Human resource information systems

Transcription

1 The current issue and full text archive of this journal is available at Human resource information systems: a review and empirical analysis E.W.T. Ngai and F.K.T. Wat Department of Management and Marketing, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong Human resource information systems 297 Received 14 February 2004 Accepted 7 July 2004 Abstract Purpose To present a comprehensive literature review of human resource information systems (HRIS) and to report the results of a survey on the implementation of HRIS in Hong Kong. Design/methodology/approach A structured questionnaire was designed, pre-tested, modified, and used to capture data on a cross-section of HRIS users in Hong Kong. The questionnaire was pilot-tested by practicing HRIS consultants and by HR and MIS managers. Based on the feedback from the pilot-test, the questionnaire was modified and a final questionnaire was developed and mailed to companies in Hong Kong. Findings Most Hong Kong industries perceived that the greatest benefits to the implementation of HRIS were the quick response and access to information that it brought, and the greatest barrier was insufficient financial support. Moreover, there was a statistically significant difference between HRIS adopters and non-adopters, and between small, medium, and large companies, regarding some potential benefits and barriers to the implementation of HRIS. Research limitations/implications Further research should address the status of internet/ intranet-based HRIS. An internet/intranet-based HRIS will undoubtedly be of much more benefit than the traditional HRIS, but its adoption will pose some challenges to practitioners. Practical implications Provides some insights into the implementation of HRIS by Hong Kong companies, which should help HR practitioners acquire a better understanding of the current status, benefits, and barriers to the implementation of HRIS. Originality/value Little research has been done to address the perceived benefits and potential barriers to the implementation of HRIS. This study is timely and important in that it examines the current status of HRIS in Hong Kong. It also compares differences in perception between HRIS adopters and non-adopters as well as in the size of organizations in relation to the adoption of HRIS. Keywords Information systems, Human resource management, Hong Kong Paper type Research paper Introduction The human resource information system (HRIS) is the composite of databases, computer applications, and hardware and software necessary to collect/record, store, manage, deliver, present, and manipulate data for human resources (Broderick and Boudreau, 1992). HRIS has grown in popularity since the 1960s (Lederer, 1984). A survey conducted in 1998 (Ball, 2001) showed that 60 percent of Fortune 500 companies use the HRIS to support daily human resource management (HRM) operations. HRIS is The authors gratefully acknowledge the anonymous referees of an earlier version of this paper. In addition, they wish to thank all of the people who participated in the HRIS survey. Personnel Review Vol. 35 No. 3, 2006 pp q Emerald Group Publishing Limited DOI /

2 PR 35,3 298 now used not only for administrative purposes but also for strategic and business decision-making purposes (Broderick and Boudreau, 1992; Kossek et al., 1994; Kovach et al., 2002). The objectives of this study are: to present a literature review of HRIS research; to examine the status and extent to which industries in Hong Kong have adopted HRIS; to empirically investigate mainly the perceptions of HR professionals of the benefits and barriers to implementing HRIS in Hong Kong; and to study whether HRIS adopters and non-adopters differ in their perceptions of the benefits and barriers to implementing HRIS in small, medium, and large companies. In order to examine the status and extent to which Hong Kong industry has adopted HRIS, as well as to enable HR practitioners to have a better understanding of the benefits and barriers to implementing HRIS in Hong Kong, a postal survey of local HR practitioners was conducted. This paper presents the results of an empirical analysis of the implementation of HRIS among certain Hong Kong companies. The paper is organized as follows: first, a review the benefits and potential barriers to implementing HRIS and a report on previous empirical studies on HRIS; second, a description of the research methods; third, presentation and analysis of the survey data; and fourth, discussion and conclusion. Literature review Perceived benefits of HRIS Businesses are usually prepared to undertake changes provided that they see a competitive advantage to doing so. However, many companies have problems implementing new technologies, including HRIS, due to a lack of sufficient capital and skills. Therefore, companies are reluctant to implement HRIS unless they are convinced of the benefits that this would bring to their organizations. The common benefits of HRIS frequently cited in studies included improved accuracy, the provision of timely and quick access to information, and the saving of costs (Lederer, 1984; Tetz, 1973; Wille and Hammond, 1981). Lederer (1984) discussed why the accuracy and timeliness of HRIS is very important in terms of operating, controlling, and planning activities in HR. In addition, Kovach et al. (2002) listed several administrative and strategic advantages to using HRIS. Similarly, Beckers and Bsat (2002) pointed out at least five reasons why companies should use HRIS. These were that HRIS can: (1) increase competitiveness by improving HR operations; (2) produce a greater number and variety of HR-related reports; (3) shift the focus of HR from the processing of transactions to strategic HRM; (4) make employees part of HRIS; and (5) reengineer the entire HR function of companies. Broderick and Boudreau (1992) examined how HRIS can contribute to cost reductions, quality/customer satisfaction, and innovation. Sadri and Chatterjee (2003) stated that when the HRIS function was computerized, faster decision making can be carried out on the development, planning, and administration of HR because data can be much easier to store, update, classify, and analyze. In addition, they noted that HRIS can strengthen an organization s character.

