On Developing Human Resource Information System Trust (HRIS-Trust) for Sustainable HRM Performance

Nguyen Ngoc Duc1 , Sununta Siengthai1 , Steve Page2

School of Management, Asian Institute of Technology, Bangkok, Thailand Chester Business School, University of Chester, Chester, England

Corresponding author email: Nguyen.Ngoc.Duc@ait.ac.th; duc.nguyenngoc@gmail.com

Abstract In this research, it is our argument that trust is very important in all stages of technology management dealing with human resources efficiency and effectiveness for organizational performance. Although many previous studies have focused on how an organization can initiate and implement HRIS efficiently and effectively, very few have investigated factors influencing the Trust in HRIS. In this paper we suggest this is very important in relation to HRIS deployment. HRIS-Trust is one of the pivotal determinants to help managers make decisions to apply HRIS in as organization in order to achieve sustainable human resource management (HRM) performance. Accordingly, to achieve the effective level of HRIS deployment, we need to have a clear understanding and definition of the terminology for operational management systems. In this exploratory study, we therefore begin to build the concept of HRISTrust. Based on the literature review, we have found that key factors influencing HRIS-Trust include the following variables: user expectations (managers knowledge, skills, abilities & other attributes (KSAOs), trustors propensity); organizational structural characteristics (organizational size, organizational financial condition, organizational type), and IT infrastructure. Keywords: HRIS-Trust, HRM, Managers KSAOs, IT infrastructure, organizational structural characteristics, organizational size, organizational financial condition, organizational type 1. Introduction With the development of ICT, organizational management has changed in the 21 century known as the Digital Era. The human resource (HR) function of organizations is also changing rapidly, reacting to a changing social and organizational environment and rapidly evolving information technologies (Hendrickson, 2003). HR
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has become an important role in firm sustainability (Boudreau & Ramstad, 2005). This has led to a new phase of HR process and practices, such as: E-recruitment, EPerformance, E-Learning, E-Selection, etc. to replace the more traditional ones (Gueutal & Stone, 2005). Consequently, HRIS has been researched extensively by many scholars, especially in the USA and Europe (Yusoff & Ramayah, 2011). However, little research to date has focused on how to apply electronic human resource management (eHRM) in an organization (Gueutal & Stone, 2005). Previous research shows that HRIS are used by HR professionals as a strategic planning tool for decisionmaking, regardless of firm size, and that this enhances professional standing (Hussain et al, 2007). HRIS is faced with the challenge of demonstrating the effectiveness during the period of application in an organization (Hagood et al, 2002). Lippert & Swiercz (2005) study considers the relationship between HRIS and technology trust finding technology trust to be one of the significant constructs used to justify HRIS effectiveness and a more focused understanding of how technology trust relates to HRIS deployment offers the opportunity to develop a broader range of strategies to improve implementation initiatives. Therefore, trust in HRIS is necessary to motivate the organization applying this system for a sustainable HRM performance and hence organizational effectiveness. In spite of the importance of trust in HRIS, there are very few pieces of research intensively exploring the elements comprising trust in HRIS. Hence, this research aims to answer the following questions: What is HRIS-Trust? and What elements comprise HRIS-Trust? 2. The connection between HRIS and Trust 2.1. What is Human Resource Information Systems (HRIS)? A contemporary HRIS is a dynamic database of demographic and performance information about each employee (Lippert & Swiercz, 2005). This HRIS database contains information on recruitment, applicant qualifications, job specifications, hiring procedures, organizational structures, professional development, training costs, performance evaluation, workforce diversity, and employee attrition (Harris and DeSimone, 1994). This source of data is also considered as a competitive information resource for four management functions: Planning, Organizing, Controlling, and Leading (Hubbard, Forcht & Thomas, 1998). It compromises software, hardware, and systematic procedures used to acquire, store, manipulate, analyze, retrieve, and distribute pertinent information about an organizations human resources (Kovach and Cathcart Jr, 1999). A HRIS may also be considered a strategic planning tool in finding labour force needs, such as: supply and demand, requirements, and forecasts (Harris and DeSimone, 1994). 2.2. The impact of HRIS on Organization In recent years, organizations applying HRIS have rapidly increased due to the development and availability of new technology (Ball, 2001). The benefits of new technology, especially in reducing operational costs, have motivated organizations to apply HRIS (Martinez M., 1999). With IT solutions and analytical tools integrated in HRIS, it enables managers to make HR-related decisions more easily and more accurately (Hendrickson, 2004). Organizational members at all levels can get access to

