TuffahaPerello-MarinSuarez-Ruz - Key Elements in Transferring Knowledge of The AI Implementation ...
TuffahaPerello-MarinSuarez-Ruz - Key Elements in Transferring Knowledge of The AI Implementation ...
TuffahaPerello-MarinSuarez-Ruz - Key Elements in Transferring Knowledge of The AI Implementation ...
Journal of Business Science and Applied Management, Volume 17, Issue 1, 2022
M Rosario Perello-Marin
Business Administration and Management School, Universitat Politècnica de València
Camino de Vera s/n E-46022 Valencia, Spain
Email: [email protected]
Esperanza Suarez-Ruz
School of Industrial Engineering, Universitat Politècnica de València
Camino de Vera s/n E-46022 Valencia, Spain
Email: [email protected]
Abstract
Although artificial intelligence (AI) is transforming the workplace structure, very little is known about
the strategy that facilitates AI implementation in organizations. The purpose of this paper is to explore
key elements in transferring knowledge of the AI implementation process in human resource
management (HRM) from the perspective of AI consultants. This study utilizes qualitative data
analysis techniques. We first review the literature and then conduct in-depth semistructured interviews
with eight AI consultants. We analyze transcripts using the ATLAS.ti software. First, this research
reveals that AI implementation is affected by a shortage of employee data, no clear vision, a limited
understanding of the AI decisions framework and managers’ desire to bypass AI decisions. Second, the
combination of an intensive training program and assigning AI specialists is the best way to transfer the
knowledge of AI implementation processes to HR managers. Third, HR managers should create
communication channels and enhance employees’ awareness of the positive impact that AI solutions
have on smooth collaboration with AI-employees. The paper also reveals that accelerating the process
of implementing AI applications has no negative impact in COVID-19 times. However, an AI bias may
be considered a potential threat for AI implementation. This paper attempts to provide a practical
understanding of the elements that facilitate AI implementation in the HRM process. It provides vital
insights for HR managers and AI developers to benchmark their activities when designing and adopting
AI solutions. It also contributes to the literature by responding to the question of how AI
implementation should be provided to HR managers and employees.
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1. INTRODUCTION
Data is becoming the most valuable asset for any organization and might be its only truly
inimitable asset (de Medeiros et al., 2020). Organizations have ample access to massive volumes of
data from several sources, which, when reliably and quickly processed, significantly increases the
likelihood of obtaining valuable insights to guide decision makers and employee performance in the
HR department (Wan & Liu, 2021). HR data plays a crucial role in guiding the performance measure in
a competitive business environment. This includes employee data, such as employee performance,
employee behavioural patterns, attendance, compensation and other personal data (Pillai & Sivathanu,
2021). Researchers have noticed that data strongly influences strategy formulation because the increase
in data and analytical capabilities is redefining innovation, competition and productivity (Nisar, et al.,
2021). According to an interview published by the McKinsey Global Institute, conducted by Barr Seitz
and Rob Roy: “Having a data-first mentality is a crucial first step, but then you need to put in place the
processes and capabilities to be able to use this data” (Seitz & Roy, 2018). Therefore, HR data needs to
be appropriately managed to maintain data quality depending on two assets: emerging technology and
human asset (Yablonsky, 2021).
Artificial intelligence (AI) is considered the most advanced technology that transforms the nature
of the workplace and the relationships among employees. Based on a study conducted by McKinsey
and Company in 2020 about the state of AI, revenue increased from adopting AI in human resources by
55% and adopting AI across several teams led to 33% increased team efficiency (McKinsey, 2020).
These advantages of AI depend on a large set of technologies that allow the computer to perform many
HR tasks that generally require human intervention. These tasks extend to covering data mining in
recruitment and selection (Allal-Chérif et al., 2021), employee turnover (Zhang et al., 2021) and data
extraction, with an emphasis placed on employee performance and productivity (Arslan et al., 2021).
For instance, IBM and Microsoft are using AI and data mining to identify suitable candidates for
particular jobs by standardizing candidate sourcing and C.V screening methods for all their subsidiaries
(Garg et al., 2021). Similarly, Human Capital Management (HCM) from Oracle is using data-driven
insights, which help with talent acquisition and advanced HR metrics as a part of AI–HR process
integration (Fernandez J. , 2019).
