Aligning HR with KM [EKM series]

Editor’s note: This is a continuing serialisation of edited portions of Andre Saito’s PhD.

The growing importance of knowledge work and knowledge workers demands innovative human resources management (HRM) practices and policies. Compared to traditional forms of work, knowledge work is said to have a broader scope, be less predictable, and involve a greater degree of judgment from workers. Thus, it cannot be centrally designed as a set of procedures and cannot be directly managed. Furthermore, knowledge workers seem to have their experience and expertise in high regard, and are motivated mainly by factors like personal growth and peer recognition. Thus, they usually require a significant degree of job autonomy and flexibility, and need different incentive systems to get inspired and committed¹.

HRM practices adapted for knowledge work and workers involve, among other things, innovative job design and adequate reward systems. Mohrman² suggests new principles of work design based on the changing and interdependent nature of knowledge work. She proposes work designs that are dynamic and emphasize systemic performance, focus on sequences of assignments instead of well-defined jobs, cut across functional, geographical and other types of boundaries, and provide experience and develop talent. Lawler³ reviews the impact of different reward systems on the motivation, attraction and retention of knowledge workers. Comparing pay systems based on a job’s functions and responsibilities, a person’s performance and achievements, and a person’s skills and competencies, he argues that the last is more appropriate for knowledge work.

HRM issues in knowledge management

Human and social factors are crucial elements of knowledge management, and many authors argue that HRM practices and policies have an important role in employees’ attitudes and behavior. They can affect issues like employee motivation and commitment, knowledge sharing behavior, and organizational culture, all of which are relevant for KM. An organization’s reward system, for instance, is often taken as a significant element affecting employees’ motivation, encouraging them to put effort on expected outcomes.

Lawler⁴ shows how alternative systems have different impacts on employees’ behavior. Job-based compensation⁵ may contribute to easier control and organizational efficiency, but may also discourage risk-taking, learning, and collaboration. Skills-based compensation⁶, on the other hand, may encourage development and improve flexibility, but hinders market comparison and employee assessment is difficult. Performance-based compensation⁷ may stimulate better performance by clearly connecting it with rewards, but defining criteria and establishing good measures may be a challenge.

The extent to which HRM practices and policies can create a knowledge-oriented organizational culture is subject to debate. The most likely relationship is a reciprocal influence between them. On the one hand, HRM derives from and is affected by the existing culture. On the other hand, HRM may also affect culture, by reinforcing cultural norms and routines that shape individual attitudes and behaviors.

Alignment of HRM, KM and business strategies

Bierly and Daly⁸ argue that firms that align their HRM practices with their particular knowledge strategy will be more successful in developing sustainable competitive advantage.

In a previous study, Bierly and Chakrabarti⁹ categorized firms in four types according to their strategy for managing their knowledge base:

• Explorers: Firms that excel at developing new, radical knowledge but are not strong at exploiting existing knowledge benefit from HRM practices that promote creativity and risk-taking. Examples of these practices include moderate external hiring, results-oriented appraisal, and loose job definitions.
• Exploiters: Firms that successfully exploit existing knowledge areas but are not effective in generating radically new knowledge benefit from HRM practices that promote flexibility, continual improvement, and the integration of tacit knowledge. Examples of these practices include internal hiring, teams, formal training, short-term results-oriented appraisals, and rewards for employee participation.
• Bimodal learners: Firms that excel at developing new, radical knowledge but are also strong at exploiting existing knowledge benefit from HRM practices that promote managing complexity, creativity, and flexibility. Examples of these practices include flexible HRM system, teams, rewards and practices that promote open communications.
• Maintainers: are firms that do not excel at developing new, radical knowledge and are not strong at exploiting existing knowledge benefit from HRM practices that promote stability and rapid socialization of new members. Examples of these practices include internal hiring, formal training, behavioral appraisals, narrow job definitions, and clear career paths.

Next edition: The limitations of the role that information systems can play in effective Knowledge Management.