3 Barriers to the implementation of HRIS Beckers and Bsat (2002) stated that the cost of setting up and maintaining a HRIS can be high, which is the major obstacle in the implementation of a HRIS. Similarly, Kovach and Cathcart (1999) pointed out that a lack of money and support from top management were the biggest barriers to achieving the full potential of HRIS. They further indicated that other challenges were a lack of HR knowledge by system designers and the lack of applications/solutions for HR users. A survey conducted by the Institute of Management and Administration (2002) indicated that the biggest problems or obstacles to managing a HRIS include:. the lack of staff; Human resource information systems 299. the lack of a budget;. problems with time management;. the need to work with other departments; and. the lack of information technology (IT) support. Empirical studies in HRIS A number of studies related to HRIS can be found in various HR magazines. However many of them are conceptual or non-empirical studies. Based on a comprehensive search of the literature, Table I summarizes, in a structured format, previous empirical studies that use either a qualitative or quantitative approach. The earliest empirical study we found was conducted by Mathys and LaVan (1982). They conducted a survey to examine stages in the development of HRIS. Nearly 40 per cent of the surveyed organizations did not have a computerized HRIS. Other survey results similarly revealed a relatively low implementation of HRIS (Murdick Schuster, 1983). Later, DeSanctis (1986) also surveyed the status of HRIS and assessed its operation and relationships to the management information system (MIS) function. Martinsons (1994) compared the degree and sophistication in the use of IT for HRM between Canada and Hong Kong. On the one hand, the use of HRIS was less widespread in Hong Kong than in Canada. However he indicated that IT for HRM was applied more in Hong Kong than in Canada. In a recent study, Ball (2001) conducted a survey of the use of HRIS in smaller organizations. Her study and others such as Martinsons (1994) showed that smaller organizations are less likely to use HRIS. It is noted that the majority of studies have focused on the status of the use of HRIS and on the HR applications/features that have been integrated as part of HRIS. Little research has been done to address the perceived benefits and potential barriers to the implementation of HRIS. This study is a timely and important one in that examines the current status of HRIS in Hong Kong. It also compares differences in perception between HRIS adopters and non-adopters as well as in the size of organizations in relation to the adoption of HRIS. Research methodology Considering the nature of this research, an empirical analysis was selected as the research method. A structured questionnaire was used to collect data. The questionnaire was pre-tested, modified, and used to capture data on a cross-section of HRIS users in Hong Kong. There were four parts to the questionnaire:

