16. Limitations of e-compensation and ESS systems
Even though e-compensation systems may have some administrative advantages, one of the major limitations of these systems is
that it is not clear that they help organizations motivate and retain critical employees. For example, these systems are based on the
D.L. Stone et al. / Human Resource Management Review 25 (2015) 216–231 225
assumption that pay and market based salaries are the primary factors that affect motivation and retention levels. However, it is well
known that employees with diverse cultural values have different reward references, and make unique tradeoffs between pay and
other important values (e.g., time off with family, location) (Stone et al., 2003; Stone-Romero, Isenhour, & Stone, 2011). For example,
today more than every before organizations have a diverse workforce that include men, women, numerous ethnic groups, people with
disabilities, those with LGBT orientations, and a variety of generations (e.g., baby boomers as well as Generation X and Y). It is also
expected that members of ethnic subgroups in the U. S. (e.g., Hispanic-Americans, African-Americans, Native Americans) will become
the majority in 2060 (U.S. Census Bureau, 2012).
As the diversity of the workforce increases organizations may have to develop new compensation and reward systems to retain
critical employees (e.g., Cennamo & Gardner, 2008; Stone et al., 2006; Stone‐Romero, Stone, & Salas, 2003). For instance, research
on generational differences indicated that the work values of students have changed over time (Twenge, Campbell, Hoffman, &
Lance, 2010). Twenge and her colleagues examined the work values of high school students at three different points in time (1976,
1991, and 2006), and found that the importance of leisure increased overtime, but the emphasis on work decreased (Twenge et al.,
2010). That same study found that extrinsic values (e.g., status, money) peaked with Generation X, but were higher among Generation
Y than Baby Boomers. Furthermore, social values (e.g., altruism) were rated lower among Generation Y than Baby Boomers. Other researchers
reported that members of Generation Y were more likely to value job security, a relaxed work environment, and personal
growth than other generations (Guillot-Soulez & Soulez, 2014; Po-Ju & Soo, 2008).
In terms of ethnic minorities, some research found that Hispanic-Americans (Hispanics) were more likely to value flexible hours,
organizational reputation, and diversity than Anglo-Americans (Anglos) (Stone et al., 2006). In addition, Hispanics with high power
distance were more likely to accept lower pay in order to work for a high status organization than Anglos (Stone-Romero et al.,
2011). Furthermore, African-Americans were more likely to value lifestyle, work environments and supervisors than Anglos
(Hammond, Betz, Multon, & Irvin, 2010).
Taken together, these findings suggested that in order to motivate and retain a diverse workforce, e-compensation systems may
need to expand beyond merely pay and benefits, and incorporate the more general notion of "e-rewards." The use of new interactive
technologies (e.g., Web 2.0, internal social media, crowdsourcing) may be especially effective in developing these new systems. For
instance, organizations might use internal social media or crowdsourcing to identify the reward preferences of employees, and
develop cafeteria reward systems that can be used to meet their needs (e.g., Stone et al., 2006). In particular, these new interactive
technologies (e.g., internal social media, virtual conferences, crowdsourcing) may help organizations gather and analyze data about
employees' reward preferences, and develop more flexible and effective reward systems.
Research on the effectiveness and acceptance of ESS indicated that even though employees are generally satisfied with ESS, there
are limitations associated with them that need to be considered. First, some researchers argued that these systems may transfer the
work from HR to managers and employees, thus overloading line managers and line employees which may decrease overall productivity
in organizations (e.g., Gueutal & Falbe, 2005; Hawking et al., 2004; Stone et al., 2003). Second, benefit systems may be negatively
affected by the use of ESS because many employees still need the advice of HR professionals when selecting health insurance or other
types of benefits (e.g., Gueutal & Falbe, 2005; Stone et al., 2003). Third, ESS systems tend to be one-way communication systems that
do not always give employees the chance to ask questions or interact with expert HR professionals. Therefore, despite the widespread
usage of ESS, these systems may not be effective or fully accepted by employees (Marler & Dulebohn, 2005).
