e-HRM-user Perceptions of e-HRM Tools

in Kuwaiti SME’s

Tahseen AbuZaineh

and Huub J. M. Ruël

Exact Software International

University of Twente

Abstract. This research aims to explore and analyze e-HRM users’ perceptions

about e-HRM in SME’s in Kuwait. The research type will be explorative. The

researcher believes that the research will help to acquire more information and

knowledge about e-HRM in SMEs. Major researches of e-HRM have been

conducted in large enterprises only. Information about e-HRM practices in

SMEs is still scarce. Users’ perceptions of using e-HRM in Kuwait have not

been explored yet. This research will focus on e-HRM tools which are em-

ployed in SME’s in Kuwait in order to acquire more information about user

perceptions of e-HRM tools in SMEs.

1 Introduction

Studies of e-HRM implementation have mainly been conducted at large enterprises,

whereas little research has been carried out on e-HRM in small and medium-sized

enterprises and to what extent it improves HRM processes.

This research aims to explore and analyze e-HRM users’ perceptions about e-HRM

in SME’s in Kuwait. The research type will be explorative. The researcher believes

that the research will help to acquire more information and knowledge about e-HRM

in SMEs.

Major researches of e-HRM have been conducted in large enterprises only. Infor-

mation about e-HRM practices in SMEs is still scarce. Users’ perceptions of using e-

HRM in Kuwait have not been explored yet. This research will focus on e-HRM tools

which are employed in SME’s in Kuwait in order to acquire more information about

user perceptions of e-HRM tools in SMEs.

The major research question is “What are e-HRM user perceptions in SME’s in

Kuwait of e-HRM tools?

AbuZaineh T. and M. Ruël H. (2008).

e-HRM-user Perceptions of e-HRM Tools in Kuwaiti SME’s.

In Proceedings of the 2nd International Workshop on Human Resource Information Systems, pages 124-135

DOI: 10.5220/0001744401240135

 SciTePress

2 Literature Review

2.1 What is e-HRM?

Based on the definitions in the literature (from e.g. [1]; [2]; [3]; [4]), it seems that the

definitions of e-HRM all agree on the following points: e-HRM is a web based tech-

nology; e-HRM supports and automates HRM processes; e-HRM empowers employ-

ees and managers; e-HRM aims at improving HRM effectiveness; e-HRM helps or-

ganizations to take strategic decision. Given the above, the researcher defines e-HRM

as a system or software that saves employees’ records and information and automates

HRM processes. It is a combination between Human Resource Management (HRM)

and IT that merges HRM as a discipline and in particular its basic human resource

activities and processes with the information technology field. In other words, e-

HRM supports and automates HRM processes through the use of IT.

2.2 Objectives of e-HRM Implementation

[5] argued that with e-HRM, users gain easier and faster access to information, taking

decisions, and communicating better and faster with other resources. There is no need

to consult HR professionals by doing so unless they choose to. With one button click,

managers can generate reports, access to information and notify the stakeholders.

Hours of processing are reduced to minutes, and minutes to seconds [5]. [1] looked at

the emergence of e-HRM as a result of the often increasing demands placed on the

HRM department as organizations continue to find a competitive edge. [6] list several

administrative and strategic advantages for implementing e-HRM. Similarly, [7] point

out at least five reasons why organizations should implement e-HRM. They are: In-

creasing competitiveness by improving HR operations; Generating a wider variety of

HR reports; Shifting the focus of HR from the processing of transactions to strategic

HRM; Encouraging employees to be a part of HRM; Reengineering the entire HR

functions of organizations.

Based on the literature review (e.g., [8]; [9]; [10]; [11]; [3]; [12] the researcher

concludes that SMEs’ objectives for using e-HRM is mainly to reduce the time and

the cost spent on HRM activities.

2.3 Types of e-HRM

According to the literature, there are three types of e-HRM. [1] and [3] distinguish

operational e-HRM which could also described in other words as administrative e-

HRM, relational e-HRM which is about e-HRM activities and practices, and finally

the transformational e-HRM which is another definition of strategic HRM.