4 PR 35,3 300 Table I. Summary of empirical studies on HRIS Author(s) Location/target Sample size Method Purpose(s) Findings Smaller organizations are less likely to use HRIS Training and recruitment are used less frequently in HRIS HRIS are used for administrative ends rather than analytical ones Ball (2001) UK companies 115 Mail survey Reviews the issues surrounding the use of HRIS Profiles system usage in terms of information stored on personnel, training and recruitment, and information processing system used 23 HR activities were identified and grouped into seven major functions: (1) project management and control; (2) strategic planning, review, and analysis; (3) employee profile; (4) employee performance; (5) human resource development; (6) payroll and accounting; and (7) information systems outside the company. 3 Case study (interview) Aims to improve the understanding of HRIS in construction companies, which are potential users of the HRIS, and the purpose of the information and the type of data they seek from the system Establishes a conceptual framework to facilitate the integration of HRIS into construction companies Ng et al. (2001) Australian construction companies Strategic exchange processes are important in influencing the outcomes of the successful implementation of HRIS. Examines whether the individuals involved in developing the HRIS are enabled and constrained in their efforts by an organizational context that is consistently re-created by the actions of those individuals within that context 1 Case study interview with 10 HR and IT representatives US-owned transnational company Tansley and Watson (2000) 152 Mail survey Identifies the conditions for a successful HRIS The presence of an HRIS department or unit increases user satisfaction and system usage The larger the size of the IS units, the lower the usage levels User satisfaction is higher when HRIS supports more HRM applications System conditions such as training, documentation, the presence of online applications, the number of HRM applications, the ease of use, and the perceived usefulness of the system, are the most important factors for a successful HRIS (continued) Members of the Canadian Association of Human Resource Systems Professionals Haines and Petit (1997)

5 Author(s) Location/target Sample size Method Purpose(s) Findings All of the respondents have either begun or plan to design, develop, and implement a global HRIS to increase the effectiveness and efficiency of the system Some HR processes in HRIS includes payroll, succession planning, pension planning, employee benefits, etc. Lack of consistency across the company s locations is the major obstacle in assessing and operating the global HRIS. Other obstacles include data transfer, data security and integrity, and technical requirements The three most important factors in the development of a global HRIS are providing training for employees working with the HRIS, ensuring the relevance and accuracy of reports, and keeping up with changes in technology The support of HR and IS executives is key to the successful implementation of HRIS 11 Telephone survey Determines how US-based multinational corporations improve the flow of information to, from, and within the HR function US-based multinational corporations Hannon et al. (1996) Examines the uses and personnel applications of IT 73 per cent make use of an HRIS The use of an HRIS is significantly associated with the presence of a personnel director within the organization The use of IT by personnel specialists remains largely unfulfilled Mail survey; semi-structured interviews for case study Europe 231 (mail survey) 4 (case study) Kinnie and Arthurs (1996) 513 Survey Studies the current status of the HRIS The HRIS of 73.5 per cent of the companies is located within the HR department HR applications such as workforce planning, recruiting, workforce management, and compensation applications are widely used in the respondents companies either in a standalone manner or as part of the core HRIS Members of the Association of Human Resource Systems Professionals McLeod and DeSanctis (1995) The use of IT for HRM is more extensive and of greater sophistication in a more developed economy (Canada) The application rate for using IT for HRM is greater in a faster-developing economy (Hong Kong) Larger organizations make more use of IT for HRM than smaller ones Mail survey Benchmarks the use of IT for HRM activities in Canada and Hong Kong Identifies future priorities for HRIS enhancements in these two places Accounts for differences in HRIS between these two places Profiles exemplary HRIS practices in these two places Canada, Hong Kong 118 (Canada) 361 (Hong Kong) Martinsons (1994) Many personnel departments lag behind in terms of both planning for and implementing HRIS. 150 Survey Determines the extent to which HRIS is employed in the personnel function Companies from Moody s Industrials Manual and Moody s Financial Manual Murdick and Schuster (1983) 105 Mail survey Studies the current stage of development of the HRIS 40 per cent of organizations do not have an HRIS The use of HRIS for career planning and development was ranked lowest, while payroll and accounting was ranked highest Fortune 500 companies Mathys and LaVan (1982) Human resource information systems 301 Table I.

