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THE INFLUENCE OF E-HRM ON EMPLOYEE PERFORMANCE IN SELECTED CONSTRUCTION
COMPANIES
AIM1 DAMIA BINTI MAT ALI
MASTER OF HUMAN RESOURCE MANAGEMENT UNIVERSITI UTARA MALAYSIA
AUGUST 2020
THE INFLUENCE OF E-HRM ON EMPLOYEE PERFORMANCE IN SELECTED CONSTRUCTION COMPANIES
By
AIM1 DAMIA BINTI MAT ALI
Thesis Submitted to School of Business Management,
Universiti Utara Malaysia,
in Partial Fulfdment of the Requirement for the Master of Human Resource Management
Universltl Utara Malaysia
Sap, mengaAar bertandatangan, m e m k a n batma
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EMPLOYEE PfRNlRMMlCE M SELECTED C ~ R U C T I O W COMPANIESBrrhawa brtas penyelidikan tersebut ti&h ctaerima dari seg4 bent& setta k m k g a n dm meE@Ai bidang h dengrvn memuaskan.
~ t t h e m ~ p a p e r a c c e p t a b k , h t h e h a n d m M ~ d t h a t a ~ ~ o f & W k c o ~ by the researdr papeI).
Nama knyeSi PROF. MAOYA DR. TRIl FEE YEAH pame d Sup&sor)
Tandatangan
PERMLSSION TO USE
In presenting this thesis in partial fulfillment of the requirements for a Post Graduate degree from the Universiti Utara Malaysia (UUM), I agree that the Library of this university may make it freely available for inspection. I further agree
that
permission for copying this dissertatiodproject paper in any manner, in whole or in part, for scholarly purposes may be granted by my supervisor(s) or in their absence, by the Dean of School of Business Management where I did my dissertatiodproject paper. It is understood that any copying or publication or use of this dissertationlproject paper parts of it for financial gain shall not be allowed without my written permission. It is also understood that due recognition shall be given to me and to the UUM in any scholarly use which may be made of any material in my dissertatiodproject paper.Request for permission to copy or to make other use of materials in this dissertatiodproject paper in whole or in part should be addressed to:
Dean of School of Business Management Universiti Utara Malaysia
0601 0 UUM Sintok Kedah Darul Aman
ABSTRACT
Electronic Human Resource Management (e-HRM) is a way to implement human resource strategies, policies, and practices. E-HRM, through Web-based technology, supports the HR fknction to satisfy the organisation's HR needs. By using this system, human resource management (HRM) can help to reduce costs, deliver information faster, and increase the performance in handling human resource tasks more efficiently and effectively. The aim of this study, is to determine the influence of e-HRM (e- Recruitment and Selection, e-Training and Development, e-Compensation and Benefit and e-Performance) on employee performance in construction companies. The quantitative method was used for data collection via the use of questionnaires. A stratified random sampling was carried out for a population that consisted of 400 employees ffom 20 construction companies. The study found that e-HRM has a positive relationship (i.e. e-compensation and benefit, and e-performance) to the performance of employees. The study's results also indicated that the relationship between e-recruitment and selection, and employee performance was insignificant.
Meanwhile, e-training and development was negatively wrrelated with employee performance. In practice, according to the findings of the current study, e-performance has more influence on employee performance than e-compensation and benefit. An effective use of eHRM has increased the performance of employees.