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2.4 People Involved in e-HRM

By using web technology, employees outside the HRM department became more

involved in HRM activities, [12] conducted a research about people involved in the e-

HRM; 74.5% of the organizations targeted e-HRM to their employees, 60.7% to mid-

dle managers, and 44.2% to HRM specialists. Based on the above, it is possible to

divide users of e-HRM into three groups: Employees; Line management; HRM spe-

cialists. [13] stated that firm size is closely related to HRM specialization, employees

in large sized enterprises perform more specialized tasks while employees in small

and medium sized enterprises perform a greater variety of tasks. Therefore, specialists

are less likely to be found in SMEs.

2.5 Barriers to Implementing e-HRM

[7] stated that the major obstacle in the implementation of e-HRM is the high cost of

implementation and support. [14] concluded that a lack of money and support from

top management were major barriers to implementing e-HRM. Also, they stated that

other barriers were a lack of HR knowledge by the software consultants and lack of

knowledge of users. A survey conducted by the US Small Business Administration in

2002 indicated that the biggest barriers to managing e-HRM are: Lack of trained

staff; lack of budget; time related problems; the need to work with other departments;

and lack of IT support.

[15] conducted a survey in 147 enterprises in Hong Kong, they found that the

greatest barrier to implementing e-HRM is the lack of financial support. The second

barrier they identified was the difficulty of digitalizing or computerizing the huge

amount of paper work.

The researcher concludes the high cost of implementation to be most frequent bar-

rier found in the literature review.

2.6 What is HRM Effectiveness?

HRM effectiveness is the relation between HRM and firm performance [16]. [17]

consider HRM to be effective if it meets the basic criteria of both the strategic and the

developmental perspectives. HRM policies and practices must be long term, in focus,

integrated with one another along with the organization’s strategy and objectives.

Furthermore, they should treat all employees fairly, increase employee motivation,

satisfaction and commitment, and help all employees develop to their maximum po-

tential’. [18] study showed that effective and high performance HRM practices were

tightly related to the organization’s revenue, profits and market value.

There is currently no defined approach to measuring HRM effectiveness. How-

ever, [19] looked at how to measure HRM effectiveness.

They conclude that measuring HRM effectiveness is very complex. However, they

state that the most effective indicator of HRM effectiveness will be the judgment of

key stakeholders. There are many different stakeholders, for instance the employees,

the community, and customers [19].

126

Measuring HRM effectiveness also depends on the way HRM itself is defined. For

example, two approaches are distinguished by [17]: ‘soft’ HRM approach and ‘hard’

HRM approach. [20] distinguished between technical and strategic HRM effective-

ness. They define strategic HRM effectiveness as follows: “Strategic HRM effective-

ness describes perceptions of how well the HRM function developed a firm’s employ-

ees to support its business needs, including facilitating teamwork, communications,

and involvement, enhancing quality, and developing talent to serve the business in the

future.” and technical HRM effectiveness thus: “Technical HRM effectiveness de-

scribes perceptions of how well the HRM function performs activities traditionally

associated with personnel management, including recruitment, selection, training,

performance appraisal, and compensation administration” [20].

In the context of SMEs, the researcher believes that HRM effectiveness will main-

ly be perceived as effective at the technical level of effectiveness. The reason for this

is that; HRM practices and e-HRM tools in SMEs will mostly be of the operational

type and not of the transformational type.

[21] define perceived HRM effectiveness: “The extent to which key stakeholders

(top management, line-managers, HRM specialists and other employees) perceive

goal attainment and helpfulness & performance of HRM”

Finally, the researcher will use Engbers & Ter Horst definition to measure the per-

ceived e-HRM effectiveness in his study. He also believes that the perceived HRM

effectiveness is most useful indicator of HRM effectiveness.

2.7 SME Characteristics in Kuwait

The abbreviation SME is common in the European Union. However, the term SME

which stands for small and medium-sized enterprise has become common in other

parts of the world including the Middle East region [22].