6 PR 35,3 302 (1) profiles of organizations; (2) application of HRIS; (3) perceptions of the barriers to the implementation of HRIS and perceptions of the benefits achievable through HRIS; and (4) profiles of the respondents. The questionnaire was pilot-tested by practicing HRIS consultants and by HR and MIS managers. Based on the feedback from the pilot-test, the questionnaire was modified and a final questionnaire was developed. Data collection As we did not know how many companies in Hong Kong had implemented HRIS, nor did we have a complete sampling frame of the population of all organizations in Hong Kong, a sample of 500 company addresses was drawn randomly from the 250 public companies quoted in the Hong Kong Stock Exchange and 250 other selected companies listed in the Business Directory of Hong Kong (2000). The questionnaire was mailed in 2001 with a cover letter and a self-addressed prepaid return envelope to facilitate the returning of the questionnaires. The target respondents were mainly practitioners in the above sampled organizations. Some measures were taken to avoid duplication in the selection of companies. The respondents were asked to complete and return the questionnaire with two weeks. Results and analysis Descriptive data Of the 500 questionnaires sent out, 147 were returned and used for the analysis. The overall response rate was 29 percent. A summary of the sample characteristics is presented in Tables II-V. Table II presents the profile of the organizations. Of the 147 responses received, 61 percent were from companies employing fewer than 500 people. About 38 percent of the companies had international operations. Table III shows the profile of the respondents. A majority of the respondents were HR practitioners (93 percent) and 55 percent of respondents were years old. Most of them had at least a post-secondary certificate, and about 32 percent had a bachelor s degree. This highlights the fact that our respondents were well educated. Approximately 78 percent of them had more than seven years of working experience. About 77 percent of the respondents used a computer daily during office hours in relation to HR activities. It seems that many organizations are increasingly using IT to carry out their HR activities. Table IV profiles HRIS usage. Eighty-three per cent of the respondents indicated that their organizations had a separate HR department/group/unit. About 71 percent of the companies had HRIS, of which more than half had implemented their HRIS more than five years ago. This indicates that more Hong Kong companies are likely to adopt HRIS when compared the survey conducted in 1992 (Martinsons, 1994). The respondents were asked to indicate the extent to which HRIS applications are used in their organizations. The results are shown in Table V. The first column shows the percentage of respondents whose companies used HRIS applications at the time of the study. The second column shows the percentage of respondents whose companies

7 Frequency Percentage Number of employees, ,000-5, , Total Organization s entire operation Local (Hong Kong) only Hong Kong and China International Total Industry type Health services Manufacturing Finance, banking, and business services Wholesale, retail, import, and export Government Transport, storage, and communication Hotel, restaurant, and tourism Education and training Construction Utilities Others Total Human resource information systems 303 Table II. Profile of the respondent organizations were currently planning and developing HRIS applications, and the last column shows the percentage of respondents whose companies had no plans to use and develop HRIS applications. The results indicate that the two major applications used in HRIS are providing general information (86.4 percent) and payroll services (84.7 percent). Perceived benefits through the adoption of HRIS Table VI shows the mean ratings of the benefits achievable through the adoption of HRIS. The perception of benefit was rated on a five-point scale, with 5 being a major benefit and 1 being not a benefit. Based on the responses, benefits with a mean rating are all greater than 3 on the five-point scale. As can be seen from Table VI, quick response and access to information had the highest mean score of This agrees with the opinion of some researchers, who also found that HRIS provides timely and quick access to information (Lederer, 1984; Tetz, 1973). In the present survey, the lowest mean score was achieved by enhancing competitiveness at Barriers to the adoption of HRIS The perception of barriers to the implementation of HRIS was investigated by asking respondents to rate each of the ten potential barriers shown in Table VII. Table VII

8 PR 35,3 304 Table III. Profile of the respondents Frequency Percentage Position HR/personnel/training vice president/director, etc HR/personnel/training manager/head, etc HR/personnel/training officer/executive, etc Others Total Age, Total % Education Secondary Post-secondary certificate/diploma Bachelor s degree Master s degree Others Total Working experience, 3 years years years years years Total Using computers related to HR during office hours Daily No more than several times every week No more than once every month Never use Total shows the mean ratings and the ranking of the potential barriers to the implementation of HRIS in Hong Kong. Perceptions of barriers were measured on a five-point rating scale with 5 being the greatest barrier and 1 being not a barrier. The greatest barrier to the adoption of HRIS was insufficient financial support. As can be seen from Table VII, the potential barrier expressed as insufficient financial support had the highest mean score (3.199). The potential barrier A lot of paperwork that is difficult to computerize had the lowest mean score (2.287). Differences between company size and perceived HRIS benefits and barriers Company size is typically measured by the number of employees in each company. There is no universally accepted definition of a small and medium-sized enterprise (SME). According to the US Small Business Administration (2002), a small business is

