HUMAN RESOURCE MANAGEMENT PRACTICES AND KNOWLEDGE MANAGEMENT

magazinebindManagement

Nov 6, 2013 (4 years and 2 days ago)

72 views

HUMAN RESOURCE MANAGEMENT PRACTICES AND
KNOWLEDGE MANAGEMENT


By


DR SALLEH YAHYA

LAILAWATI MOHD SALLEH

GOH WEE KEAT

Department of Management and Marketing, Universiti Putra Malaysia





ABSTRACT


This paper examines five areas of human resource management

and its ability to
accommodate the implementation of knowledge management. The five areas are
(1) recruitment and selection, (2) training, (3) performance appraisal system, (4)
reward and compensation system, and (5) retrenchment. The results suggest th
at
the majority of Malaysian companies are still at the initial stage of knowledge
management practices. However, more concrete measures are expected after the
groundwork of knowledge management is completed.


INTRODUCTION

In recent years, a dramatic cha
nge in the world economy and the use of IT have
affected the way businesses and organizations operate. One of the changes is the shift from a
resource
-
based view of competitive advantage (i.e. capital, labour, and raw material) to a
knowledge
-
based compet
itive advantage through Knowledge Management (KM). This
increased enthusiasm on KM is a result of cost reduction in data management, due to the rise
of computing capabilities like the Internet, electronic networking, and local database (Civi,
2000). This

also means an increase in an organization's feasibility on acquiring,
documenting, processing, and distributing data and information globally.

The adoption of KM by businesses and organizations has initiated the interests of
researchers and academicians
. Many issues are being examined and studied, such as KM
structure, knowledge diffusion, KM implementation, KM performance framework, and HRM
strategy in KM. Roberson and Hammersley (2000) pointed out that the earlier stages of these
studies tend to asso
ciate KM with information technology, which was perceived as the main
driver for KM. However, technology is not the only requirement of KM. What is more
important is the knowledge created by human beings (Civi, 2000). This view is also
supported by othe
r researchers and academicians such as Filius, et al. (2000), Davenport and

2

Prusak (1998), Mintzberg (1989), Quinn (1992), and Robertson and Hammersley (2000), and
Soliman and Spooner (2000).

This paper will focus on five areas of HRM and its ability to
accommodate and
implement practices that enhance the knowledge creation process. The five areas are: (1)
recruitment and selection, (2) training, (3) performance appraisal system, (4) reward and
compensation system, and (5) retrenchment.


HUMAN RESOURCE M
ANAGEMENT AND KNOWLEDGE MANAGEMENT

Knowledge can be defined in many ways. A comprehensive definition of knowledge
is given by Davenport and Prusak (1998). They said, that knowledge is “a fluid mix of
framed experience, values, contextual information, and

expert insight that provides a
framework for evaluating and incorporating new experience and information. It originates
and is applied in the mind of knowers. In organizations, it often becomes embedded not only
in documents or repositories, but also in

organizational routines, processes, practices, and
norms" (p 5). However, KM has a different meaning. The American Productivity & Quality
Center defined KM as “the strategies and processes of identifying, capturing, and leveraging
knowledge (Manasco, 19
96)”. Chong, et al. (2000) defined KM as “the ability to recognize
and manage the system of core competencies required for knowledge
-
intensive businesses”.
An empirical survey by Chong, et al. (2000) suggests KM as “a process of leveraging and
articulat
ing the skills and expertise of employees, supported by information technology.”
Malhotra (1998) believed that KM “embodies organizational processes that seek synergistic
combinations of data and the information processing capacity of information technolog
ies,
and the creative and innovative capacity of human beings”.

The implementation of KM requires a system called Organizational Knowledge
Management Systems (OKMS). Meso and Smith (2000) define OKMS as a "system that
provides for the creation of new kn
owledge, the assembly of externally created knowledge,
the use of existing knowledge, and the finding of knowledge from internal and external
sources.” The OKMS could fall into two major perspectives, namely: (1) technical
perspective, which stresses the e
mployment of a combination of new telecommunication
technologies, and (2) socio
-
technical perspective that sees OKMS as combinations of
technology infrastructure, organizational infrastructure, corporate culture knowledge, and
people. In Meso and Smith's
(2000) view, the socio
-
technical perspective of OKMS will help
generate the sustainable strategic advantages an organization desires, by leveraging the key
source of intellectual capital, the employees. Many other researchers and practitioners also

3

expres
s the importance of people in KM. Hence, the role of HRM should not be taken lightly
and exploration of its relationship with KM is deemed necessary.

