The role of the capability, opportunity, and motivation of firms for using human resource analytics to monitor employee performance: A multi‐level analysis of the organisational, market, and country context

• Published date: 01 November 2022
• Author: Barbara Bechter,Bernd Brandl,Alex Lehr
• Date: 01 November 2022
• DOI: http://doi.org/10.1111/ntwe.12239

Received: 2 April 2021

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Revised: 21 March 2022

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Accepted: 23 March 2022

DOI: 10.1111/ntwe.12239

RESEARCH ARTICLE

The role of the capability, opportunity, and

motivation of firms for using human resource

analytics to monitor employee performance:

A multi‐level analysis of the organisational,

market, and country context

Barbara Bechter

1

|Bernd Brandl

1

|Alex Lehr

2

1

Durham University Business School,

Durham University, Mill Hill Lane,

Durham, UK

2

Institute for Management Research,

Department of Political Science,

Radboud University, Nijmegen, the

Netherlands

Correspondence

Bernd Brandl and Barbara Bechter,

University of Durham, Mill Hill Ln,

Durham, DH1 3LB, UK,

Email: bernd.brandl@durham.ac.uk and

barbara.bechter@durham.ac.uk

Alex Lehr, Radboud University,

Nijmegen, the Netherlands.

Email: a.lehr@fm.ru.nl

Abstract

The digitalisation of business processes has led to the

availability of (big) data which increasingly allows

firms to analyse their workforce using HR analytics.

On the basis of a cross‐national multi‐level analysis

and a data set that covers more than 20,000 firms in all

member states of the European Union we investigate

the reasons why some firms make use of human

resource (HR) analytics to monitor employee perform-

ance while others refrain from doing so. We show that

the use of HR analytics depends upon firm character-

istics as well as contextual factors. In terms of firm

characteristics, we find that firms require the structural

and managerial capability to make use of HR analytics.

For contextual factors, our findings show that some

market factors motivate firms to make use of HR

analytics while the institutional, that is, juridico‐

political, and cultural environment in which firms

are embedded influences firms' opportunities to use

HR analytics.

KEYWORDS

comparative HRM, contextual factors, Europe, HR analytics

New Technol Work Employ. 2022;37:398–424.398

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wileyonlinelibrary.com/journal/ntwe

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and

reproduction in any medium, provided the original work is properly cited.

© 2022 The Authors. New Technology, Work and Employment published by Brian Towers (BRITOW) and John Wiley & Sons Ltd.

INTRODUCTION

The digitalisation of business and management processes and activities as well as technological

advancements of the recent past has increasingly enabled many firms to collect and store

information and data about their work force (Davenport, 2014; Parry et al., 2007).

Methodological developments, which went along with these improvements, also provided

firms with the analytical methods, that is tools, to take a more evidence‐based approach to

management and to analyse the information and quantitative data more systematically

(Angrave et al., 2016; Edwards, 2019). These developments not only led to the accumulation of

(often big) data in firms, but also promoted the use of human resource (HR) analytics as a

strategic organisational capability (Margherita, 2021).

From a firm as well as from a wider societal perspective this accumulation of data and the

possibility for management to analyse HR‐related data with new and sophisticated analytical

methods is ambiguous. Especially when it is about monitoring employees and when using the

data and analyses for performance management (Ball & Margulis, 2011; Carter et al., 2011).

This is because on the one hand, literature regularly emphasises the negative consequences the

use of data‐driven HR practices and tools can have on work autonomy and control (McGovern

et al., 2007; Moore et al., 2018). More specifically research has shown that the use HR analytics

as a central mechanism to manage employee behaviour and control their performance more

closely (Taylor & Bain, 1999) can have severe negative implications on well‐being and health of

safety of employees (Carter et al., 2013; Taylor & Connelly, 2009). On the other hand, literature

has also shown that applying HR analytics can help increasing face validity and even objectivity

and consistency, positively affecting occupational health and safety as well as employees'

perceived fairness and satisfaction in management processes (Sharma & Sharma, 2017). In this

sense, HR analytics can support management and promote evidence‐based organisational

decision‐making if (and only if) its benefits are balanced and contextualised.

Although the context for the use of HR analytics matters a lot, the availability of more

information and data on HR and the use of methods that process this data can help to address

some fundamental problems in the area of human resource management (HRM). Most notably

problems caused by the lack of information and/or information asymmetries between

management and employees (Campbell et al., 2012). Consequently, one might expect incentives

for firms to make use of both the data and HR analytics. Especially management can be

expected to be interested in the use of HR analytics because it potentially allows management

to gain a comparative advantage over competing firms (Minbaeva, 2018).

Against this background, it is puzzling that even though the use of HR analytics and the

effective ‘exploitation’of the available information and data appears to offer advantage for

management, more arguably even for employees, and despite evidence supporting the benefits

of analytical approaches in HRM are paying off (Guenole et al., 2017; Kryscynski et al., 2018;

Levenson, 2011), its use is by no means universal and many firms are not making use of its

potential. Recent literature shows that many firms hesitate to make use of HR analytics because

there are a number of contextual and firm‐specific factors that hinder or even prevent its

use (Schiemann et al., 2018). This study contributes to our understanding of why some firms

make use of HR analytics for monitoring employees while others do not and is novel in three

main ways.

First, the study proposes a theoretical framework that moves beyond the focus on

predominantly organisation‐specific factors by studying the role of market‐and contextual

factors. In this way, it augments the range of the analysis by embedding it into a cross‐country

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