9 Frequency Percentage Has a separate HR department/group/unit Yes No Total Number of employees in the HR unit (for companies with a separate HR department/group/unit), Total Have adopted HRIS Yes No Total Plan to set up an HRIS (for companies that have not yet adopted HRIS) Yes No Total Number of years HRIS has been implemented,1 year years years years Total Set-up cost or the budget planned to set up HRIS Approximately HK$ Not sure No separate budget Total Human resource information systems 305 Table IV. Profiles of HRIS usage Type In use (%) Currently under planning and development (%) No plans (%) Corporate communication Recruitment Selection Training Employee opinion survey Compensation Payroll service Employment verification General information Table V. Usage of HRIS applications

10 PR 35,3 306 Table VI. Mean rating of the perceived benefits of the adoption of HRIS Benefits Mean a S.D. Ranking Quick response and access to information Improving data control Reducing data re-entry and data may be used immediately Streamlining HR processes Allowing for fewer errors Standardizing programmes and procedures Reducing paperwork Reducing manpower Tracking and controlling the different HR functions Helping to make more informed decisions Improving customer services Enhancing competitiveness Note: a the factors were measured on a five-point scale, with 1 ¼ not a benefit and 5 ¼ a major benefit Potential barriers Mean a S.D. Ranking Table VII. Mean rating of perceived barriers to the implementation of HRIS Insufficient financial support Lack of expertise(s) in IT Inadequate knowledge in implementing the system Lack of commitment from top managers No suitable HRIS or software Difficulty in changing the organization s culture Fearful of changing the way they do things Not perceived as an advantage at all Lack of commitment and involvement by all employees A lot of paper work that is difficult to computerize Note: a the factors were measured on a five-point scale, with 1 ¼ not a barrier and 5 ¼ the greatest barrier defined as a company that employs fewer than 500 employees. In Germany and the UK, a company that is comprised of employees is defined as a small-sized enterprise and one that has employees is defined as a medium-sized one (Lauder et al., 1994). In contrast, the Hong Kong government defines an SME as a company with fewer than 100 employees with regard to manufacturing enterprises; and one with fewer than 50 employees for other sectors (Trade and Industry Department, 2000). However, in this study, we define a small-sized enterprise as one that has 1-49 employees and a medium-sized one as one that has employees. A one-way analysis of variance (ANOVA) test was used to compare the means of the respondents perceived benefits and barriers to the implementation of HRIS and determine if there were any significant differences among small, medium, and large companies. Table VIII indicates that the size of a company is linked has some bearing

11 Significant Difference (Fisher s LSD) Large companies (mean) F value Medium companies (mean Small companies (mean) Benefits Quick response and access to information * Small, medium, large Improving data control Reducing data re-entry and data may be used immediately Streamlining HR processes Allowing for fewer errors * Small, medium, large Standardizing programmes and procedures Reducing paper work Reducing manpower Tracking and controlling the different HR functions Helping to make more informed decisions Improving customer services Enhancing competitiveness Potential barriers Insufficient financial support Lack of expertise(s) in IT Inadequate knowledge in implementing the system Lack of commitment from top managers * Large, small No suitable HRIS or software Difficulty in changing an organization s culture Fearful of changing the way they do things Not perceived as an advantage at all ** Large, small, medium Lack of commitment and involvement by all employees A lot of paper work that is difficult to computerize Notes: *p # 0:05; **p # 0:01 Human resource information systems 307 Table VIII. Significant differences according to company size

