Changing the way HR departments do business through employee self-service

Changing the Way HR Departments Do Business Through Employee Self-Service

Thomas D. Cairns

© 2006 Wiley Periodicals, Inc.Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/ert.20087

The Internet revolution began in 1991,when British scientist Tim Berners-Lee

invented the World Wide Web (WWW).1 Asthis promising technology developed throughthe 1990s, entrepreneurs and venture capital-ists sought to exploit every opportunity itseemed to offer. The presumption was thattypical brick-and-mortar companies would bea thing of the past, replaced by a virtual com-pany delivering goods and services via theInternet. Though this has yet to occur, theuses of the Internet were perceived to be lim-itless—and indeed they were and are.

While the technology advanced, compa-nies continued to look for ways to apply theInternet to their businesses. The initial focuswas on using it to market products and ser-vices to customers. In doing this, companiessoon realized that the Internet was not only agreat marketing tool, but that it also enabledcustomers to complete transactions withoutleaving their homes. As the technologyimproved, Web sites became more elegantand robust with information. Large and smallbusinesses, government agencies, universi-ties, churches, and individuals were able touse the Internet to market products and/orservices. It almost certainly is not an exagger-ation to state that nearly every business hassome kind of presence on the Internet.

One of the major uses of the Internet byconsumers is to search for products and ser-vices. Several companies are vying to be the

number-one provider in this space. One ofthose companies is Google. Google’s mission,according to an executive at the company, “isto organize the world’s information.” Thetechnology certainly exists or will exist toenable Google to achieve this goal.2 Its suc-cess will depend on obtaining the information.

Information is the key to the success ofanyone who uses the Internet to marketgoods or services. Consequently, massiveefforts are under way to digitize every formand kind of data possible. If the three rulesin retail are location, location, and location,then the analogous rules in technology mustbe digitization, digitization, and digitization.

As organizations were focusing on theuses of the Internet for their external cus-tomers, they began to explore its uses withtheir internal customers—that is, managersand employees. As stated previously,Google’s goal is to organize the world’s infor-mation. Many companies have tried to dothis on a much smaller scale—to organizedata (employee information) and make itavailable to employees via an intranet. Com-panies use Internet technology but limitaccess to the site to employees only.

WHAT IS EMPLOYEE SELF-SERVICE?

The U.S. consumer understands the conceptof self-service. Whether at a gas pump, gro-cery store, or cafeteria, the idea of self-service

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Employment Relations Today

offers the consumer a certain level of speedand control. The Internet feeds on that notion.An intranet, a by-product of the Internet,offers the same idea to internal customers.

The concept of employee self-service firstemerged as an opportunity for humanresource departments to transfer certain HRtransactions/activities to employees throughan intranet. This would allow HR to focusless on administrative tasks and more onstrategic, value-added processes. The initial

focus of most HR-related intranet activitieswas on the employee benefit process. Thisprocess was manual, very transactional,labor-intensive, and high-volume. Byautomating the process and using an intranet,the idea of employee self-service (ESS) began.ESS set off a “change in the fundamentalparadigm of how employees would interactwith information they need and informationthey would own.”3

The Basis for ESS

The rationale for companies to implementESS was obvious. Because HR processescould be streamlined on an intranet, organi-zations could improve service to employeesand reduce costs. Printing and distributingcompany policies, corporate directories,employee handbooks, forms, and other workcould be replaced by posting these materialson an intranet, thereby reducing the costs ofmaterials, equipment, and labor. The num-ber of specialists and the amount of timethat HR would need to assist employeeswith simple transactions such as changes of

Thomas D. Cairns Employment Relations Today DOI 10.1002/ert

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address, emergency contact information, andbeneficiary information could be dramati-cally reduced, and in some cases eliminated.Employees could immediately access thenecessary information and implementchanges instantly.