According to Armstrong (2000), HRM can be viewed as an extension of personnel
management, that is “concer
ned with obtaining, organizing, and motivating the human
resources required by the corporation (Armstrong, 1977)”, with greater emphasis on strategic
management. The reason for strategy being highlighted is that new changes around the world
have led to th
e need to re
-
position of both organizations and personnel management. Based
on his experience as a personnel director of Book Club Association in the 1970s and 1980s,
Armstrong (2000) suggests that the role of HR in the context of learning organizations o
r
KM, is “to facilitate the dissemination of learning through workshops, projects and
conferences and, later, to take responsibility for co
-
ordinating the preparation of business
plans which incorporated the outcome of the learning activities”. Soliman an
d Spooner
(2000) viewed the role of HRM in managing human resource knowledge as an identifier of
knowledge gap(s) and facilitator in filling the gap(s), apart from mapping out the human
resource knowledge. They have outlined the HRM roles in eight strateg
ies of human
resource knowledge management. These eight strategies are:

1.

Alignment of knowledge management with business directions,

2.

Identification of the benefits of knowledge management efforts,

3.

Choosing the appropriate knowledge management programme,

4.

Im
plementing a know
-
how strategy,

5.

Creating supportive environments for knowledge management programmes,

6.

Using of enabling technologies for the knowledge management programme,

7.

Creating the knowledge management team, and

8.

Creating knowledge management leadershi
p.


METHODOLOGY


The question survey technique was used to solicit the data. Six different sections of
questions were developed in the questionnaire, which are: (1) Recruitment (selection), (2)
Training, (3) Employee Involvement, (4) Performance Assessmen
t, (5) Compensation, and
(6) Retrenchment. For the first section, several behavioural factors and non
-
behavioural
factors are stipulated and respondents were asked to indicate the importance of these factors
in selecting employees. The factors investigat
ed are shown in Table 1.



4


TABLE 1

Selection of Employees






Mean

S.D

Behavioural factors:






Ability to communicate effectively



4.33

0.75

Able to work in team or group efficiently


4.29

0.76

Interest or affinity for that job



4.10

0.79

Willing
ness to exchange ideas



3.93

0.80

Creative and innovative




3.92

0.79

Values that fit in with organization



3.85

0.84

Dare to challenge exiting assumptions


3.61

0.97

Multilingual ability





3.46

1.00

Non
-
behavioural factors:





Knowledge curre
ntly seeks by organization


4.02

0.80

General computer literacy



3.95

0.83

Marketing capabilities



3.89

0.92

Related professional experience



3.88

0.90

Strong commercial awareness



3.83

0.90

High level of ICT knowledge



3.68

0.91

Knowledgeable o
n others disciplines

3.66

0.86

Good command of written and spoken English


3.38

1.03

Active in external professional network or association

3.23

1.06


The second section covers the areas where training is conducted, and the approaches
taken during trai
ning. The latter is adopted from Bramley (1990). Table 2 documents the
training areas investigated and statements pertaining to training approaches.


TABLE 2

Training Areas and Approaches


Mean

S.D.

Types of Training Conducted



Documentation of proced
ures and processes

3.47

1.19

Problem solving skills and techniques

3.45

1.21

Industry and business knowledge

3.39

1.17

Quality initiatives

3.37

1.20

Interpersonal communication

3.25

1.20

Customer relationship management

3.24

1.31

Team concepts/workin
g in groups

3.21

1.30

Managing performance

3.20

1.26

Leadership

3.18

1.24

Company mission and values

3.13

1.28

Skills to build teams

3.10

1.28

Information Communication Technology (ICT)

