39 40

N

Control Treatment Group Group

F

Time 1 Sample (1)

Control Group (2)

Treatment Group (3)

F

3.38 3.12

3.31 3.03

0.26 ns 0.23 ns

3.34 3.06

3.453 2.981,3 2.853

4.452 2.521,2 2.361,2

26.03** 24.80** 11.79**

2.86

2.83

0.02 ns

2.85

3.323

2.401,2

9.40**

2.36 2.80

2.51 2.85

2.84 ns 0.03 ns

2.46 2.83

2.721,3 3.691,3

2.432 2.962

6.24** 5.51*

2.09

2.07

0.05 ns

2.08

2.491,3

2.022

8.80**

42

36

78

42

36

Note: ns = not significant Superscript numbers in the Time 2 columns identify which group(s) the particular group is significantly different from based on the none-way Anova post hoc tests. * p < 0.01; ** p < 0.001.

4260 Ch07 4/12/02 11:11 am Page 175

Compensation Congruency 1

175

Hypothesis Testing

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Hypothesis 1 stated that treatment group would perceive having a higher workload than the control group. A comparison of the treatment group and control group found that the treatment group’s perceived work load (mean = 4.45) was significantly higher (F = 26.03, p < 0.001) than the control group (mean = 3.45). These results supported Hypothesis 1. Hypothesis 2 stated that the treatment group would experience lower perceptions of procedural justice between Time 1 and Time 2. A comparison of the treatment group and control group found that the treatment group’s evaluation of procedural justice (mean = 2.52) was significantly lower than both the Time 1 group (mean = 3.34) and the control group (mean = 2.98) (F = 24.80, p < 0.001). In contrast, there was no difference between the control group and the Time 1 full sample group. Consequently, Hypothesis 2 was supported. Hypothesis 3 stated that the treatment group would experience lower perceptions of distributive justice between Time 1 and Time 2. A comparison of the treatment group and control group found that the treatment group’s perception of distributive justice (mean = 2.36) was significantly lower than the Time 1 full sample group (mean = 3.06) and the Time 2 control group (mean = 2.85) (F = 11.79, p < 0.001). Similar to the results for procedural justice, there was no difference between the control group and the Time 1 full sample group. These results supported Hypothesis 3. Hypothesis 4 stated that the treatment group would experience lower levels of satisfaction with the organization’s structure and administration of pay between Time 1 and Time 2. The results indicated that the treatment group’s level of satisfaction (mean = 2.40) was significantly lower than the Time 1 full sample group (mean = 2.85) and the control group (mean = 3.32) (F = 9.40, p < 0.001). There was no difference between the control group and the Time 1 full sample group. These results supported Hypothesis 4. Hypothesis 5 stated that the treatment group would report lower levels of organizational commitment, pay level satisfaction, pay raise satisfaction, and general job satisfaction, between Time 1 and Time 2, while the control group would not. Table 1 reveals that the treatment group’s means at Time 2 for organizational commitment (mean = 2.43), pay level satisfaction (mean = 2.96), and general job satisfaction (mean = 2.20) were significantly lower than the control group’s means at Time 2 for organizational commitment (mean = 2.72; F = 6.24, p < 0.001), pay level satisfaction (mean = 3.69; F = 5.51, p < 0.01), and general job satisfaction (mean = 2.49; F = 8.80, p < 0.001). Table 1 indicates that there were no significant differences between the treatment group’s means and the Time 1 full sample group’s means for organizational commitment, pay 175

4260 Ch07 4/12/02 11:11 am Page 176

176 1 2 3 4 5

JAMES H. DULEBOHN

level satisfaction, and general job satisfaction. Consequently, the significant differences between the treatment group and control group were due to an increase in these attitudes for the control group between Time 1 and Time 2. Together these results demonstrated no decrease in the treatment group’s means between Time 1 and Time 2. Therefore Hypothesis 5 was not supported.

6 7

DISCUSSION

8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

This paper examined the necessity of making compensation changes along with technology implementation that results in job redesign. The paper reviewed Leavitt’s (1965) organizational change model and the 7-S framework that provide insight into the corollary effects of organizational change in one organizational element on other elements. The framework was used to discuss the changes made in an organization implementing a new information system that resulted in job redesign and increased job demands. It was seen that while there were several corollary changes in the organization, resulting from changes in the elements of structure, systems and culture, the organization only addressed the corollary changes in skill and culture. This particular organization did not adjust the compensation system to support the other organizational changes. Procedural and distributive justice theories were examined to provide theoretical support for the need to make compensation changes when implementing technological change that affects incumbent jobs. In general, the organizational justice literature underscores the need to consider the employee side of the equation in a technology implementation change program both in terms of process fairness and reward fairness. Research in the area of organizational justice has demonstrated that employee evaluations of the fairness of organizational processes and subsequent outcomes (e.g. pay) received may strongly affect their work-related attitudes and behaviors. While organizations may enhance process fairness through providing employees with input or control in a change process, RCT suggests that this would not mitigate their evaluations of the distributive injustice, or pay inequity, from a failure to change the compensation system to equitably reward affected employees for increased job requirements or responsibilities. The results of the empirical study supported Hackman and Oldham’s (1980) contention that reward changes should be made when implementing organizational changes that include job redesign. A pretest-posttest control group design and field study data were used to examine the effects of implementing a new HRIS system, adopting a work team structure, and redesigning affected jobs from being specialist to being generalist positions. The objective was to ascertain the overall effects of these particular changes, recognizing that the changes together increased the job requirements for incumbents affected by

4260 Ch07 4/12/02 11:11 am Page 177

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

177

the implementation of the new HRIS. The research design enabled the examination of the change on the group of employees, in comparison to the employees not directly affected by the change. A brief discussion of the results of the hypotheses testing follows. First, the comparison between the treatment group and the control group at Time 1 indicated no significant differences for the measures. Consequently, the two groups were equivalent with respect to the justice evaluations and attitudes that were measured at Time 1. Hypotheses 2 and 3 were supported which stated that group members would experience lower perceptions of procedural justice and distributive justice following the organizational change. The results indicated that for both of these measures the treatment group experienced a decrease in these evaluations between Time 1 and Time 2 while the control group did not. These results demonstrated while both groups had similar evaluations of the fairness of organizational procedures and outcomes prior to the change program, the group affected by the change experienced a significant drop in their evaluations of the process and outcome fairness. Distributive justice was operationalized in terms of the fairness of rewards received for the job based on job requirements, effort, and performance. In light of equity theory, those in the treatment group may have compared their present job situation with their prior job (i.e. input requirements and outcomes received) or with co-workers in the organization whose jobs were not affected by the change. Hypothesis 4 examined participants’ satisfaction with the structure and administration of pay. Research has supported the multidimensionality of pay satisfaction and has identified structure and administration as representing a primary facet (e.g. Judge, 1993). Pay structure and administration satisfaction is particularly relevant to this study because it reflects participant satisfaction with the compensation system itself and with how their pay is determined. In the 7-S model, the compensation system represents a primary subcomponent of the system element. The results indicated a significant decrease in satisfaction for the treatment group between Time 1 and Time 2 as well as a significantly lower satisfaction than the control group. The control group experienced no change in satisfaction. The results suggested that, in addition to the treatment group’s perceptions of procedural and distributive injustice, the treatment group also reported increased dissatisfaction, following the change, with how the organization administered and structured its compensation. Obviously, dissatisfaction with the pay structure and administration reflects a root problem and if future changes are made in this area the changes will probably be reflected in increased evaluations of organizational justice. The results for Hypothesis 5 were surprising. As discussed above, research has found that procedural and distributive justice are associated with personal 177

4260 Ch07 4/12/02 11:11 am Page 178

178 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

JAMES H. DULEBOHN

and organizational attitudes such as organizational commitment, pay satisfaction, and job satisfaction. The results indicated that there were no changes in the treatment group’s means between Time 1 and Time 2 for organizational commitment, pay level satisfaction, and job satisfaction. The insignificant results for these constructs may be explained as follows. First, because the organizational change program did provide the treatment group members with more challenging jobs (i.e. an increase in skill variety and task identity), these job enrichment changes may have compensated for any decrease in job satisfaction associated with perceptions of procedural and distributive unfairness. Second, in light of the Hawthorne effect, the treatment group members were the focus of attention in the organization between Time 1 and Time 2. This treatment may have compensated for any decrease in organizational commitment (and possibly job dissatisfaction) associated with perceptions of procedural and distributive unfairness. But, it is likely that failure to deal with the perceptions of injustice in the future will lead to a decrease in these attitudes as any Hawthorne effect subsides. It was expected that the treatment group’s pay level satisfaction would experience a significant decrease, similar to that found with pay structure and administration satisfaction. Surprisingly, this was not the case. A possible explanation for this is that the Pay Satisfaction Questionnaire items for the pay level satisfaction subscale include items comparing pay level with the pay of other jobs in the participant’s organization as well as with jobs outside of the organization. Consequently, the level of satisfaction may have been strongly influenced by the comparison with the relevant labor market which may have not have afforded higher paying opportunities. Interestingly the control group experienced a significant increase in pay level satisfaction, job satisfaction, and organizational commitment between the two time periods. The small size of the organization and the interaction between the treatment group members may have contributed to a contrast effect for those who were not affected by the HRIS change program. Seeing dramatic changes and increased demands among the treatment employees’ jobs, in contrast to the unchanging situation with respect to their own job demands, may have augmented the control group’s satisfaction with their situation and enhanced these attitudes.