Keywords: E-recruitment and selection, e-training and development, e-compensation and benefit, e-performance, e-HRM
ABSTRAK
Elektronik pengurusan sumber manusia (e-HRM) adalah cara untuk melaksanakan strategi, polisi, dan amalan sumber manusia. E-HRM, menyokong fungsi sumber manusia melalui teknologi yang berasaskan laman web demi memenuhi keperluan sumber manusia dalam sesebuah organisasi. Dengan menggunakan sistem ini, pengumsan sumber manusia dapat membantu organisasi mengurangkan kos, berkongsi dan menyampaikan m e a t dengan cepat serta dapat meningkatkan prestasi sumber manusia dengan lebih efisien dan efektif. Oleh itu, objektif kajian ini adalah untuk mengetahui pengaruh e-HRM (e-perehtan dan pemilihan, latihan dan pembangunan, e-pampasan dan faedah, clan e-prestasi) terhadap prestasi pekerja di syarikat pembinaan. Kaedah kuantitatif digunakan. Pengumpulan data adalah melalui soal selidik. Persampelan rawak berstrata dilakukan yang terdiri daripada 400 kakitangan dari 20 buah syarikat pembinaan. Kajian ini mendapati bahawa e-HRM mempunyai hubungan positif (iaitu, e-parnpasan dan faedah, dan e-prestasi) dengan prestasi pekerja. Keputusan kajian juga menunjukkan bahawa tiada hubungan antara e-perekrutan dan pemilihan dengan prestasi pekerja. Selain itu, keputusan regresi menunjukkan bahawa e-latihan dan pembangunan mempengaruhi prestasi pekerja secara negatif. Berdasarkan penemuan kajian, e-prestasi mempakan faktor pengaruh . - yang paling signifikan terhadap prestasi pekerja berbanding de&an e-pampasan dan faedah. Penggunaan e-HRMsecara berkesan bempaya meningkatkan prestasi pekerja.
Kt& kunci: E-pereloutan dan pemilihan, e-latihan dan pembangunan, e-pampasan
dan faedah, e-prestasi, e-HRM
ACKNOWLEDGEMENTS
In the name of Almighty ALLAH (SWT), the Most Merciful and the Most Gracious, Praise and Peace be upon His beloved our Prophet Muhammad (PBH), his family and his companions and by the will of ALLAH (SWT), we escape darkness into enlightenment. I strongly believe that going through the Master's journey is a challenging undertaking which is only made possible when ALLAH (SWT) makes it easy by His kindness.
Firstly, I would like to express my deepest gratitude to my honourable supervisor, Assoc. Prof. Dr. Tan Fee Yean for providing invaluable guidance throughout my Master's journey and for her extra-ordinary tips in writing this dissertation paper. The entire research owed its pace to the wonderful comments and expertise sharing of my supervisors. In fact, I feel in my heart that without her advice and constructive criticisms this dissertation paper would never have been written.
In addition, my love and appreciation is extended to my parents who have always kept me in their blessings and love. Moreover, I am thankful to my husband, Mohd Jeffry Mohd Annorwar for his sacrifices as well as for giving inspiration, moral support, encouragement and well-wishes throughout the study period.
TABLE OF CONTENTS
TITLE PAGE
CERTIFICATION O F RESEARCH PAPER PERMISSION TO USE
ABSTRACT ABSTRAK
ACKNOWLEDGEMENT TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES
LIST OF ABBREVIATION
CHAPTER ONE: INTRODUCTION 1.1 Background of the Study
1.2 Problem Statement 1.3 Research Questions
1.4 Research Objectives 1.5 Scope of Study 1.6 Significance of Study 1.7 Definitions of Key Temw 1.8 Organization of the Thesis
Page
i
11
..
. . .
Ill
iv v vi vii xi
xii
. . .
Xlll
CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction
2.2 Definition and Conceptualisation of Variables 2.2.1 Employee Performance
2.2.2 E-Recruitment and Selection 2.2.3 E-Training and Development 2.2.4 E-compensation and Benefits
2.3 Underlying Theory
2.3.1 Information Systems (IS) Success Model 2.3.2 Human Capital Theory (HCT)
2.4 Research Framework 2.5 Hypothesis Development
2.5.1 E-recruitment and Selection and Employee Performance 2.5.2 E-training and Development and Employee Performance 2.5.3 E-compensation and Benefit and Employee Performance 2.5.4 E-performance and Employee Performance
2.6 Summary
CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Introduction
3.2 Research Design
3.3 Population and Sample 3.4 Measurements
3.4.1 Dependent Variable 3.4.2 Independent Variable 3.5 Questionnaire Design 3.6 Pilot Study
3.7 Data Collection Procedure 3.8 Data Analysis Techniques 3.9 Summary
CHAPTER FOUR: RESEARCH METHODOLOGY
Introduction Rate of Response
Demographic Profile of the Respondents Reliability Analysis
Descriptive Statistics Correlation Analysis Regression Analysis
Summary of Hypothesis Testing Summary
CHAPTER FIVE: DISCUSSION
Introduction
Discussion of Findings
The relationship between e-recruitment and selection and employee performance
The relationship between e-training and development and employee performance
The relationship between e-compensation and benefit and
employee performance
The relationship between e-performance and employee performance
Implication of study
Limitations of the Study and Suggestions for Future Research Conclusion
REFERENCES APPENDICES
LIST OF TABLES
Table 3.1 Table 3.2
Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 4.1 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6 Table 4.7
Table 4.8
Krejcie and Morgan (1970)
Number of Employees in a Random Selection of Construction Companies in Selangor.
