HUMAN RESOURCE MANAGEMENT IN THE ERA OF ARTIFICIAL INTELLIGENCE AND CHALLENGES OF HUMAN RESOURCES

Before starting to examine the impact of  Artificial Intelligence(AI) and robots to organization and person working inside, it will be necessary to review briefly an artificial intelligence, more exactly what it is. Unfortunately there is no shared definition on AI and everybody has his own definition. This problem is understandable in that it is a research area where everything is rapidly developing and constantly evolving with an accelerating speed. However, it is also true that this lack of shared definition makes it difficult to study the impact of AI on people and organization.

What is an artificial intelligence(AI)? In spite of different definitions, we can define it AI as a programmed algorithm with a learning capability, aiming to be human-like but to surpass human in its ability. It is a preliminary definition but can capture an important characteristics of AI. The most basic nature of the artificial intelligence is that it is a programmed algorithm specialized on computing and analyzing, and it has a huge power of computing, analyzing and predicting. But it is now extending its application area and evolve to the more general AI where experts diverge on the possibility and methods which leads to different definition of AI.

In fact, there are different type of AI. AI begins from specialized to the rational computing (weak AI) and evolve into more human-like capacity called strong AI. Strong AI is distinguished from AI in three aspects. First, it has a learning capability like human. Machine learning is a method to make AI learn by itself and deep learning is one of the machine learning, considered the most efficient way of training AI. There is still a hot debate if AI can really think autonomously like human and have a consciousness, but it is true that some experts are pursuing that direction.

Digital technology brings about new business model and strategy. For example, many leading firms in IT industry have already opted for the planform strategy, and other firms are also desperate to find a platform where they can get so precious personal data of customers. They are not just contented to have the information but to secure their attention to understand their preferences and tastes they don’t know themselves. Using these information, the firms do their best to customize their service or products and offer them on real time base. For doing so, they decide on data using AI algorithm. All these change in business model and strategy require an important transformation in human resource management. Like they approach customers, they need to take care of employees on the individual base on the real-time base. To succeed in their new strategy, they have to foster more creative and agile human resource. On the other hand, they need to make use of human resource more exactly and efficiently. That’s why Human Resources(HR) analytics and Hyper Threading(HT) tech using robotic process automation become so important for them. 

Business model of firms evolves into mass customization or individual customization. Data bank and credit scoring can evaluate personal credit score and genome based medical system treat patients on their individual genome characteristics. Customized production is gaining ground. Mercedes-Benz began to produce car according to customer’s demand. Customer specifies his or her preferences in terms of sport, food or living, and receives a proposal for a Mercedes model which he or she will certainly like. To be competitive in pursuing customization strategy, the firms need to take advantage of their human resource on individual base which is enabled by AI. In this respect, HR decision has to be based on personal competence, needs or potential. HR practices for the high potential are already done in this direction. Rigid employee grading system tend to give way to individually customized HR system, like what Japanese or Korean NAVER did. Training also take that direction. IBM replace traditional collective development by the individually customized training and development.

Due to constant change in the environment, it become more important to take fast action than perfect decision. And to serve customers and win the competition, it is crucial to apprehend customers’ needs and behaviour on real time through Simple Notification Services (SNS) and platform and suggest immediate solutions. This is exactly what Youtube, Facebook and Amazon do using their platform. In other firms, real time data can secured by Internet Of Things (IoT), analyzed immediately by AI, and take preventive action. GE try to transform their engine manufacturing business into maintenance solution business through this method.

Real-time intervention and decision making can be applied to human resource management. It takes often real time feedback and evaluation in the firms. Many companies are replacing relative evaluation with absolute one and reinforce real time feedback. Adobe, IBM, GE, Microsoft are some examples and they use Information Technology (IT) applications for that purpose. Data analysis and real time decision can also be done for real-time recognition and spot bonus, or promotion or change of role and responsibility.

Real-time intervention and decision making can be applied to human resource management. It takes often real time feedback and evaluation in the firms. Many companies are replacing relative evaluation with absolute one and reinforce real time feedback. Adobe, IBM, GE, Microsoft are some examples and they use IT applications for that purpose. Data analysis and real time decision can also be done for real-time recognition and spot bonus, or promotion or change of role and responsibility.

In today’s rapid increase in the complexity of the environment, there are too many variables to consider to take a business decision, and it has become too risky to rely on the intuition of management or personal gut. More and more CEOs acknowledge the necessity to use more data or fact-based decision making and that is called as evidenced-based management. This can also apply exactly to human resource management and examples are not scarce. The most well-known case is the oxygen project carried out in Google. Google examine a very simple but important question whether good leader makes difference and support it with abundant result of data analysis.