HRIS data while the management team can analyze this data to make decisions (Lippert and Swiercz, 2005). At any time, employees can also access a web-based HRIS to modify their personal information (Sobkowiak and LeBleu, 1996). With Enterprise Resource Planning (ERP) systems from reputable companies, such as: SAP, PeopleSoft, Oracle, Bann, and Lawnson, the HRIS is one of integrated functions in ERP to require HR and IT professionals to improve and enhance their skills to keep up with changes over time when the organization operates with this system (Lippert and Swiercz, 2005). From this view point, HRIS is one of the key factors that contribute to sustainable HRM which is: the pattern of planned or emerging human resource strategies and practices intended to enable organizational goal while simultaneously reproducing the HR base over a long-lasting calendar time and controlling for self-induced side and feedback effects of HR systems on the HR base and thus on the company itself (Ehnert, 2009, p. 74). 2.3. What is HRIS-Trust? Among the numerous previous pieces of research relating to trust, we have selected the following relevant ones, which we use in this research. Trust is: the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party (Mayer et al, 1995, p. 712). This level of trust can be split into two elements: (1) Trusting intention which occurs when one is willing to depend on the other person in a given situation; and, (2) Trusting beliefs which occurs when one believes the other person is benevolent, competent, honest, or predictable in a situation (McKnight et al, 1998). Trust can be in a person, place, event, or object (Giffin, 1967). In this paper we are using the object element from Giffin. From the user-side, the trust in HRIS is the level of security and privacy of a new technology (Lu et al, 2005). In addition, three common trust elements between humans and machines, so-called one-sided trust relationship, are considered as follows: (1) Trust as an expectation or confidence; (2) the focus of trust toward a specific person, place, or object; and (3) the presence of multiple characteristics of trust referents (Muir, 1987; Muir, 1994 & Muir and Moray, 1996). The first element discusses trust as an expectation relating to the concept that HRIS will operate properly in the future, whereby an individuals assessment about the HRIS can be anticipated. The second element shows that HRIS-Trust is an electronic system used in HRM; hence, it is a state, perception, or condition to use HRIS. The third identifies the multi-dimensionality of the trust construct. This means that HRISTrust is formed by several characteristics, such as: an entitys reliability, honesty, & motivation (Muir, 1987); ability, benevolence, and integrity (Mayer et al, 1995), predictability, reliability, and faith (Rempel and Holmes, 1986).

Based on the review of the above literature about trust in HRIS, this research defines HRIS-Trust as follows: HRIS-Trust is the assessment of users (trustors) on HRIS based on user expectation, confidence, predictability, and motivation on the system ability, integrity, benevolence, and reliability.