Dependent Variable Independent Variable Layout of the Questionnaire
Cronbach's Alpha Reliability Analysis Response Rate
Demographic Profile of the Respondents
Cronbach's Alpha Reliability Analysis Descriptive Statistics
Strength of Linear Relationship Correlation Between Variables
Regression Results of E-HRM Practices and Employee Performance
Summarised Result of Hypothesis Testing
LIST OF FTGURES
Figure 2.1 Information Systems (IS) Success Model.
Figure 2.2 Human Capital Theory Model.
Figure 2.3 Theoretical Framework.
Page 22 24 25
Abbreviation E-HRM HCT HR HRM IT IS SMEs SPSS
LIST OF ABBREVIATION
Description of abbreviation
Electronic Human Resource Management Human Capital Theory
Human resource
Human Resource Management Information Technology Information System
Small and Medium-sized Enterprises Statistical Package for the Social Sciences
xiii
CHAPTER 1 INTRODUCTION
1.1 BACKGROUND OF STUDY
The advent of new technology also presents challenges of competitive benefits to an organisation. The organisation needs to compete in the market in order to retain their employees and to improve the quality of work. One of the technologies in human resource systems is Electronic Human Resource Management which is also known as e-HRM. By using this system, human resource management (HRM) can help to reduce costs, deliver information faster, and increase the performance in handling human resource tasks more efficiently and effectively. Companies find themselves in never ending competition with regard to customers with high qualitative, low cost, and performance expectations (Nivlouei, 2014). According to Nzuve (2007) observation, when good practices of e-HRM are employed in companies, the productivity of employees can be increased and organisation goals can also be achieved. Nyambegera, (2005) and Okumbe (2001) also observed that companies with good practices of e- HRM are able to retain or keep their talented employees, and are also able to attract the most talented new employees from the labour market to join them. Many companies have been introduced to e-HRM systems which are frequently labelled as web-based applications for HRM purposes (Swaroop, 2012).
E-HRM is the planning and application of web-based technology channels to implement a company's human resource strategies, policies, and practices (Gurol, 2010). In other words, e-HRM is the application of electronic technology which enables interactions between employee and employers. The purpose is to transform the human resource functions into one which is paper-less, flexible and also enables
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APPENDlCES Appendix - A
Survey Questionnaire
Dear Participant,
The purpose of the attached survey questionnaire is to understand the e-HRM practices of the selected construction companies in Selangor. The survey questionnaire consisted of some statements and you are requested to give the appropriate answer.
This questionnaire is designed to assess your perception of your e-HRM practices influence on the employee performance.
There is no right or wrong answers in this survey. All your answers will reflect your personal opinion about the cument e-HRM pactices of your organization.Individual responses to this survey will be kept CONFIDENTIAL and will NOT be disclosed.
Your company will have NO access to the information you have provided herein.
Besides, no reference will be made in writing or orally that could link you to this study.
Only summarized data will be reported in the results.
Please read carefully the instruction at the beginning of the questionnaire and answer all the statements as accurately as possible. Your time and cooperation will be highly appreciated. Please take a few minutes to fill out this survey questionnaire. Thank you in advance for taking your valuable time to complete this survey.