34 35

Strengths and Limitations

36 37 38 39 40

A primary strength of the present study was the pretest-posttest control group design. This design allowed the assessment of whether any change occurred between the time periods and whether the change resulted from the technology implementation program. A primary limitation of this study was the field setting.

4260 Ch07 4/12/02 11:11 am Page 179

Compensation Congruency 1 2 3 4 5 6 7 8

179

Since data collection was limited to a public sector organization, the generalizabiilty of the findings to private sector organizations represents a research question. The fact that the changes that occurred among the treatment group members were consistent with organizational justice predictions mitigates some of the external validity concerns. Still, future researchers with access to private sector organizations should attempt to examine the effects of similar information technology implementation programs, in the absence of compensation adjustments, in other organizational settings.

9 10

CONCLUSION

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Overall, the results of this study support the importance of adjusting compensation when technology implementation and related job redesign increase the requirements and demands of incumbent jobs. The decrease in justice perceptions and pay structure and administration satisfaction are indicative of this particular organization’s failure to adequately consider and meet employee needs and concerns during the course of adopting a new HRIS and modifying the affected jobs. While this study did not report subsequent outcomes, based on equity theory and research investigating reactions to unfairness, it may be assumed that these perceptions of inequity resulted in unwanted behavior outcomes. Such outcomes may include lowered effort or performance, higher levels of customer or member complaints, slower customer response time, shirking on the job, higher levels of absenteeism, decreases in organizational citizenship behaviors, as well as more egregious negative behaviors. Because change programs typically result in corollary effects, a conclusion of this paper is that it is not appropriate to approach implementing information systems that involve job redesign in isolation or as a sole means to increase organizational performance. The literature review and results of this study underscore the need to take a humanistic approach to any technology implementation change program by considering employee needs and making any necessary adjustments. To do this it is necessary to carefully assess, prior to the implementation phase, what corollary affects may result from the change program(s). Proper assessment can contribute to proper planning and a proactive approach to change. For example, job analysis and job evaluation of affected jobs may preclude the subsequent need for reactive assessment and measures to correct problems associated with corollary effects. Finally, the question arises regarding what organizations should do, that are similar to the one examined in this study, that are unable to make needed compensation adjustments for jobs affected by technology implementation or other major change programs. The results of this study suggest that efforts 179

4260 Ch07 4/12/02 11:11 am Page 180

180 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

JAMES H. DULEBOHN

should be made to provide some sort of revised and appropriate support system. Therefore, a future area of research would be the comparison of the effectiveness of alternative support changes. For example, while some organizations may be unable to change direct compensation they may be able to make other compensation-related changes such as in area of incentives (e.g. bonuses) or benefits (e.g. enhanced tuition remission or flex-time). Whether these changes would be adequate and enhance fairness perceptions and system satisfaction, in the absence of direct compensation changes, represents a research question. Related, the comparative effectiveness of changes in alternative rewards to that resulting from direct compensation changes needs to be examined. Research in these areas would go beyond this present study by providing direction to organizations regarding the appropriateness and relative effectiveness of different interventions. In organizations where no support changes are feasible, a change program may need to be reconsidered. With respect to an information system, since the success of the system in improving organizational performance is dependent on the end users, the human factor cannot be ignored. A failure to make necessary adjustments in an organization’s compensation support system, for those jobs that are affected, may result in the sub-optimization of the change implemented and no increase or even a decrease in organizational performance.

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

REFERENCES Adams, J. S. (1963). Toward and understanding of inequity. Journal of Abnormal and Social Psychology, 47, 422–436. Adams, J. S. (1965). Inequity in social exchange. In: L. Berkowitz (Ed.), Advances in Experimental Social Psychology (Vol. 2, pp. 267–299). New York: Academic Press. Adams, J. S., & Freeman, S. (1976). Equity theory revisited. In: L. Berkowitz (Ed.), Advances in Experimental and Social Psychology (Vol. 2, pp. 267–299). New York: Academic Press. Alexander, S., & Ruderman, M. (1987). The role of procedural and distributive justice in organizational behavior. Social Justice Research, 1, 177–198. Ambrose, M. L., & Harland, L. K. (1995). Procedural justice and influence tactics: Fairness, frequency, and effectiveness. In: R. S. Cropanzano & K. M. Kacmar (Eds), Organizational Politics, Justice, and Support: Managing the Social Climate of the Workplace (pp. 97–130). Westport: CT: Greenwood Publishing Company. Anthony, W. P., Perrewe, P. L., & Kacmar, K. M. (1993). Strategic human resource management. Orlando: Dryden. Barrett-Howard, E., & Tyler, T. (1986). Procedural justice as a criterion in allocation decisions. Journal of Personality and Social Psychology, 50, 296–304. Berlinger, L. R., Glick, W. H., & Rodgers, R. C. (1988). Job enrichment and performance improvement. In: R. A. Katzell (Ed.), Productivity in Organizations: New Perspectives from Industrial and Organizational Psychology (pp. 219–254). San Francisco: JosseyBass.

4260 Ch07 4/12/02 11:11 am Page 181

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

181

Beugré, C. D. (1998). Managing fairness in organizations. London: Quorum Books. Bies, R. J. (1987). The predicament of injustice: The management of moral outrage. In: B. M. Staw & L. L. Cummings (Eds), Research in Organizational Behavior (Vol. 9, pp. 289–319). Greenwich, CT: JAI Press. Bies, R. J., & Shapiro, D. L. (1987). Voice and justification: Their influence on procedural fairness judgments. Academy of Management Journal, 1, 676–685. Brett, J. M. (1986). Commentary on procedural justice papers. In: R. Lewicki, M. Bazerman & B. Sheppard (Eds), Research on Negotiation in Organizations (Vol. 1, pp. 81–91). Greenwich, CT: JAI. Ceriello, V. R., & Freeman, C. (1991). Human resource management systems. Toronto: Lexington Books. Clegg, C. W., & Kemp, N. (1986). Information technology: Personnel, where are you? Personnel Review, 15, 8–15. Cleland, D. I., & King, W. R. (Eds) (1983). Project management handbook. New York: Van Nostrand Reinhold Co. Conlon, D. E. (1993). Some tests of the self-interest and group-value models of procedural justice: Evidence from an organizational appeal procedure. Academy of Management Journal, 35(5), 1109–1124. Cowherd, D. M., & Levine, D. L. (1992). Product quality and pay equity between lower-level employees and top management: An investigation of distributive justice theory. Administrative Science Quarterly, 37, 302–320. Cropanzano, R., & Folger, R. (1989). Referent cognitions and task decision autonomy: Beyond equity theory. Journal of Applied Psychology, 74, 293–299. Davis, L. E., & Wacker, G. J. (1987). Job Design. In: G. Salvendy (Ed.), Handbook of Human Factors (pp. 433–452). New York: John Wiley & Sons. Deutsch, M. (1985). Distributive justice. New Haven, CT: Yale University Press. Dulebohn, J. H. (1997). Social influence in organizational justice evaluations of processes and outcomes of human resources systems. In: G. R. Ferris (Ed.), Research in Personnel and Human Resources Management (Vol. 15, pp. 241–291). Greenwich, CT: JAI Press. Dulebohn, J. H., & Ferris, G. R. (1999). The role of influence tactics on fairness perceptions of performance evaluations. Academy of Management Journal, 42(3), 288–303. Dulebohn, J. H., & Martocchio, J. J. (1998). Employees’ evaluations of the fairness of work group incentive pay plans. Journal of Management, 24(4), 469–488. Earley, P. C., & Lind, E. A. (1987). Procedural justice and participation in task selection: The role of control in mediating justice judgments. Journal of Personality and Social Psychology, 52, 1148–1160. Emery, F. E., & Trist, E. L. (1975). Towards a social ecology: contextual appreciations of the future in the present. New York: Plenum. Festinger, L. (1957). A theory of cognitive dissonance. Evanston, IL: Row, Peterson. Finn, R. H., & Lee, S. M. (1972). Salary equity: Its determination, analysis, and correlates. Journal of Applied Psychology, 56(4), 283. Folger, R. (1986). A referent cognitions theory of relative deprivation. In: J. M. Olson, C. P. Herman & M. P. Zanna (Eds), Social Comparison and Relative Deprivation: The Ontario Symposium (Vol. 4, pp. 33–55). Hillsdale, NJ: Erlbaum. Folger, R. (1987). Relative deprivation and referent cognitions: Reformulating the preconditions of resentment. In: J. C. Masters & W. P. Smith (Eds), Social Comparison, Justice, and Relative Deprivation: Theoretical, Empirical, and Policy Perspectives (pp. 183–215). Hillsdale, NJ: Erlbaum.