European Union member states traditionally had their own definition of what con-

stitutes an SME. For example, the traditional definition in Germany had a limit of 500

employees, while in Belgium, it was only less than 100 employees (European Com-

mission, 2003). Now the EU has standardized the concept, so that organizations with

less than 50 employees are considered to be “small, and those with less than 250

employees to be categorized as “medium sized organizations” [23]. In the United

States, when small business is defined by the number of employees, small business

often refers to those with less than 100 employees, while medium-sized business

often refers to those with less than 500 employees. However, the most widely used

American definition of micro-business by the number of employees is the same as

that of European Union: less than 10 employees [23]. In Kuwait, the key definition of

SMEs is the number of employees and revenues. A small business is defined as a

business with less than 50 employees with an annual revenue from $1 million to $3

million, while a medium-sized business might have 50 to 200 employees and annual

revenue of $5 million to $10 million. Therefore, the SMEs in Kuwait are the organi-

zation with fewer than 200 employees [24].

In Kuwait, there are 33,000 established SMEs, that make up about 88.6 percent of

the total number of registered companies in Kuwait [24].

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2.8 Factors Affecting HRM Practices in SME’s

Based on the literature review, the researcher assumes that mainly two internal factors

affects HRM practices in SMEs; the size of the organization and the organization

strategy.

Size of the Organization. [13] examined determinants of the formalization process

of HRM practices within small organizations. These determinants are: family busi-

ness, the existence of a formal business plan, firm size, and the availability of an HR

department or HR manager. Their study of more than 700 Dutch SMEs found that

larger organizations apply more formalized HRM practices than smaller sized organi-

zations. In their sample of SMEs, large organizations have a high demand for human

resources. Therefore, a high demand for specific HRM practices such as recruitment,

selection and performance appraisal [13].

[13] concluded that larger organizations apply more formal HRM practices than

smaller organizations do. Also, Kotey and Slade (2005) researched 1330 micro, small

and medium organizations in Australia and concluded similar results in their research

at Australian SMEs (Australian Bureau of Statistics defines an organization as small

if it employs less than 20 workers and medium if it has up to 199 employees). In

short, SMEs often apply less formal HRM practices than large organizations.

2.9 HRM Practices in SME’s

[25] discovered that the HRM practices in SMEs depend on staffing, compensation,

training, performance management, organizational change, and labor relations. [13]

findings about HRM in SMEs mention six practices; recruitment, selection, compen-

sation, training, development, and appraisal, while [26] mentioned eight HRM prac-

tices in SMEs; HRM planning, recruitment & selection, training & development,

performance evaluation, rewarding & remuneration, career development, employer-

employee relations, and sickness policies.

When comparing De Kok’s findings with Cardon & Stevens, the researcher no-

ticed that Cardon & Stevens exclude HRM planning, career development, employer-

employee relations and sickness policies. They did not find these HRM practices in

their literature search about HRM practices within SMEs. The categorization of [25]

is more specific and will be used as basis for the categorization of e-HRM practices in

SMEs in this research. However, the researcher will exclude organizational change

and labor relations due to their irrelevance to e-HRM applications.

2.10 e-HRM Tools for HRM Practices

e-Recruitment & e-Selection. Web technology has become a major tool for recruit-

ing and selecting employees [27]. Recruiting became one of the most successful ap-

plications of the internet due to web technology emergence [28]. Due to the impor-

tance of direct contact, e-selection tools are still not used to select candidates to a

128

greater extent. Some tools can support pre-selection (or pre-screening). For example,

Cisco Systems uses a pre-screening tool to scan applicant CV’s of applicants. So e-

selection is especially about using the internet for the first selecting process which

was in the past done on papers.

e-Compensation. E-compensation could be described as a web-based software tool

that enable managers to design, administer, and communicate compensation practices

more effectively [29]. E-compensation tools are very helpful for designing and ad-

ministering compensation programs in a competitive and dynamic environment [29].