HR data-driven solutions have a constructive effect on survival during times of crisis and
pandemics (Vahdat, 2021). COVID-19 is a contagious infectious pandemic that negatively influences
major economic sectors globally. This influence is driven by a series of widespread lockdowns of
various sizes, marking it as the first crisis and life-changing phenomenon of its type for nearly 7 billion
people around the world (Nguyen et al., 2021; Nizamidou & Vouzas, 2018). This crisis has, in turn,
posed financial challenges for organizations as a result of a massive decrease in product demand and
sharp declines of in-house employee numbers due to isolation and social distancing, which inevitably
leads to fewer investments (Adikaram et al., 2021). On the one hand, companies are concerned to
ensure their employees’ health and safety. On the other hand, curtailing the spread of this virus means
having to make drastic changes in the workplace structure and employee performance (He et al., 2021).
Disruption in the workplace, such as that caused by COVID-19, prompts the need for a novel
solution to facilitate remote working options. The AI-powered solution is bridging the physical world
and the digital world by strengthening human-machine interactions and fostering automation through
integrations between smart machines and HR tasks (Pereira et al., 2021). Accordingly, AI is considered
the recent key answer in the unexpected situations faced by individuals and corporations related to
business survival in disasters (Kashyap & Raghuvanshi, 2020). In fact 52% of US companies are
accelerating their AI investments in the wake of the COVID-19 crisis in different company areas (PwC,
2020). One international bank has created a source of truth from datasets and launched an AI-powered
chatbot to respond to customer queries. These efforts not only helped customers, but also demonstrated
to employees the role of AI in facilitating job demands (McKinsey, 2020). Therefore, AI
implementation acts as the optimum solution for organizations and technology developers to bypass
COVID-19 challenges.
On the other side of the story, human assets, HR managers and employees are playing a crucial
role in maintaining the quality of data and uploading these data in AI-powered solutions to leverage
these solutions (Wiblen & Marler, 2019). Both HR managers and employees have witnessed the
advanced role of AI applications in several human resource management (HRM) functions. From a
manager’s perspective, AI facilitates the functions of collecting, managing, analyzing and visualizing
large amounts of data to generate recommendations and insights (de Medeiros et al., 2020). From an
employee’s perspective, AI enables employees to work in both physical and virtual spaces. These
facilities will help employees to save useless commuting time, provide them with more flexibility,
enable them to manage work and collaborate with no time and place constraints (Malik et al., 2021).
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Organizations have taken advantage of AI in different ways, which has led to a massive change in
the landscape of HR processes. However, there are still challenges and difficulties to be addressed with
AI advantages (Tambe et al., 2019), for instance: the data generation stage, employees' learning
capabilities, the accountability questions associated with fairness and ethical constraints, possible
adverse employee reactions to management’s decisions via data-based AI (Harney & Collings, 2021).
These challenges have brought about a need to enhance HR managers’ knowledge about AI and how
this technology should be adopted among their employees. Kolbjørnsrud et al. (2017) report that
managers are not confident enough about AI. Their readiness and enthusiasm for AI may vary
extensively across organizational levels, which raises serious questions about the optimum strategy for
sharing knowledge of the AI implementation process.
The importance of extending HR managers' and employees’ knowledge about AI implementation
has been further highlighted by Chang (2020). He calls for further studies to investigate the best HR
manager-employee balance for AI implementation and how knowledge about AI implementation
processes can be provided to HR managers and employees. At the same time, the current massive
challenges posed by COVID-19 provide an opportunity for management scholars to extend research
efforts and turn them into actionable insights. These initiatives will support organizations in handling
one of the greatest challenges in modern history by identifying the potential impact of COVID-19 on
AI implementation (Hamouche, 2021).
Despite several studies having been conducted on AI implementation in HR tasks, such as
recruiting, selecting and performance management (Wall & Schellmann, 2021; Tuffaha & Perello-
Marin, 2021; Xiong & Xia, 2020), there is still a gap in the literature in terms of understanding the best
HR manager-employee balance for AI implementation. To overcome these gaps, the following research
questions (RQs) are raised:
RQ1: How can the knowledge of AI implementation process be transferred to HR managers?
RQ2: What kind of strategies can HR managers adopt for smooth AI implementation among
employees?
Our analysis contributes to the literature about HRM in AI in several ways. First, we develop a
practical understanding of the elements facilitating AI implementation in the HR department during a
pandemic. Second, our study responds to Chang’s (2020) request to research the best-demand balance
for AI implementation. Finally, this novel research will be beneficial for HR managers and AI
developers when designing and adopting AI solutions.
The article is organized as follows. We first provide a literature review. Then we discuss the
methods. Next we analyze the categories reported by the participants. This is followed by a section
with discussion and implications. The final section offers some conclusions.
2. LITERATURE REVIEW
This section attempts to look closely at what is currently known about AI solutions in HR, the role
of AI in COVID-19 times and the effects of AI implementation on HR managers and employees. We
review the literature and technical reports on AI and HRM. HRM and COVID-19 are also considered.
