Does managerial intuition/experience matter or does HR Analytics take over? A multilevel stakeholder perspective on HR Analytics and its' ability to influence employee performance in Multi-National Corporations (MNCs)

Research aim & Questions Managers are increasingly reliant on predictive analytics to make high-quality, unbiased decisions, which raises the concern that managers can become over-reliant on data (HR-analytics) and limit their... [ view full abstract ]

Research aim & Questions

Managers are increasingly reliant on predictive analytics to make high-quality, unbiased decisions, which raises the concern that managers can become over-reliant on data (HR-analytics) and limit their ability to integrate other forms of decision-making. Further, little is known about the extent to which cultural factors influence the interaction of data-informed and intuition-based decision-making. This paper develops a theoretically derived conceptual framework on decision-making behaviour and the strategic use of HR-analytics and intuition in MNCs. The central research questions for this project are:

RQ1: How can an effective interaction between HR-analytics and intuition in managerial decision-making increase employee performance?

RQ2: What effect has organisational and national culture on the interaction between HR-analytics and intuition in managerial decision-making?

Methodology             

An extensive multi-level systematic review of Strategic Decision-making and HR-analytics is being conducted using numerous electronic databases, including EBSCOHost, Emerald, JSTOR, Proquest, PsycINFO, Science Direct, Sage Full-Text Collections, SCOPUS, and Wiley InterScience. Derived from the systematic review, our conceptual framework advances synthesised multi-disciplinary knowledge on the interaction of HR analytics and interaction in managerial decision-making, and sets out several propositions to be tested by future research.

Key Findings To-Date

Existing literature has called attention to the potential of HR-analytics to improve the quality of decision-making (Edwards and Edwards 2016).  HR-analytics is defined as “A HR practice enabled by information technology that uses descriptive, visual, and statistical analyses of data related to HR processes, human capital, organisational performance, and external economic benchmarks to establish business impact and enable data-driven decision-making” (Marler and Boudreau 2017, p.15). Despite the fact that many scholars and practitioners belief in the effectiveness of HR-analytics to make unbiased decisions, research has shown that data-driven decisions can be inaccurate and biased, and that intuition-based decisions can be effective when time is limited and managerial experience is present (Seo and Barrett, 2007; Marler and Boudreau 2016). If the trend that individuals implicitly rely 100% on data without considering the drawbacks of HR-analytics continuous, the danger exists that decisions become even more biased and unethical.

Furthermore, the literature suggests that contextual factors, such as cultural differences and managerial experience influence decision-making processes (Buchtel and Norenzayan 2009; Yates and de Oliveira 2016). It is thus recognized that a better understanding of HR-analytics and intuition usage in decision-making in different situational contexts is urgently required to inform interventions at individual and organisational level.

Emerging from reviewed literature a multi-level conceptual model is currently being developed and builds the framework for future empirical investigation of the interaction of HR-analytics and intuition in managerial decision-making. Managerial decision-making is viewed as the cognitive process of an individual (micro-level). Neglecting the meso- and macro level factors, such as organisational and national culture and concentrating only on micro-level factors would lead to an incomplete understanding of the decision-making process of managers (Hitt et al. 2007). Therefore a multi-level examination has to be employed. The following concepts form the model:

• Micro-level: managerial decision-making behaviour will be investigated through the lens of dual-process often referred to as ‘System 1 & 2 thinking’ (intuitive & analytical thinking). (Kahneman 2003). In addition, the concept of bounded rationality will be considered, as it is often negatively associated with intuition-based and biased decisions (Simon 1979). A focus on the cultural background of the individual and the managerial level of expertise is also considered since these factors influence the decision-making behaviour (Chu and Spires 1999; Dane and Pratt 2007). The assumption is made that higher technology acceptance leads to higher use of HR-analytics in the decision-making process of managers; the concept of technology acceptance is also considered (Venkatesh and Bala 2008).

• Meso-level: the organisational culture, practices and the politics influence the decision-making behaviour of managers (Pettigrew 1973; Eisenhardt and Zbaracki 1992; Schein 2010).

• Macro-level: McCarthy and Murphy (2016) highlight two well-established cultural concepts, the cultural dimensions theory and the more recently undertaken GLOBE study (Hofstede 1980; House et al. 2014). Together, these will build the framework for the macro-analysis. In addition, Nisbett’s (2010) distinction between holistic and analytical thinking in different cultures will be examined on macro-level as well as the stability of the environment (Khatri and Ng 2000).

Originality/Value

Conceptually, there are limitations in the development of the concepts in HR-analytics and intuition (Dane and Pratt 2007; Marler and Boudreau 2017). By investigating a conceptual model, based on existing theory in the field of organisational decision-making and HR-analytics, this research can add to the academic and organisational understanding of the value of HR-analytics and intuition in the decision-making process.

Theoretically, this research will contribute to the development of theory and theoretically-derived research in the field of effective decision-making behaviour in different situational contexts and HR-analytics, with high value by combining it with Strategic Decision-Making science (Davenport et al. 2010; King 2016; Marler and Boudreau 2017; Yates and de Oliveira 2016; McDonnell et al. 2017).

Practical & Social implications 

If companies use HR-analytics without being aware of the benefits and drawbacks of HR-analytics and intuition use, inaccurate decisions can be made which lead to employee dissatisfaction and poor management practices (Angrave et al. 2016; McDonnell et al. 2017). Thus, it is important that academic research is conducted and that the research findings will be translated into a practical guide for companies to close the practice gap (Davenport et al. 2010; Angrave et al. 2016; King 2016; McDonnell et al. 2017).

References 

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Buchtel, C., Norenzayan, A. (2009). Thinking across cultures: Implications for dual processes. In Evans, J. St. B. T., Frankish, K. (Eds.), In two minds: Dual processes and beyond (pp. 217–238). Oxford, England: Oxford University Press

Chu, P. C., Spires, E. E., & Sueyoshi, T. (1999) ‘Cross-cultural differences in choice behaviour and use of decision aids: A comparison of Japan and the United States’. Organizational Behavior and Human Decision Processes, 77(2), 147-170.

Dane, E., & Pratt, M. G. (2007) ‘Exploring intuition and its role in managerial decision making’, Academy of management review, 32(1), 33-54

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