HRM is people business – it deals mostly with motivations, competencies and cultures. It is “touchie-feelie” stuff even as it works on rules, manuals, formats, forms and metrices. What has electronics got to do with it? Electronics is supposed to de-humanize work – the normal ware does not distinguish one person from the other, nor a handicapped child from a criminal; it makes drudgery out of work. In the early days of automation, the concern was of the manner in which it impacts people.. Multi-lateral organizations and Governments set up committees and prepared guidelines for automation, to ensure that work is not de-humanized. That it does not affect people adversely.

Even as programmers world wide have been reminding us since mid-80s of the same industrial sociological issues such as those of Emile Durkhiem`s “alienation” and “anomie”, some argue that ICE (internet, communication and entertainment segments) have humanized the workplace. Teleconferencing, online chats, for example draw people closer than ever before, they say. This possibly is so, where the faceless paper-work is replaced by atleast electronic contact.

Providing for such humanizing content in some processes of the new technology wave, the term E-HR still bothers me. Mainly, it appears to connote that electronics can some how cannibalise HRM. The great hype for Business Process Outsourcing (BPO) reinforces the possibility of HRM being “critical but non-core” and hence divestible. HR professionals must debate the nuances of the new wave before becoming unsuspecting victims by shooting themselves in the foot.

I will light the “fuse” by making three broad points: one of history; the other of E-HRM tools and toys; and the last on BPO.

Rationalisation, Automation, Computerisation and E-HR
For decades, HRM has drawn upon electronic/computer technology as much as on management technology like industrial engineering, quality, strategic planning. In the 70’s the data processing machines took over the payroll and attendance functions, gave numbers to people and knew the deductions to be made – the ESI, the PF, the tax, the housing loans, car loans, festival advances, etc. They quickly and automatically adjusted for leave encashment, pay, half-pay, increments, revisions in any of the elements on account of wage agreements. Automation took away the drudgery of using “facit” machines and 40-columned huge sheets to prepare wage data. By the mid 80’s personnel records started getting computerized and then the search has been for a fully integrated HRIS (HR information system) that would help HR Managers to access information fast, make information available to several people simultaneously and analyze information for decision purposes, data analysis, extrapolation and the like. The HRIS, implemented in several big corporates by mid-90s, has driven down the time and cost of running HR processes and improved the reliability and timeliness of decisions. All this can be termed as “first wave”.


With the advent of the ERP, the effort has been to integrate HRM with the entire business, though the results have been rather mixed. BPR, which has been integral to the ERP in several companies reduced the time-lines and improved the effectiveness of HR function. It is another matter, and an embarrassing one, that several HR related IT projects have a dubious cost-benefit ratio. In all these developments in the second wave, the personnel administration has been converted to electronic version. The drudgery was taken over, giving space for the HR professional to concentrate on the core of the function – assessment, development, and motivations.

In the third wave which overlaps the second, the internet has given an added thrust – extranets, knowledge managements, electronic communications, work-flow processing, distance learning, self-paced learning have made HR very different, especially in the software companies, from the known versions in the old economy industries. There are now a host of electronic tools or “toys” available to give the HR professional a new look altogether. These tools have made some processes in HR easy to handle.

What has E done to HRM?

Fortunately, it has not yet cannibalized the core of HRM. It has facilitated and provided the base for improving the linkage of HR with value accretion to the company. In the main, it has promises of reducing transaction costs (such as recruitment and communications); improving the effectiveness of HR interventions (such as web based employee satisfaction surveys) and increasing the “fit” with company strategy (say, by integrating PMS and Balanced Score Cards systems). Yet there should be worries.

For instance, take the big strides in recruitment with the onset of online job postings. HR professionals have a very wide field of candidates now to recruit from. They are, in fact, so inundated with data that there is new evidence that HR professionals are regressing to “referrals” “references”, often turning out to be euphemism for cronyism / in-breeding, if not worse. This is like taking a taxi to reach the neighbors house! The real worry is not this but the fact that E has opened the doors for all the employees to broadcast their CVs to unknown markets which in turn put pressure on retention. Time will tell if the E in the case of employee recruitment has actually increased transaction costs!

In addition, E seems to have impacted some facets of HR more than the others. With the result, there are spikes of development and a mass of stagnation. Recruitment, assessment centers and training are experiencing a spike while workload analysis, role design languish. This, of course, is not a worry in itself. The worry is when HR discipline is warped chasing the spikes and a glib headhunter or a half-baked psychologist masquerades as a full-blown HR professional.

Whatever will BPO do to the HR function?

Business Process Outsourcing is the flavour of the season and HR comes fairly high on the agenda. It is seen as great business opportunity for those in the E related business. Is it a threat to the HR function in the company, one wonders?

Are the HR professionals who parrot the BPO language shooting themselves in the foot? Hopefully not, if they have been discerning enough to hang on to the core HR function and outsource the drudgery alone. However, who is to decide what is core? Technically, HR in most businesses can be termed as “critical but not the core” – the message is that it can be given away like a pet dog that you love, on migrating to the US. You must find someone who will care nearly as much as you do. But as in the case of the pet dog, you have to commit the pet to one party alone and you are stuck - atleast for a while. Worse still, is the fact that the love and attachment may accrue to the new master and not you.

When part of the HR function, say the Training activity, is divested to an external agency, knowledge and competence accretion takes place elsewhere on this count. The company will need to pay to get the same competence. Obviously, though the problem is very real, it is not easy to put a value to this transfer of benefit.

Most critical is the fact that the HR function in the company may lose all competitive advantage in the process. Michael Porter had noted this aspect in another context while discussing the Internet and Strategy (see, HBR, March, 2001 for connected reading). If the BPO firm is going to give homogeneous products and services to several, how does distinctiveness occur to ones HR strategy? In many companies, by slow stripping, you can give away the entire HR function to external agencies. That would not only demonstrate that HR in such a company does not add value to its strategy but also a willingness of the company to be captured by the service-provider through increased bargaining power.

Obviously, HRM must become modern and use the new technology to facilitate and provide the lever to improve its efficiency, effectiveness and integration with company’s business results. However, it should ride the fashion wave than be ridden and cannibalized or captivated.