Yours faithfully,
Aimi Damia Binti Mat Ali
Master Candidate, School of Business Management, College of Business Universiti Utara Malaysia
06010 UUM Sintok, Kedah Darul Aman, Malaysia.
Phone: +6 018 382 4166; e-mail: airnydarnia@hotmail.com
THE INFLUENCES OF E-HRM ON THE INDIVIDUAL EMPLOYEE PERFORMANCE IN CONSTRUCTION INDUSTFUES IN SELANGOR
RESEARCH PAPER FOR MASTER IN HUMAN RESOURCES MANAGEMENT
PART A: DEMOGRAPHIC INFORMATION
Kindly tick
(4)
the appropriate response in the box provided1 Gender:
Male 2 Age in years
1 8 3 0 31 - 40 41-50 50 and above 3 Level of education
SPM Diploma
Degree
L!
Masters
1 1 '
4 Length of selvice in your current organization:
1-3 years 4-6 years
more than 7 years
5 How long has it been introduced EHRM?
1-3 years 4-6 years
more than 7 years
PART B:
The perception of influence of EHRM on the individual employee's performance is scored on a five -
5 - Strongly agree, 4 - Agree, 3 -
Average, 2 - Disagree, 1 - Strongly Disagree
Section I: Influence of e - Recruitment and e- Selection on individual employee's performance of Construction Industries in Selangor
uccess rate of recruitment &
I
selection process.I I
Section 11: Influence of e - Training & Development on individual employee's performance of Construction Industries in Selangor
Section 111: Influence of e - Compensation and Benefit on individual employee's performance of Coilstruction Industries in Selangor
Section IV: Influence of e -Performance on individual employee's performance of Construction Industries in Selangor
10
salary calculation enhances speed and accuracy
NO.
11
12
13
14
15
16
Disagree 2 The discussion of employee
performance is no longer done face to face.
My company is using performance appraisal software for evaluation purposes.
E-HRM tools can he used to improve underlying business processes.
E-HRM tools have allowed for higher quality HR services.
E-HRM tools allow me to work more productively.
E-HRM tools improve quality of services.
Average 3 Str@$@x :,.. .>..,~
Disagee 1
Agree 4
---
Strongly Agree
5
HR services have been streamlined and standardized using information
-HRM activities reduce cost
The use of e-HRM tools is more cost effective than manual HR
The advantages of e-HRM are outweighed by the cost
Section V: Dependent variable: User 1 Individual employee's performance
Strongly AgWe
5 Agree
4 Disagree
2
-
Strongly Disagree
1 NO
21
22
Average 3 E-HRM tools provlde current
rnformatlon that 1s beneficla1 to employee related
declsion m a h n g E-HRM tools help HR
practitioners handlrng tasks more
systematic and efficient Fewer errors occur when
24
-
25
26
HR professionals, wlth the help of e-HRM tools, can play more of an advlso~y
role to line
management E-HRM tools able to help HR
Manager make the declsrons qurckly and better
The use of e-HRM tools has led to
the automation of routrne HR
work
Appendix - B
Frequency Of Demographic
FREQUENCIES VARIABLES=AQl AQ2 AQ3 AQ4 AQ5 /ORDER=ANALYSIS.
Frequency Table
A Q I Statistics
AQ5 200
0
1
Valid 41-50I
Valid N
Missing
MALE Valid FEMALE
Total
Frequency
I
50 AND ABOVETntal
I
AQ2 200
0 AQ 1
200 0
Valid Percent
47.0 53.0 100.0
Cumulative Percent
47.0 100.0 Frequency
94 106 200
I I I I
Percent
37.5 30.0 26.0 6.5 inn n AQ3
200 0
Percent
47.0 53.0 100.0
75 60 52 13 7nn
AQ4 200
0
Valid Percent
37.5 30.0 26.0 6.5 inn n
Cumulative Percent
AQ3
I
1-3 YEARSI
1001
50.0AQ4
Percent SPM
DIPLOMA Valid DEGREE
MASTER Total
Frequency Percent
34.0 29.5 33.5 3.0 100.0 Frequency
68 59 67 6 200
Percent
I
TotalI
2001
10001
100.01 I
4-6 YEARS Valid
MORE THAN 7 YEARS
I
Frequency PercentValid Percent
34.0 29.5 33.5 3.0 100.0
Cumulative Percent
34.0 63.5 97.0 100.0
41 59
4-6 YEARS 20.5
Valid
MORE THAN 7 YEARS
I I I
26.0I I
Total
I
2001
100.020.5 29.5
1-3 YEARS
Valid Percent Cumulative
I
20.5 29.5
107
Percent
100.0 70.5 100.0
53.5
Appendix - C Reliability
Independent Variable-1: E-recruitment and selection
Cronbach's
Alpha Alpha Based on Standardized
ltems
ltem Statistics
BQR7
BQR8 4.01 ,437
Inter-Item Correlation Matrix
1.000
BQR7 1.000
BQR8 ,477 ,788 1.000
Independent Variable-2: E-training and development
Summary ltem Statistics
Reliability Statistics Cronbach's
Alpha Alpha Based on Standardized
N of Items
3
Items
Maximum / Minimum
2.105 Item Means
,758
Valiance
1.436 Maximum
4.010
.702 3
Range
2.105 Mean
3.288
Minimum
1.905
OOZ OOZ OOZ
ooz
N
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P1 30 8
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30 8
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tl
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sl!is!lels u al l
n!