12 PR 35,3 308 on the perceived benefits and barriers to the implementation of HRIS. The ANOVA test showed that there was a significant difference of opinion depending on the size of the company on the following two aspects of the perceived benefits of HRIS: Quick response and access to information (F ¼ 4:016, p # 0:05) and Allowing for fewer errors (F ¼ 3:083, p # 0:05). To facilitate the interpretation of the solution, a multiple comparison analysis of mean differences based on a Fisher s LSD post hoc test was undertaken. The results of the post hoc test showed no significant difference between large and medium-sized companies, but significant differences between large and small companies, as well as between medium-sized and small companies. Since the mean values for large and medium-sized companies were larger than for small companies, this implies that, more than small companies, large and medium-sized companies believe that in implementing HRIS they can expect quick responses and access to information and fewer errors. A similar analysis of the potential barriers to the implementation of HRIS was conducted. The result showed that statistically significant differences across the three groups of companies for the following two perceived barriers: Lack of commitment from top managers (F ¼ 3:311, p # 0:05), and Not perceived as an advantage at all (F ¼ 5:318, p # 0:01). In both of the barriers, the mean rating of the small companies was larger than that of large and medium-sized companies. The Fisher s LSD post hoc test revealed a significant difference between small and large companies in Lack of commitment from top managers. There was also a significant difference in Not perceived as an advantage at all between small and large companies, and medium and large-sized companies. This also indicated that small companies were in greater agreement and were more concerned about these two barriers than large and medium-sized companies. Differences between HRIS adopters and non-adopters, and the perceived benefits and barriers to HRIS in companies of different sizes Since it was possible that the perceptions of the benefits and barriers of HRIS held by HRIS adopters and non-adapters, and by companies of different sizes would differ, an attempt was made to further analyze the phenomenon. In order to determine the relationship between company size and HRIS adoption, a Chi-square test was conducted. There were positive, statistically significant differences between the adoption of HRIS and company size (x 2 ¼ 52:987, p ¼ 0:000). This shows that large companies are more likely to adopt HRIS. The findings are consistent with those in the survey conducted by Ball (2001) and Martinsons (1994). Table IX provides the mean of the perceived benefits and potential barriers to the implementation of HRIS from HRIS adopters and non-adopters in companies of different sizes. An ANOVA test was used. It showed that there was no significant difference between the adopters and the three groups of companies. This indicates that regardless of size, all of the companies that had adopted HRIS have same perception of the benefits and barriers to doing so. By contrast, depending on the size of the company, non-adopters held significantly different perceptions with regard quick response and access to information (F ¼ 19:231, p # 0:001), improving data control (F ¼ 9:318, p # 0:01), reducing data-re-entry and data may be used immediately (F ¼ 14:183, p # 0:001), allowing fewer errors (F ¼ 7:028, p # 0:05), reducing paper work (F ¼ 6:451,

13 Significant difference (Fisher s LSD) Large (mean) F Medium (mean) Small (mean) Large (mean) F Medium (mean) Small (mean) Adopter Adopter Adopter value Non-adopter Non-adopter Non-adopter value Non-adopter Benefits Quick response and access to information *** Small, medium, large Improving data control ** Small, medium, large Reducing data re-entry and data may be used immediately *** Small, medium, large Streamlining HR processes Allowing for fewer errors * Small, medium, large Standardizing programmes and procedures Reducing paper work * Small, medium, large Reducing manpower Tracking and controlling the different HR functions * Small,large, medium Helping to make more informed decisions Improving customer services Enhancing competitiveness Potential barriers Insufficient financial support * Large, small, medium Lack of expertise(s) in IT Inadequate knowledge in implementing the system Lack of commitment from top managers No suitable HRIS or software Difficulty in changing an organization s culture Fearful of changing the way they do things Not perceived as an advantage at all Lack of commitment and involvement by all employees A lot of paper work that is difficult to computerize Notes: *p # 0:05; **p # 0:01; ***p # 0:001 Human resource information systems 309 Table IX. Significant differences according to HRIS adoption and company size