181

4260 Ch07 4/12/02 11:11 am Page 182

182 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

JAMES H. DULEBOHN

Folger, R., & Greenberg, J. (1985). Procedural justice: An interpretive analysis of personnel systems. In: K. M. Rowland & G. R. Ferris (Eds), Research in Personnel and Human Resources Management (Vol. 3, pp. 141–183). Greenwich, CT: JAI Press. Folger, R., & Konovsky, M. A. (1989). Effects of procedural and distributive justice on reactions to pay raise decisions. Academy of Management Journal, 32, 115–130. Fox, W. M. (1995). Sociotechnical system principles and guidelines: Past and present. The Journal of Applied Behavioral Science, 31(1), 91–105. Gerhart, B., Minkoff, H. B., & Olsen, R. N. (1995). Employee Compensation: Theory, Practice, and Evidence. In: G. R. Ferris, S. D. Rosen & D. T. Barnum (Eds), Handbook of Human Resource Management. Oxford: Blackwell Publishers. Goodman, P. S. (1974). An examination of referents used in the evaluation of pay. Organizational Behavior and Human Performance, 12, 170–195. Goodman, P. S., & Friedman, A. (1971). An examination of Adam’s theory of inequity. Administrative Science Quarterly, 16, 271–288. Gordon, M. E., & Fryxell, G. E. (1993). The role of interpersonal justice in organizational grievance systems. In: R. S. Cropanzano (Ed.), Justice in the Workplace (pp. 231–255). Hillsdale, NJ: Lawrence Erlbaum. Greenberg, J. (1986). Organizational performance appraisal procedures: What makes them fair? In: R. J. Lewicki, B. H. Sheppard & M. Bazerman (Eds), Research on Negotiation in Organizations (Vol. 1, pp. 25–41). Greenwich, CT: JAI Press. Greenberg, J. (1987). Reactions to procedural injustice in payment distributions: Do the means justify the ends? Journal of Applied Psychology, 72(1), 55–61. Greenberg, J. (1990). Organizational justice: Yesterday, today, and tomorrow. Journal of Management, 16, 399–432. Hackman, R. J., & Lee, D. M. (1979). Redesigning work: A strategy for change. Scarsdale, NY: Work in America. Hackman, R. J., & Oldham, G. R. (1980). Work redesign. London: Addison-Wesley. Heneman, H. G., III., & Schwab, D. P. (1985). Pay satisfaction: Its multidimensional nature and measurement. International Journal of Psychology, 20, 129–141. Hills, F. S. (1980). The relevant other in pay comparisons. Industrial Relations, 19, 345–351. Hollinger, R. C., & Clark, J. P. (1983). Theft by employees. Lexington, MA: Lexington Books. Homans, G. C. (1961). Social behavior: Its elementary forms. New York: Harcourt, Brace. Judge, T. (1993). Validity of the dimensions of the pay satisfaction questionnaire: Evidence of differential prediction. Personnel Psychology, 46, 331–357. Kanfer, R. M., Stein, B. A., & Jick, T. D. (1992). The challenge of organizational change. New York: Free Press. Kanfer, R., Sawyer, J., Earley, P. C., & Lind, E. A. (1987). Participation in task evaluation procedures: The effects of influential opinion expression and knowledge of evaluative criteria on attitudes and performance. Social Justice Research, 1, 235–249. Konovsky, M. A., & Brockner, J. (1993). Managing victim and survivor layoff reactions: A procedural justice perspective. In: R. S. Cropanzano (Ed.), Justice in the Workplace (pp. 133–154). Hillsdale, NJ: Lawrence Erlbaum Associates. Konovsky, M. A., & Cropanzano, R. S. (1991). The perceived fairness of employee drug testing as a predictor of employee attitudes and job performance. Journal of Applied Psychology, 76, 698–707. Konovsky, M. A., & Cropanzano, R. S. (1993). Justice considerations in employee drug testing. In: R. S. Cropanzano (Ed.), Justice in the Workplace (pp. 171–192). Hillsdale, NJ: Lawrence Erlbaum Associates.

4260 Ch07 4/12/02 11:11 am Page 183

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

183

Konovsky, M. A., & Folger, R. (1991). The effects of procedures, social accounts, and benefits level on victims’ layoff reactions. Journal of Applied Social Psychology, 21, 630–650. Kulik, C. T., & Ambrose, M. L. (1992). Personal and Situational Determinants of Referent Choice. The Academy of Management Review, 17(2), 212–237. LaTour, S. (1978). Determinants of participant and observer satisfaction with adversary and inquisitorial modes of adjudication. Journal of Personality and Social Psychology, 36, 1531–1545. Laudon, K. C., & Laudon, J. P. (2001). Management information systems (4th ed.). Upper Saddle River, NJ: Prentice Hall. Lawler, E. E., III. (1968). Equity theory as a predictor of productivity and work quality. Psychological Bulletin, 70, 596–610. Lawler, E. E., III. (1987). The strategic design of reward systems. In: R. M. Steers & L. W. Porter (Eds), Work and Motivation (4th ed., pp. 201–227). St. Louis: McGraw-Hill. Lawler, E. E., III., Mohrman, S. A., & Ledford, G. E. (1998). Strategies for high performance organizations – The CEO report. San Francisco: Jossey-Bass. Leavitt, H. J. (1965). Applied organizational change in industry: Structural, technological, and humanistic approaches. In: J. G. March, Handbook of Organizations (pp. 1144–1170). Chicago: Rand McNally. Lerner, M. J., & Whitehead, L. A. (1980). Procedural justice viewed in the context of justice motive theory. In: G. Mikula (Ed.), Justice and Social Interaction (pp. 219–256). New York: Springer-Verlag. Leventhal, G. S. (1980). What should be done with equity theory? In: K. J. Gergen, M. S. Greenberg & R. H. Willis (Eds), Social Exchange: Advances in Theory and Research (pp. 27–55). New York: Plenum. Leventhal, G. S., Karuza, J., & Fry, W. R. (1980). Beyond fairness: A theory of allocation preferences. In: G. Mikula (Ed.), Justice and Social Interaction: Experimental and Theoretical Contributions from Psychological Research (pp. 167–218). New York: Hans Huber. Lederer, A. L. (Ed.) (1991). Handbook of human resource information systems. Boston: Warren, Gorham & Lamont. Li, Eldon Y. (1990). Software Testing in a System Development Process: A Life Cycle Perspective. Journal of Systems Management, 41(8), 23–31. Lind, E. A. (1995). Justice and authority relations in organizations. In: R. S. Cropanzano & K. M. Kacmar (Eds), Organizational Politics, Justice, and Support: Managing the Social Climate of the Workplace (pp. 83–96). Westport: CT: Greenwood Publishing Company. Lind, E. A., Kanfer, R., & Earley, P. C. (1990). Voice, control, and procedural justice: Instrumental and noninstrumental concerns in fairness judgments. Journal of Personality and Social Psychology, 13, 338–350. Lind, E. A., Kulik, C., Ambrose, M., & de Vera Park, M. V. (1993). Individual and corporate dispute resolution: Using procedural fairness as a decision heuristic. Administrative Science Quarterly, 32(2), 224–251. Lind, E. A., Lissak, R. I., & Conlon, D. E. (1983). Decision control and process control effects on procedural fairness judgments. Journal of Applied Social Psychology, 13(4), 338–350. Lind, E. A. & Tyler, T. (1988). The social psychology of procedural justice. New York: Plenum. McFarlin, D. B., & Sweeney, P. D. (1992). Distributive and procedural justice as predictors of satisfaction with personal and organizational outcomes. Academy of Management Journal, 35(3), 626–637. McLeod, R., Jr. (1995). Management information systems: A study of computer-based information systems. Prentice Hall: Englewood Cliffs, NJ.

183

4260 Ch07 4/12/02 11:11 am Page 184

184 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

JAMES H. DULEBOHN

Markovsky, B. (1985). Toward a multilevel distributive justice theory. American Sociology Review, 5(6), 822–839. Milkovich, G. T. & Newman, J. M. (1996). Compensation. Boston: BPI-Irwin. Moorman, R. H. (1991). Relationship between organizational justice and organizational citizenship behaviors: do fairness perceptions influence employee citizenship? Journal of Applied Psychology, 76(6), 845–855. Mowday, R. T. (1991). Equity theory predictions of behavior in organizations. In: R. Steers & L. Porter (Eds), Motivation and Work Behavior (5th ed., pp. 111–131). New York: McGrawHill. Mowday, R. T., Steers, R. M., & Porter, L. W. (1979). The measurement of organization commitment. Journal of Vocational Behavior, 14, 224–247. Noble, D. (1984). Forces of production: a social history of industrial automation. New York: Knopf. Oldham, G. R., & Miller, H. E. (1979). The effect of significant other’s job complexity on employee reactions to work. Human Relations, 32, 247–260. Peters, T. J., & Waterman, R. H., Jr. (1982). In search of excellence. London: Harper & Row. Peters, T. J. (2001). True confessions. Fast Company, 53, 79–92. Pfeffer, J., & Davis-Blake, A. (1992). Salary dispersion, location in the salary distribution, and turnover among college administrators, Industrial and Labor Relations Review, 45, 753–763. Pfeffer, J., & Langton, N. (1993). The effect of wage dispersion on satisfaction, productivity, and working collaboratively: Evidence from College and University faculty. Administrative Science Quarterly, 38, 382–407. Price, J. L., & Mueller, C. W. (1986). Handbook of organizational measurement. Marshfield, MA: Pitman. Prichard, R. A. (1969). Equity theory: A review and critique. Organizational Behavior and Human Performance, 4, 75–94. Ropohl, G. (1999). Philosophy of socio-technical systems. Phil & Tech, 4(3), 59–71. Salancik, G. R., & Pfeffer, J. (1977). An examination of need satisfaction models of job attitudes. Administrative Science Quarterly, 22, 427–456. Scarpello, V., & Jones, F. F. (1996). Why justice matters in compensation decision making. Journal of Organizational Behavior, 17(3), 285–301. Scott, W. R. (1987). Organizations: Rational, natural, and open systems. Englewood Cliffs, NJ: Prentice-Hall. Scher, S. J., & Heise, D. R. (1993). Affect and the perception of injustice. In: E. J. Lawler, B. Markovsky, K. Heimer & J. O’Brien (Eds), Advances in Group Processes (Vol. 10, pp. 223–252), Greenwich, CT: JAI Press. Schuler, R. S., & Jackson, S. E. (Eds) (1999). Strategic Human Resource Management. Blackwell Publishers: Oxford. Sheppard, B. H., & Lewicki, R. J., & Minton, J. (1992). Organizational justice. New York: Free Press. Smith, P. C., Kendall, L. M., & Hulin, C. L. (1969). The measurement of satisfaction in work and retirement. Chicago: Rand McNally. Stolovitch, H. D., & Keeps, E. J. (Eds) (1999). Handbook of human performance technology. San Francisco: Jossey-Bass. Sweeney, P. D. (1990). Distributive justice and pay satisfaction: A field test of an equity theory prediction. Journal of Business and Psychology, 4(3), 329–341. Sweeney, P. D., & McFarlin, D. B. (1993). Workers’ evaluations of the “ends” and the “means”: An examination of four models of distributive and procedural justice. Organizational Behavior and Human Decision Processes, 55(1), 23–40.