ls
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suealn] Mall SEE'Z
a6 ue
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wnlu!u!ln]
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OOZ S8
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96 E
paz!pJepuels
uo paseg eqdlv
suean wa)l
s3!js!)e)S L ua
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et uw ns
S66'E uean
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S9o'P wnw!xen
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ZOO' a3 ue
!~
e~
L ZO ' 1 wnw!u!n
wnw!xew 1
S O L '
a6 ue
~
Inter-Item Correlation Matrix
Dependent Variable: Employee Performance
BQP16 BQP17 BQP18 BQP19 BQP20 BQP21 BQP22 BQP23 BQP24 BQP25
Summary ltem Statistics
Cronbach's
Alpha Alpha Based on
Standardized Item Means
BQPl6
1.000 492 .779 .617 -.239 -.I40 ,208 ,480 3 5 3 ,687
Mean
4.015
ltems BQPl7
,492 1.000 ,668 ,664 -.254 -.I48 ,518 ,509 ,755 ,599
.784
Minimum
3.920 BQPl8
,779 5 6 8 1.000 ,768 -.289 -.I69 ,297 ,579 ,618 .710
3 6 0
Maximum
4.1 30
6 BQPl
9 ,617 ,664 ,768 1.000 -.218 -.I27 ,235 ,437 ,491 .548
Range
,210 BQP20
-.239 -.254 -.289 -.218 1.000 ,416 .391 ,429 -.239 -.267
Maximum /
Minimum 1.054 BQP21
-.I40 -.I 48 -.I69 -.I27 ,416 1.000 -.I43 ,432 -.I40 -.I56
Variance
.005 BQP22
,208 5 1 8 ,297 .235 ,391 -.I43 1.000 ,491 ,453 .I 11
N of Items
10 BQP23
,480 509 ,579 .437 ,429 ,432 .491 1.000 ,480 ,536
BQP24
,653 ,755 618 ,491 -.239 -.I40 ,453 ,480 1.000 ,544
BQP25
.687 .599 ,710 ,548 -.267
-. 156 .I11 ,536 ,544 1 .OOO
ltem Statistics
BQU26 BQU27 BQU28 BQU29 BQU30 BQU31
Inter-Item Correlation Matrix
BQU26 BQU27 BQU28 BQU29 BQU30 BQU31
Summary ltem Statistics Mean
4.06 3.96 4.06 3.90 3.99 3.88
Mean
I
BQU26 1 0 0 0
,547 1.000 ,533 ,571 ,415
Minimum Std. Deviation
,238 .484 .238 ,525 ,448 ,684
Minimum
N 200 200 200 200 200 200
BQU27 ,547 1 .OOO
5 4 7 6 3 4 5 0 0 .I66
Item Means 3.973
Maximum BQU28
1 .OOO ,547 1.000 ,533 ,571 ,415
3.880
Range BQU29
,533 ,634 5 3 3 1 .OOO
,551 ,301
4.060
Maximum / BQU30
.571 5 0 0 571 .551 1.000 .I 93
.I 80
BQU31 ,415 ,166 .415 ,301 .I93 1.000
Variance N of Items
1.046 .006 6