This kind of evidence-based approach is found in other firms like IBM and Hitachi. IBM show clearly that employee engagement explains two thirds of customer satisfaction. The case of Hitachi is more interesting. It succeeds in demonstrating that happy employee and organizational vitality lead to high performance. For this, Hitachi invented some wearable device that employees keep on their body, and it collected all the data including bio-physiological ones they are not even conscious

and analyzed them using AI.

It is a matter of course that routine HR activities have to be done efficiently while all the new direction of Human Resources Management (HRM) are groped for. Divers method using AI are often called HR tech, and robotic process automation (RPA) is the most popular among them. Nissay adopted an employee of RPA  and United Financial Of Japan(UFJ) go further using a collection of diverse RPA, called robot mansion. These RPA aim to reduce working time and workforce which allows employee to concentrate more valuable work. It is not rare now to see robot to conduct a job interview to job applicants. 

As strategic human resource theory says, HR strategy have to follow business strategy. And many authors emphasize the role of the strategic partner of business. Keeping in mind this theoretical discussion, we can propose some HR strategies fitting to each strategy type.

Entrepreneur HR strategy fit with a firm aiming to get the market by a new business model formulated through intensive use of AI. It can be mainly found in small start-up. Key HR challenge for these firms is to foster an entrepreneurial culture and people, because they need people capable of speedy decision making, risk-taking, and resilient to make a disruptive innovation in product and service.

Firms yearning for the disruptive innovation have another HR option emphasizing the collaboration between human and AI. They do not only rely on AI technology but also on the human creativity. Even more, they want to explore and capitalize on the human-AI collaborative intelligence. AI can assist and stimulate human creativity, and the synergy between them could be huge.

On the other hand, the firms whose primary strategic focus is laid on the efficiency of the organizational activity and process have two choices for their HR. Expertise-based HR make use of the benefit from AI use and pursue operational excellence while reducing the workforce in proportion to the productivity gained. What they need as human resource is a small number of experts with good technical and digital competence. They need also engineers and data scientist to develop and introduce more efficient AI programs and solutions.

Ambivalent HR is oriented towards combining human and AI to make more flexible and efficient the existing product or service. They try to recruit and develop people who can understand machine logic and collaborate with AI. They want to introduce AI technology considering human characteristics and helping human to use their full potential. For this purpose, adaptability and digital competence is very highly considered as core skills.

How to create collaborative intelligence then? First of all, the firm has to understand the anxiety and resistance of the employees to AI technology and help them to overcome it. For this happen, it is important to clarify company’s strategy based on collaborative intelligence. This should not be beautiful rhetoric but contain a strong message consistently. And even more importantly, human experience and ideas have to be incorporated in designing and implementing AI system. It is better to make happen the improved performance through collaboration between human and AI as soon as possible. This ‘quick-in success’ can strengthen the collaboration more firmly.

Secondly, the firm need to build up digital literacy in the employees. It consists of basic knowledge of statistics, programming language. If fact, it is a basic language for communication between human and AI to understand each other. Selection criteria for hiring must include this skill and knowledge or digital awareness program can be offered to stimulate digital literacy for the incumbents. Company can support individually customized learning program. Make a composition of team more diverse including data scientist, functional expert and AI.

Thirdly, it is vital to cultivate and reinforce learning agility to cope with constant reconstruction of work. In fact, AI technology change constantly the content of the work, and the value of experience decrease and the future become more and more unpredictable. According to the constant change and evolution of technology, work need to be modified continuously. It is in this context that learning agility becomes crucial. The management can use learning agility as selection criteria for hiring of new comers or it is also used as an important element for development and selection of future leaders.

Fourthly, management need to stimulate insight and creative ideas from employees. In a sense, this is the most important human contribution. Human have to do what AI cannot do. It matters, therefore, to encourage employees to ask “why” always. It could be more important to bring out questions than to solve them. Solution can be found by human and AI through collaborative intelligence or open collaboration with collaborators outside the organization.

Last but not least, management should create open organizational culture. Managers have to take a good attention for that age or experience override over new ideas and competence. It is important to create an open and constructive atmosphere in which everyone speak up one’s ideas without hesitation, in particular for the organizations that have a collective and hierarchical culture. It would be a miracle for them to survive in the technological torrents.

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