4260 Ch07 4/12/02 11:11 am Page 185

Compensation Congruency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

185

Thibaut, J. & Walker, L. (1975). Procedural justice: A psychological analysis. Hillsdale, New Jersey: Lawrence Erlbaum Associates. Thibaut, J., & Walker, L. (1978). A theory of procedure. California Law Review, 66, 541–566. Treiman, D. J. (1979). Job evaluation: An analytic Review. Washington, D.C.: National Academy of Sciences. Trist, E. L., & Bamforth, K. W. (1951). Some social and psychological consequences of the Longwall Method of Coal-Getting. Human Relations, 4, 3–38. Tyler, T. R. (1986). Justice and leadership endorsement. In: R. R. Lau & D. O. Sears (Eds), Political Cognition (pp. 257–278). Hillsdale, NJ: Erlbaum. Tyler, T. R. (1987). Procedural justice research. Social Justice Research, 1, 41–66. Tyler, T. R. (1994). Psychological models of the justice motive: Antecedents of distributive and procedural justice. Journal of Personality and Social Psychology, 67(5), 850–863. Tyler, T. R., & Bies, R. J. (1990). Beyond formal procedures: The interpersonal context procedural justice. In: J. S. Carrol (Ed.), Applied Social Psychology and Organizational Settings (pp. 77–98). Hillsdale, NJ: Lawrence Erlbaum Associates. Tyler, T. R., & Folger, R. (1980). Distributional and procedural aspects of satisfaction with citizenpolice encounters. Basic and Applied Social Psychology, 1, 281–292. Tyler, T. R., & Lind, E. A. (1992). A relational model of authority in groups. In: M. P. Zanna (Ed.), Advances in Experimental Social Psychology (Vol. 25, pp. 115–191). San Diego, CA: Academic Press. Tyler, T. R., Rasinski, K., & Spodick, N. (1985). The influence of voice on satisfaction with leaders: Exploring the meaning of process control. Journal of Applied Social Psychology, 15, 700–725. Tyler, T. R., & Schuller, R. (1990). A relational model of authority in work organizations: The psychology of procedural justice. Unpublished manuscript, American Bar Foundation. Walker, A. J. (1982). HRIS development. New York: Van Nostrand Reinhold. Walker, A. J., & Towers Perrin (Eds) (2001). Web-based human resources. New York: McGrawHill. Walster, E. G., Walster, W., & Berscheid. (1978). Equity theory and research. Boston: Allen and Bacon. Weick, K. E. (1966). The concept of equity in the perception of pay. Administrative Science Quarterly, 11, 414–439. Werner, S., & Mero, N. P. (1999). Fair or foul? The effects of external, internal, and employee equity on changes in performance of Major League baseball players. Human Relations, 52(10), 1291–1311. Zimbalist, A. (1979). Case studies on the labor process. New York: Monthly Review Press.

31 32 33 34 35 36 37 38 39 40

185

4260 Ch08 4/12/02 11:12 am Page 187

1 2 3 4 5 6 7 8 9 10 11 12

8. BACK TO THE FUTURE: A CLASSICAL CONSIDERATION OF THE IMPACT OF TECHNOLOGY ON HUMAN RESOURCE MANAGEMENT

13 14 15 16

Marshall Schminke and Jie G. McCardle

17 18 19 20

INTRODUCTION

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

In his classic book Organizations in Action, James Thompson noted that “technologies and environments are the basic sources of uncertainty for organizations. How these facts of organizational life lead organizations to design and structure themselves needs to be explored” (1967, p. 1). Thirty-five years later, management scholars and practitioners continue to struggle with how best to cope with technological and environmental change. Such struggles are reflected throughout this volume. The goal of this special edition has been to consider the impact of technology and technological change on human resource management (HRM) and systems. Technology presents an enormous challenge to human resource professionals, and the chapters in this volume have provided innovative and insightful perspectives on some of the most significant of those challenges. The purpose of this concluding chapter is to step back and take a broad view of the impact of technology on HRM, and how organizations might best respond

36 37 38 39 40

Advances in Human Performance and Cognitive Engineering Research, Volume 3, pages 187–205. Copyright © 2003 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0986-5

187

4260 Ch08 4/12/02 11:12 am Page 188

188 1 2 3 4 5 6 7 8 9 10 11

MARSHALL SCHMINKE AND JIE G. MCCARDLE

to such challenges. We do so by building upon a theme that has emerged elsewhere in this volume: the role of organizational design and structure in coping with technological change. In particular, we draw on three classical lines of organization theory research – socio-technical systems, buffering and boundary spanning of the technical core, and structural contingency theory – to illustrate some of the common threads among these chapters and to highlight additional issues of relevance to managing the impact of technology. Before we begin to explore how these organization theory classics might inform our thinking on issues of technology, let us take stock of where we are by briefly recapping the central message of the preceding chapters, as each relates to organizational design and structure.

12 13

PREVIOUS CHAPTERS IN THIS VOLUME

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

In the opening chapter, Cascio explores virtual work arrangements, the technology that enables such work arrangements, and the associated organizational structural changes. He suggests that the emergence of virtual teams and “teleworking” provides for the opportunity to study flat, flexible and boundary-less organizational forms. These “organic” structures have been shown to be more effective in coping with environmental turbulence than traditional bureaucratic forms. In this sense, virtual organizations provide us with a promising field to examine the processes through which organizations can create alternative structural and adaptive mechanisms. Next, Gueutal suggests that information technology has provided employees with “self-service” alternatives for many of the functions performed by HR professionals, thus streamlining – and circumventing – traditional HR processes, with the goal of improving employee efficiency. His perspective is consistent with Thompson’s (1967) view of managerial control as performing a mediating role between the organization’s technical core and environmental fluctuations. However, the technological evolution Gueutal describes, which destroys barriers between employers, potential employees, and the HR technical core, also places some traditional HRM practices in peril. In the third chapter, Stone, Stone-Romero, and Lukaszewski propose that human resource information technology (HRIT) can facilitate achieving HRM goals. However, the utilization of IT in HR processes is likely to result in both functional and dysfunctional consequences for the organization and its members. In view of this, they call for a socio-technical systems (STS) approach to designing effective HR systems. The STS perspective suggests that system designers should jointly optimize the relationship between social and technical subsystems. Such an approach may shed light on the effective application of IT in HR process.