14 PR 35,3 310 p # 0:05), tracking and controlling the different HR functions (F ¼ 5:425, p # 0:05), and insufficient financial support (F ¼ 3:999, p # 0:05). The Fisher s LSD post hoc test was used to further identify which group in fact differed from the others. As the LSD post hoc test showed, non-adopters in large and medium-sized companies more than small companies perceived the major benefits of HRIS to be quick response and access to information, improving data control, reducing data-re-entry and data may be used immediately, allowing fewer errors, and reducing paperwork. Non-adopters in medium-sized companies, on the other hand, perceived greater benefits in terms of tracking and controlling the different HR functions than did small and large companies. Moreover, small and medium-sized companies who had never adopted HRIS perceived that they had insufficient financial support to be able to implement HRIS. In order to determine whether there were significant differences between HRIS adopters and non-adopters, independent sample t-tests were conducted. In the independent sample t-test, a comparison was made of the benefits and barriers as perceived by adopters and non-adopters. Table X shows the mean for each group and the t-value for a test of the difference between these two groups. The results showed that there were no significant differences between adopters and non-adopters in the Adopters (mean) Non-adopters (mean) t-value Table X. Significant differences according to HRIS adoption Benefits Quick response and access to information Improving data control Reducing data re-entry and data may be used immediately Streamlining HR processes Allowing for fewer errors Standardizing programmes and procedures Reducing paper work Reducing manpower Tracking and controlling the different HR functions Helping to make more informed decisions Improving customer services Enhancing competitiveness Potential barriers Insufficient financial support Lack of expertise(s) in IT Inadequate knowledge in implementing the system * Lack of commitment from top managers ** No suitable HRIS or software Difficulty in changing the organization s culture * Fearful of changing the way they do things Not perceived as an advantage at all *** Lack of commitment and involvement by all employees A lot of paper work that is difficult to computerize Notes: *p # 0:05; **p # 0:01; ***p # 0:001

15 perceived benefits of HRIS. Nearly all of the mean ratings of the perceptions of HRIS adopters of the implementation of HRIS are lower than that of non-adopters. It seems that HRIS adopters perceive those barriers to be easier to overcome than HRIS non-adopters. The reasons may be that they have experienced the successful implementation of the HRIS. The results of the t-tests show statistical differences in mean rating between HRIS adopters and non-adopters for four of the 11 potential barriers to the implementation of HRIS. These four barriers are Inadequate knowledge in implementing the system, Lack of commitment from top managers, Difficulty in changing the organization s culture, and Not perceived as an advantage at all. In all four barriers, the mean rating of the non-adopters was larger than that of the adopters. This implies that HRIS non-adopters tend to perceive these barriers to be greater than HRIS adopters. Human resource information systems 311 Discussion and conclusions This paper has presented a survey analysis of the application and implementation of HRIS in Hong Kong. This study had several objectives. The first was to present a review of research on HRIS. An extensive literature search was conducted from which highly relevant of HRIS studies were identified and summarized as shown in Table I. The second objective was to examine the current use and applications of HRIS. Eighty-three per cent of the respondents indicated that their organizations had a separate HR unit, and the majority of the sample organizations had less than five members of staff employed in the HR unit. Thirty per cent of the respondents indicated that their company had spent approximately HK$300,695 per year to set up the HRIS in their organizations. This reflects the fact that the cost of adopting, operating, and maintaining the HRIS is relatively high. On average, 86 percent of the HRIS that are used or developed are for payroll services and general information. Perhaps it is not surprising that, as with previous studies, the areas to which HRIS are applied are for the automation of various HRM activities rather than for decision-support (Ball, 2001; Kovach and Cathcart, 1999). However, HRIS is not only designed to automate HRM activities to gain administrative advantages; rather, it can also be used for decision making to provide strategic advantages for companies (Kovach et al., 2002). Companies currently using or planning to adopt HRIS should pay attention to this area in order to obtain the full benefits of HRIS. The third purpose of the study was to identify the benefits that are perceived to be achievable through HRIS and the perceived barriers to the implementation of HRIS. Based on the empirical results, the major benefit of HRIS is its quick response and the access it provides to information. York s survey in Wille and Hammond (1981) showed similar results, with improved timeliness of information ranked first in importance. A quick response is extremely important for employees, as rapid access to data makes it possible to finish tasks much more quickly. The greatest barrier to the implementation of HRIS is insufficient financial support. Although this empirical study demonstrates the concrete benefits of using HRIS, many companies face a lack of money to design and develop HRIS (Beckers and Bsat, 2002; Patterson, 2002). One of the possible explanations for this is the high cost of HRIS. In order to promote the smooth adoption of HRIS operations, it is necessary to first ensure that bankers are willing to give their support to a company that intends to set up a HRIS.

