An-Najah National University Faculty of Graduate Studies Factors Affecting the Acceptance of Electronic Human Resource Management System in Palestinian Service Sector By Maha Mohammed Ibrahim Saleh Supervisor Dr. Yahya Saleh This Thesis is submitted in Partial Fulfillment of the Requirements for the Degree of Master in Engineering Management, Faculty of Graduate Studies, An-Najah National University, Nablus, Palestine. 2014 iii Dedication To My LOVE iv Acknowledgement First of all, I would like to express my sincere thanks to Almighty Allah for giving me the ability, chance, and patience to accomplish my goals during my study. My thanks go to my family for the support they provided me through my entire life and specially, I must acknowledge my parents for their constant encouragement. Thank you, mom for your prayers to during my study. I would like to dedicate this master thesis to my beautiful sisters and brothers for giving my life a whole beautiful meaning and for enduring love and encouragement. From the bottom of my heart “I love you all so much”. I would like to express my sincere thanks and my appreciation to my supervisors, Dr. Yahya Saleh for his support, understanding and patience. His constant encouragement, motivation and valuable advices have resulted in the completion of this thesis. I have gained so much knowledge from working with him for the past two years I would like also to thank the members and chair of my examinations committee for taking their time reading the thesis and doing their efforts to improve it. Finally, I would like to extend my thanks to my friends for giving me the chance to spend a great time with them. A Big thanks to all of you and may Allah bless you. vi Abbreviations e-HRM Electronic Human Resource Management Technology TAM Technology Acceptance Model TPB Theory of Planned Behavior HR Human Resource IT Information Technology ICT Information and Communication Technologies HRM Human Resource Management CRM Customer Relationship Management ERM Employee Relationship Management HRMS Human Resource Management Systems IS Information System SMS International Labor Organization SME Short Message Service MMS Multimedia Messaging Service ADSL Asymmetric Digital Subscriber Line GDP Gross Domestic Product CPM Computerized Performance Monitoring CEO Chief Executive Officer HRIS Human Resource Information Systems H Hypothesis SPSS Statistical Package for the Social Sciences Comm. Communication PU Perceived Usefulness PEOU Perceived Ease of Use ATT Attitude ITA IT Availability (Employee training and Availability of IT resource) INT Intention SS System Security TIME Time Performance OR Organization Roles SR Social Risk vii Abbreviations PR Perceived Risk Std. Deviation Standard Deviation N Numbers Sig. Significant LSD Least Significant Difference viii Table of Contents Subject Page Dedication III Acknowledgement IV Declaration V Abbreviations VI Table of Content VIII List of Tables XII List of Figures XIV List of Appendices XV Abstract XV Chapter One – Introduction 1 1 Introduction 2 1.1 Background 2 1.2 Problem Definition 6 1.2.1 Motivation of the Research 7 1.2.2 Research Objectives 7 1.2.3 Research Questions 8 1.3 Structure of the Thesis 9 Chapter Two - Literature Review 10 2 Literature Review 11 2.1 Background 11 2.1.1 Definition of e-HRM Technology 14 ix Subject Page 2.1.2 Importance of e-HRM Technology 16 2.1.3 Types of e-HRM Technology 18 2.1.4 Benefits of e-HRM Technology 21 2.1.5 Challenges of e-HRM Technology 24 2.2 Information and Communication Technology in e- HRM 26 2.2.1 Palestinian ICT Sector 28 2.3 Human Resource Management Department 32 2.3.1 Human Resource Management in Palestine 33 2.4 Elements of e-HRM Systems 34 2.5 Factors Affecting e-HRM Technology 38 2.5.1 Cultural Factors 40 2.5.2 Managerial and Personal Factors 44 2.5.3 Organizational Factors 46 2.5.4 Technological Factors 49 2.5.5 Work Environment Factors 50 2.6 Technology Acceptance Models 52 2.6.1 Technology Acceptance Model (TAM) 52 2.6.2 Theory of Planned Behavior (TPB) 54 2.6.3 Yale Model of Communication and Persuasion 57 Chapter Three – Methodology and Data Collection 60 3 Methodology and Data Collection 61 3.1 Introduction 61 x Subject Page 3.2 Research Types 61 3.3 Research Approach 65 3.4 Research Strategy 66 3.5 Research Tools 68 3.5.1 Interviews 69 3.5.2 Questionnaire 72 3.6 Research Framework and Hypotheses 73 3.7 Sampling Technique 80 3.7.1 Study Population 80 3.7.2 Study Sample 81 3.7.3 Sample Size 84 3.8 Quality Standards for the Research Tool 85 3.8.1 Pilot Experiment 85 3.8.2 Reliability and Validity 86 3.9 Distribution of the Questionnaire 88 Chapter Four–Results and Discussion 90 4 Results and Discussion 91 4.1 Introduction 91 4.2 Demographic and Descriptive Statistics 91 4.2.1 Personal Information 92 4.2.2 Technology and e-HRM Usage 94 4.3 Statistical Differences among Survey Respondents 95 xi Subject Page 4.4 Hypotheses Testing 119 4.5 e-HRM Adoption Framework in Palestine 128 Chapter Five–Conclusion and Recommendations 130 5 Conclusion and Recommendations 131 5.1 Conclusion 131 5.2 Recommendations 133 5.3 Research Contribution 141 5.4 Future Studies 142 References 143 Appendix 154 abcFGا xii List of Tables Table No. Title Page Table (2-1) Palestinian ICT Sector Statistics 29 Table (2-1) ICT Companies in Palestine 31 Table (3-1) Choosing a research strategy depends on research question 67 Table (3-2) GDP percentage of service activities in Palestine 81 Table (3-3) Choosing a research sample companies 83 Table (3-4) The number of questionnaires for each sector 85 Table (3-5) Reliability statistics of factors affecting e-HRM adoption 88 Table (3-6) Distribution and Collection of Data 89 Table (4-1) Distribution of Age 92 Table (4-2) Distribution of Job Title 93 Table (4-3) Distribution of Educational Level 93 Table (4-4) Distribution of Specialization Sector 94 Table (4-5) Statistical differences among participants according to their gender 97 Table (4-6) Independent Samples Test for gender differences among participants 97 Table (4-7) Descriptive of statistical differences according to participants Education. 103 Table (4-8) ANOVA Test for educational level differences among participants 105 Table (4-9) LSD Test for educational differences among participants (Perceived Usefulness) 106 Table (4-10) LSD Test for educational differences among participants (Perceived Ease of Use) 107 xiii Table No. Title Page Table (4-11) LSD Test for educational differences among participants (Attitude) 108 Table (4-12) LSD Test for educational differences among participants (Intention) 109 Table (4-13) LSD Test for educational differences among participants (System Security) 110 Table (4-14) Summary of the Results 118 Table (4-15) Results of Hypothesis Testing 119 Table (4-16) Correlations between Factors Influencing e-HRM Technology perspective 128 xiv List of Figures Figure No. Title Page Figure (2-1) Technology Acceptance Model (TAM) 53 Figure (2-2) Planned Behavior Theory (PBT) 55 Figure (2-3) Yale model of Communication and Persuasion 58 Figure (3-1) External variables affecting e-HRM 74 Figure (3-2) Perceived Risk relationship 75 Figure (3-3) Perceived Usefulness relationship 76 Figure (3-4) Perceived Ease of use relationship 76 Figure (3-5) Perceived Risk relationship 77 Figure (3-6) Perceived Usefulness and attitude toward e-HRM relationship 77 Figure (3-7) Perceived Usefulness and attitude toward e-HRM relationship 78 Figure (3-8) Company role and Social risk relation with perceived risk 78 Figure (3-9) Hypothesis Relationship Network 79 Figure (4-1) e-HRM Technology Adoption Framework in Palestine 129 xv List of Appendices Appendix No. Title Page 1 Appendix A 154 2 Appendix B 157 xvi Factors Affecting the Adoption of e-HRM Technology in West Bank Companies By Maha Mohammed Saleh Supervisor Dr. Yahya Saleh Abstract This study aims at investigating factors affecting the adoption of Electronic Human Resource Management system (e-HRM) in Palestine and to develop an e-HRM framework that can be adopted by the Palestinian organizations to utilize technology effectively in their operations. The study relied on a representative sample of banks, government organizations, hospitals, insurance companies, internet service providers, logistics companies, telecommunication companies and universities working in Palestine. The development of the framework was based on the extension of other existing models, namely, Technology Acceptance Model (TAM), Theory of Planned Behavior (TPB), Yale model of Communication and Persuasion, Perceived Risk, Social Risk, and Organizations Role. To conduct the study, both qualitative and quantitative research methods were used. Qualitative data were collected via interviews with IT specialists and HR managers. Besides, a self-report questionnaire was designed to gather the pertinent quantitative data from sample of HR managers, IT managers, department managers, and employees in the targeted organizations. xvii The analysis of collected data indicates that perceived ease of use, attitude, intention, and communication are the most significant factors influencing e-HRM adoption by Palestine businesses. Additionally, perceived risk, system security, organizations role, and availability of resources are influencing e-HRM technology adoption in less degree. Based on the research findings, Palestinian organizations should work on formulating new strategies, developing their operational process, introducing services with high quality, and coordinating with other entities such as ICT companies and government that would be helpful in achieving employees and managers trust in order to spread e-HRM system among Palestinian society. 1 Chapter One Introduction 2 Chapter One Introduction This chapter introduces a general background of the research title, and clarifies problem statement, motivation of the research, research objectives, and research questions. Also, it presents the research hypotheses, and the structure of the thesis. 1.1 Background Human Resources Management (HRM) is the management of an organizations workforce, or human resource and it is responsible for the attraction, selection, training, assessment, and rewarding of employee. HRM is the most important management function that focuses on the human element, which is the most precious resource and the most influential element in productivity of the organization. Management and development of human resources is an essential cornerstone in the majority of organizations which aims to strengthen the organizational capacity, and enable companies to do rehabilitation of the necessary competencies and ability to keep up with current and future challenges. Human resources can contribute strongly to the goals achievement, and profit maximization for the organization (Alleyne et al., 2007). HRM means the optimal utilization of available human element, more specifically, use HRM to utilize capacity and expertise of the human 3 element in the organization and its success in reaching its intended goals. So, researchers are interested in HRM to make the principles more helpful in effectively and efficiency which help every individual in the organization through management of human resources. These foundations begin with planning and selection, training, incentives and evaluation of the human element. Information technology has serious effects on human resource management processes and practices, and is propelling them to adopt new ideas in order to improve the development environment and workflow to reach the goals in a more effective manner. Because of the importance of human resource (HR) department, many organizations began to develop the culture and the tools used to reach the desired goals in order to develop their work that fits with requirements of customers in the market. The development of information and communication tools has rapidly changed our economic and social live, It also given us multiple ways to accomplish tasks better and faster, and has had a significant effect on the way organizations are managed (Kavanagh et al., 2012). As a result, companies have become more focused on providing the best services to their customers through the use of the latest technological methods to realize competitive advantage. These trends have become more interesting after the emergence of e-commerce era and electronic customer 4 relationship management (CRM) system which is strategy, programs and technology to effectively manage how firms relate to prospective, current and former customer (Rogers, 2008). Later on, companies have become more knowledgeable that the role of employees in the organization success is not as important as the role of customers so there is an increased interest in the use of modern technology in employee’s side and the emergence of employee relationship management (ERM). CRM is a model for managing a company interaction with customers and it involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support. ERM has been openly emerged from the more widely used CRM and it aims at transferring principles of technology-based relationship from customer to employee domain. Major values provided to employees are the greatest possible satisfaction of their individual needs, while the increased attraction, retention, motivation and performance of employees are values promised to employers (Keimand Fritsch, 2008). The two important resources in organizations; people and information, can significantly affect the overall performance of a business and the business success naturally requires the management of resources (Martinsons, 1994). 5 Therefore, the managers must combine the two resources (people and information) by adopting new systems which can drive the organization to success. So, that stems the need for these systems due to the great development of technology that could be employed in all areas. The performance of HR system promotes the organization success in today’s knowledge economy, so we need to increase the effectiveness of HRM by becoming strongly dependent on technology. Technology, especially the Internet, has helped the advancement of many HR processes including human resource planning, recruitment, selection, performance management, work flow, training, development, and compensation. Most large organizations now use Web-based recruiting systems, and have implemented Web-based training programs. These new systems have enabled HR professionals to provide better service to all of their stakeholders (e.g., applicants, employees, managers), and thus reduced the administrative burden. These changes made it possible for organization to focus on HR strategy, and become true business partners in organizations (Gueutal and Stone, 2005). E-HRM provides the HR function with the opportunity to create new avenues for contributing to organizational effectiveness through such means as knowledge management and the creation of intellectual and social capital (Lengnick-Hall and Moritz, 2003). 6 Besides that, the HR function has not been proactive in its use of Internet technology in order to provide integrated services or to communicate more effectively with its customers to elicit and fulfill their changing expectations (Alleyne et al., 2007). 1.2 Problem Definition The development of technology affected the organization needs and tools to achieve its goals. So, some of the positive and negative factors have emerged in affecting the acceptance of these technologies in work environments, especially those associated with a significant correlation capabilities of the human. The entry of modern technologies in the management of HR has led to a number of factors which are related to the acceptance or rejection depending on the nature of the various companies. Nowadays, the trend towards using new technologies became widespread, such as e-learning, e-commerce, e-marketing, e-banking and other management systems that depend on achieving goals electronically. E-HRM integrates HR processes and organization information system to manage all HR activities electronically. So, the researcher aims to identify the factors that constitute impediments or incentives to accept HRM in Palestinian organization to manage human resources electronically based on technology. 7 1.2.1 Motivation of the Research During past years, e-management concept became more widespread, so it was necessary to apply this new policy in the management of human resources department, which is one of the most important sections within the company because of its active role in the success or failure of businesses in different company sections. The importance of this research is represented in extracting the factors that help companies adopt this new technology by clarifying its benefits to the company, staff and administration role in general to facilitate the various processes and organize work in better and in an explained manner. 1.2.2 Research Objectives The research aims to achieve the following objectives: 1. Study the current system used in human resource management in Palestinian service sector including: banks, hospitals, insurance companies, government, internet providers, logistics, telecommunication, and universities. 2. Study the impact of the advancement in ICT that affect use of e- HRM. 3. Identify positive and negative factors that affect manager to adopt of e-HRM. 8 4. Define relationship between those factors and how these factors can affect the adoption of e-HRM in the Palestinian companies. 1.2.3 Research Questions This research aims at answering the following questions: 1. What are the methods currently prevailing in the management of human resources in Palestinian organizations? 2. What is the impact of human resource manager’s experience in using computers and modern methods of communication on the acceptance of e-HRM? 3. What is the impression of employees and managers about the benefits that can be obtained as a result of use of electronic administration? 4. Does the prevailing culture of the use of technology in the community and among employees have great influence on the use of electronic administration? 5. Does the development of Information and Communication Technologies (ICT) tools and networks affect the adoption of the use of this new technology for Human Resource Management? 6. What is the impact of manager’s fear of safety and confidentiality of electronic information on the trend towards adoption of e-HRM? 9 1.3 Structure of the Thesis The thesis consists of six chapters; Chapter One introduces the thesis subject and objectives of this research. Chapter Two introduces a literature review and summarizes studies that addressed the e-HRM, and previous studies which support the hypotheses formulation. Chapter Three presents the methodology that has been followed in this research .Chapter Four presents the adopted data collection tool which includes interviews and questionnaires. Chapter Five illustrates the analytical results of research variables and gives the hypotheses results. Chapter Six gives brief conclusions on hypotheses results with a set of recommendations and future research suggestions. 10 Chapter Two Literature Review 11 Chapter Two Literature Review This chapter aims discusses the research conceptual framework and previous literature concerning e-HRM. It is divided into two parts; the first one discusses e-HRM and ICT terminologies, importance of e-HRM, benefits of e-HRM, and element of e-HRM systems. The second part discusses the previous studies related to e-HRM adoption, factors affecting e-HRM technology, and user acceptance models. 2.1 Background Both human resource management (HRM) and electronic human resource management (e-HRM) are relatively new research area. HRM literature emerged about 30 years ago (Lengnick-Hall et al., 2009), and early e-HRM studies began to appear around 1995 (Strohmeier, 2007). In addition, both research streams mention potential transformational of HRM within organizations. In HRM literature, experts focus on strategic outcomes such as organizational performance (Becker and Huselid, 1998), strategic alignment (Schuler and Jackson, 1987), and competitive advantage (Wrightet al., 2001). In the e-HRM practitioner literature, e-HRM suppliers often assert that internet based technological innovations are important in realizing the outcomes predicted in the HRM literature. 12 HRM departments using ICTs are becoming an increasingly important phenomenon commonly referred to as e-HRM. In addition, e- HRM provides the HR function with the opportunity to create new path for contributing to organizational effectiveness through such means as knowledge management and the creation of social and intellectual capital (Lengnick-Hall and Moritz, 2003). Also, HR has lagged behind other internal departments in its adoption of information system (IS), information technology (IT) innovations (Alleyne et al., 2007). Stone (2003) discusses the impact of technology and word wide web (WWW) on HRM practices such as planning, selection, recruitment, and performance evaluation. Despite the extended use of these systems, there has been a surprising dearth of research and theory on this topic. Most of the research on this topic has focused on examining the effectiveness of different applications in HRM. In addition, many of the researches on e-HRM have focused on e- recruiting (e-recruiting can be defined as “the use of Web-sites, Web- portals, or kiosks to attract applicants to the organization (Braddy, Meade, and Kroustalis, 2009), and enable them apply for jobs online” (Stone et al., 2005). One notable exception is the article by Kehoe et al. (2005). It outline some of the key parameters associated with using web-based systems in the selection process which is one of the most important functions of the Human Resources Department. However, most of the research on these 13 systems has focused on the equivalence of personality inventories and computerized or paper employment tests. In addition, other studies have assessed applicant’s reactions to the use of new technology in the interview practice. Some other studies have examine the use of web-based systems to enhance the effectiveness of other HR processes, for instance, a study on the effectiveness of electronic job analysis (Reiter-Palmon et al., 2006). Likewise, there have been different articles on electronic compensation and benefit systems. Dulebohn and Marler (2005) discover that e-compensation involves the use of web based software tools that allow managers to effectively communicate, administer, and benefits information. In addition, Strohmeier (2007) review current empirical work on e- HRM and discusses some implications for future research. The review reveals an initial body of work from different disciplines that is mainly non theoretical, employs diverse empirical methods, and points several levels of analysis to diverse focal topics of e-HRM. Also, Strohmeier (2012) refer to the importance of employee relationship management (ERM) beside to customer relationship management (CRM), these encourage companies to adopt modern tools and systems to increase employee effectiveness and achieve companies’ goals. 14 A review of the literatures reveals the importance of adoption information system in managing different companies and the effect of using different technologies in their goals and achievement. 2.1.1 Definition of e-HRM Technology Given that various authors published articles related to e-HRM and information technology, it is visible that there are interchangeable terms used to refer to e-HRM. For instance Human Resource Information Systems (HRIS), HR intranet, web-based HR, computer based human resource management systems, virtual HR, and HR portals. Several authors argued about internet or web-based channels as a venture of HRIS (Lengnick-Hall and Morritz, 2003). While some authors preferred to use the term e-HRM over HRIS, many authors agreed that a line cannot be drawn between IT-based information system for HR and internet-based HR applications as these two are basically doing similar jobs (Ruel et al., 2011). Thus, Ruel et al.(2011) defined HRIS as “ all IT-based information system and application either stand alone or networked, for the human resource management purpose, be it for facilitating HR practices, policies or strategies”. The core difference between HRIS and e-HRM in that basically HRIS are direct towards the HR department itself whereas with e-HRM, the target group is not only the HR staff but people outside this department it including the employees and management in the organization. 15 Technically speaking, it can be said that e-HRM is the technical unlocking of HRIS for all employees of an organization. Kavanagh et al. (2012) mention although HRIS includes hardware and software, it also includes people, forms, policies and procedures, and data. Recently, the focus of HRIS has shifted to more strategic applications of an organization like recruitment, performance and compensation management, self-service technologies and HR planning alignment with the organizations planning (Lengnick-Hall and Moritz, 2003). Olivas-Lujan et al. (2007) mention that the term E-HR or E-HRM was first used in the late 1990s when “e-commerce” was sweeping the business world. In the literature, E-HR is used interchangeably with virtual HRM, HR intranet, web-based HR, computer-based human resource management systems (CHRIS), and HR portals (Ruel et al., 2007). According to Voermans and van Veldhoven (2007), E-HRM could be narrowly defined as the administrative support of the HR function in organizations by using Internet technology. Lengnick-Hall and Moritz (2003) referred E-HR to conducting business transactions (and in particular HRM) using the Internet along with other technologies. Ruel et al. (2011, 2007) define E-HRM as a way of implementing HR strategies, policies, and practices in organizations through a conscious and directed support and/or with the full use of web- technology-based channels. 16 2.1.2 Importance of e-HRM Technology Technology indicates to the collection of tools that make it easier to collect, create, use, manage and exchange information, it refers the knowledge and exploitation of tools, techniques and systems in order to solve problems, improve a pre-existing solution, achieve a goal, handle an applied input/output relation or perform a specific function to serve a bigger purpose such as making life better and easier. Technologies significantly affect human ability to control and adapt to their natural environments. The term can either be applied generally or to specific areas: examples include construction technology, medical technology, and information technology. Today’s companies are different from the ones that existed in the past. Because it is constantly changing, the most important characteristics of our era may be the transformation, transmission and dominion of information. We live in an information era where the leading role has been given to new technologies. Organizations use a number of strategies for improving their operation and procedures, one of which is the development and use of HRM systems. The importance of e-HRM is derived from the importance of technology in different areas of work. Surveys of HR consultants suggest that both the number of organizations adopting e-HRM and the depth of applications within the organizations are continually increasing 17 (CedarCrestone, 2007). This increase in adopting new technologies in different companies is an indicator to the importance and multi-benefits of it. In addition, a number of practitioner reports provides a strong evidence that e-HRM is becoming increasingly common and must lead to remarkable changes and support for competitive advantage. The advancement in tools and procedures of information technology has driven many companies to change its policies in all directions. For instance, almost all large organizations use electronic human resource (e- HR) systems to attract job applicants (Stone et al., 2005). In addition, they are increasingly using these systems to determine employee needs, deliver training, manage employee performance, and administer compensation and benefit systems plus evaluation systems (Strohmeier, 2007). To date, research has suggested that e-HR systems typically increase the efficiency of all HR processes and procedures, reduce administrative costs, and decrease transaction times (e.g., the time of recruitment, time to replace employees) (Gueutal and Stone, 2005). However, results of old surveys show that only 14% of companies which use e-HR systems report that they have enabled them to make better HR decisions (CedarCrestone, 2007). As a result, there may be problems with the design or implementation of these systems that preclude them from achieving their intended goals (Stone et al., 2003). 18 Interestingly, results of one survey show that 74% of large organization now uses electronic recruitment (e-recruitment) and electronic selection (e- selection) technology (CedarCrestone, 2007). On the other hand, connecting e-HRM and strategic decision making improves organizational performance. Based on data of over 19,000 organizations, Liuet al., 2007 showed that HRM has a significant added- value in terms of influencing an organizations performance. Also it shows the importance of strategic decision making and the added-value of HRM was strongest when HRM decisions were related to strategy. Electronic HR systems may be less interesting compared with the traditional HR systems, especially in tools and procedures, and cannot attract the attention of employees. For example, messages in electronic systems may lack the richness of face-to-face communication, and prevent individuals from understanding important HR information (e.g., HR rules and procedures, safety guidelines). 2.1.3 Types of e-HRM Technology To consider IT as the backbone of HR department which moves along e-HRM, IT might influence the structural integration within HR in three types: operational e-HRM is concerned with administrative functions, payroll, and employee personal data, by streamlining operations and alleviating much of the administrative burden, relational e-HRM is concerned with supporting business processes by training, recruitment, and 19 performance management to increasing the timeliness and service levels with employees and managers, as well as outside partners, and transformational e-HRM is concerned with strategic HR activities such as knowledge management, and strategic re-orientation because IT has enabled people to communicate across geographic boundaries and share information which eliminates barriers of time and space (Lepark and Snell, 1998). Operational e-HRM: This type of HRM includes the basic activities in the department which can be named as administrative tasks such as capturing of personnel data, keeping records, payroll, company policies and procedures. According to Snell et al. (2001), about 75-75 percent of the workload is related to this type of activities. Regardless of the activities themselves and their types, Strohmeier (2007) also considers functions such as e-learning, e-recruitment and e- selection (these activities belong to the relational HRM) to review efficiency and effectiveness outcomes of e-HRM, namely operational consequences, which were report by employees, like 1. Reduction of HR staff. 2. Faster processes. 3. Cost reduction. 4. Release from administrative burdens resulting from automation. 20 5. Shifting responsibilities from HR to line managers and employees. 6. Considerable cost savings from e-recruiting and e-selection, due to reduce employee turnover. 7. Reduce staffing costs. 8. Increase hiring efficiency. Relational e-HRM (Transactional): Activities which require direct and two-way relationship among HR professionals and internal or external sources can be classified in this type of HRM (e.g., e-recruitment, e- learning, performance appraisal). As Strohmeier (2007) says it refers to interacting and networking of different actors. Also Ruël and Bondarouk (2004) put emphasis on HR tools that support business processes, not on administration. About 15-30 percent of HR workload is related to this type of activities (Snell et al., 2001). Transformational e-HRM: This is the highest-level and most complex type of activities which has nothing to do with HR routines and transactions. According to Snell et al. (2001) these activities tend to be strategic with the same pace of the company mission and vision and only about 5-15 percent of the time are devoted to this type. Many companies are trying to make this share bigger by reducing the activities in operational sector (e.g., outsourcing). Nevertheless, as 21 Strohmeier (2007) reviewed as an evidence-based approach there is no strong evidence to support this phenomenon since no studies directly examined the relationship between E-HRM and any kind of organizational performance measures. Ruël and Bondarouk (2004) make a clear distinction on these types of activities by comparing the possible solutions for doing them, through face-to-face interaction or Web-enabled functions. For operational e- HRM the choice is between asking employees to keep their own personal data up- to-date through HR portals or to have an administrative force in place to do this. For relational e-HRM there is the choice between support recruitment and selection through a web-based application or using a paper-based approach (through advertisements, paper-based application forms and letters.). Finally, in terms of transformational e-HRM, it is possible to create a change-ready workforce through integrating a set of web-based tools that enable the employees to develop in line with the company strategic choices or to have paper-based materials. 2.1.4 Benefits of e-HRM Advances in information technologies have changed HR functions within organizations. Today, most organizations implement an HRIS extensively to support basic HR functions, as well as to enhance 22 administrative efficiency, decision making, and information sharing (Lengnick-Hall and Moritz, 2003). Organizations can seek to (1) improve the strategic orientation of HRM, (2) reduce costs or increase efficiency, (3) improve client service or facilitate management and employees and (4) improve organizations global orientation by standardizing and harmonizing the HR function (Ruël et al., 2004). The literature on e-HRM suggests that, overall, the three goals of e- HRM are cost reduction, improving HR services, and improving strategic orientation. E-HRM systems are thought to provide a number of key benefits to organizations. For instance, practitioners and researchers have argued that these new systems (1) enhance HR efficiency, (2) reduce costs, (3) decrease administrative burdens, (4) facilitate HR planning, and (5) allow HR professionals to become a strategic or business partner in organizations (Gueutaland Stone, 2005). For instance, there are concerns that these new systems focus primarily on efficiency and cost containment, and do not enhance the effectiveness of HR processes (e.g., recruitment systems). There are also concerns that e-HRM systems may (1) have an adverse impact on members of some protected groups (e.g., older job applicants) (McManus and Ferguson, 2003), and (2) have the potential to invade personal privacy (Eddy, Stone, and Stone-Romero, 1999; Harris et al., 2003). 23 In an effort to overcome system-related problems in organizations, practitioners and researchers have started to establish HR standardized criteria that can be used to assess system effectiveness (Cascio and Boudreau, 2008). Some common used HR standardized criteria include: (1) system impact (e.g., new hire quality, turnover of high performers), (2) system effectiveness (e.g., vacancies filled internally, grievances resolved successfully), and (3) system efficiency (e.g., time to fill vacancies) (CedarCrestone, 2007). According to Ruel et al. (2004), who refined Lepak and Snell's (1998) classification of pressures for virtual HR by the implementation and usage of e HRM, organizations can seek to (1) improve the strategic orientation of HRM, (2) reduce costs or increase efficiency, (3) improve client service or facilitate management and employees and/or (4) improve the organization's global orientation by standardizing and harmonizing the HR function (Ruël et al., 2004). Of course, a stronger focus on HR strategy can also be a goal in itself, and strategic arguments can drive an organization's intention to reduce costs, improve services or standardize the HR function. Marler (2009) presents a model of e-HRM strategy formulation that distinguishes three primary goals of e-HRM: cost savings, strategic alignment, and building resources. Each of these primary goals is seen as fitting within the overall deliverables and roles for HR, related to strategy 24 and competitive advantage. Strategic e-HRM is focused on increasing added-value through increased business focus by the following activities: 1. Acquire the right employee for the right job at the right time. 2. Provide conditions for optimal alignment between personal objectives and company objectives. 3. Provide means for keeping the right employees and outplacement of the lesser qualified. 4. Maximize capitalization of employee capabilities. 5. Analyze and report on factors that lead to employee turnover and how it affects business performance goals. 6. Analyze the impact on the workforce of possible restructuring or new market approaches. 7. Improve effectiveness and efficiency of HR processes. 2.1.5 Challenges of e-HRM Technology E-HRM technology faces challenges and difficulties influence the adoption of this technology. Several authors argue about the most prevalent issues facing management are control, business requirements, and best practices. Varma and Gopal (2011) explain the most important challenges impeding the spread of e-HRM technology in different organizations: 25 1. Cost Implications: cost is one of the biggest obstacles to the adoption of e-HRM due to the hardware and software cost of building or purchasing equipment as well as the cost of training employees on the new technology. 2. Aligning the e-HRM system with the business requirements: conformity between the functions provided by the e-HRM system with business requirements within the organization goals and objectives. 3. Security of the information: security concern is the most important challenge which influences e-HRM technology. The company needs to ensure that outsiders or competitors cannot access to company information to ensure confidentiality. 4. Managing the data: managing the huge amount of data generated through e-HRM is a relatively new challenge for companies. 5. E-HRM to function along with other systems to be successful: ensure of compatibility between all systems within the company, such as accounting system and work control system. 6. Continuous monitoring and feedback: continuous monitoring and feedback are critical for the success of any e-HRM effort in an organization to ensure that all the requirements of future work can be achieved through the system. 26 7. Training the users: training staff to use the system plays a significant role to achieve the goals of adopting e-HRM because the misuse of e-HRM constitutes a threat to the companies. Furthermore, to achieve the companies goals from adopting e-HRM technology there are some pre-requisites of e-HRM technology need to be address to ensure the constraints of reducing the obstacles facing e-HRM adoption such as: � Employee and mangers commitment to change management style. � Presence of an IT usage culture within the company. � Support culture of knowledge management. � Involvement of all the stakeholders early in e-HRM adoption project � Discussion of the value of any technology solution to the users. � Adequate users training to encourage them toward the new systems. 2.2 Information and Communication Technology in e-HRM The development in Information and Communication Technologies (ICTs) sides radically changed the social and economic lives, and created a huge effect on the management tools and strategies within the organization. As a result, internal organization department, such as human resource (HR) function, have been forced to re-examine their own roles in the light of a dramatic increase of organizational demands on them (Gloet and Berrell, 2003). HRM departments using ICTs is becoming an increasingly important phenomenon. 27 The power of information technology (IT) tools appears in achieving business goals. The utilization of IT tools helps not only to fulfill company targets but to optimize the work processes as well. The trends and results of the contemporary studies constantly confirm contribution of the IT tools in Human Resources (HR) to accomplish assigned HR responsibilities by using the source of IT capabilities. According to Armstrong (2002), the significance of information systems in HR practices emerge through: 1. Providing better services to managers. 2. Connecting a personal policy and personal processes in all organization and thus facilitating management processes in the company. 3. Providing important data for a strategic personal decision making and enabling a quick acquiring and analysis of information for HR assistants. 4. Reducing cost labors at performance of personal activity. In addition, Lee (2009) shows that organizations use technologies for HR field such as employee participation, clearly defined jobs and extensive formal training. On the other hand, according to survey, companies which are using external IT capability, only internal career opportunities used IT tools. 28 2.2.1 Palestinian ICT Sector The Palestinian ICT sector is recognized as a significant sector for economic viability and growth by both the Palestinian private sector and the Palestinian Authority. The ICT sector currently employs 3% of the Palestinian workforce. ICT sector is highly productive in that they contribute more than 8% to the overall Palestinian GDP (Ministry of Telecom and Information Technology, 2013). In Palestine, Paltel is the largest Palestine Telecommunications Company which operates all communications in Palestine. Paltel works in many fields such as fixed telephones, leased lines, and VPNs. Recently, Paltel provides Internet services with high speeds by using fiber optics technology (Paltel Corporation, 2011). In addition, Palestine has two mobile operators (Jawwal and Wataniya), which introduce advanced solutions and services for Palestinian people like local and international calling, SMS, MMS, Internet via mobile devices and other services which introduce benefits for people. The number of Palestinians who are using mobile technology ranges from 2 to 2.5 million users (Jawwal, 2011, Wataniya Mobile, 2011). In line with technological development in Palestine, the usage of technology (computers, Internet, and mobiles) is rising. Palestinian Central Bureau of Statistics publications and Ministry of Telecom and Information Technology explained the increasing use of mobiles and Internet (Palestinian Central Bureau of Statistics, 2010). Statistics show that: 29 • At the end of 2011, the number of internet subscribers is 165 thousand, a rise of 44.5% from 2010 where the number of ADSL internet subscribers is 108 thousand. • At the end of 2011 the number of mobile phone lines 2,865 thousand subscribers, an increase of 10% for 2010. • At the end of 2011 the number of fixed telephone lines385 thousand subscribers, an increase of 6.1 %for 2010. On the other hand, the Palestinian ICT sector employs over 5,000 people as Table (2-1) shows the great development in this sector, which is one of the most productive workers in the Palestinian economy. The ICT sector is also a critical component of the Palestinian infrastructure which is needed to sustain and develop the local economy. Table (2-1): Palestinian ICT Sector Statistics. Year 2010 2011 Number of Establishments 446 500 Number of Workers 4,377 5,418 ICT Production in US Dollar 588,918,700 681,698,700 Total Output (US Dollar) 7,365,581,000 7,925,022,000 ICT Contribution to Total Output 8.00% 8.60% Value Added to GDP 89.50% 87.00% Source: PCBS, 2012. Remarkably, Palestinian ICT creates the highest added-value as compared to total production with 89.6%. The ICT sector is the fastest 30 growing sector among Palestinian economic sectors with annual growth rate of more than 10% contributing 8% to the Palestinian GDP (Palestinian Ministry of Communications and Information Technology, 2013).In addition, there are several Information Technology companies which are working with global IT and provide the local and regional market with hardware and software solutions (ASAL Technologies, 2011). Table (2-2) shows some ICT Companies in Palestine and other related information. 31 Table (2-2): ICT Companies in Palestine. Firm Name # of Staff Services Provided Specialty Bisan Systems Ltd. 25 Business Management and Financial Applications Software Solutions ASAL Technologies 120 1) Custom Software Development 2) Staff Augmentation: Creating IT teams that including members with specialized expertise that are offshore 3) Hardware Verification and Design. Software Development EXALT Technologies Ltd. 90 1) IT Outsourcing Services 2) Software Development Outsourcing 3) Software development (Mobile application development) Software Development iConnect 35 1) Mobile Application Development 2) Enterprise Solutions 3) E-Health Care Systems 4) Web portals 5) Application Service Provider 6) Custom Software Development Software Solutions Jaffa.Net 35 1) Software Development 2) Internet and e-Commerce 3) Hardware Solutions 4) Networking and Wireless 5) System Integration 6) Security and Protection Solutions Software development Infinite Tiers Group 52 Software Development Software Development Art Technologies/ Pal Earth 18 1) Software Development 2) Mobile Technologies 3) Business intelligence (BI) 4) GIS Services Software Development Hulul Business Solutions 131 Business Solutions for Paltel Group Business Solutions Isra Software and Computer 32 1) ERP Systems 2) E-Trading Solutions 3) Outsourcing Services Software Development Source: Palestinian Ministry of Communications and Information Technology, 2013. 32 2.3 Human Resources Management Department Human resource management is a function in organizations prepared to maximize employee performance in service of their employer’s strategic objectives. HR is mainly concerned with how people are managed within organizations, focusing on policies and systems. HR departments and units are typically responsible for a number of activities, including employee recruitment, training and development, performance appraisal, and rewarding, also concerned with industrial relations, that is, the balancing of organizational practices with regulations arising from collective bargaining and governmental laws. It is well-known that Human Resource Management is the only living factor of production and controlling the other factors, at present globalization is changing the stable workplace systems in the region. This is evident in many countries. Thus, the effects of changes created by the globalization pose major challenges for HRM in the Southeast Asian region (Jaeger et al., 1995). For instance, in China and India there is some evidence that economic liberalization arising from globalization and competitive pressures is changing the pattern of HRM, employee relations and industrial relations and labor legislation. Some of these changes are occurring both in the private and public sectors in both countries. In China, it is argued that the emergence of market economy is undermining the “nanny employer” image of organizations as there is a concerted effort to 33 shift the huge welfare burden from employers to individuals (Jaeger et al., 1995). 2.3.1 Human Resource Management in Palestine Different studies show that several HRM practices at small and medium enterprises are influenced by organizational contextual variables including ownership, age and size of firms, even though the level of formality of HR practices at these firms is low .Using data from micro, small, and medium firms in Australia leads to the fact that human resource practices increase with increasing firm size (Zheng and Morrison, 2009). While most studies prove that organization size has a positive substantial influence on HR practices, other studies show that organizational size has a limited effect on HR practices (Ding and Akhtar, 2006). At the Palestinian level the economy has been faced with overwhelming challenges since September 2000. It has been dealing with a tight closure policy, geographical fragmentation, a separation barrier that significantly reduces agricultural land, uncertain public revenue and donor aid, eroded productive capacity, an array of donor agendas, and limited government and institutional capacity. Closure feeds a vicious circle whereby the resulting loss in income constrains output from the demand side, while uncertainty and the higher cost of imported inputs, transportation and storage constrain output from 34 the supply side. Israel’s closure policy is widely recognized as one of the most devastating factors limiting the Palestinian economy. Consequently, little is known of human resource management processes within the Palestinian territories and how modernization has shaped, and is shaping, management philosophies and practices. 2.4 Elements of e-HRM Systems Actually, the role of information technology (IT) systems in human resources (HR) function primarily seeks to provide support at an administrative level, while IT support for strategic purposes is lacking (Strohmeier, 2007). Although electronic applications (e-HRM) are being used in various disciplines of HRM such as recruitment (Stoneet al., 2003), selection (Chapman and Webster, 2003), performance management and payroll administration (Teo et al., 2001), organizations do not yet realize the importance of e-HRM systems in make better HR decisions (Stone andLukaszewski, 2005). The possible components of the HR systems are based on the five HR best practices, namely (1) Selective recruitment and selection, (2) Compensation (3) Appraisal and performance management, (4) Training and development and (5) Employee involvement (Strohmeier, 2007). Main HR responsibilities is to select and recruit the appropriate employees, this is reflected in e-HRM system through e-recruitment or e- 35 selection tools. Electronic selection (e-selection) is being used increasingly by organizations. It typically refers to the use of various applications and forms of technology (e.g., web-based job applications, web based tests, videoconference interviews) to help organizations with such tasks as conducting job analyses, gathering applicant data, assessing individuals, and making selection decisions (CedarCrestone, 2010). E-selection systems are thought to offer a number of important advantages over traditional systems (Kehoe et al., 2005). For instance, they (a) provide organizations with large numbers of recruits, (b) simplify the job analysis process, (c) accelerate the development and assessment of selection procedures, (d) reduce administrative burdens by automatically screening applications to ensure that applicants meet basic job requirements, (e) allow organizations to interview applicants using web- based or videoconference methods, and (f) facilitate the storage and use of applicant information, allowing for the assessment of selection system effectiveness (e.g., by validating inferences made in the selection process). Often this results in savings of both time and money. Overall, e- selection systems are thought to (a) enhance efficiency, (b) reduce costs, (c) promote the hiring of qualified employees, and (d) manage the flow of new members into the organization. In addition, compensation and wages is a critical issues relating to employees and managers within organizations which can be controlled 36 through payment systems or e-Compensation systems through e-HRM technologies. According to Dulebohn and Marler (2005), the e-compensation systems are those software packages or programs which are bought or developed by companies and are accessible through the company system through specific application or the internet which all the employees would be able to reach and use it. E-compensation systems primarily contribute to the effectiveness and efficiency in three manners: (1) Easy Accessibility to the information through e-HRM system (2) The availability of the meaningful compensation information in detail for employees, managers and HR professionals in an interactive way (3) Streamlining the cumbersome tasks through the introduction of workflow functionality and real-time information processing in a cost-effective manner (Dulebohn and Marler, 2005). On the other hand, performance appraisal and measuring work achievement play an important role in achieving the organizations goals. E- performance appraisal is utilized intelligent software instead of traditional methods to capture, store, analyze, rate and report the personals activities inside the companies to let the HR managers be informed about employee strengths and weaknesses, employee performance levels, and take the right decisions about them. 37 E-performance systems play a significant role in HRM decisions because the importance of the information resulting from the e-HRM systems, which can be used in: (1) Making administrative decisions like pay increase and promotions. (2) Providing feedback to employees about their work and developmental needs (3) and as criteria for the assessment of HR systems like selection procedures or training programs (Farr et al., 2013). Computerized Performance Monitoring systems (CPM) which are actually software packages able to count the number of wok units completed by employees in a specific time period, record idle time of each terminal, calculate error rates, capture time spent on different tasks or even count the number of times an employee strikes the keys (keystroke), etc. These systems would collect all the information about all the activities done by the employees inside the company and provide feedback to both superiors and subordinates (Irving, 1986). Cardy and Miller (2005) listed some advantages coming from applying the technology in performance appraisal process such as: (1) Facilitate the process of writing reviews. (2) Greater span of control. (3) More and cheaper feedback. One of the critical functions of a HR department in the organizations is Training and Development. From organizational point of view employees training is one of the crucial needs through which the overall performance would be improved. 38 Moreover, most companies start to think of online learning primarily as a more efficient way to distribute training inside the organization, making it available anytime and anywhere to reduce direct costs (instructors, printed materials, training facilities), and indirect costs (travel time, lodging and travel expenses, workforce downtimes).Attracted by these significant and measurable advantages, companies start to look for ways to make the most of their existing core training available online, and to manage and measure the utilization of the new capabilities. In a study by Welsh et al. (2003) six reasons have been realized which drive organizations to use e-learning systems: (1) Provide consistent and worldwide training. (2) Reduce delivery cycle time because through e- learning the companies are able to deliver training to many people quickly since the courses are not constrained by instructors or classrooms capacity. (3) Increase learner convenience.(4) Reduce information overload. (5) Improve employees tracking. (6) Lower expenses. 2.5 Factors Affecting e-HRM Technology Numerous studies discuss e-HRM technology and study the usage of information and communication technology (ICT), to identify the factors that influence the adoption of e-HRM systems. Those studies provide theoretical and empirical background about e-HRM technology. Therefore, it is very important to examine those studies to understand, analyze, and highlight the factors that influence e-HRM technology. In addition, those 39 studies give a significant chance to compare the research findings with others. Models of e-HRM systems contend that two factors determine their acceptance (i.e., the degree to which individuals react favorably to the system) and system effectiveness: (a) the nature of e-HRM system and (b) the attitudes and abilities of individuals who use them (e.g., applicants). For example, organizations develop e-selection systems to hire highly talented employees who can help them meet their short run (e.g., productivity) and long term goals (e.g., growth, survival). In addition, the values, goals, and abilities of applicants affect system acceptance and use. Ideally, e-selection systems should be designed to be congruent with the values and abilities of applicants (Stone et al., 2006). Four main factors are influencing the acceptance and implementation of e-HRM technology. These factors are workforce acceptance, organizational features, technological capabilities, and work environmental determinants. Organization workforces are the most critical factor for applying new technology and system. Without workforces (employees and managers) satisfaction, organizations cannot achieve any profits from adoption the new technology. Workforce satisfaction is important to spread new technologies and innovations. Therefore, organizations should meet workforce needs and expectations to encourage them to achieve organization goals. 40 Technological issues are the main factors that influence e-HRM technology by workforces and the companies. E-HRM needs specific technological solutions such as equipment (software and hardware), networks, security, and training. Therefore, technology plays the significant role in e-HRM technology adoption. On the other hand, cultural values, social attributes, norms and habits, beliefs, economic scale, legal regulations, political and governmental issues are influencing the adoption of new technologies like e-HRM systems. Among innovation adoption studies and research, a huge number of studies follow diffusion of innovation theory which mainly provide by Rogers (1995). E- HRM technology adoption is one part of innovation adoption in any organization. Rogers (2008) link the initial adoption of any new technology decision to five specific attributes: relative advantage, complexity, compatibility, trial ability and observe ability. Based on previous literature and research models and many conducted interviews, four sets of factors affecting e-HRM technology are categorized as: cultural, managerial and personnel, organizational, technological, and work environmental factors. 2.5.1 Cultural Factors According to Kluckhohn (1962), “Culture consists of patterns, explicit and implicit, of and for behavior acquired and transmitted by 41 symbols, constituting the distinctive achievement of human groups, including their embodiments in artifacts”. In the literature pertaining to the IT acceptance the researcher noticed that the most used model by Information System academicians and practitioners is the Technology Acceptance Model (TAM) designed by Davis (1989). The TAM takes its roots mainly from the Theory of Reasoned Action explaining behavior across behavioral intentions. The importance attributed to social norms in determining and predicting behavior varies across cultures (Triandis, 1977), therefore, many researchers expect that integrating subjective norms will strengthen the understanding of differences in behavioral intentions and will allow a better capturing of cultural effect on IT use. Hofstede (2001) developed the cultural dimensions of uncertainty avoidance, power distance, individualism, masculinity, and long term orientation based on over 116,000 survey responses in approximately 60 countries between 1967 and 1971. The surveys were designed to measure work-related values. 1. Power Distance: Power distance refers to the degree of inequality that exists among people with and without power. A high Power distance score indicates that society accepts an unequal distribution of power. Low Power distance 42 means that power is shared and well dispersed. It also means that society members view themselves as equals. 2. Individualism: Individualism refers to the strength of the ties people have to others within the community. A high individualism score indicates loose connections. In countries with a high individualism score there is a lack of interpersonal connection, and little sharing of responsibility beyond family and perhaps a few close friends. A society with a low individualism score would have strong group cohesion, and there would be a large amount of loyalty and respect for members of the group. 3. Masculinity: Masculinity refers to how many a society sticks with, and values, traditional male and female roles. High masculinity scores are found in countries where men are expected to be tough, to be the provider, and to be assertive. If women work outside the home, they tend to have separate professions from men. Low masculinity scores do not reverse the gender roles. In a low masculinity society, the roles are simply blurred. You see women and men working together equally across many professions. Men are allowed to be sensitive, and women can work hard for professional success. 43 4. Uncertainty Avoidance Index: Uncertainty avoidance relates to the degree of anxiety that society members feel when in uncertain or unknown situations. High Uncertainty avoidance scoring nations try to avoid ambiguous situations whenever possible. They are governed by rules and order and they seek a collective truth. Low Uncertainty avoidance scores indicate that the society enjoys novel events and values differences. There are very few rules, and people are encouraged to discover their own truth. 5. Long Term Orientation: Long term orientation refers to how much society values longstanding as opposed to short term traditions and values. This is the fifth dimension that Hofstede added in the 1990s, after finding that Asian countries with a strong link to Confucian philosophy acted differently from Western cultures. In countries with a high long term orientation score, delivering on social obligations and avoiding loss of face are considered very important. The country culture is a very important factor in the adoption of technology in general and using e-HRM system. Technology acceptance differs from one country to other according to different cultural and social habits. 44 2.5.2 Managerial and Personal Factors Several studies and interviews focus on e-HRM adoption by employees and managers, and explore many factors that influence e-HRM adoption by organization workforces. According to Zafer (2012), security concern is the most significant factor influencing workforce’s decisions to adopt e-HRM technology, managers and employees influence by information and communication security to ensure reliability of their information. Information security refers to computers security, is defined as the protection afford to an automat information system in order to attain the applicable objectives of preserving the confidentiality, integrity, and availability of information system resources(Stallings and Brown, 2008). Confidentiality assures that private information is kept safe from unauthorized individuals. It is critical for maintaining the privacy of the employee personal information (Wong and Thite, 2008). It is important to assure the integrity of both the data and the system. Availability assures that systems work and service is providing promptly to those who are authorized to use the system. Reluctance and resistance to change also influence workforces to adopt e-HRM technology. On the other hand, trust in a company is an important factor influencing the system adoption. Trust is not only 45 connected with security issues, but it is also related to company image, and company reputation. Personnel transactions and information processing are increasingly more vulnerable to security threats and risks due to the increase use and complexity of e-HRM systems. Accordingly, information security should be a critical important issue of concern for HR personnel. Davis (1989) developed the Technology Acceptance Model (TAM) in studying the determinants of IT usage. The goal of TAM was to present an explanation of the determination of computer acceptance technologies that is generally capable of explaining user behavior across a broad range of the end-user computing technologies. Furthermore, Davis (1989) explained many other factors affecting managers and employees acceptance technology, one of these factors is perceived ease of use. Davis (1989) defined perceived ease of use as "the degree to which a person believes that using a particular system would be free from effort". Employees and managers prefer simplicity in e-HRM systems and avoid the complex systems because they fear from errors and information losses. Besides perceived ease of use, another factor which is perceived usefulness shows influencing action on adoption of e-HRM. Perceived usefulness is defined as “the degree to which a user believes that using the system will enhance his or her performance" (Davis, 1989). Perceived 46 benefits and perceived usefulness influence employees and managers to adopt e-HRM technology. Perceived usefulness and perceived ease of use are the components of Technology Acceptance Model, which will be discussed later in this section. Attitude toward using technology and perceived behavioral control are the components of theory of planned behavior. These components influence employees and managers to adopt e-HRM technology. Attitude is either positive or negative evaluation on specific thing or person. Attitude is influenced by beliefs about the results. Organization workforces should realize e-HRM benefits to formulate positive attitude toward using this new system (Liao et al., 1999). 2.5.3 Organizational Factors Organizational factors are the factors which constitute organizational characteristics which influence adoption of e-HRM within different organizations. Yang et al. (2007) explained that technology adoption can be influence in organizations that show high level of centralizations because the top management can make adoption decision irrespective of resistance from lower level managers or employees. Furthermore, HRM system expertise or human capability and degree of centralization are also some significant factors influencing the adoption of HRM system. HRIS expertise which refers to employee knowledge to using new technology and technical competences in HRIS was found as an 47 important factor in the adoption of new technologies by Kwon and Zmud (1987). Therefore, successful adoption of e-HRM requires availability of skilled professionals in the organizations because if the users have lack of understanding of systems functions and features it can be a major obstacle in e-HRM adoption. According to Troshani et al. (2011) study which indicated that training is needed for all user levels such as operational and strategic levels to increase their knowledge and skills in using the system effectively. In addition, the authors also argued that degree of centralization effects adoption when decision is made at higher levels in organization. Many other factors drive organizational decision to adopt new systems, for example: organization size and supporting organization settings including a skilled workforce are important factors in successful innovation adoption. According to Hendrickson (2003) HRM systems must be varied in types and characteristics in order to suit with different companies sizes. A major HRM systems can be installed in large and small accompanies, but in small companies, for example, the use of this system considered as a huge expensive would be difficult to justify. Similarly, a large multinational company could create or purchase a database program just to access and perform the functions necessary to 48 operate, but it would be unmanageable and very limited solution compared with the organization size and number of employees. So, the effective of HR systems requires a balance between technical and critical information needs of the HR responsibilities according to the organizations size. Thereby, the size of the organization can define the needs of the HR function (Hendrickson, 2003). From what has been stated above, only large companies have tried to implement HRM systems of all three types, naming operational e-HRM, relational e-HRM and transformational e-HRM. On the other hand, smaller and mid-size company only tried to implement operational and relational e- HRM as these two HRM systems do not perform HR activities with a strategic character thus are less costly (Ruël et al., 2011) In addition, top management support is another important factor shows influencing action on adoption of e-HRM.CEOs attitude and interest towards ICT is important to promote technology adoption within the company (Yang et al., 2007). However, according to Teo et al. (2007) Technology adoption issues in the organizations not only connected with top management support, but also employee engagement is needed which is also greatly influenced by the management commitment. Many other studies showed that management commitment has a positive influence on e-HRM or IT adoption (Teo et al., 2007; Troshani et al., 2011; Yang et al., 2007). 49 2.5.4 Technological Factors Technological factors focus on the technology characteristics which can influence adoption of e-HRM technology. Technology readiness depends on organizations technology infrastructure and IT expertise resources. Based on IT human skills and knowledge that are used to build a database application and technology infrastructure makes an easier base on which internet technologies can be created and spread within organizations. E-HRM can become an integral part only if the organization has infrastructures and technical skills. These factors allow the technological capacity of an organization to adopt HRM systems (Oliveira and Martins, 2010). The organizations with superior technology readiness better to adopt e-HRM technology, companies that do not have strong technology infrastructure and wide IT expertise may not take the risk of adopting HRM systems. Many researches recognize technological readiness as a significant factor that influence IT adoption (Kwon and Zmud, 1987; Oliveira and Martins, 2010). Network security is an important factor which influences the adoption of HRM systems. In the globalization time, there are many risks which can harm all company information. Therefore, advanced infrastructure should be implemented by telecommunication ministry, 50 communication and Internet companies, and company interested on e-HRM technology to protect all significant data. Carter and Belanger (2004) Studies show that innovation characteristics adoption match with the technological factors, and pointed out three main influencing factors for e-Government technology adoption namely relative advantage, image and compatibility. These factors influence the decision to adopt a technology innovation. Similarly, Teo et al., (2001) in their research in Singapore found only relative advantage and compatibility as influencing factors in HRM systems adoption. Rogers (2008) defined complexity as the degree to which an innovation is perceived as relatively difficult to understand and use. Thereby, the institution must choose uncomplicated e-HRM systems to encourage employees to use it. In addition to these factors, organization strategy fit, HRM system adoption cost, degree of complexity or user friendliness, and systems efficiency were also found as significant influencing factors in Australian public sector organization (Troshani et al., 2011). Thus, it shows various numbers of technological factors contributing in influencing HRIS adoption as it is a type of innovation adoption. 2.5.5 Work Environment Factors Work environmental factors explain the area where organizations conduct their business, and include industry characteristics, government 51 regulation, and supporting work infrastructure (Oliveira and Martins, 2010; Troshani et al., 2011). According to Rogers (2003) in order to adopt innovation, information about them must be available to prospective adopters. Besides infrastructure and technical support, government also can play a vital role for encouraging technology adoption by raising awareness, training, and support, and funding (Troshani et al., 2011). Moreover, Ruël et al. (2004) in their paper explain six environmental characteristics that influence e-HRM implementation; these are competition, technological development, HRM state of art, labor market, societal developments and governmental regulation. The competitive advantage aims to reduce cost and serve more strategic role as well as to better manage and organize the employees within organizations. So, the firms must realize that they cannot be competitive if they do not manage their human resources effectively (Teo et al., 2007). Thus, this need has driven the organizations to use HRM systems as it can help make more informed decision, more efficient HR processes and better allocation of human resources in the organizations. Therefore, competition is counted as an influencing environmental factor in adopting e-HRM. However, Teo et al. (2007) found that competition only influence 52 the extent of HRIS adoption, further research in different firms or geographical area may show different result. 2.6 Technology Acceptance Models This research aims to study how to accept new technology within various companies, and to achieve the objectives of this research, it is important to discuss the theories and models of technology acceptance and planned behavior to accept these ideas within employees and managers and then to highlight the most significant factors that can be used to achieve acceptance of e-HRM. Acceptance terminology is defined as "the demonstrable willingness within a user group to employ Information Technology for the tasks it is designed to support" (Dillon and Morris, 1996). There are several acceptance technology models such as: technology acceptance model (TAM), theory of planned behavior, and Yale model of communication and persuasion. 2.6.1 Technology Acceptance Model (TAM) TAM model developed by Davis et al. (1986) to study the determination of IT usage, the purpose of TAM was “to provide an explanation of the determination of computer acceptance that is generally capable of explaining user behavior across a broad range of end-user computing technologies and user populations, while at the same time being both parsimonious and theoretically justified” (Davis, 1989). Furthermore, 53 a key purpose of TAM is to provide a basis for discovering the impact of external variables on internal beliefs, attitudes, intentions, and usage. TAM model clarifies the prediction of the acceptability of the information system tools, and to identify the modifications which must be brought to the system in order to make it acceptable to users. This model suggests that the acceptability of an information system is determined by two main factors: perceived usefulness and perceived ease of use. The TAM developed by Davis et al. (1989) is shown in Figure (2-1). Figure (2-1): Technology Acceptance Model (TAM). Source: Davis et al. (1989). Perceived ease of use refers to the degree to which a user believes that the use of a system will be effortless. Perceived usefulness is defined as being the degree to which a user believes that the use of a system will improve his/ her performance. Several factorial analyses demonstrated that perceived usefulness and perceived ease of use can be considered as two different dimensions. TAM based on the theory of reasoned action, and TAM axiom that the use of an information system is determined by the behavioral intention, but on the other hand, that the behavioral intention is determined by the person’s attitude towards the use of the system and also by his perception of its interest. According to Davis (1989), the attitude of an individual is not the only factor that determines his use of a system, but is also based on the 54 impact which it may have on his performance. Therefore, even if an employee does not welcome an information system, the probability that he will use it is high if he perceives that the system will improve his performance at work. Besides, the Technology Acceptance Model hypothesizes a direct link between perceived usefulness and perceived ease of use. With two systems offering the same features, a user will find more useful the one that he finds easier to use (Dillon and Morris, 1996). The reason why TAM is chosen in our research is because TAM has been tested empirically and supported through validations, replications, and applications (Venkatesh, 2000; Lee, 2010). TAM is one of the most powerful, strong and parsimonious model for predicting user acceptance especially in information system context (Bueno and Salmeron, 2008). According to Venkatesh (2000), “the parsimony of TAM combined with its predictive power makes it easy to apply to different situations”. 2.6.2 Theory of Planned Behavior (TPB) The Theory of Planned Behavior (TPB) developed to predict an individual's intention to engage in a behavior at a specific place and time, and it is based on the Theory of Reasoned Action in 1980. The theory was intended to explain all behaviors over which people have the ability to make self-control (Ajzen, 1988). The key component to this model is behavioral intent; behavioral intentions are influenced by the attitude about the likelihood that the 55 behavior will have the expected outcome and the subjective evaluation of the risks and benefits of that outcome. The following figure explains factors of Planned Behavior Theory (PBT). Figure (2-2): Planned Behavior Theory (Based on Ajzen, 1988). According to Taylor and Todd (1995) the TPB has been used successfully to predict and explain a large group of health behaviors and intentions including smoking, and health services utilization. The TPB states that behavioral achievement depends on both motivation (intention) and ability (behavioral control). It distinguishes between three types of beliefs: behavioral, normative, and control. It comprised of six constructs that collectively represent a person's actual control over the behavior: 1. Attitudes: refers to the degree to which a person has a favorable or unfavorable evaluation of the behavior of interest. 2. Behavioral intention: refers to the motivational factors that influence a given behavior where the stronger the intention to perform the behavior, the more likely the behavior will be performed. 3. Subjective norms: refers to the belief about whether most people approve or disapprove of the behavior. 4. Social norms: refers to the customary codes of behavior in a group or people or larger cultural context. Social norms are considered normative, or standard, in a group of people. 56 5. Perceived power: refers to the perceived presence of factors that may facilitate or obstruct performance of a behavior. Perceived power contributes to a person's perceived behavioral control over each of those factors. 6. Perceived behavioral control: refers to a person's perception of the ease or difficulty of performing the behavior of utility. Perceived behavioral control varies across situations and actions, which results in a person having varying perceptions of behavioral control depending on the situation. 2.6.3 Yale Model of Communication and Persuasion Yale Model of Communication and Persuasion was developed by Hovland and his colleagues and constitutes one of the most widely cited models of communication. Hovland defined communication as the “process by which a communicator transmits stimuli (usually verbal) to modify the attitudes and behaviors of other individuals (audience)” (Hovland and Janis, 1959). The model suggests that three factors influence the degree to which communication influences attitudes and behaviors: source factors, message factors, and audience characteristics. In addition, several message factors may influence the effectiveness of the communication process including 57 the order of arguments, the explicitness of requests, and the use of emotional appeals (Hovland, 1957). Likewise, the model argues that recipient characteristics also affect communication effectiveness such as personality, individuals' persuasibility, and intelligence (Hovlandand Janis, 1959). Although this model includes many of the primary factors thought to affect the acceptance of communication, McGuire (1969, 1985) expanded it with his Communication Persuasion Matrix Model. This model suggests that “attention and comprehension determine the degree to which the recipient will learn from the communicator's message, and the individual's motivation will determine whether he or she accepts or adopts what is learned” (McGuire, 1969). A graphical depiction of the model (Hovland and Janis, 1959) presented in Figure (2-3). Figure (2-3): Yale model of Communication and Persuasion (Janis and Hovland, 1959). Another basic assumption in the model is that the effect of any given communication depends on the extent it influences three processes: attention, comprehension, and acceptance. Thus, for communication to be effective recipients must attend to the information, comprehend what is communicated, and accept it. For instance, individuals may be less likely to attend to communication when sources have low levels of credibility or expertise. Furthermore, recipients may be less likely to comprehend or 58 understand a message when the source uses one-way rather than two-way communication. Also, the model suggests that recipients may be less likely to accept a message when it does not capture their attention or enable them to understand the information. This model has been selected in our search in order to reach the impact of the use of e-HRM to communicate between individuals within the organization and how we can develop communication skills among employees and managers through the adoption of new technology in the management. 59 Chapter Three Methodology and Data Collection 60 Chapter Three Methodology and Data Collection The chapter presents the research methods that are used in this study. In this chapter we explore research definition, research types, research approach, research strategy, the sampling techniques, and sample size. In addition this chapter outlines the design of research tool upon the methodology which is selected. Furthermore, it displays the quality standards for research tool and data collection results Moreover, this chapter involves some main ideas extracted from the interviews conduct with Palestinian IT specialists and some HR managers. In this chapter, the researcher introduces the research framework and presenting the research hypotheses. 3.1 Introduction Research methodology is the method or style researchers pursue in conducting their research. In fact, researchers select the research methodology according to the nature of the research itself. Each research has its uniqueness and properties (Alhamdani et al. 2006). 3.2 Research Types Kothari (1990) emphasized that research can be classified from three perspectives: 61 1. Application of research study. 2. Objectives of the research. 3. Inquiry mode employed. Application of Research Study From the application perspective, there are two different categories of research: 1. Pure Research: Include formulating, developing and testing theories and hypotheses that are intellectually challenging to the researcher but not necessary to have practical application at the present time or in the future. 2. Applied Research: Aims to find solution for specific problem or practical questions at present time or future. This research used widely in universities and industrial institutions. Based on this classification this research aims to find solutions at the present time to accept e-HRM in the service sector institutions to adopt new management style depending on the technology to organize work force. Hence, applied research is being used in to fulfill this approach. Objectives of the Research In terms of objectives, there are four different categories of research: 62 1. Descriptive Research: Is undertaken to describe specific situation, problem, phenomenon, service, or provides information about some scientific cases, or describes attitudes towards different issue. This type includes surveys and fact finding enquiries of different problems kinds. 2. Correlational Research: This type aims to test for statistical relationships between variables. In fact, correlational research used to discover or establish the existence of interdependence between two or more aspects of a situation or phenomenon. 3. Explanatory Research: Research design in which the major emphasis is on determining cause and effect relationships. This type attempts to clarify why and how there is a relationship between two or more aspects of a situation or phenomenon. 4. Exploratory Research: Conducted for a problem that has not been clearly defined. This type of research used to explore an area where little is known or to investigate the possibilities of undertaking a particular research study. Exploratory research helps determine the best research design, data collection method and selection of subjects. In this research, we conducted several interviews with HR managers, IT specialists, and employees in service sector in order to understand the 63 research problem accurately, and to reveal its ambiguity. Therefore, exploratory research is used in this area. Furthermore, this research needs to describe the current situation of the problem, answer the research questions, and to highlight the most important factors that influence the adoption of e-HRM in service sector institutions. Moreover, this research aims to explain the phenomenon and assess the current situation of e-HRM. Therefore, descriptive research is being used in to fulfill this approach. In addition, this research aims to compute the correlations between factors that influence e-HRM adoption and introduce e-HRM adoption model which join all factors together. Hence, Explanatory research is being used in to fulfill this approach. Inquiry Mode Employed From the process adopted to find answer to research questions, there are two approaches of research: 1. Structured Approach: The structured approach to inquiry is usually classified as quantitative research. In this type everything that forms the research process, objectives, design, methods, and the questions are predetermined. 2. Unstructured Approach: The unstructured approach is classified as qualitative research. This approach allows flexibility in the research process because not all research process is defined. It is more 64 appropriate to explore the nature of a problem, issue or phenomenon without quantifying it. In this research the theories, models, and factors that influence e- HRM adoption were chosen from literature and exploratory interviews. Depending on these factors and models, we designed the research model and we created the research hypothesis to be tested to gather data and observations. Structured approach was used in this area. 3.3 Research Approach Initially, a researcher must decide what approach of research is to be conducted. Researchers follow qualitative approach, quantitative approach, or both of them to realize and explain a specific phenomenon. Researchers choose the right approach depending on the research purpose, the nature of the research, the problem area, research questions, and research hypothesis to determine the appropriate approach in order to reach the desired results (Alhamdani et. al. 2006). Qualitative Approach is all about exploring issues, understanding phenomena, and answering research questions through using focus groups, interviews, content analysis, and evaluation. Quantitative Approach is based on the measurement of quantity or amount. It is applicable to phenomena that can be expressed in terms of quantity. In essence, this approach reduces the data into numbers. The 65 objective of quantitative research is to develop and employ mathematical models, theories and hypotheses pertaining to specific phenomena. To solve the research problem and answer the research questions, the researcher utilized a mixed model approach that combines both qualitative and quantitative approach. We used exploratory interviews to explore and understand the e-HRM phenomenon in service sector institutions. To achieve this purpose, we used flexible questions. Qualitative approach is used in this area. 3.4 Research Strategy Saunders (2007), illustrate the research strategy as a plan for drawing the research path through reflects the general approach and goals of a research study, researchers determine how they will develop their questions that solve research problem, and how these questions would be answered to achieve research purpose. Usually there are five kind of research strategy used for the research area to collect data and get results: experiment, survey, archival analysis, history and case study. Types of research questions determine the type of research strategy as the table (3-1) show: 66 Table (3-1): Choosing a research strategy depends on research question. Research Strategy Form of Research Question Experiment How, why Survey Who, what, where, how many, how much Archival Analysis Who, what, where, how many, how much History How, why Case Study How, why Source: Yin, 1994. The survey approach has been chosen in this research because the research questions are: What are the factors influencing the adoption of e- HRM? What is the impression about the benefits that can be obtained as a result of use of electronic administration? So the types of questions are in the form ‘WHAT’. Furthermore, to achieve the descriptive purpose, questionnaire is needed to illustrate the current situation of using e-HRM. An explanatory purpose can be achieved by using survey strategy through data analysis, and then determine the causal correlations between variables. To achieve the exploratory purpose, the survey strategy is also valid by many interviews and meetings with HR managers. From all the above, the most suitable strategy to follow in this research is the survey strategy. 67 3.5 Research Tools The researcher made exploratory interviews with IT specialists and some of HR managers to explore the problem of e-HRM adoption, assess the usage of e-HRM in Palestine, and investigate the factors that influence e-HRM technology adoption in Palestine. The questions of exploratory interviews are mentioned in Appendix B. Many face-to-face interviews have been held in order to discover the reality of HRM system and determine the level of the application and use of this technology within the companies involved in the research. All interviewees explained that all factors which discussed in literature are appropriate and influence e-HRM adoption in Palestine. In addition, they focused on the role of company in the adoption of e-HRM. Most of the Palestinian companies use a lot of the technological aspects in their work, such as: Web sites, e-careers, and electronic database. The trend towards using the HRM system becomes highly prevalent. Some of interviewees argued that Palestinian companies forced employees to use the e-HRM system because when the managers adopted it the employees do not have the choice to accept or reject it because they must commit to the company laws. This study is based on survey tools. Two surveys were designed to collect the required data. The first was interviews aimed to collect data from specific IT specialist and HR managers in the target organizations. 68 The second survey was a questionnaire to get quantified results to answer the research questions and hypotheses. 3.5.1 Interviews In this research, semi-structured interviews were used because the researcher needs to hear about research problem as much as possible with some restrictions or orders by defining some important. Furthermore, semi- structured interviews enable participants to answer the specific questions without limitations. The researcher conducted telephone interviews with HR department employees in order to guarantee the existence of electronic system in the organizations to choose a company within the group targeted by this research. These interviews are not the main tool for collecting data; it is just exploratory. On the other hand, the researcher conducted face-to-face interviews with some IT specialist and specific HR managers in the target organizations which are mentioned in the previous chapter. Furthermore, the number of interviews conducted was with seven participants to collect the required information. In this case should be noted that face-to-face interviews needed a lot of time and effort. The interviews questions were divided into two parts: � The first section contains the general information in order to discover the reality of e-HRM technology usage in the organizations, 69 determine the extent of their utilization, and the acceptance level by employees and managers for this technology. The questions in this filed are refined to be as the following: 1. What are the methods currently prevailing in the management of human resources in the Palestinian institutions? 2. What is the impact of human resource manager’s experience using computers and modern methods of communication on the acceptance of electronic administration? 3. What is the definition of e-HRM? 4. What is the impression about the benefits that can be obtained as a result of use of e-HRM? 5. Does the prevailing culture of the use of technology in the community and among employees have great influence on the use of e-HRM? 6. Does the development of ICT tools and networks affect the adoption of the use of e-HRM? 7. What is the impact of manager’s fear of safety and confidentiality of electronic information on the trend towards adoption of e-HRM? 70 8. Does the adoption of e-HRM increasing management effectiveness from the perspective of HR managers? And why? 9. What is the attitude of the senior management, technical managers, and employees toward using e-HRM? The second section of the interviews was illustrated by the questions relating to the factors that have been drawn from previous studies in e- HRM technology in order to confirm their importance in Palestinian institutions. The main questions in this section are the following: 1. What are the most important external factors that are affecting the using of e-HRM? 2. What is the relationship between each of the following factors on the adoption of e-HRM: • Ease of use? • Usefulness? • Company norms? • Attitude toward advancement? • Performance time? • System security? 71 3.5.2 Questionnaire Questionnaire was chosen as a research tool to test the research model which is formulated in Chapter two. Questionnaire is designed with clos