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machine learning and artificial neural networks (ANN) (Ali & Frimpong, 2020; Lu, 2021). The main
advantages of AI, such as high-speed processing, big data mining and sophisticated prediction and
analysis, differentiate AI from existing heritage IT applications (Cheng & Hackett, 2021). These
advantages help HR managers to save time and to make accurate decisions (Borges et al., 2021) in
critical tasks like recruitment and selection, performance management and workforce planning (Black
& van Esch, 2021; Santana & Valle-Cabrera, 2021).
3. RESEARCH METHODOLOGY
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8 Director, AI & over 16 Helping PwC and its clients benefit Online
FinTech Leader years of from global AI insights and expertise interview
in PwC experience Leading the development of AI- (via Zoom)
enabled products and solutions
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Cleaning Coding
data Online
Data interviews Schedule interview
cleaning was were 5.5% interviewees
done to recorded and showed an interest and
eliminate then participated in the study.
unnecessary converted Interviews were
values, into conducted via Zoom
characters, transcripts
numbers and by the cloud
spaces from 365 single
transcripts. Microsoft
sheet
4. FINDINGS
Data analysis has been done with the help of statistical tools like Statistical Package for the Social
Sciences (SPSS) and Structural Equation Modelling using AMOS version 21. To ensure the validity of
the Information quality measures (adapted scale), Exploratory Factor Analysis (EFA) was conducted.
The EFA result showed a one-dimensional scale of information quality. The total variance explained
was 67.20%. Further to establish convergent validity, mainly three criteria are used: “Factor loadings
>0.7>, Average Variance Extracted (AVE) >0.50 and Composite Reliability (CR)>0.7” (Sarstedt,
Ringle and Hair, 2017; Hair et al., 2018). The results are under the prescribed threshold limits. Table 2
displays the factor loadings along with Cronbach’s Alpha values. The correlation matrix, composite
reliability (CR), and AVE of the study variables are shown in Table 3.
The analysis of interviewees’ responses revealed three major categories: 1) challenges associated
with AI implementation in the HR process in COVID-19 times; 2) transfer of knowledge about AI
implementation processes to HR managers; 3) HR managers' strategy for smooth AI-employees
interaction (Figure 2). The first two categories addressed the first question, while the third category
dealt with the second question.
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Figure 2: Key elements to transfer knowledge about AI implementation processes for HRM in
COVID-19 times
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Interviewee 7: “Massive volumes of data would be worthless unless AI models unlock the
potential of these data and turn them into information”.
Table 2: Themes identified for Research Question 1 (RQ1) (Part 1)
The next theme was the unclear vision on the areas where AI is used to support organizational
performance (16.6%), which resulted from the ambiguity as to how AI is building its decisions or
predictions. HR managers frequently lack an understanding of the assumptions and decisions made by
AI. They also need standardized assessments of the overall risk and financial metrics of AI like return
on investment (ROI). Additionally, tools that explain how AI systems make decisions could enable
managers to better understand the potential risk associated with AI implementation. Quoted below are
some instances from interviewees’ answers:
Interviewee 3: “One organization manager told me: we are facing problems to build a clear
vision for the future of AI in our company resulting from the ambiguous process of the AI decisions”.
Interviewee 4: “HR managers need a clear conceptual model to analyze the ROI when adopting
AI in their departments; such as potential risks and financial impacts. We know the features of AI, but
managers are unaware of the disadvantages of AI in their departments”.
Another theme is that managers wish to have the authority to bypass AI solutions (11.2%). AI has
wide applications for integrating information, analyzing data and using the insights gained to improve
employee performance. However, interviewees admitted that their organization’s manager wishes to
have the upper hand in the final AI decision related to employees. Some instances from interviewees’
answers are quoted below:
Interviewee 6: “Another challenge that we are facing is: to what extent should AI be involved in
decision making? Some HR managers would like to use AI internally but, at the same time, they want
the authority to bypass AI solutions”.
Interviewee 3: “Some companies are not responding to AI recommendations, which poses
obstacles to machines toward generating correct decisions in the future”.
Finally, another aspect worth highlighting is that all interviewees shared the same impression: AI
is the best solution that organizations should adopt to manage their employees and to minimize the
influence of uncertainty and confusion. Therefore, AI-powered solutions and implementation are in
great demand in COVID-19 times. These responses are reasonable if we analyze the advantages of AI
in the virtual workplace. These advantages include but are not limited to: 1) the role of AI-powered
solutions in effectively achieving employees’ tasks; 2) helping the HR department to follow up the
analysis of the sentiment of employees and to flag up employees’ concerns; 3) detecting employee
engagement trends across specific employee segments (PwC, 2020)
Along similar lines, all the interviewees also reported that accelerating AI implementation during
pandemics does not have a negative impact on organization performance. However, interviewees voice
a concern about the negative impact of AI bias on organizational performance.