4260 Ch08 4/12/02 11:12 am Page 189

Back to the Future 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

189

Technological advances have not only contributed to altering the boundary conditions of organizations, but have also dramatically transformed their internal learning landscapes. Such is the case of distance learning in organizations, discussed by Kosarzycki, Salas, DeRouin and Fiore. Distance learning provides organizations with the ability to be more responsive and adaptive to changing market conditions, by encouraging decentralized knowledge, horizontal communications, and the continued adjustment and enrichment of individual tasks. Therefore, technology becomes an integral part of the HR system designed to train and support a highly skilled and flexible workforce. The authors also note that, although “e-learning” has been shown to have a positive impact on the training process, it is not for every organization. How “e-learning” can enhance the organization will depend on contingent factors such as organizational size, type of knowledge, strategy, product complexity and life cycle. The authors suggest that a blended learning solution, which includes e-learning, instructorled training, and teamwork, will be better suited for developing positive social network behavior. This fact demonstrates the importance of compatibility of technology and human functions in order to maximize the effectiveness of HR systems. Cardy and Miller continue the discussion by suggesting that new technologies exert strong forces on organizational environments, which necessitate strong organizational responses. They describe how new technologies have fundamentally altered both the content and process of work. Organizations may adapt to these changes by altering their boundaries to incorporate sources of uncertainty through team structures, empowerment, and virtual connections. Their reasoning suggests that structural adaptations are necessary to cope with environmental uncertainty, and ultimately, to attain organizational goals. In the sixth paper, Johnson and Isenhour explore the influence of virtual organizations on HRM practices, and the role of HR professionals. Advances in IT enable virtual organizations to cope with high-velocity environmental changes. These new organizations are characterized as dynamic networks with flat hierarchies, project-based departmentalization, a broad division of labor, and a horizontal distribution of power. Thus, they exhibit flexible, organic structures that extend beyond traditional organizational boundaries. The emergence of virtual organizations provides a promising avenue for both organizational theorists and HR professionals, searching for the effective organizational structures to adapt to environmental changes. Finally, the implementation of new technology is investigated by Dulebohn, who raises concerns regarding the disparity between technological advances and employee motivations and capabilities. He proposes that organizations cannot realize the full benefits of adopting new technology if the proper HR systems 189

4260 Ch08 4/12/02 11:12 am Page 190

190 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

MARSHALL SCHMINKE AND JIE G. MCCARDLE

are not in place. Dulebohn notes that organizational structure can influence employees’ perceptions of procedural and distributive justice. Specifically, organic structures may lead individuals to focus on outcomes as an indicator of fairness (Ambrose & Schminke, 2000). Dulebohn’s study reveals that changes in technology may cause changes in organizational structures, which subsequently shift employee justice perceptions. Such changes necessitate alterations in other organizational elements like compensation. In all, our colleagues have done a commendable job in identifying key issues relating to technology and its role in HRM. The papers are diverse, thoughtful, and practical. They have identified the tremendous potential that technology holds for enhancing HR systems. They also identify several challenges that need to be managed as technology plays a larger role in how managers and HR professionals pursue their responsibilities. Each of these chapters has recognized – either explicitly or implicitly – the role that organization structure plays as HR systems and new technologies interact. Thus, each of these chapters has recognized – either explicitly or implicitly – the potential contributions of organization theory in better understanding how to manage the interaction. The issues that have emerged throughout this volume are not new ones. The impact of technology on organizational systems and structure has been considered from a number of perspectives including change management (Shani & Sena, 1994), logistics (Bowersox & Daugherty, 1995), innovation (Teece, 1996), organizational design (Beekun, 2001), manufacturing (Chapman & Schminke, 1986), and product development (Cusumano & Nobeoka, 1992). However, the fact that these issues are not new to organizations does not imply that they are not new, troublesome, or important to those entrusted with creating and maintaining the HR systems within organizations. To the contrary, they are all three. Fortunately, we may draw on the rich history of organization theory as we attempt to provide a framework to better understand the role of technology in today’s organizations. What remains to be done is to integrate these issues, concerns, and ideas into a framework that might guide the work of HR researchers and practitioners alike. It is on this foundation that we now enter the fray. We begin by exploring more deeply the meaning of technology and how it relates to our concept of structure.

34 35

TECHNOLOGY AND ORGANIZATION STRUCTURE

36 37

Conceptualization of Technology

38 39 40

Consistent with other work in the field of technology research, our colleagues in this volume have adopted diverse conceptualizations of technology. For

4260 Ch08 4/12/02 11:12 am Page 191

Back to the Future 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

191

instance, the technology discussed in the Cardy and Miller chapter ranges from mechanical and electrical tools to virtual connections among workers. Dulebohn adopts the definition of technology found in the Leavitt (1965) model representing the “direct problem solving inventions like work measurement techniques or computers used to complete work” (Leavitt, 1965, p. 1144). Stone et al. define human resource information technology (HRIT) as consisting of human resources information systems (HRIS) as well as a variety of other technological portals designed to disseminate knowledge and communicate organizational policies and practices. In the Johnson and Isenhour chapter, technologies, as a key enabler of virtual organizations, refer to the technologies and processes through which information is derived and products are produced. Together, these diverse conceptualizations of technology demonstrate the multifaceted nature of technology, the pluralism of current knowledge about technology, and its impact on organizations. Roberts and Grabowski (1996) note that research on technology has often adopted distinct, and sometimes contradictory, definitions. In an attempt to integrate different views on technology, Collins, Hage and Hull (1986) suggest that technology systems consist of three distinct types of technologies: mechanical, human, and knowledge. They note that “mechanical technologies refer to the physical machines, tools and equipment used to produce goods and are featured in most approaches to technology. Human technologies consist of the skills and physical energy involved in producing goods and can be substituted for mechanical technologies. Knowledge technologies refer to the abstract meanings and concepts used in production” (Roberts & Grabowski, 1996, p. 411). A common theme among the definitions of technology presented in this volume is that no matter which facet of technology is viewed as a driver of organizational change, these changes do not occur in isolation. Rather, they must be coordinated with concomitant changes in organizational structure and HR management. As such, a comprehensive understanding of technology involves examining the process by which technology and structure interact to impact organizational design and HRM systems.

33 34

Relationship between Technology and Organization Structure

35 36 37 38 39 40

Weick (1990) argued that technology presents difficulties for organizations and organizational members because it is the source of three types of events: stochastic, continuous, and abstract. Stochastic events are those that result from unclear cause and effect relationships in the production process. They create “moving targets for learning” (Roberts & Grabowski, 1996, p. 412) because 191

4260 Ch08 4/12/02 11:12 am Page 192

192 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

MARSHALL SCHMINKE AND JIE G. MCCARDLE

technological change often occurs more rapidly than people can change. Further, because such stochastic events are often non-recurring events, learning how to cope with them is both difficult and unlikely. Continuous events may also be a source of problems. In continuous production systems, different skills are required than in production systems characterized by discontinuous events. Because of the interdependencies involved in continuous systems, and thus, the high potential cost of failure or breakdown in any one of the interdependent subsystems, managerial attention may be focused more strongly on the work process (and the reliability of that process) than on the people involved in that process (Roberts & Grabowski, 1996). Finally, technology may also be a source of abstract events. That is, technological innovation has meant that much work that previously was performed by people, in an open and understandable process, has now “disappeared” into machines. Managers and workers alike must now be able to envision that “invisible” production process, and this process involves utilizing increased levels of imagination, integration, problem solving, and inference (Roberts & Grabowski, 1996). To deal with these challenges created by new technologies, relational and cultural views of structure and technology have emerged (cf. Monge & Eisenberg, 1987), which consider organizations as networks of systems, people, and groups. These integrated views argue that, in such a social network, individuals enact new structures by forging and maintaining communication linkages. At the same time, constraints imposed by an existing structure limit and shape the interactions of individuals due to extant roles and status. Thus, structure is seen “as a complex medium of control which is continually produced and re-created in interaction and yet shapes that interactions” (Roberts & Grabowski, 1996, p. 416). In other words, technology and structure are both processes and products of human action and interaction within the organization. Such a theme appears in the articles in this volume. For instance, Johnson and Isenhour explicitly point out that technology does not necessarily enforce organizational changes. Rather, the manner in which it is appropriated within the organization does. They make the interesting observation that changes in organizational structure, strategy, and management practices, enabled and necessitated by advances in IT, can facilitate future IT innovations. Likewise, Dulebohn’s study demonstrates the importance of concurrent consideration of changes in organizational design with the implementation of new technology, and implies a reciprocal influence among relevant organizational elements. We contend that issues like these have important implications for both research in, and the practice of, HRM in an era of new technology. HR management has its roots in the bureaucratic model of Weber (1947), and thus often

4260 Ch08 4/12/02 11:12 am Page 193

Back to the Future 1 2 3 4 5 6 7 8 9 10 11 12

193

invokes a closed system approach to organizing. However, technological advances, and the application of new technology in organizations, are changing the context in which HRM is operating. Consequently, the integration of technology to HR practices has exposed HRM directly to an open system context. Thus, the answer to the question of how traditional HRM systems might adapt to the changing environment imposed by technology may lie in open systems theories of technology and structure. Such approaches have observed that technology is one of the determining elements affecting workforce behavior. Misalignment among the technical, social, and structural forces may impede the effective implementation of technologies. In the following sections we draw from three classic perspectives on organizational theories of technology and structure to explore these relationships.

13 14 15

THREE CLASSIC PERSPECTIVES FROM ORGANIZATION THEORY

16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Organization theorists have long wrestled with the question of how technology impacts organizations (e.g. Perrow, 1970; Woodward, 1965). Among these classic approaches, three seem especially germane to the issues facing HRM. One of these – socio-technical systems – has been referenced explicitly in two chapters (one by Stone, Stone-Romero, & Lukaszewski, and the other by Dulebohn) and the other two – Thompson’s (1967) conceptualization of buffers and boundary spanners, and the general framework known as structural contingency theory – have played an implicit role. Here we address each explicitly. In the following sections, we consider each of the perspectives in three stages. First, we summarize each approach and place it in some historical context (in a section titled Theoretical Background). Second, we tie each to specific HR examples raised in earlier chapters (Current Applications). Finally, we provide some direction for how each might further inform our thinking on key HR issues (Extensions and Further Considerations).