3.01

1.31

Skills to build empowerment

2.93

1.32

Managing chang
e

2.93

1.30

Creativity/innovation

2.83

1.30

Coaching skills

2.80

1.47

Stress management

2.42

1.40




Approaches in Training



Making sure that trainees understand the general principles and rationale behind
3.57

1.17


5

the skills they are learning

Ens
ure that what is being learned in training will be supported by colleagues,
peers, and top management

3.32

1.22

Many examples are being used during training by presenting various contexts in
which trainees can expect to use the skills and knowledge learne
d in training

3.30

1.24

Varying the training setting to show trainees that classroom is not the only place
where knowledge and skills can be learned

3.26

1.28

Open and supportive organization policies in rewarding and recognizing trained
staff

3.20

1.27

Intensive drills and practice techniques for trainees to reach a level of automatic
implementation on the job

3.19

1.20

Visual displays of information are offered to boost training transfer

3.18

1.32

Letting trainees explore the training content before
training actually begins

2.84

1.39




The third section investigates the degree of matches between characteristics of
performance appraisal system proposed by Scholtes (1993) with the surveyed companies
(Table 3).


TABLE 3

Basis of Performance Appraisal


Mean

S.D

Feedback useful for improvement

3.77

1.01

Give direction to the work force

3.69

0.99

Feedback used for ratings, rewards, and sanctions

3.59

1.12

Controlling processes

3.57

0.97

Directing individual employee

3.51

0.99

Feedback based on needs
of customers and the key process indicators

3.36

1.22

Employees receiving systems/processes

3.36

1.01

Feed
-
down from the next layer up in the hierarchy

3.35

1.06

Controlling people

3.28

1.04

Feedback from parts of the system that receive one’s work (in
ternal customers)

3.23

1.06

Employees receiving judgement on themselves

3.21

1.09

Feedback based on personal characteristics not relevant to work

2.81

1.20



In the fourth section, the seven dimensions of successful reward plans proposed by
Hale and Bai
ley (1998) are listed in the questionnaire, and respondents were asked to indicate
their degree of matches between their company compensation system with those proposed by
Hale and Bailey. Table 4 documents the seven dimensions developed by Hale and Baile
y
(1998).







6

TABLE 4

The Compensation and Reward System


Mean

S.D

Pay for performance that tied to successful achievement of critical business goals

3.69

1.05

Reward for measurable competencies

3.60

1.05

The extent of contribution in knowledge sharing

in a work team

3.38

1.01

Keep group incentives clear and simple

3.35

1.04

Link rewards to other levels of organizational change

3.35

1.06

Initiating new approaches and tactics in daily work

3.34

1.06

Work or task itself provides the greatest incentive

3.31

1.03

Match incentives to culture

3.01

1.09

Over
-
communicate (compensation and incentives system) for best results

3.01

1.05






Finally, the section on Retrenchment attempts to discover the conditions or
circumstances a company will release thei
r employee from duty. Ten situations are listed in
the questionnaire, which are shown in Table 5.


TABLE 5

The Retrenchment Policy


Mean

S.D

Disclosure of information to customers and suppliers

3.79

1.06

Destroying established relationship with customer
s and suppliers

3.73

1.08

Values that do not fit with organizational values

3.53

0.96

Low level of loyalty toward organization

3.45

1.07

Conflict with supervisor or top management

3.38

1.04

Opposes organizational change or restructuring

3.37

1.06

Demo
ralise his/her team mates

3.27

1.11

Unable to follow predetermined procedures and documentation

3.21

1.04

Lack of self
-
initiative while interacting with others

3.04

0.99

Fail to display positive reaction toward contributing ideas or information

3.04

1.0
2






The questionnaires were answered by managerial personnel of Malaysian companies
located in the Federal Territory and the Klang Valley. A total of 300 sets of usable
questionnaires were successfully collected and analysed. The companies were grou
ped in
terms of paid
-
up capital (in Ringgit Malaysia): less than
5 million (53.9%), 5 to 20 million
(19.4%), 21 to 50 million (7.2%), 51 to 100 million (4.4%), and greater than 100 million
(15.0%). In terms of sector, they are: Manufacturing and Processin
g (30.8%), Banking,
Finance, and Insurance (12.2%), Research, Consultation, and Training (8.0%), IT
-
related
(9.8%), other services (27.6%), and others (11.6%).