According to a survey conducted of 100companies in 2000, over 60 percent of themallowed employees to complete their annualbenefit-enrollment processes online.4 Thenumber of companies doing this is mostlikely increasing yearly. Corresponding to thisis that, due to ESS, HR departments haveexperienced a “75 percent reduction in every-day benefit-related questions.”5

FUNDAMENTAL QUESTIONS WHENIMPLEMENTING AN ESS PROGRAM

When a company is considering implement-ing an ESS program, a number of factorsmust be considered.

1. Does the company have the internalresources (information technology) to cre-ate and support an intranet, or will it needto use the services of an outside vendor?

2. How comfortable are employees withusing technology, and do employees haveaccess to such technology?6

3. How will the company “persuade”employees that ESS is a benefit to them?7

4. Is the company prepared to invest intraining employees on how to use ESS?8

5. What applications will the company firstoffer to employees?9

The responses to these questions will varyfrom company to company. The need to ade-quately prepare for the implementation of anESS program, however, will not: “[The] deci-sions are easy, but hard to implement. Gaining

By automating the process and using an intranet, the ideaof employee self-service (ESS) began.

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cooperation within the human resource andinformation technology departments requireseffort. In addition, understanding which pro-cesses to impact and then making them consis-tent across the organization is no small chal-lenge, not to mention getting people to accepta new way of doing things.”10 Therefore, itseems obvious that HR should focus its effortson those areas that are value-added and easyto implement. Once the easy-to-implementareas are flawlessly executed, a company canmove into the more complex value-addedareas. See Exhibit 1 for a matrix that can beused to determine what activities have themost impact and ease of implementation.

ADVANTAGES AND DISADVANTAGES OF ESS

Human resource departments need toremind themselves, as increasingly more ispushed to ESS, that an intranet is a tool tofacilitate improved employee service. It doesnot replace the need for solid humanresource benefits, policies, and practices. Agood intranet site does not make up for apoorly designed benefits enrollment process,training program, employee handbook, orother function. Nor does a well-designedbenefits enrollment process, training pro-gram, or employee handbook negate the

Changing the Way HR Departments Do Business Through Employee Self-ServiceEmployment Relations Today DOI 10.1002/ert

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need for a fully integrated intranet system.There are clear advantages and disadvan-tages to ESS for both the employer andemployee. See Exhibits 2 and 3, which con-tain examples of both.

STRATEGIC APPROACH TO ESS IS KEY TO SUCCESS

As technology continues to advance, progres-sively more human resource applications canbe delivered on the intranet. Humanresources will need to be strategic in select-ing which HR applications to move to anintranet. The majority of HR tasks that havebeen moved to ESS have been transactionaland administrative. What is left are the morecomplex yet highly value-added tasks thathave direct effects on the manager-employeerelationship—compensation planning, succes-sion planning, training programs, and soforth. Since successful implementations ofESS have been “tactical,” a strategic approachwill be necessary in the future “if ESS isgoing to be a key factor in the paradigm-shift-ing transformation of the HR function.”11 ESSis well on its way to being institutionalized inorganizations today; however, the continuedsuccess of ESS will be dependent on HR con-tinuing to communicate to employees that

Simple ComplexHigh Value Basic employee information Performance appraisals

(e.g., change of address) Employee opinion surveysAnnual benefits enrollment Time and attendance infoCompany policies Training programsEmployee handbook Vacation tracking

Low Value Company directories

Exhibit 1. ESS Value-Added and Ease-of-Implementation Matrix


ESS is employee “empowerment” and employ-ees agreeing that it is not an “imposition” andthat their needs are being met.12 AmericanHonda Motor is strategically using ESS toprovide skills training to its employees. Afterevaluating what skills employees needed toensure quality customer service, AmericanHonda concluded that effective problem-solv-ing skills and decision-making skills were thekey components. These two skills were thebasis of “rational thinking skills” that Ameri-can Honda had trained employees in for


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years through a standard workshop format.However, American Honda looked for waysto blend e-learning with the more traditionalclassroom setting. The result was taking thefeatures of the workshop training that did notrequire instructor interaction and deliveringthem online.13

For example, training on the concepts ofeffective problem solving and decision mak-ing could be delivered online at theemployee’s own pace and be monitored by aninstructor. Once this phase was completed,

Advantages for Employer:• Reduce expense of:

• printing materials, forms;• distributing materials;• processing information, paperwork;• administrative support staff;• expert support staff; and• storing information.