31 32

Socio-Technical Systems

33 34 35 36 37 38 39 40

Theoretical Background The socio-technical systems view of organizations (Emery & Trist, 1973; Fox, 1995; Trist, 1981) suggests that healthy organizational systems reflect a balance between social and technical constraints. It grew from the systems perspective on organizations (e.g. Blau, 1955; Gouldner, 1954; Selznick, 1957) as well as concurrent work that considered the interaction of the individual with the formal structure of the organization in which he or she works (cf. Argyris, 1957). 193

4260 Ch08 4/12/02 11:12 am Page 194

194 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

MARSHALL SCHMINKE AND JIE G. MCCARDLE

Subsequently, open systems approaches to organizing (Katz & Kahn, 1966; Thompson, 1967) also contributed to its evolution. In founding STS research, scholars at the Tavistock Institute reconsidered a prevailing assumption that the social side of production should play a subordinate role to technology when organizing work. That is, Emery, Trist and their colleagues suggested that both social and technical systems permeate organizations, and that the most effective means of managing both involved a joint optimization of the two. Although the prevailing wisdom of the 1950s suggested that top-down, hierarchical bureaucracy represented the optimal work structure, the STS approach endorsed the concepts of individual and work group autonomy and discretion (Scott, 1998). However, it is important not to confuse the STS framework with the “human relations” school of management thought (e.g. Mayo, 1945), which had gained significant traction by the middle of the 20th century. In fact, the human relations school was under fire in the 1950s for assuming that work technology and the mechanical and physical aspects of jobs were relatively unimportant compared to the social and psychological aspects of individuals performing the jobs (cf. Drucker, 1953). In fact, the Tavistock researchers bristled at such criticism, clearly explicating the distinctions between the STS and human relations approaches. They explicitly noted that their findings did not suggest that individual and group autonomy be maximized in all settings, nor did they suggest that the psychological needs being met were the need of workers for on-the-job friendships (Emery & Trist, 1973). Rather, they argued that the social side of STS involved a consideration of worker relationships related to task functioning and interdependence. Emery and Trist noted that as the system of interrelated worker roles “becomes more mature and integrated, it becomes easier for a worker to understand and appreciate his relation to the group” (1973, p. 218). They stated that friendships may emerge as a byproduct of these relationships, but friendships did not drive the relationships.

30 31 32 33 34 35 36 37 38 39 40

Current Applications Elsewhere in this volume, both Stone et al. and Dulebohn draw from the STS framework in exploring the impact of technology on HR systems. Stone et al. apply STS thinking to HR information technology (HRIT) systems by noting that the design of new systems should consider the following factors: (1) multiple stakeholders; (2) improvements needed in current systems; (3) flexibility in system design; (4) team implementation of system changes; and (5) regular team evaluation and improvement of the system. Based on previous research, they hypothesize that both increased effectiveness and increased internal customer satisfaction will result from an STS approach to HRIT.

4260 Ch08 4/12/02 11:12 am Page 195

Back to the Future 1 2 3 4 5 6 7 8 9

195

Dulebohn also argues in favor of an STS approach to HR systems design. In particular, he considers the role of STS in adapting compensation systems to redesigned jobs that result from new technology applications. His results are consistent with – but do not directly test – the STS principle that specific support systems like compensation must be matched with changes in work structure resulting from technology implementation efforts. In other words, an alignment between technology, work structure, and employee motivation is needed in order to achieve the potential benefits rendered by technological advances.

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Extensions and Further Considerations We suggest that the HR literature could benefit considerably from an integration and extension of efforts like these. That is, the Dulebohn study represents a fine beginning, offering a glimpse of the potential efficacy of STS considerations in implementing change frameworks. However, as is evident across all of the chapters in this volume, the impact of technology is felt in all aspects of HR systems. Compensation represents a reasonable starting point, but arguments similar to Dulebohn’s could be crafted for a variety of recruiting, selection, training, and performance management applications. Further, Stone et al. suggest that adopting an STS approach to such change frameworks – considering the needs of a broad set of stakeholders, focusing on program improvement and flexibility, and adopting a team-based implementation and evaluation system – could be beneficial as well. We agree. What would such a system look like? Consider the training function as an example. Recent research in training identifies four aspects of successful training programs: trainee characteristics, training design, transfer of trained skills, and evaluation issues (Wells & Schminke, 2001). An STS approach to training systems would require a ground-up rethinking of how the training process is structured, with an eye toward STS concerns at each stage. Here, we briefly consider each. Trainee characteristics. Tracey (1992) notes that to maximize training effectiveness and efficiency, trainees should be carefully selected. That is, training prerequisites can be established that are likely to net trainees for whom interventions will be most effective. In this case, those characteristics might include “Big Five” personality characteristics like openness to experience (Barrick & Mount, 1991) to be better equipped to cope with rapidly changing technology applications. Training design. Concerns with training design include assessing training needs, which may be accomplished by a variety of means including employee surveys, 195

4260 Ch08 4/12/02 11:12 am Page 196

196 1 2 3

MARSHALL SCHMINKE AND JIE G. MCCARDLE

advisory committees, assessment centers, management requests, exit interviews, and group discussions (Tracey, 1992). These techniques all lend themselves to Stone et al.’s suggestion for broad participation and team-based implementation.

4 5 6 7 8 9 10 11

Transfer of training. A third aspect of training effectiveness addresses the extent to which trainees can apply what they have learned concerning new technologies back on the job. For example, the importance of maximizing the similarity between the exercises, examples, and situations used in training and those on the job has been underscored in a number of studies (e.g. Skarlicki & Latham, 1996; 1997). Thus, a successful STS-based training program would involve usertechnology interfaces as similar as possible to those found on the job.

12 13 14 15 16 17 18 19 20 21 22

Evaluation of training. Finally, creating and maintaining effective training programs requires accurate information on the impact of training overall (Morrow, Jarrett & Rupinski, 1997; Phillips, 1997). Under STS considerations, this overall evaluation would, of necessity, include an assessment of the joint optimization of social and technical outcomes. Of course, training provides only one example of the potentially rich interface between STS thinking and HR systems. Such an approach could not only inform our thinking more deeply with respect to a myriad of other training concerns, but could also permeate recruiting, selection, and performance management domains as well.

23 24

Buffering and Boundary Spanning

25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Theoretical Background A second theoretical perspective that may serve to increase our understanding of the impact of technology on HR systems, and how to better manage it, is Thompson’s (1967) conceptualization of buffering and boundary spanning. Thompson defines the technical core of an organization as its core production process. He envisions the organization as a complex, open system that seeks to “remove as much uncertainty as possible from its technical core” (1967, p. 11). Organizations do so in two ways, through buffering and boundary spanning. Buffering involves protecting an organization’s technical core from uncertainty by surrounding it with components that absorb environmental fluctuations. Failing that, buffers may smooth input and output transactions with the core. Examples of such buffering include stockpiling of raw materials and supplies in irregular markets. However, buffering and smoothing activities cannot always succeed in protecting the technical core from environmental fluctuations. In such cases, an

4260 Ch08 4/12/02 11:12 am Page 197

Back to the Future 1 2 3 4 5 6 7 8 9 10 11

197

organization must employ other devices to protect its core technologies. Thus, an organization might employ boundary-spanning components, whose function is to confront the environment head-on, in an attempt to interact with it or alter it in such a way as to be less potentially harmful. Therefore, the problem facing organizational boundary-spanning units is to adjust to constraints and contingencies not controlled by the organization (Thompson, 1967). Examples of boundary-spanning activities include lobbying activities, in which a firm might solicit intervention from a governmental agency for more favorable operating regulations. Taken together, buffering and boundary spanning provide the organization with multiple mechanisms for coping with environmental and technological disruptions.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Current Applications Interestingly, Thompson (1967) explicitly includes labor considerations in his description of both buffering and boundary spanning components. In particular, he addresses these in terms of recruiting and training issues. Although the authors in this volume have not specifically invoked Thompson’s framework, many of their examples either reflect or are relevant to Thompson’s thoughts. For example, consider the image of virtual organizations presented by Johnson and Isenhour. These virtual organizations are characterized by nontraditional, transcendent boundaries and flexible partnerships. The lack of “hard” organizational boundaries suggests that an organization’s technical core would be at greater risk of penetration than in more traditional organizational forms in which organizational boundaries are able to provide buffering. When organizational boundaries are not clearly identifiable, or are easily malleable or permeable, it is not clear what buffering activities might look like, or whether they could be identified at all. As a result, boundary spanning activities are likely to provide the greatest opportunity for coping with environmental hazards. For example, Johnson and Isenhour describe the communities of practice in which professionals operate, sharing work and social connections. Such informal recruiting networks play an important boundary spanning role in a flexible work environment. However, as noted by several of our colleagues in this volume, more formal boundary spanning functions have arisen from new technologies, as well. For example, Johnson and Isenhour note the emergence of the Internet as a powerful recruiting medium. Under both virtual and traditional organizational conditions, the emergence of electronic recruiting practices represents a significant step forward in boundary spanning activities. Stone et al. echo this belief, noting that 100% of large organizations are expected to utilize Internet recruiting by the year 2003. Similarly, Gueutal describes the HR portal as the primary external 197

4260 Ch08 4/12/02 11:12 am Page 198

198 1 2 3 4

MARSHALL SCHMINKE AND JIE G. MCCARDLE

source for information about jobs and culture of a company, and notes that eRecruiting represents the fastest growing HR application. He argues that HR portals have become increasingly sophisticated, and increasingly effective at creating positive first impressions to potential applicants.