16 PR 35,3 312 The fourth objective of the study was to compare differences between HRIS adopters and non-adopters; and between small, medium, and large-sized companies on the perceived benefits and barriers to the implementation of HRIS. This study found no significant differences between HRIS adopters and non-adopters on the perceived benefits of implementing HRIS. In addition, the perception of HRIS adopters did not vary significantly by company size. However, some perceived benefits did vary significantly by company size. The statistical significance of Quick response and access to information and Allowing for fewer errors differed with the size of the company. Respondents from large and medium-sized companies perceived Quick response and access to information and Allowing for fewer errors as greater benefits than small companies when implementing HRIS. This reflects the fact that large and medium-sized companies have more resources to implement HRIS to a greater degree than smaller companies. They will obtain more advantages from implementing a HRIS. Interestingly, the perception of barriers related to Lack of commitment from top managers, and Not perceived as an advantage at all both differed significantly with the size of the company and between HRIS adopters and non-adopters. Small companies and HRIS non-adopters were more concerned that these two barriers would restrict them from adopting HRIS than medium and large-sized companies, and HRIS adopters. These differences indicate that the top management in small companies and HRIS non-adopters do not fully understand the benefits of implementing HRIS; therefore they may enjoy fewer benefits from the system. In fact, the size of a company may have an impact on the achievement of a number of benefits and on the obstacles faced when implementing HRIS. Large companies have well-established facilities such as intranets and extranets to access the required personnel information quickly and efficiently. Small companies generally lack the capital and technical resources to implement HRIS. A more feasible way to start may be to use prepackaged HRIS software. In order to purchase the most appropriate package, it is necessary to communicate with vendors and compare different packages to find the one that best fits the requirements of a company. Lack of commitment from top managers was the most frequently cited barrier to implementation in small companies and non-adopters. The support of top management is one of the most important factors in the successful implementation of HRIS (Kovach and Cathcart, 1999). Top management takes primary responsibility for providing sufficient financial support and adequate resources for building a successful HRIS. The lack of financial support and adequate resources will inevitably lead to failure. It is not surprising that there is a significant difference between small companies and non-adopters and large companies and adopters concerning the lack of top management commitment. A comprehensive HRIS requires a sizeable budget to implement and maintain. If top managements do not understand how the HRIS bring the benefits to the company, they will not be willing to allocate valuable resources to the effort of implementation. Further promotional efforts as well as an action plan to demonstrate the concrete advantages of using HRIS are necessary if top management is to become aware of the benefits that can be achieved from implementing HRIS. This study provides some insights into the implementation of HRIS by Hong Kong companies, which should help HR practitioners acquire a better understanding of the current status, benefits, and barriers to the implementation of HRIS. Further research

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18 PR 35,3 314 Patterson, S. (2002), Lack of money, staff and time: toughest part of managing HRIS, Human Resource Department Management Report, Vol. 2 No. 12, pp Sadri, J. and Chatterjee, V. (2003), Building organisational character through HRIS, International Journal of Human Resources Development and Management, Vol. 3 No. 1, pp Tansley, C. and Watson, T. (2000), Strategic exchange in the development of human resource information systems (HRIS), New Technology, Work and Employment, Vol. 15 No. 2, pp Tetz, F.F. (1973), Evaluating computer-based human resource information systems: costs vs benefits, Personnel Journal, Vol. 52, pp Trade and Industry Department (2000), SMEs in Hong Kong, available at: hk/smeop/english/smehk.cfm US Small Business Administration (2002), What is a small business?, US Small Business Administration, Charlotte, NC, available at: ID=24 Wille, E. and Hammond, V. (1981), The Computer in Personnel Work, Institute of Personnel Management, London. About the authors Dr Eric W.T. Ngai is currently an Associate Professor in the Department of Management and Marketing at The Hong Kong Polytechnic University. His research interests are in the areas of e-commerce, decision support systems, human resource information systems, supply chain systems and knowledge management systems. Eric W.T. Ngai is the corresponding author and can be contacted at: mswtngai@polyu.edu.hk Mr Francis K.T. Wat is currently a Research Associate in the Department of Management and Marketing at The Hong Kong Polytechnic University. He was awarded the degrees of BSc (Hons) and MPhil from The Hong Kong Polytechnic University. His current research interests are in the areas of management information systems, e-commerce, and fuzzy systems. To purchase reprints of this article please reprints@emeraldinsight.com Or visit our web site for further details: