Human Resource Planning and Virtual Human Resource Management

Paper instructions:
Read Application Case 5-1 on pages 145-146 in the text. Analyze the case and thoroughly answer the four questions at the end of the case.

Application Case 5-1
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Just tt few years ago. computer technology offered a revolutionary change in human
resource management. Organizations experimented with computerized skills invento-
ries. pay and benefits administration. and applicant tracking systems. Today. the revolu-
tion continues but is undergoing fundamental changes as computer technology and the
Internet grow at unprecedented rates. Human resource management is moving away
from a mainframe technology to the world of virtual reality. with the Internet at its core.
Although many forces drive this change. one of the most important is the globalization
of business. As organizations spread their operations and personnel worldwide. the need
for a truly global. integrated human resource inforination system has reached critical
levels. The most obvious answer-virtuaI human resource management on the World
Wide Web.

A 2006 survey of HR decision makers across 325 major organizations in North
America indicates that 9 out of 10 firms use the Web for HR.-related activities such as
benefit enrollment- This is in contrast to survey findings from 1977 which suggested that
only 2? percent of surveyed organizations reported using the Web for its HR systems.
Over the past Io years. the nutnber of US. companies using the Web for its I-[R system
ltas more than tripled.

The most common uses of the Internet in human resource planning are in corporate
communications. applicant and resume tracking. and benefits and retirement planning. in
the area of recruiting. Humana Inc. has created one of the most advanced applicant identi-
fication and tracking systems in the world. Humana is an HMO with approximately 20,000
employees and 6 million subscribers. [is human resource recruiters can rapidly identify.
contact. and track qualified applicants for virtually any job opening in their organization.
Humana‘s success revolves around a specialized software application, Soltshoe Select, provided
by and linked to This software automatically searches millions of individual
Web pages looking for resumes that meet any need that Hurnana may have. While setup
costs are relatively large (a one-time fee of $50,000 for licensing and configuration in
addition to a $2,000 per month lease). organizations such as Humana find that the costs are
well worth the efl‘orts. I-lumana. for example. estimates that it previously spent an average
of $l28 in advertising to find a single qualified applicant’s resume. Today. it estimates
that the cost is approximately $.06. For Humana. that translates into an annual savings of
$8.3 million.

The Internet is also helping revolutionize a number of other human resource planning
activities for many organizations. Citibank. for example. has a single global HRIS that
maintains a detailed skills inventory, compensation database. and HR practices for 98
countries and 10.000 managerial personnel worldwide. Numerous other global employers
have created employee self-service compensation and benefits systems that allow employ-
ees from around the globe to manage many of their own HR activities. For example. em-
ployees at Shell Oil Company manage their retirement plans. tnaintain andior change
health care coverage. and track other petsonallgfifllhiitiiil inllflfiilfofihflldlihugh an auto-
mated. self-service system.

Use of the Internet in these kinds of human resource planning activities is not. however.
without danger. The ease of access to so much information always has the potential to cre-
ate both legal and ethical abuse. both by employees and by hackers. or unauthorized users
of the system. Organizations must take all necessary precautions to safeguard the privacy

Part Two Acquiring Human Resources
and integrity of these virtual human resource systems. The challenges are immense. but the
organizational consequences can be invaluable.
Sources: Prepared by lames Phillips using information from “2006 HR Service Delivery Survey
Rt-port-Executive Sumtrrary,” Towers Perrin (http:h’www.towersperrin.con1 accessed on January 2!. T
2008), Samuel Greengard (August 1998), “Hurnana Takes Online Recruiting to a Hire Level.’
Worlrforce. p. 75; Scott l-lays (March 1999), “Reach Out to Expats via the Web,” Workforce. PP- 46-43″;
Gary Meyer (April 1999).. ‘Soltshoe Select: An Engine for Internet-Based Recruiting,” HR Magazine.
pp. 112-I 6: Steven Mccornticlr (October 1993), “The Virtual I-llt Organization,‘ Management
Accounting, pp. 48-51: l.lnda Sttoh, Sven Grassltoff, Andre l-lucle, and Nancy Carter (April 1998),
Integrated Hlt Systems Help Develop Global Leaders,“ HR Magazine, pp. I4-1 7.
li’i.-t’tI.-1-it2-it (.}llt”.’_1ll[lll”-«
I . How has the emergence of the lntemet changed the way that organizations plan nd
manage their human resource needs?
2. What kinds of future human resource activities might we see developed over the next
several years‘?
3. What are the legal and ethical issues surrounding the use of the Internet by individual
employees for human resource activities? Are you concerned about violations of your
own privacy because of these kinds of Web applications?
4. What specialized skills will the future l-IRIS professional need in order to effectively
manage an organization’s virtual human resource function?
Notes 1. Bill’Maca1eerandJonesSharmnn(January2tll3).“Doesl-IRP1anninglmproveBusiness Perfor-
rnance?” lndrrrrrial Management, Vol. 45. Ins. I, pp. 14-21:. Ronald C. Page and David M. Van
De Voprt (1985)), “Job linal)-sis and l_li’ayne E grseio (od.)_, Human Resource
Planning Emplaynmu & Placement Chhshingtoa, DC: Bureau of Nadonal Afiiiira). pp. 34-72.
2. Kristina I. Bartseh (November 2009). “’l‘he Employrmat Projections for 2008-I8.” Moruhly
Labor Review; Buruu of Labor Statistics.
3. Steven Mandet-scheid d Mitdrell Kusy (2005), “How to Design Strategy with No Dust-Just
Rwrltsl” Organizational Develmrrenr .bra-rial. Vol. 23. lss. 2, pp. 92-71; Alan Seharf{Januar3r-
Pcbnurry I991 ), “Secrets ofstratqie Planning: Rsponrling to the Opportunities ofTornonrrw.”
Induunbl Management, pp. 9-Io.
4. Btian.B.:Beclter and..Marlr Agtfluselid (2fl5}.. “Str’etem’e.l-lurnan.Ruourees-Manegetnenu
When Do We Go From Hue?” Joanna! offlanaganau, Vol. 32, Iss. 6, pp. 893-W5; Bob Kane
and Ian Palmer (I995), “Strategic HRH or Managing the Employment Rdalionsltip.” Intersta-
lional Journal ofhfanpawer: pp. 6-21.
5. Kurt F”rsche_r (2003), “Traltsforming HRGIohally: The Caitu of Bxcellmce Approach,” Human
Resource Planning, Vol. 26, Isa. 2. pp. 9-11; Patrick M. Wright (I998). “Strntegy-HR Fit:
Don It Really Matter,” Human Resource Planning, pp. 56-57.
6. Wayne F. Casein (2003). Marragiag Human Resaruees, ah ed. (Boston: Mefiravr-Hill). p. 177;
Page and Van De Voort. “Job Analysis and HR Planning,” p. 62.
7. Kenneth .l. Zola and ‘Thomas 1. Chermaek (2007). “Human Capital Planning: A Review of
Literature and Implications for Human Raouree Development.” Hurnan Resou rte Development
Revieiu Vol. 6. lss. 3, pp. 245-63; Simon Lam and John Schauhroeclr (1998), “lnteparing HR
Hanning and Organizational Strategy,” Huntnn Resource Monagemerrt‘ Journal. pp. 5-I 9.
8. Susan Carey (Septm 17, 2010), “Aha Vote on Airline Merger, Real Work Starts,” The Wail
Street Jorrmnl, p. B4.
9. Christian Zeller (2004). “North Atlantic Innovation Relations of Swiss Pharmaceuticals and
the Pronirnities with Regional Biotech Arenas.” Economic Geography, Vol. 80, lss. I,


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