payroll system
MGX9850 - Human Resource Management Assignment: Literature ReviewAbraham Auzan (20326335)Page|
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MAKING THE DECISION TO OUTSOURCEHUMAN RESOURCE
LITERATURE REVIEW ON OUTSOURCING AREAPreviously, many companies used outsourcing and subcontracting to support their productionand manufacturing operation, especially for their low level function, such a labor, cleaningservices, etc. In addition, currently most of the core business functions in companies are shiftedby outsourcing, such as Finance function, IT function, and HR function. In several instances,companies hire a third party to perform and maintain their IT system and contract accountingfirms to support their finance system. According to Caruth, outsourcing is defined ascontracting the third party outside the company to perform the function that previouslyperforms in-house (2008).The increase of the outsourcing practices in many firms over the decade make the HumanResources function undergo several changes in term of services (Klass, 2008). This functiontraditionally has to handle administrative and transactional services for large number andseveral category of employee in a firm. Apparently by third party, several traditional HumanResources function was shifted, moreover by using technology, such as Business ProcessOutsource or BPO. These phenomena lead the staff reduction and made major changes inhuman resource function in company, more over it might bring several drawbacks to thecompany. In other hand, companies need to run this strategy in order to achieve the companystrategy based on the drivers that is compatible with the company condition.This literature review will elaborate the decision making in outsourcing the HR function byexamining the area of outsourcing, main drivers of outsourcing the HR function, drawback of outsourcing, and the effect of the function and career path in Human Resource Management.According to Caruth, there is several areas of HR Function which can and cannot be
1
MAKING THE DECISION TO OUTSOURCEHUMAN RESOURCE
LITERATURE REVIEW ON OUTSOURCING AREAPreviously, many companies used outsourcing and subcontracting to support their productionand manufacturing operation, especially for their low level function, such a labor, cleaningservices, etc. In addition, currently most of the core business functions in companies are shiftedby outsourcing, such as Finance function, IT function, and HR function. In several instances,companies hire a third party to perform and maintain their IT system and contract accountingfirms to support their finance system. According to Caruth, outsourcing is defined ascontracting the third party outside the company to perform the function that previouslyperforms in-house (2008).The increase of the outsourcing practices in many firms over the decade make the HumanResources function undergo several changes in term of services (Klass, 2008). This functiontraditionally has to handle administrative and transactional services for large number andseveral category of employee in a firm. Apparently by third party, several traditional HumanResources function was shifted, moreover by using technology, such as Business ProcessOutsource or BPO. These phenomena lead the staff reduction and made major changes inhuman resource function in company, more over it might bring several drawbacks to thecompany. In other hand, companies need to run this strategy in order to achieve the companystrategy based on the drivers that is compatible with the company condition.This literature review will elaborate the decision making in outsourcing the HR function byexamining the area of outsourcing, main drivers of outsourcing the HR function, drawback of outsourcing, and the effect of the function and career path in Human Resource Management.According to Caruth, there is several areas of HR Function which can and cannot be