• Provide employees access to pertinent information.• Provide more accurate and timely information.• Improve communication to employees.• Use an intranet for other applications, such as:

• employee performance assessments;• training (e.g., compliance, workplace violence);• employee opinion surveys;• time and attendance records;• compensation planning; and• succession planning.

Advantages for Employee:• Have instant access to information.• Get more accurate information.• Have personal control of information.• Increase privacy.• Have repository of important information and documents.• Use when convenient.

Exhibit 2. Advantages of ESS for Employers and Employees

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the employee would then learn how to applythe skills to real work situations. This actionlearning would take place in a classroom set-ting. Once the training is completed, theemployee returns to his or her job and startsapplying the learning in day-to-day situations.American Honda then uses ESS to reviewprogress and provide online “support toolsand information.”14

More than 300 American Honda employ-ees have gone through the “high-tech and


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high-touch” training in the past couple ofyears. American Honda believes the blendedtraining has been successful in helpingemployees retain and use the skills learned.Although no formal study has been con-ducted to evaluate the long-term effectivenessof the training methodology, the strategic useof ESS to improve the quality of customerservice is value-added.15

Another area for the strategic use of ESSis in employee performance management.

Disadvantages for Employer• Fail to realize reduced expenses from decrease in support staff because of:

• the need to invest in human resource technology and• the expense of creating and supporting IT infrastructure.

• Encounter new communication problems, including: • reminding employees to keep information current;• ensuring that employees access their information and make pertinent changes; and• ensuring that employees receive important communication they need to act on.

• Encounter issues of training and access, for example:• training employees to use the intranet and• providing for employees who do not have access to the intranet.

• Must allow employees access to experts as support without replacing the requirement to use the intranet.

• Printed materials and forms must remain available.• Must resist tendency to put everything on the intranet.• Cannot overload employees with requests for information and feedback.• Changes must be validated as well as confirmed.• Maintain adequate interaction with employees about matters important to them.

Disadvantages for Employee• Experience information overload.• Have less interaction with experts.• Have limited access to experts.• May miss important deadlines.• May not be computer-savvy.• May have concerns that “Big Brother” is watching.• Data filed exclusively electronically may prove less reliable

Exhibit 3. Disadvantages of ESS for Employers and Employees


Since the intranet can store significantamounts of employee performance informa-tion, many companies have placed theiremployee evaluation forms on the intranet.Employees and managers can be notifiedautomatically about the need to completeperformance appraisals. Employees are ableto complete their portions of the perfor-mance appraisal online and submit it to theirmanagers. The manager can access anemployee’s self-evaluation and complete hisor her portion of the appraisal. Once the ini-tial review is completed, the next step in theprocess is approval at the next level of man-agement and then formal feedback to theemployee. When this process is complete,there is a documented record of employeeperformance. This not only documentsemployee performance but also can providea history of the employee’s past perfor-mance. The record can further include infor-

mation on employee development and train-ing. For example, information about trainingcourses the employee has completed can bestored on an intranet.

The value of having the performanceappraisal process online is that it facilitatesperformance feedback. Employees areempowered to complete their performanceappraisals. The bottleneck in the performanceappraisal process is usually with the man-ager. Most managers need help in preparing aquality performance review and learning howto conduct an effective employee feedbacksession. Using ESS in the performance man-agement process enables HR to focus onthese more value-added activities.