An AI algorithm decision is based on training data, which may either include biased human
decisions or reflect historic or social concerns, even if sensitive variables like gender, race or sexual
orientation are removed. Algorithm biases reduce employees’ ability to participate in developing their
organization by encouraging mistrust, which may produce inadequate results.
Business and organizational leaders need to ensure that the adopted AI system is free from
algorithm bias to maintain the quality of the decision-making process. They have the responsibility to
encourage the progress of research and standards that reduce any bias in AI to eliminate potential
negative impacts from implementing AI. The following remarks made by AI consultants reflect this
approach:
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Interviewee 3: “if we have an algorithm that is biased toward women because of training data,
this will be reflected in the determinant of women’s future success, and women who have trained will
be subject to an AI algorithm bias because most leading positions have to be for men”.
Interviewee 6: “The role of imbalanced data is vital for introducing bias. Feeding AI with the
correct dataset is vital to maintain the perfect image in the face of our employees. Otherwise AI
implementation will collapse”.
Based on our data, it would appear that while AI is a tempting next step toward creating value for
organizations and employees, shortage of data and the relationship of mistrust between AI and
managers have been considered a barrier for AI implementation. These challenges are boosting the
need for initiatives that eliminate the risk of users being threatened by AI implementation. This
message is similar to a project launched by the European Union called “TRUST-AI” (European, 2020)
to develop trust in AI adequacy to tackle predictable.
Note: Only the themes with a frequency of more than 2 were included
AI’s contribution to the organization’s performance depends, on the one hand, on enhancing HR
managers’ knowledge by an intensive training program and, on the other hand, appointing an AI
specialist in the organization. Quoted below are some instances from interviewees’ answers:
Interviewee 1: “If I need an AI solution for interviewing candidates, this kind of solution needs the
recruiter to be familiar with the AI system. At the same time, AI technicians should be available in the
organization to maintain data and to cover any problems if the system collapses.”
Interviewee 7: “I believe that internal training is not enough alone. The organization should
assign an AI specialist who is aware of this recently emerged technology to maintain the follow-up of
data in the AI solution”.
To maintain the quality of the first point of view (Theme 2.1), and to explore the potential
negative impact on the organization’s performance, the authors followed interviewees’ answers with
another question: “If AI specialists are hired, could the role of AI specialists overlap that of decision
makers?”. The first point of view believed that AI specialists would have no reflection on HR decisions
for two reasons: 1) AI specialists do not work for the HR department only, but facilitate AI
implementation for other departments within the organization; 2) AI specialists work as consultants
only because HR managers have the qualitative and quantitative skills which are difficult for AI
specialists to acquire. Some instances from interviewees’ answers are quoted below:
Interviewee 7: “AI specialists should do cross-company work, and not just deal with HR. They are
solutions-oriented and AI specialists perform cross-domain functions”.
Interviewee 4: “AI specialists provide and explain why this recommendation is proposed. They
play no role in final management decisions”.
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The second point of view (Theme 2.2) emphasizes that the training program is a sufficient way to
transfer knowledge about the AI implementation process (22%). Here it was argued that personal data
and employee performance data should remain confidential and not be exposed to any third party.
Quoted below are some instances from interviewees’ answers:
Interviewee 2: “We should not accept the AI specialists’ point because [1] of data privacy, and
[2] they could guide us in the wrong direction, which could affect on the functionality of the HR
department”.
Interviewee 4: “Training is key for AI implementation. We can’t expose our employee data to a
third party. We can go for some kind of external support, but only at the beginning. But, in the end, you
have to manage the whole process”.
The first point of view is in line with the finding reported by Khabiri et al. (2012). They claimed
that the most important aspect of technology transformation is how to transfer technology and which
mechanism offers the transferee more benefits. Collaboration between the transferer (the AI specialist
in our case) and transferee (HR managers in our case) is essential for the smooth implementation of
new technology. Therefore, in parallel to what is noted above, the authors decided to follow the first
point of view as a key factor for transferring knowledge about the AI implementation process to HR
managers.