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Extensions and Further Considerations Our colleagues are correct in their assessment that these trends change the landscape of recruiting and hiring in fundamental ways, not only in technical and professional positions, but also for entry-level jobs. But these trends also create an interesting “technology paradox” for HR professionals. That is, the very boundary spanning technologies that enable HR departments to reach a large number of qualified potential employees accurately, globally, and inexpensively, allow their own employees to do so as well. It is true that the imperfect information transfer and strong internal labor markets of the “old economy” made it more difficult for employers to find and entice potential applicants. But it also made it more difficult for one’s own employees to access such information about other firms and other opportunities. Therefore, the increased boundary spanning activities of today’s organizations – virtual and otherwise – cut both ways. What organizations are able to gain from technological advances that benefit recruiting and selection activities, may well be lost on the retention and training side of the equation. On a related note, Gueutal and Stone et al. both reflect on the concept of HR branding, suggesting that the HR brand of a particular firm might provide significant competitive advantage as these more competitive labor markets emerge. Gueutal takes this even a step further, suggesting that such branding efforts might also pay dividends in retention activities, as well. Thus, branding may provide one way in which the technology paradox can be addressed. It is clear that new technologies and new organizational forms each contribute to a breaking down of traditional organizational boundaries and thus, traditional organizational labor markets. Thompson (1967) provides insight into why this might be true, but more importantly, he provides insights about how organizations might deal with it most effectively. From Thompson’s perspective, new technologies and organizational forms may conspire to limit a company’s ability to buffer its technical core from outside influences. In fact, in the virtual organization, the environment becomes part of the organization! Thus, as buffering gives way as an effective means of protecting the technical core, boundary spanning activities gain potential value. New technologies like the Internet hold much promise for spanning these (now hazy) boundaries. But managers and HR professionals alike must note that such spanning, by definition, is a two-edged sword.

4260 Ch08 4/12/02 11:12 am Page 199

Back to the Future 1

199

Structural Contingency Theory

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Theoretical Background Our final classic consideration of organization theory is that of structural contingency theory (SCT). Grounded in the work of Burns and Stalker (1961) and Woodward (1965), SCT grew from the then-revolutionary idea that a single most effective form of organizational structure might not exist. Previous organizational research had assumed that there was, indeed, “one best way” of organizing, and that it was up to organizational scientists to discover and refine that form to perfection (e.g. Weber’s (1947) concept of the ideal bureaucracy). However, early contingency theorists recognized that different organizational forms perform differentially well under different conditions. Although Lawrence and Lorsch (1967) are believed to have coined the term “contingency theory,” Donaldson (1996) credits Burns and Stalker (1961) with the “seminal statement that pioneered the contingency approach to structure” (1996, p. 59). Burns and Stalker differentiated between two forms of structure, organic and mechanistic. Organic structures are loose, flexible, and decentralized. Roles are loosely defined, knowledge is dispersed, workers are more highly trained to cope with uncertainty, and communication tends to be oral and horizontal. Mechanistic organizations are rigid and machinelike. Roles are tightly defined, procedures are formalized, rules abound, and control is centralized. Little horizontal communication exists (Donaldson, 1996). In a study of the electronics industry, Burns and Stalker (1961) theorized that mechanistic structures are, in the main, more efficient, and thus more effective in stable, predictable environments. Organic structures are less efficient, but any lack of technical efficiency is more than compensated for by the advantages they provide under turbulent environmental conditions. There, the flexibility and adaptability of the organizational form is more effective. Thus, Burns and Stalker proposed that environmental uncertainty provided a key contingency for determining structural effectiveness. Under predictable environmental conditions, mechanistic structures dominate, whereas unpredictable environmental conditions require organic structures. Woodward (1965) extended the consideration of potential contingencies to include internal uncertainties in the form of production technology. That is, internal operating systems also create greater or lesser degrees of uncertainty, and organic structures seem to be more effective in coping with that internallygenerated uncertainty as well. Later studies expanded the list of potential contingencies to include factors such as size (e.g. Pugh, Hickson, Hinings & Turner, 1968), strategy (e.g. Chandler, 1962), and product life cycle (Donaldson, 1985). Today, the central theme of SCT is that increased operating uncertainty 199

4260 Ch08 4/12/02 11:12 am Page 200

200 1 2 3 4 5 6 7 8

MARSHALL SCHMINKE AND JIE G. MCCARDLE

– whether emanating from internal (technology) or external (environment) sources – requires a more flexible, adaptive, organic organization structure. It is also well understood that structural considerations play a role at the departmental as well as organizational level (Perrow, 1970). That is, within a single organization, multiple structures may exist. Departments that operate under higher uncertainty conditions may exhibit more organic characteristics than those operating under more predictable conditions. For clarity, however, we will simply refer to organizational structures in the discussion that follows.

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Current Applications Each chapter in this volume has made implicit reference to structural contingency considerations. Note Cascio’s image of virtual organizations as temporary collaborations, as organizational “tents” rather than “palaces,” which may be dissembled, moved, and reassembled on short order. He describes membership in these organizations as fluid, enabling swift responses. He notes the role of decentralized control – and the potential hazards of centralization – in such structures. Without using the term explicitly, Cascio is describing organic structures. Likewise, Cardy and Miller describe the uncertainties that new technologies may bring to a workplace. Shorter completion times, for example, require a change in the nature of work, including more direct and interactive involvement with computer systems, more interaction and integration among various production functions, and more informal communication and collaboration. They note that change requires constant training and skills improvements for newly-empowered employees, with parallel improvements in communication capabilities for these more highly trained individuals. Consistent with SCT, Cardy and Miller thus describe a movement toward more organic organization structures to cope with emerging high-velocity environments. They note that technology may facilitate freer communication, which, in turn, facilitates the decentralization that is characteristic of organic structures. Similarly, they describe companies abandoning narrow job descriptions in favor of broad cross training, implying less specialized jobs that are also characteristic of organic structures. Throughout their chapter, Cardy and Miller illustrate the many ways in which technology can and does influence work processes, communication, and so on. They do so by noting fundamental alterations in the structural foundation of firms, in ways that are consistent with SCT. Kosarzycki et al. also present an image of structural adaptation consistent with SCT. They describe the trends driving distance learning as including a shift toward a knowledge-based economy, increasing speed of technological change, more highly competitive global markets, increased product complexity,

4260 Ch08 4/12/02 11:12 am Page 201

Back to the Future 1 2 3 4 5 6 7 8 9 10 11 12

201

and shorter product life cycles. All of these trends give rise to increasing organizational uncertainty, which should be met by increasingly organic structural adaptations. Such organic adjustments are one of the positive (albeit potentially unplanned) outcomes of distance learning initiatives. Kosarzycki et al. describe the resulting workforce, which is more flexible and exhibits increased interaction, collaboration, and horizontal communication. These authors are not alone. Each chapter in this volume raises the specter of rapidly changing technologies, rapidly changing environments, and the implication that organizations must adapt to meet these challenges. And each of these authors is correct. We suggest that SCT can provide such a blueprint for adapting organizational structures to shifts in both environments and technologies, and can do so in a thoughtful, efficient way.

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Extensions and Further Considerations Of all of the papers in this volume, the Stone et al. chapter may provide the most generally applicable link between SCT and HRM. They note that a critical goal of HR systems is to maintain the organization’s ability to adapt to a constantly changing environment. This is a vital insight, and SCT provides a concrete means to address it. That is, the appropriate structural response to increased environmental turbulence is a more organic structure. Of course, doing so requires an ability on the part of the HR professional to distinguish between organic and mechanistic structures and the specific dimensions on which they differ, and to identify the HR processes and policies that are congruent with the different structural dimensions. Suppose a biologist is walking the Australian outback, and stumbles upon a previously unrecognized animal. One of the first tasks she might undertake in her report would be to classify the animal as a mammal, reptile, amphibian, et cetera. Doing so requires considering how it looks, functions, or behaves on a number of dimensions. Does it have fur or feathers? Is it warm-blooded or cold-blooded? Does it have teeth? Does it bear live young or lay eggs? As answers to these questions emerge, so does the image of which group it belongs to. For example, warm-blooded animals with fur and teeth that bear live young are, in the main, mammals, even in Australia. So, too, with organizational structures: role specialization, task standardization, power centralization, rules formalization, flexibility of communication. All of these are dimensions on which structures may be evaluated. Whether an organization is high or low on these dimensions provides answers to the organizational scholar that mirror the biologist’s “warm-blooded or cold?” inquiries. Decentralized organizations with flexible, horizontal communication and low levels of specialization, standardization, and formalization are, by definition, organic. 201