They can be found in three areas: Streamlining bureaucratic tasks; increasing access

to critical compensation information, and enabling continuously available relevant

compensation information.

e-Learning (e-training and e-Development). [30] describe e-learning as the forms

of electronically supported learning and teaching. It aims to increase knowledge of

users (managers and employees). e-Learning use IT to deliver contents like learning,

knowledge, and skills. Yet current research on e-learning in SMEs is limited [31].

e-Performance Management. E-performance is defined as “improving individual

performance by leveraging technology” [32].

e-HRM tools support performance management; the assessment of individual per-

formance can be supported with e-HRM tools by computer monitoring activities. Jobs

which can be supported with this type of e-performance are mainly repetitious or

scripted and involve little personal judgment or description (e.g. call centre work, data

input). Figures and statistics of the performance of the job (e.g. numbers of calls, time

on task) become both the job content and appraisal content. An advantage of this type

of e-performance from a managerial point of view is that managers can permit a

greater span of control. Managers do not have to observe all employees, computers

can monitor this process [33].

2.11 Users’ Perceptions

The Technology Acceptance Model (TAM) is an information systems theory that

models how users come to accept and use a technology. The model assumes that when

users are using new software, a number of factors influence their decision about how

and when they will use it [34].

[34] conducted a research to develop new measurement scales for predicting users’

perceptions of IT. The reason for this research was a short supply of valid measure-

ment scales for the user acceptance of computers and the aim was to pursue better

measures for predicting and explaining users’ acceptance of IT.

129

Fig. 1. Technology Acceptance Model [34].

Davis hypothesized (based on several earlier conducted researches) that the follow-

ing two determinants would be fundamental of user acceptance; perceived usefulness

and perceived ease of use. Perceived usefulness is defined as “the degree to which a

person believes that using a particular system would enhance his or her job perform-

ance”. Perceived ease of use is defined as “the degree to which a person believes that

using a particular system would be free of effort” [34].

3 Research Methodology

An explorative approach will be used in this study. Multiple case studies are going to

be conducted, which will give the researcher an opportunity to compare the results

from different cases. We included three case studies in Kuwait in our research. The

researcher has conducted qualitative case studies. A case study is defined by [35] as:

“an empirical inquiry that investigates a contemporary phenomenon within its real life

context, especially when the boundaries between phenomenon and context are not

clearly evident”. Data have been collected using personal in-depth interviews with the

selected e-HRM users in SMEs which are using e-HRM applications in Kuwait.

[36] identify several instruments (documents, archival records, interviews, direct

observations and physical artifacts) when conducting case studies. In this research, the

researcher will use documents and interviews in addition to the direct observation.

4 Results

4.1 General Results of all Cases

The researcher conducted eight interviews with e-HRM users in Kuwait and the Neth-

erlands, the below. The following tables summarize the cases by number of employ-

ees, availability of HRM department, business sector, availability of formal business

plan, availability of formal HRM strategy, the level of the communicated strategy and

the type of generic strategy.

External

Variables

Peeived

Usefulness

Perceived

Ease of use

Attitude

toward

using

Behav-

ioral

intention

to use

Actual

System

to use

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Table 1. SMEs listed by No. of employees.

Organization No. of Em

ployees

Availability of

HRM Depart

ment

Business Sector

Al-Dhow

Investment

23 Yes Investment

Jiblah Holdin

Co.

Yes Investment

Tawasul Telecom 40 Yes Telecommunication

From the above tables, the researcher conducted three cases studies in SMEs oper-

ating in different sectors in Kuwait.

Objectives of using e-HRM. The following are the mentioned objectives of using e-

HRM mentioned by the interviewees in Kuwait.

• Quick access to information;

• cost reduction;

• sharing of important information;

• streamlining HRM processes;

• documenting HRM processes;

• managing information;

• knowledge sharing.

HRM/e-HRM Practices. As can be seen in the above table, HRM departments exist

in all three organizations interviewed by the researcher. Compensation management is

practiced in all the organization interviewed by the researcher. Next to that is per-

formance management which is practiced in two out of three organizations. However,

recruitment and selection HRM practices are employed in one organization only, the

same with training and development. All the organizations practice personnel but as

mentioned earlier, personnel is not to be considered as HRM practice.