7

RESULTS


On the behavioural aspect in employee selection, many companies emphasized
interperson
al communication skill. This is shown by a high mean score of “ability to
communicate effectively" and “able to work in team or group efficiently” (see Table 1).
Interest or affinity of applicant towards job exhibited during the selection process is anot
her
important behavioural factor that was considered important by the companies. In terms of
non
-
behavioural factors, applicants who possessed knowledge currently required by the
companies were highly preferred. On the whole, the weightage on behavioural

factor
compared to the non
-
behavioural factor is much higher during the selection process.


The training and development of employee deal more with knowledge of
documentation of processes and procedures, problem solving skills and techniques, and
industry

and business knowledge (see Table 2). However, training related to creativity,
information communication technology and customer relationship management was not
extensively covered. The principles and rationale of training were thoroughly covered during

the training. In addition, all parties in the companies expressed support for the training by
encouraging the trainees to practise and apply what they learned during training.


The results on performance appraisal suggest that the majority of companies v
alued
the practice of providing useful feedback to employee after the performance appraisal (see
Table 3). The practice of giving feedback that is not relevant to work was strictly contained
by the majority of the companies and unconstructive comments or
judgements on employees
were shunned. This is also supported by the fact that another important aim of performance
appraisal was to direct the employees toward attainment of critical business goals.


Regarding the compensation and reward system, the major
ity of companies rewarded
their employees based on the employees' ability to achieve the company’s critical business
goals (see Table 4). The second important element of the compensation system, “reward for
measurable competencies”, is in parallel with th
e first mentioned above. However, the
system was not communicated to the employees effectively, and the system failed to match
company culture. It is also found that not many companies could significantly instil the joy
of working in employee in performi
ng duties and responsibilities.


Finally, an employee will be laid off if he or she discloses information to outside
parties, and destroy company relationships with customers and suppliers (see Table 5). In
contrast, an employee will not be retrenched
if he or she is unable to perform his or her task
effectively, and the company is willing to train them. This is reflected on the low mean score
of “unable to follow predetermined procedures and documentation". Employees who did not
contribute their idea
s or actively communicate with their colleagues were not penalized for

8

the act. On the whole, the issue of employees’ ethical conduct was strongly emphasized in
retrenchment practices compared to their capacity or ability in performing their duties and
r
esponsibilities.


DISCUSSIONS


The results discussed in the previous section suggest that many companies were
starting to establish the foundation of KM implementation. Such a move was apparent in the
screening and selection process of new employees. In
particular, the results in this paper
suggest that employers value people that have good interpersonal communication skill, are
capable of working as a team, and possess knowledge that is relevant to company needs. By
recruiting these people into the comp
any will help build a pool of strong human resource that
is ready for knowledge creation and application. This recruitment practice has been viewed
significant to KM by Mayo (1998).

Other signs that suggest that knowledge is gaining importance in Malays
ian
companies are: (1) rewarding employees that contribute new knowledge to company, (2)
greater weight on team performance than individual performance during performance
evaluation, and (3) tight control of knowledge and information through company’s
retr
enchment policies. The first and second exercises act as a stimulus for the creation of a
knowledge
-
sharing culture. The third exercise reminds employees of the consequence of
exposing the company’s critical knowledge to external parties.

However, it s
eems that many employers felt that their existing pool of human resource
lacked the required skills and expertise for implementation of KM. This situation is
understandable, as before the Asian Currency Crisis, the prosperous business environment
had made

employers less harsh and demanding on their employees. However, as the business
environment became more demanding and stiff, companies and employees needed to be more
efficient than before in order to survive. As a result, the focus of current training
is placed on
enhancing employees' basic skills and expertise. The principles and rationale of training are
being emphasized in order to give the trainees a complete picture of their future role in the
company's operation.


Companies realized that provid
ing training alone would not be sufficient in preparing
their current employees for KM implementation. Various kinds of support and incentives
were given to the employees to ensure the success of employee transformation. For example,
the reward and compe
nsation of employees strongly hinged upon employees' individual
ability in meeting critical business goals. In other words, employees must quickly equip
themselves with the necessary skills and knowledge that are critical to the attainment of the

9

company’
s goals. Top management and other parties in the company also encouraged
trainees to apply what they had learned in training in daily operations. Performance appraisal
is another area that was designed to direct employees to meeting the company’s goals,
whether as a team member or an individual player.


