Does e-HRM improve labour productivity? A study of commercial bank workplaces in Pakistan
| Published date | 12 February 2018 |
| DOI | https://doi.org/10.1108/ER-01-2017-0018 |
| Pages | 281-297 |
| Date | 12 February 2018 |
| Author | Naveed Iqbal,Mansoor Ahmad,Matthew M.C. Allen,Muhammad Mustafa Raziq |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
Does e-HRM improve labour
productivity? A study of
commercial bank workplaces
in Pakistan
Naveed Iqbal
Department of Management Sciences,
COMSATS Institute of Information Technology, Abbottabad, Pakistan
Mansoor Ahmad
Department of Management Sciences,
COMSATS Institute of Information Technology, Islamabad, Pakistan
Matthew M.C. Allen
Alliance Manchester Business School, The University of Manchester, Manchester,
UK, and
Muhammad Mustafa Raziq
Department of Management Sciences,
COMSATS Institute of Information Technology, Islamabad, Pakistan
Abstract
Purpose –Drawing on data from a unique, large-scale survey, the purpose of this paper is to examine the
links between e-HRM and perceived labour productivity both directly and through the mediating role of HR
service quality amongst commercial-bank workplaces in Pakistan, many of which have introduced e-HRM.
Design/methodology/approach –The authors use partial least squares structural equation modelling to
examine the direct links between e-HRM and productivity as well as the mediated links between e-HRM,
perceived HR service quality and productivity.
Findings –The authors show that e-HRM practices have a statistically significant, positive effect on
managers’perceptions of labour productivity. The authors also reveal that e-HRM practices influence the
quality of HR service, and that the quality of HR services fully mediates the relationship between e-HRM
practices and managers’perceptions of labour productivity.
Practical implications –The results highlight the importance of designing and implementing e-HRM
systemsso that they support organisationworkflow and enable workersto carry out a range of HR and non-HR
activitiesmore efficiently. In particular,this study suggeststhat managers should focuson how e-HRM impacts
on HR servicequality in a holistic way,as this is the “route”via whiche-HRM can improve labour productivity.
Originality/value –Existing research has demonstrated a link between e-HRM and the quality of HR
services; however, these studies downplay the potential impact of e-HRM on labour productivity, a key
organisational outcome and one that e-HRM aims to improve. This studycontributes to the HRM literature by
identifying how e-HRM can improve labour productivity by enhancingthe perceived HR service quality. This
study, therefore, provides the basis for future theory developments in this area.
Keywords Organizational performance, Human resource management, Structural equation modelling,
Labour utilization, e-HRM, Line managers
Paper type Research paper
Introduction
Existing studies have revealed an important association between e-HRM and the quality of
HR services (Bondarouk et al., 2017; Wahyudi and Park, 2014); however, research on the
links between e-HRM and strategic objectives is limited (Marler and Fisher, 2013; Parry,
2011; Parry and Strohmeier, 2014; Schalk et al., 2013; Stone and Dulebohn, 2013; Strohmeier,
2007). For instance, previous studies have not examined the direct and indirect links
Employee Relations
Vol. 40 No. 2, 2018
pp. 281-297
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-01-2017-0018
Received 25 January 2017
Revised 24 July 2017
9 August 2017
Accepted 10 August 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
281
Commercial
bank
workplaces in
Pakistan
between e-HRM and labour productivity (Marler and Fisher, 2013; Obeidat, 2016;
Strohmeier, 2007). Productivity is arguably an even more important outcome for many
organisations than the quality of HR services, as improving workforce efficiency can
enhance firms’competitiveness (Aryee et al., 2013; Datta et al., 2005; Delery and Shaw, 2001),
and companies often introduce e-HRM to enable HR and other employees to focus to an even
greater extent on key value-adding activities.
We respond to calls to extend work e-HRM, and focus on e-HRM’s direct impact on
labour productivity (Marler and Fisher, 2013; Obeidat, 2016) as well as its indirect effect
on productivity that is mediated by employers’perception of the quality of HRM services on
(Uen et al., 2012; Zheng and Lamond, 2010). If e-HRM does enable employees to perform
HR-related activities more conveniently, they are likely to perceive the quality of HR
services as high and should have more time for other activities. Existing research has not
addressed these relationships (Marler and Fisher, 2013; Obeidat, 2016; Stone and Dulebohn,
2013; Strohmeier, 2007). In addition, research on e-HRM has mostly been conducted in the
context of developed European and US economies, and has paid little attention to different
national contexts (Bondarouk et al., 2016).
We focus on commercial banks in Pakistanfor four reasons. First, this sectoris one of the
most profitable sectors of the economy (Khan, 2009), facilitating the use of the latest
management trends and technology. Second, it is expected to remain a strong contributor to
the economy (KPMG, 2013), making it an important formal sector within Pakistan’slargely
informal economy(Ahmad and Allen, 2015). Third, banks’use of individual e-HRM practices
and systems has risensharply recently, as top managementhas focused on the quality of HR
processes and productivity to improve competitiveness (Sabir et al., 2015), enablin g us to
assess the links between e-HRM and labour productivity. Finally, very little is known about
the use of different HRM policies, including e-HRM, and their impact on organisational
outcomes in Pakistan (Khilji, 2001).In high power distance cultures, suchas Pakistan (Ahmad
and Allen, 2015), some employees may think that performing HR tasks themselves as
“beneath them,”potentially limiting their satisfaction with e-HRM and any impact of e-HRM
on productivity ( Johnson et al., 2016). Studying e-HRM in Pakistancould, therefore, highlight
how cultural norms influence the impact of HR practices on organisational outcomes.
We, therefore, seek to make three contributions to the literature. First, we enlarge the
focus of research on e-HRM’s impact on organisational outcomes. Despite the growing
importance of e-HRM, existing research has tended to examine the effects of e-HRM on the
productivity of the HRM function (CedarCrestone, 2008, 2013; Marler and Parry, 2016;
Obeidat, 2016; Stone and Dulebohn, 2013). Whilst this is undoubtedly important, we draw on
existing empirical evidence that highlights a potential link between e-HRM and overall
workplace productivity. Second, by adopting an exploratory approach, we seek to make a
contribution to theory building in an emerging area of HRM research. Finally, we respond to
recent calls to extend HRM research to emerging economies to explain better how particular
HRM policies affect organisational outcomes in different institutional and cultural contexts
(Budhwar and Debrah, 2009; Olivas-Lujan et al., 2007).
Definition of e-HRM
Definitions of e-HRM abound ( Johnson et al., 2016). Generally, e-HRM is an organisation
strategy to help align employee behaviour with strategic choices by using flexible and
integrated technologies (Marler and Fisher, 2013; Marler, 2009; Panos and Bellou, 2016).
More specifically, Johnson et al. (2016, p. 29) define e-HRM as “the implementation and
delivery of HR functionality enabled by a HRIS [HR information system] that connects
employees, applicants, managers, and the decisions they make.”This definition conceives of
e-HRM as a platform that internal and external stakeholders use to access HRM processes
and functions, and that the wider HR information system enables (Johnson et al., 2016).
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