Note: Only the themes with a frequency of more than 2 were included
Another dominant theme was enhancing awareness about the positive impact of AI on employee
performance (14%). AI plays a role in accelerating the achievement of employees' daily tedious work
by providing a powerful database and analytical support for their decisions. To rule out alternative
explanations, the dominating idea spread among employees that AI-powered solutions are machine-
oriented and have difficulties in understanding human perceptions. To eliminate negative perceptions,
HR managers should offer practical evidence to convince employees of the abilities of AI-powered
solutions in customized recommendations depending on the tasks demanded. Quoted below are some
instances from the interviewees’ answers:
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Interviewee 1: “HR managers should make employees aware of the usefulness of AI; it’s here to
support them, not to disturb them, as well as sharing the message that employees could promote
themselves by focusing on developing their skills. On the one hand you improve your performance and,
on the other hand, it could minimize your routine”.
Interviewee 2: “Promote awareness with real examples. For instance, if you would like to speak
with HR staff, obviously you have to talk during working hours. But if you're talking to AI-powered
chatbots you can talk at night once you're back home after work. So this atmosphere should be
dominant among employees. AI minimizes employees’ routine tasks and maintains the organization’s
reputation”.
Therefore, employees collaborating with AI maintains the balance among job demand,
professional development and social life (8.5%). AI is led to constantly change in the jobs conducted
by employees. Combining the rapid speed of AI development with changes in employees’ lifestyles
gives a balanced job-social life a whole new meaning. AI implementation will offer employees new
opportunities to develop their skills and to spend time with their families as a result of achieving
deadlines more quickly. Therefore, sharing the message with employees that AI complements human
productivity and, unlike the normal perception, poses no threats, will facilitate AI implementation
strategies. Quoted below are some instances from interviewees’ answers:
Interviewee 8: “We have to build confidence. What is the benefit of the intention of using new
technology? We should send to employees the notion that AI reduces their workload and helps to strike
a balance between job demands and social life demands. This kind of balance will add value to their
job and family. On the one hand, relieving employees from tedious tasks and providing them with
easier access to information. On the other hand, employees will have time and effort to invest in their
children and family. It’s about these kinds of benefits and how they will impact their lives, and not
about taking their job away but, instead, AI will reduce their work so they can concentrate on
somewhere else”.
Interviewee 2: “HR managers have to share the message that AI is here to support employees and
for them to reach their targets, which will definitely be reflected in social life”.
These results fall in line with the findings reported by Dabbous et al. (2021), who claimed that
employees’ acceptance of new technologies depends on several factors. Individual factors are major
determinants of employee acceptance. They also added that the organization's social environment,
culture and HR strategy are technology acceptance parameters. Therefore, HR managers should
integrate organizational culture, social environment and technology acceptance factors when
implementing AI-powered solutions.
5. DISCUSSION
The present study makes some significant contributions with consequences for both research and
practice. This section highlights the areas in which we extend the boundaries of current knowledge and
the ramifications of our findings.
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overall performance evaluation. Data obfuscation is described as any process that hides sensitive data
while retaining certain aspects of usability. For example, when employees create an alternate version of
data that is not easily identifiable or reverse-engineered they, therefore, seek to manipulate the
generated results using AI-algorithmic control mechanisms (Kellogg et al., 2020). HR managers have
to deploy a sequential AI implementation process by first selecting pilot employees, followed by
analyzing the reflection of AI solutions on the selected sample and, finally, deploying training with a
wide range of employees. The symbiotic interaction between employees and AI solutions is critical for
successful AI implementation (Grover et al., 2022).
6. CONCLUSION
The evolving and mutual relation between the implementation of emerging technologies and the
HR process can be lucidly explained by an in-depth qualitative study. This exploratory study builds on
two recommendations made by Chang (2020), namely: 1) key factors in the successful knowledge
transfer of the AI implementation process to HR managers; 2) HR managers’ strategies for smooth AI
implementation among employees. By building further on these earlier contributions, we offer a deep
understanding of the challenges associated with AI implementation in the HR process and the impact of
COVID-19 on AI implementation. These contributions help in building the key elements to transfer
knowledge about AI implementation processes for HRM in COVID 19 times.
Such a study provides a comprehensive understanding in addition to the considerable existing
literature on AI implementation and the AI-HR manager-employee interaction. The study is one that
focuses, on the one hand, on the challenges that affect AI implementation and, on the other hand, on
particular strategies for managers and employees to undertake digital transformation.
The bottom line is that this study’s findings provide valuable details for AI developers and HR
managers when digitalizing the HR process. It calls for a wide range of organizational activities that
come in the form of developing HR managers’ technical and soft skills, such as data analysis,
digitalization trends, basic AI core concepts, communication skills, critical thinking, team building and
leadership skills. All these soft skills are lifesavers in today's technology-driven environment because
they allow employees to accept HR managers’ guidance to implement emerging technologies (Caputo
et al., 2019).
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