With the innovation of the latest advanced technologies which offer the potential to streamline many HR functions, businesses are making use of the information technology to design and deliver their HR practices. This trend is not surprising given the substantial benefits which can emerge from integrating information technology into HR function. The resent survey predicts that making use of the new technologies can reduce the HR transaction cost by 75% (Cedar, 2001).
There is no doubt that information changes our lifestyle to a large extent. On the other hand, Information technology has been cited as a critical driver of HR’s transition from a focus on administrative tasks to a focus on serving as a strategic business partner. This strategic role not only accumulates a valuable dimension to the HR function, but also changes the competencies that define the success of HR professionals. Through making an interview with 19 firms, the implication for the development of HR competencies and identify learning strategies that HR professionals can utilize to fulfill their changing roles and responsibilities is got (Bradford, 2006). Furthermore, The institution of Management and Administration (IOMA) found that 70% of companies claimed that technology improve the quality of HR service and 67% reported that E-HR has led to improvements in organizational efficiency (IOMA, 2002).
As the growth of information technology, most of the administrative function can be finished through advanced technology hosted by the enterprise and the other institute (Lawler and Mohrman, 2003). Up to now, most technology substitute the routine boring tasks, there is a chance for HR professionals to be a strategic partner (Brockbank, 1999; Ulrich, 1997). A lot of new expert in areas such as change management, strategic business partnership and employee advocacy is appearing (Ulrich, 1997).
Recently, some researcher use data collected through making a interviews with senior HR professionals from 19 Fortune 500 companies to testify the relationship between E-HR and the reshaping of the professional competence in HRM. The result shows that information has been identified as an impetus of HR’s transition to becoming a strategic business partner (Lawler and Mohrman, 2003). The research on E-HR has proved the function of E-HR from the perspective of the theoretic and in practice. More and more enterprises are inclined to adopt this new method to resolve and improving the management of enterprise. A practical implication can be draw from the analysis above. That is, an important implication of this competency shift is that as companies implement E-HR initiatives, they also will need to pay attention to how best to prepare HR staff for their new roles and responsibilities. The shift predicts utilizing development activities that provide HR professional with the competencies necessary to be successful in an E-HR environment. The key to creating the capacity for strategic application of the expertise is integrating two competency domains.
2.4 Review Literature on HRM Practices of SMEs
Human resource management practices have attracted much attention from many researchers and much past research has been done to investigate the topics relating to this research area. Especially with the growing importance of small and medium-sized enterprises (SMEs) in the economy, many issues about SMEs such as strategic management and human resource management have become increasingly important in the research. More and more researchers begin to not only pay attention to human resource management practices of large enterprises, but also attach enough importance to HRM practices of SMEs.
Brand and Bax (2002) did a research focusing on the growing importance of strategic human resource management (SHRM) for small and medium-sized enterprises (SMEs). They did this research upon the background that many small encounter serious human resource problems, while at the same time these human resource play a vital role in developing and sustaining their competitive advantages. In this research, the authors explored specific issues concerning small firms in HRM literature, and concluded that the available knowledge on human resource management in small firms is highly descriptive and fragmented. The findings of the research suggested that the strategic labour allocation process model (SLAP) should be applied as a tool to analyze human resource problems in SMEs, because this model focuses on the balance between the supply of and the demand for labour on a firm level. In the research, it was proved through the application of the SLAP model to produce two strategic scenarios for Dutch SMEs presently confronted with a tight labour market.
Kasturi et al (2006) did a research to investigate the relationship between HRM systems architecture and firm performance based on the evidence from SMEs in a developing country, because the authors believed that the effects of human resource management (HRM) on firm performance can be examined at the systems architecture (i.e. guiding principles or philosophy), the policy, or practices levels. In this research, the authors used a unique dataset of 44 small and medium-sized enterprises in Tamil Nadu city of India and them presented a regression analysis of the relationship between human resource management philosophies and measures of firm performance. It was found in the research that the attitude of the firm’s owner(s) towards its employees is a major determinant of the firm’s profitability, and on the other hand, the effect of human resource management philosophy on productivity is smaller, albeit still highly significant. Moreover, the findings of the research also suggested that at least for small and medium-sized enterprises (SMEs) in the developing countries, HRM systems architecture is the guiding principle that affects a firm’s performance.
Cassell et al (2002) reported on empirical work recently conducted about the use and effectiveness of human resource management practices in small and medium sized enterprises (SMEs). The authors did this research through a telephone survey conducted with 100 senior managers of SMEs to ascertain their use of a range of human resource practices and the extent to which they had found those practices successful or failed in aiding the achievement of their companies’ objectives. Besides this telephone survey, an additional in-depth interviews were also conducted by the authors with the senior managers from a further 22 SMEs. Moreover, a model is provided that identifies the key criteria that underlie the adoption of human resource management practices, and the implications of the model are discussed. The findings of the research indicated that there is considerable diversity amongst SMEs in relation to their use of human resource practice.
Wilkinson (1999) did a research to investigate human resource management practices of SMEs focusing on employment relations in SMEs. Although most of the HRM literature is based on large firms despite the growing significance now accorded to smaller firms, in this research the author explored employment relations in SMEs and argued that the existing literature tends to polarize into a “small is beautiful” or “bleak house” perspective. So this research examined some of the key issues in relation to employment relations in SMEs. The findings of the research showed that compared with the large enterprises, SMEs also have to face many problems involved with their employment relations, though the size of their enterprises and the scale of employees is relatively smaller.
Reid and Adams (2001) did a survey of practices within family and non-family firms, because small firms were generally neglected by the studies. Much of the literature relating to human resource management (HRM) has attempted to demonstrate that the “human resource” is the most valued asset in a company. Large companies have revolutionized their approach to the training and development of their personnel in order to maximize their “competitive edge”. Hotly debated is whether investment in good HRM is lined to commercial business. However, very little is known about HRM practices within a family business. This research describes the HRM practices of SMEs (both family and non-family businesses) in Northern Ireland. In this research, comparisons between the groups are made by authors and the findings of the research indicated that family businesses practices of human resource management are very different from their non-family counterparts. Implications forthe tra ning and development of these two groups question whether family businesses need to be treated as a “special case”.
Szamosi et al (2004) did a research to focus on developing an understanding and benchmarking, human resource management (HRM) issues in small and medium sized enterprises (SMEs) in South-Eastern Europe. The importance of SME’s in helping transition based economies develop is critical, but ar the same time the research indicates that the movement toward westernized business systems has a dramatic impact on the human resources within such businesses. Toward addressing this linkage, critical HRM issues related to work outcomes, measures of satisfaction, and managerial support were studies with a sample of nearly 300 employees from 21 SMEs in a country in South Eastern Europe (the Former Yugoslav Republic of Macedonia). The data suggested that SMEs are not currently giving their employees what they want from their job (e.g. career development, participation in decision making) and that women are treated differently than men creating an imbalance within the workforce. These findings of the research drawn from the data are very useful to recommend for SMEs on how to move forward as transition unfolds.