Considering e-HRM tools which support the HRM practices, all the interviewed

organizations practice e-compensation as an e-HRM tool to support compensation

HRM practice, then comes e-recruitment and selection in two organizations while e-

training and development is being used in one organization only. None of the inter-

viewed organizations use e-performance management to support HRM performance

management practices.

Barriers to using e-HRM. Cost and employees’ resistance barriers were the most

commonly given answers by the interviewees. All the Kuwaiti interviewees have

mentioned employees’ resistance as the major barrier to using e-HRM. Cost was

131

mentioned one time. The need to have the software adapted to local rules and regula-

tions was mentioned clearly in one case and partially in another case.

Perceived Usefulness of e-HRM. E-HRM is perceived as clearly useful in two out of

three organizations and as partially useful in one organization only.

Perceived Ease-of-use of e-HRM. E-HRM is perceived as easy to use in one organi-

zation, as easy to use to a certain extent in two organizations, and as difficult to use in

one organization.

Perceived e-HRM Effectiveness. E-HRM is perceived as effective in one organiza-

tion and as ineffective in another organization. The situation in the last organization is

unclear due to the technical problems users are facing in dealing with the software.

5 Conclusions

After comparing the available literature review with the findings of this study, the

objectives of using e-HRM applications are similar to the ones mentioned in the litera-

ture review; the researcher concludes that SMEs focus on reducing cost and time

instead of improving strategic orientation of the organizations. This confirms the

results of other studies and surveys – included in the literature review – which state

that the objectives of implementing e-HRM differ in SMEs and large organizations;

the main focus in SMEs is on operational tasks, while in large organizations the ob-

jectives of implementing e-HRM are strategic. In all the case studies conducted in this

research, only one type of e-HRM was used in all three organizations, namely opera-

tional e-HRM. E-performance management is categorized as relational e-HRM type.

The finding confirms that SMEs often use operational e-HRM for their HRM prac-

tices.

HRM practices are more often to be found in organizations with a business plan

and a clear strategy. In this research, only one organization had an implemented busi-

ness plan and strategy. Having an implemented business plan and strategy is not

enough to increase the number of HRM practices. A logical consequence of a higher

number of HRM practices is a greater number of e-HRM tools supporting those prac-

tices. Therefore, an implemented business plan and strategy along with an efficient

communication of that strategy to the employees might be an indication of high num-

ber of formal HRM practices.

Employees’ resistance to using the e-HRM applications was the most common bar-

rier to be found in Kuwaiti SMEs. The researcher believes that due to the above aver-

age uncertainty avoidance rate in Kuwait (According to Hofstede’s cultural dimen-

sions), users are less willing to adapt to the new technologies. In high uncertainty

avoidance cultures, people are more anxious, show more resistance to change, and

believe that what is different is dangerous. Therefore, their resistance to using the e-

132

HRM as shown in chapter four was not a surprise to the researcher, who believes that

employees’ resistance is a logical consequence of the high uncertainty avoidance

ranking of Kuwait according to Hofstede’s cultural dimensions theory. All the men-

tioned studies and surveys in the literature were conducted in low uncertainty avoid-

ance cultures such as the Netherlands, United States and Hong Kong. In Kuwait,

which is a country with above average uncertainty avoidance, the major barrier to

using e-HRM application was the employees’ resistance.

The e-HRM application is perceived as useful in two out of three case studies.

However, in one of the case studies the level of perceived usefulness of the e-HRM

application is not very clear to the researcher. Therefore, e-HRM is perceived as use-

ful in the majority of the case studies in Kuwait. The e-HRM application is definitely

perceived as easy to use in one of the cases, while it is perceived as easy to use to a

certain extent in another. It is perceived as not easy to use in only one case study.

e-HRM application is perceived as clearly effective in only one case study out of the

three case studies conducted by the researcher.

As mentioned, there are several limitations in this research; the number of case

studies conducted was relatively small and so was the number of interviewees per

case study. All the case studies are of organizations which are using an e-HRM from

only one vendor (Exact Software). Due to these limitations, further research should

add more depth to this study. Further research could be a descriptive one with struc-

tured interviews. More cultural values might be investigated to measure the cultural

impact e-HRM usage more effectively.

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