2.4. The impact of Users on HRIS-Trust As defined above, in order to enhance the level of HRIS-Trust to ensure sustainable HRM performance and hence organizational performance, we posit that users impact on the overall HRIS-Trust. Lippert and Swiercz (2005) suggest that the user socialization, user sensitivity to privacy, and user predisposition to trust are three main factors impact on HRISTrust. They believe: (1) new employees explicitly socialized to the role and significance of HRIS will experience higher levels of HRIS-Trust; (2) higher levels of personal sensitivity to privacy will lead to lower levels of HRIS-Trust; and (3) individuals that exhibit a greater overall predisposition to trust will express higher levels of HRIS-Trust. However, in this study, we focus on the initiation stage of the HRIS system implementation. Thus, the decision-making by the management team is critical at this stage. We assert that users, especially Managers Knowledge, Skills, Abilities, and other attributes (KSAOs) and trustors propensity to trust, are suitable mediums to evaluate the influence of the management team on organizational structures and IT infrastructure as well as HRIS-Trust. This means that the organizational feasibility depends on the competency, responsibility and decisions of managers. Moreover, the organizational structures and IT infrastructure are affected by managers. Managers must predict future strategic trends and assess how the IT infrastructure must adapt to support the enterprise (Weill et al, 2002). In turn, these structures impact upon managers decision-making during the evaluation of the organizational feasibility. Business managers, faced with obstacles in deciding the value of the technological and human components of IT infrastructure can readily recognize and value a service that integrates both technical and human capability (Weill et al, 2002). Managers generally recognize that they have to take responsibility on IT choice more than just authorizing the IT managers decision. This is especially important when the IT investment is a significantly large expenditure (Broadbent et al, 1997). The feasibility study must be undertaken carefully and in-depth before making decision any decision on purchase. In this case, business and IT managers together select what is suitable for the company to ensure adequate technical capabilities, integration, and standards (Broadbent et al, 1997). Therefore, if managers have trust in HRIS based on their KSAOs the organization will be encouraged to apply this system to enable sustainable HRM performance. 2.5. The impact of Organization Structural characteristics on HRIS-Trust In this section, we describe and discuss how organizational structural characteristics (i.e., type, size and financial conditions) can influence the level of HRISTrust. With reference to organizational type, this research considers the ideal types of organizational structure of Mintzberg (1979) to explore the effect of organizational type on HRIS-Trust. The pertinent characteristics of this concept are synthesized by Morton & Hu (2008) as illustrated in Table 1.

Ideal type a) Simple form

Salient characteristic 1. 2. 3. 4. 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 3. 4. 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5. 6. 7. 8. 9. Small, simple Low formalization Highly centralized Unsophisticated technical systems Perform routine operating tasks Highly formalized Relatively centralized decision-making Automated and integrated technology Highly differentiated structure Standardized work processes used for coordination Operate in stable environments Regulating, non-automated technical system Decentralized decision-making Standardization of skills used for coordination Highly skilled workers who value autonomy Non-regulating, non-sophisticated technical system Centralized headquarters Semiautonomous, loosely joined divisions Little interdependence or close coordination among divisions Main goal of headquarters is to coordinate goals of divisions with that of its own without sacrificing autonomy Standardized outputs of divisions used for coordination Divisions are generally machine bureaucracies Technical system separated into segments, one for each division Operates as a cohesive group working together Mutual coordination and cooperation Innovative Workers are trained experts from different specialties Ad hoc project teams Low formalization Decentralized decision-making Operate in dynamic environments Sophisticated and often automated technical system (in the administrative adhocracy)

b) Machine bureaucracy

c) Professional bureaucracy

d) Divisionalized form

e) Adhocracy

Table 1: Mintzberg (1979) ideal types of organizational structures synthesized by Morton & Hu, 2008.

With respect to organizational size, this is the ranking of organizations in terms of large, medium, or small Companies. Organizational size is not just measured by annual turnover but also commonly by the number of employees (Currie, 1996). Different sized firms in different operational contexts require HRIS that meet their specific needs and remain cost effective (Hendrickson, 2003). In this context, size will be evaluated by capital, workforce, and manufacturing scale. The test whether or not the size of company affects the HRIS-Trust will be run. With relation to organizational financial condition, this is the financial status and health of an organization. It is measured by financial indicators, such as: return on assets (ROA), return on equity (ROE), and return on investment (ROI). This condition helps to confirm the