Interestingly, research from marketing on service quality examined customers' reactions to a variety of self-service technologies
(SSTs) such as ATMs, automated hotel checkout, pay-at-the pump terminals, and retail self-service checkout (see, for example,
Bitner, Brown, & Meuter, 2000; Dabholkar & Bagozzi, 2002; Meuter, Ostrom, Roundtree, & Bitner, 2000). These research findings
have important implications for understanding employees’ reactions to ESS. For example, research on SSTs revealed that a number
of factors were related to users' acceptance of these systems including: ease of use, location, time savings, and avoidance of service
personnel (Meuter et al., 2000). SST research findings also suggested that system factors affect user dissatisfaction levels, such as
technical failure, poor system design, difficulty of use, and loss of password (Meuter et al., 2000). Furthermore, studies found that individual
traits such as novelty seeking, computer self-efficacy, self-consciousness, and need for interaction moderated the relationship
between SSTs and user attitudes (Dabholkar & Bagozzi, 2002). Other studies found that individuals' motivation, ability, and role clarity
were related to attitudes toward SSTs and their usage rates (i.e., Curran, Meuter, & Surprenant, 2003; Meuter, Bitner, Ostrom, & Brown,
2005).
Taken together, the research on SSTs was consistent with a number of elements in the model of ESS acceptance developed by
Marler and Dulebohn (2005), including the need to focus on individual factors (e.g., compute self-efficacy, motivation), personal outcome
expectancies (e.g., time savings, convenience) in addition to focusing on technology factors (e.g., ease of use). Notably, these
findings echo earlier suggestions that organizations should adopt new technologies that provide for two-way communication
(e.g., virtual conferences or benefit fairs), and solicit information from employees (e.g., internal social media). In view of these concerns,
organizations using e-compensation and/or ESS should adopt technologies that enhance, not replace, the interaction between
employees, managers, and HR professionals.
17. Conclusion and Perspectives on eHR
In recent years, technology has had a dramatic impact on the field of HR, and as technology evolves it is likely to move the field in
some very new directions in the future. Despite the widespread adoption of eHR practices, there are still a number of questions about
whether these new systems enable organizations to achieve their primary HR goals. In addition, the current systems have a number of
limitations including the fact that they (a) employ one-way communication systems, (b) are impersonal, (c) passive, and (d) may
226 D.L. Stone et al. / Human Resource Management Review 25 (2015) 216–231
preclude individuals with low computer skills from gaining access to jobs. Furthermore, some analysts have argued that technology
has resulted in a form of "outsourcing" for HR (S. Casino, personal communication, July 15, 2014).
First, given that the "electronic revolution" has been going on for more than 20 years, it's surprising to find so few studies on the
various eHR topics and processes. Most of the eHR research has been on e-training and e-recruiting with very little research on other
HR areas. Second, the general take-away from eHR research is that many of the traditional HR research findings also apply to eHR. In
this sense, even though the technologies used may be new, the basic HR goals still hold true; e.g., the goal of recruitment is to make
successful placement, the goal of selection is to hire the most talented and diverse employees, and the goal of training is to enhance the
knowledge and skills of the workforce. In spite of these goals, most of the research on e HR has focused on strategies for implementing
electronic processes, and increasing their acceptance.. Relatively little research has examined the extent to which e HR enables
organizations to achieve their basic HR goals.
The movement toward eHR is expected to grow in the future, and the hope is that research on eHR will also increase. As we undergo
this shift in technology, two questions come to mind that will have long-term effects on the field of HR as a whole.
18. Is the "real" goal of eHR "efficiency" or "effectiveness"?
This question represents one of the basic conflicts in Management; in this context, the concern is whether the real purpose of eHR
is to reduce costs and increase speed of delivery, or to attract, motivate, and retain a highly talented and diverse workforce. Granted,
there is a middleground, but as with any area of Management the issue is whether mass implementation is pursued at the expense of
specialized services. The danger is that the more HR becomes technology-focused, rather than employee-focused, the field of HR as a
whole may be viewed as more of a management "tool" and less as a valued strategic partner. We are not saying that technology
doesn't matter, but we are saying that technology is merely a decision support tool that should enhance, not replace, the role of
managers and HR professionals in organizations.
19. Does eHR result in a transaction-based versus relations