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THE CONTINUING IMPACT OF TECHNOLOGYON MANAGEMENT AND ESS

The Internet and its offspring, the intranet,continue to have a profound effect on thework environment. The Internet and itsenabling technology have helped create infor-mation-based organizations. Through theimplementation of ESS, human resource pro-fessionals facilitate employees “learning touse information generated by a computer—data that has been analyzed, synthesized, andorganized in useful ways.”16

As technology advances, one of the “great-est benefits of an HR self-service platform isthat it can help an organization move to abroader employee portal, allowing employeesto access a range of other applications andservices, from industry news to facilitiesinformation and financial metrics.”17 Addi-tionally, ESS and the evolving manager self-service (MSS) will transform the traditionalmanager-employee relationship from one thatrelies on management structure to conveydaily work direction to one with less controland more goal and expectation setting, allow-ing employees to determine how to achievetheir goals.18 If technology has changed theway business is conducted, it has alsochanged the way employees are managed.

CONCLUSION

Human resource departments were some ofthe early adopters of intranets. The initialinterest was in reducing operating expenseswhile improving employee services. Humanresource departments seized the opportunityto convert many of their transactional func-tions and activities to ESS. However, the costbenefit of implementing ESS has not beenachieved, due to the expenses of entry and of

The value of having the performance appraisal processonline is that it facilitates performance feedback.

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the continuing support of new Web-enablingtechnology. Still, ESS has achieved improvedemployee communication and delivery of HRservices, though these gains are difficult toquantify. Employees have accepted ESS, butfurther research is necessary to determinethe level of employee satisfaction.

Human resource departments continue toshift from providers of administrative func-tions to strategic business partners. Humanresource executives have a unique opportu-nity to provide leadership in the new infor-mation-based organization. Human resourceswill need to continue to monitor the impactthat ESS has on the manager-employee rela-tionship. Technology may assist good leader-ship, but it will never replace it.

NOTES

1. Sullivan, B. (2001). Internet founder working on secretoptical brew. ISP Business News, 7(2), 13.

2. Grossman, L. (2003, March 31). How the web was spun.Time, 161(13), A66.

3. Wegner, J. (2004, July 14). Study shows Internet nowbeginning to pay off for firms after initial costs. USAToday, p. 3B.


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4. LaPointe, J. R. (1998). Seven steps to successful ESS. HRFocus, 75(4), S13.

5. Elswick, J. (2001, September 15). Employee self-servicesoars, but ROI lags. Employee Benefit News, pp. 1–2.

6. Ascentis Software. (2003, June). Special advertising sec-tion: 2003 product showcase. Workforce, 82(6), 82.

7. Lampron, F. (2002). Is ESS right for your company? HRMagazine, 47(12), 77.

8. Crosby, A. (2004). Persuading workers to serve themselves.National Underwriter Life & Health, 108(30), 29.

9. Employee self-service. (2002). Strategic Finance, 83(12),19.

10. See note 8.11. Roberts, B. (2004). Empowerment or imposition. HR Mag-

azine, 49(6), 158.12. See note 4.13. Roberts, B. (2004). Empowerment or imposition. HR Mag-

azine, 49(6), 157–166.14. Stottler, W. (2004). Improving service quality at Honda.

Quality Progress, 37(10), 33–38.15. Ibid., p. 36.16. Cetron, M. J., & Davies, O. (2001). Trends now changing

the world: Technology, the workplace, management, andinstitutions. Futurist, p. 39.

17. Rodgers, K. (2003, May 7). Do-it-yourself HR functionsreap benefits: Employee self-service. Financial Times, p. 4.

18. See note 13.

Dr. Thomas D. Cairns is senior vice president of human resources for NBC Universal.He has responsibility for all HR functions for digital, television, and studio operations. Hehas published a number of HR-related articles and teaches HR leadership at the graduatelevel. His interests are mainly in labor relations, HR leadership, and HR team building.He may be contacted via e-mail at [email protected]. This article is excerptedand adapted from the 2006 Pfeiffer Annual: Human Resource Management (with CD-ROM), Robert C. Preziosi (Ed.) (2005), by permission of Pfeiffer/A Wiley Imprint.

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Changing the way HR departments do business through employee self-service