effectiveness of the organization following the size of company. It means that for example larger organizations may be not effective based on the ROI result. It plays a role in appraisal and a trade-off between profit levels today and tomorrow when consideration of IT infrastructure flexibility and exploitation is counted (Weill et al, 2002). Thus, organizational financial condition may be a factor for boosting trust in HRIS. Such organizational structures (size, financial condition, and type) help to appraise the economic and operational feasibility with the increase in HRIS-Trust. 2.6. The impact of IT Infrastructure and Technology on HRIS-Trust The HR function is quickly closing the gap in terms of applying contemporary IT capabilities to traditional HR functions (Hendrickson, 2003). IT managers are becoming increasingly aware of the role of IT infrastructure in organizations (Weill, 1994). Among the IT capabilities required, IT infrastructure is the most significant contributor to long-term strategic business advantage and distributes flexibility in grasping the incipient trends of the marketplace (Weill, 1994). Therefore, IT infrastructure is a major business resource and one of the few sources of long-term competitive advantage (Keen, 1991). In addition, Lippert and Swiercz (2005) show that technology adoption, technology utility, and technology usability are the significant factors causing effect on HRIS-Trust. They assert that: (1) higher favourable technology adoption experience will be positively related to higher HRISTrust; (2) higher user perceptions of technology utility are positively related to HRISTrust; and (3) higher user perceptions of technology usability are positively related to HRIS-Trust. IT Infrastructure in this context is the levels of IT infrastructure applied within an organization. IT infrastructure is not just a set of equipment and components (Sirkemaa, 2002). It includes information systems, such as: applications, information and its processing, working practices (Turnbull, 1991), IT skills and managerial practices (Broadbent et al, 1997). IT infrastructure capabilities reinforce for competitive positioning of business initiatives (Broadbent & Weill, 1997). Weill et al. (2002) explain the differences between the three pivotal levels of IT infrastructure. Each level comprises its specific hardware, software, and service components as follows: (1) public level is formed by the Internet, public telephone networks, cable systems, satellite systems, and cellular telephone networks; (2) enterprise-wide level may be established by email, web sites, intranets, extranets, and enterprise applications; and (3) business units level is built by infrastructure components that support the four functional areas of a specific business: sales & marketing, production & manufacturing, finance, and human resources (Laudon and Laudon, 2007). Accordingly, IT infrastructure will help to confirm the technical feasibility for applying HRIS. In addition, it will be credible to become one of the key factors to test the level of trust in HRIS in terms of technology. In summary, what we have learned in the relevant literature is that HRIS-Trust is significant in making a decision to use HRIS for an organization. Three important factors impacting on HRIS-Trust are user expectation, organizational structural characteristics, and IT infrastructure. 3. Conclusion

This paper has discussed relevant concepts of HRIS and trust in the system. It argues that most previous studies have paid attention to the trust of people in people but very little attention has been paid to the issue of trust in objects. In the current business environment, many organizations are more and more likely to introduce the technology-environment into the workplace to sustain their competitiveness. The human resource management function is no exception. The concept of e-HRM systems has been introduced and yet, it has been observed that the efficiency and effectiveness of these systems has not yet fully materialized. It is our assumption that one important factor that enhances the effective deployment of an e-HRM system is trust in HRIS. Hence, the questions we addressed in this paper being: what is HRIS-Trust; and what are the elements that influence such HRIS-Trust. We have found that HRIS-Trust is the assessment of users (trustors) on HRIS, based on: user expectation, confidence, predictability, and motivation on the systems ability, integrity, benevolence, and reliability. As to the question of what are the factors influencing HRIS-Trust (especially at the system initiation stage) the following are our tentative conclusions. Firstly, the higher the levels of KSAOs of management will lead to increase in HRIS-Trust. Secondly, the larger the organizational size leads to increases in HRIS-Trust (especially among users with higher KSAOs). Thirdly, a better organizational financial condition will lead to increase in HRIS-Trust especially among users with higher KSAOs. Fourthly, higher levels of organizational type will lead to increase in HRIS-Trust especially among users with higher KSAOs. Lastly, higher levels of IT infrastructure lead to an increase in HRIS-Trust especially among users with higher KSAOs. References
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