4260 Ch08 4/12/02 11:12 am Page 202

202 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

MARSHALL SCHMINKE AND JIE G. MCCARDLE

Quality instruments exist that allow organizational researchers to evaluate the degree to which an organization reflects organic or mechanistic tendencies. These range from relatively brief and general instruments that assess the overall structural “gestalt” toward an organic or mechanistic style (e.g. Khandwalla, 1976/1977), to instruments designed to tap specific structural dimensions like formalization (e.g. Pugh et al., 1968), to even more detailed instruments able to assess subscales of structural dimensions, such as centralization’s subcomponents of participation in decision making and hierarchy authority (Hage & Aiken, 1969). Armed with accurate assessments of the extant organizational structure, HR managers wishing to respond to increasingly turbulent environments and rapidly changing technologies are faced with two tasks. The first might be termed a static application of SCT. That is, under current (static) conditions, what do our current contingencies say about our appropriate organizational form? Are our environments and technologies stable and predictable, or unstable and turbulent? If it is the former, we should be taking advantage of the efficiencies offered by a mechanistic structure. But if not, we should seek the flexibility of an organic structure. A “gap analysis” of the difference between one’s current structure and one’s desired structure will reveal opportunities to alter the structure so as to create a better fit with environmental and technical contingencies, as well as a better fit between the organization and its people. Once the “static” portion of the task has been successfully completed, the HR manager is faced with a second, possibly more daunting, task: the dynamic application of SCT. Here, the consideration shifts from what is (the current, static state of the environment and technology) to what may be (the dynamic, or changing state of the environment or technology). New strategic initiatives typically involve movements into new (less well understood) markets or product lines and thus, more uncertain environments. They may involve adopting new (less well understood) and thus, more uncertain production or communication technologies. Such strategic shifts imply significant shifts in the contingencies facing the organization. And shifting contingencies require parallel shifts in structure so as to ensure what Donaldson (1995) refers to as “fit” between an organization’s structure and the contingencies it faces. This structural adaptation to regain fit (SARFIT) model lies at the heart of practical application of SCT concepts. Change in a contingency variable thus moves an organization out of fit and into misfit, a state of disequilibrium that may harm performance. The organization then adapts its structure – through shifts in formalization, centralization, specialization, and so on – to regain fit, equilibrium, and a return to higher performance.

4260 Ch08 4/12/02 11:12 am Page 203

Back to the Future 1 2 3 4 5 6 7

203

Especially germane to our discussion here is the role of technology in determining appropriate structure. Note, however, that in this context technology is not limited solely to internal production systems. Rather, it plays both an internal role (e.g. communication and production system changes) and, as we noted above in our examples dealing with recruiting, an external one as well. Thus, it represents a doubly important contingency consideration for HRM professionals.

8 9

CONCLUSION

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

In their section titled “Implications for HRM Research and Practice” Cardy and Miller get it exactly right as they note that technology has – and will continue to – fundamentally influence the nature of work, both in content and process. They state unequivocally that in order to remain of value to organizations, HRM professionals must recognize the changed environment and adapt their organizations to this new reality. Failing to do so, they state, risks the relevance and very survival of the HR profession. We agree. Further, we believe that HR scholars and practitioners need not enter this conflict empty-handed. The field of organization theory offers innumerable insights and guidelines for managing such revolutionary change. This chapter has highlighted three classic approaches. They represent powerful tools that are the result of years of research and practice. We encourage HR scholars and practitioners alike to take a second look at the benefits and insights they might provide the field.

25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

REFERENCES Ambrose, M. L, & Schminke, M. (2000). Are flexible organizations the death knell for the future of procedural justice? In: R. Cropanzano (Ed.), Justice in the Workplace (pp. 229–244). Mahwah, NJ: Lawrence Erlbaum Associates, Inc. Argyris, C. (1957). The individual and the organization: Some problems in mutual adjustment. Administrative Science Quarterly, 2, 1–24. Barrick, M. R., & Mount, M. K. (1991). The big five personality dimensions and job performance: A meta-analysis. Personnel Psychology, 44, 1–26. Beekun, R. (2001). Organization structure from a loose coupling perspective: A multidimensional approach. Decision Sciences, 32, 227–250. Blau, P. (1955). The dynamics of bureaucracy. Chicago: University of Chicago Press. Bowersox, D. J., & Daugherty, P. J. (1995). Logistics paradigms: The impact of information technology. Journal of Business Logistics, 16, 65–80. Burns, T., & Stalker, G. M. (1961). The management of innovation. London: Tavistock. Chandler, A. D. (1992). Strategy and structure: Chapters in the history of the industrial enterprise. Cambridge: MIT Press.

203

4260 Ch08 4/12/02 11:12 am Page 204

204 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

MARSHALL SCHMINKE AND JIE G. MCCARDLE

Chapman, S., & Schminke, M. (1986). Toward a theoretical understanding of just-in-time manufacturing. Operations Management Review, 4, 32–36. Collins, P. D., Hage, J., & Hull, F. (1986). A framework for analyzing technical systems in complex organizations. In: Research in the Sociology of Organizations (Vol. 6, pp. 81–100). Greenwich, CT: JAI Press. Cusumano, M. A., & Nobeoka, K. (1992). Strategy, structure and performance in product development: Observations from the auto industry. Research Policy, 21, 265–293. Donaldson, L. (1985). Organizational design and the life-cycles of products. Journal of Management Studies, 22, 25–37. Donaldson, L. (1995). American anti-management theories of organization. Cambridge: Cambridge University Press. Donaldson, L. (1996). The normal science of structural contingency theory. In: S. R. Clegg, C. Hardy & W. R. Nord (Eds), Handbook of Organization Studies (pp. 57–76). London: Sage. Drucker, P. F. (1953). The employee society. American Journal of Sociology, 58, 358–363. Emery, F. E., & Trist, E. L. (1973). Towards a social ecology. London: Plenum Press. Fox, W. M. (1995). Sociotechnical system principles and guidelines: Past and present. Journal of Applied Behavioral Science, 31, 91–105. Gouldner, A. (1954). Patterns of industrial bureaucracy. Glencoe, IL: Free Press. Hage, J., & Aiken, M. (1969). Routine technology, social structure, and organizational goals. Administrative Science Quarterly, 14, 366–376. Katz, D., & Kahn, R. L. (1966). The social psychology of organizations. New York: Wiley. Khandwalla, P. N. (1976/1977). Some top management styles, their context and performance. Organization and Administrative Sciences, 7, 21–51. Lawrence, P. R., & Lorsch, J. W. (1967). Organization and environment: Managing differentiation and integration. Boston: Division of Research, Graduate School of Business Administration, Harvard University. Leavitt, H. J. (1965). Applied organizational change in industry: Structural, technological, and humanistic approaches. In: J. G. March (Ed.), Handbook of Organizations (pp. 1144–1170). Chicago: Rand McNally. Mayo, E. (1945). The social problems of an industrial civilization. Boston: Graduate School of Business Administration, Harvard University. Monge, P. R., & Eisenberg, E. M. (1987). Emerging communication networks. In: F. Jablin, L. Putnam, K. H. Roberts & L. W. Porter (Eds), Handbook of Organizational Communications (pp. 304–342). Beverly Hills, CA: Sage. Morrow, C. C., Jarrett, M. Q., & Rupinski, M. T. (1997). An investigation of the effect and economic utility of corporate-wide training. Personnel Psychology, 50, 91–119. Perrow, C. (1970). Organizational analysis: A sociological approach. Belmont, CA: Wadsworth. Phillips, J. J. (1997). Handbook of training evaluation and measurement methods (3rd ed.). Houston, TX: Gulf. Pugh, D. S., Hickson, D. J., Hinings, C. R., & Turner, C. (1968). Dimensions of organizational structure. Administrative Science Quarterly, 13, 65–105. Roberts K. K., & Grabowski, M. (1996). Organizations, technology, and structuring. In: S. R. Clegg, C. Hardy & W. R. Nord (Eds), Handbook of Organization Studies (pp. 409–423). London, Thousand Oaks: Sage Publications. Scott, W. R. (1998). Organizations: Rational, natural, and open systems. Upper Saddle River, NJ: Prentice Hall. Selznick, P. (1957). Leadership in administration. New York: Harper & Row.

4260 Ch08 4/12/02 11:12 am Page 205

Back to the Future 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

205

Shani, A. B., & Sena, J. A. (1994). Information technology and the integration of change: Sociotechnical system approach. Journal of Applied Behavioral Science, 30, 247–270. Skarlicki, D. P., & Latham, G. P. (1996). Increasing citizenship behavior within a labor union: A test of organizational justice theory. Journal of Applied Psychology, 81, 161–169. Skarlicki, D. P., & Latham, G. P. (1997). Leadership training in organizational justice to increase citizenship behavior within a labor union: A replication. Personnel Psychology, 50, 617–633. Teece, D. J. (1996). Firm organization, industrial structure, and technological innovation. Journal of Economic Behavior and Organization, 31, 193–224. Thompson, J. D. (1967). Organizations in action. New York: McGraw-Hill. Tracey, W. R. (1992). Designing training and development systems (3rd ed.). New York: AMACOM. Trist, E. L. (1981). The evolution of sociotechnical systems as a conceptual framework and as an action research program. In: A. H. Van de Ven & W. F. Joyce (Eds), Perspectives in Organizational Design and Behavior (pp. 19–75). New York: Wiley-Interscience. Weber, M. (1947). The theory of social and economic organization. Glencoe, IL: Free Press. Weick, K. E. (1990). Technology as equivoque: sense-making in new technologies. In: P. S. Goodman & L. Sproull (Eds), Technology and Organizations. San Francisco: JosseyBass. Wells, D. L., & Schminke, M. (2001). Ethical development and human resources training: An integrative framework. Human Resource Management Review, 11, 135–158. Woodward, J. (1965). Industrial organization: Theory and practice. London: Oxford University Press.

20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

205