CONCLUSIONS

The findings of this study suggest that Malaysian companies are still at the infancy
stage of KM. The very prerequisites or inputs of KM, employee’s skills and expertise, need
further improvem
ent and preparation in order to embrace the coming knowledge
-
era.
Nevertheless, there are signs showing that many are giving more attention to the issue of
knowledge, especially in the recruitment process. It is expected that more concrete measures
that
induce KM implementation will be carried out by the surveyed companies when their
current employees and technology infrastructure are ready. The measures that could be
considered by companies include mentoring of new employees, introducing incentives that

encourage knowledge
-
sharing, establishing good communication plans on the
implementation of KM, emphasizing team performance, and giving more attention to
employees’ creativity.

The measures outlined above are only some basic guidelines of KM. One part
icular
issue that needs to be seriously attended to is the sentiment of withholding information or
knowledge which is perceived more pertinent spreading or disseminating it (Warren, 1999).
To address this issue requires the establishment of a company cult
ure that appreciates
knowledge sharing and open discussion to resolve problems and reduce failures. The more
important questions that need to be answered before a formal attempt of KM are:



What strategy is pursued by the company?



What type of knowledge is

needed to support the decided business goals or strategy?



Which area of the company does this knowledge reside?

It is important to note that the aforementioned measures are not “new” models or rules of
HRM for implementation of KM. Following Armstrong (
2000), it is believed that the
practice of KM in HRM has long existed before the knowledge trivia. It is the enhancement
of some areas in the company that are needed to support the implementation of KM.


REFERENCES:

Armstrong, M (1977).
A Handbook of Pe
rsonnel Practice
, 6
th

ed., London: Kogan Page.

Armstrong, M (2000). “The name has changed but has the game remained the same?”
Employee
Relations
, Vol. 22 No. 6, pp. 576
-
593.


10

Bramley, P (1990).
Evaluating Training Effectiveness: Training Theory into Practi
ce
, Berkshire:
McGraw
-
Hill Training Series.

Chong C
-
W, Holden, T, Wilhelmij, P. and Schmidt, R A (2000). “Where does knowledge
management add value?”,
Journal of Intellectual Capital,

Vol. 1 No. 4, pp. 366
-
380.

Civi, E (2000). “Knowledge management as a
competitive asset: a review”,
Marketing Intelligence &
Planning
, Vol. 18 No. 4, pp. 166
-
174.

Davenport, T, DeLong, D and Beers, M (1998). “Successful knowledge management projects”,
Sloan
Management Review
, Vol. 39 No. 2, pp. 43
-
57.

Filius, R, de Jong, J

A and Roelofs, E C (2000), “Knowledge Management in the HRD office: a
comparison of three cases”,
Journal of Workplace Learning,

Vol. 12 No. 7, pp. 286
-
295.

Mayo, A (1998). “Memory bankers”,
People Management
, Vol. 4 No. 2, pp. 34
-
38.

Meso, P and Robert,
S (2000). “A resource
-
based view of organizational knowledge management
systems”,
Journal of Knowledge Management
, Vol. 4 No. 3, pp. 224
-
234.

Mintzberg, H (1989).
Mintzberg on Management: Inside Our Strange World of Organisations,
NY:
Free Press, New York.

Quinn, J B (1992).
Intelligent Enterprise: A Knowledge and Service Based paradigm for Industry
,
NY: The Free Press, New York.

Robertson, M and Hammersley, G M (2000). “Knowledge management practices within a knowledge
-
intensive firm: the significance of t
he people management dimension”,
Journal of European
Industrial Training
, Vol. 24 No. 2/3/4, pp. 241
-
253.

Soliman, F and Spooner, K (2000). “Strategies for implementing knowledge management: role of
human resources management”,
Journal of Knowledge Managem
ent
, Vol. 4 No. 4, pp. 337
-
345.

Warren, L (1999). “Knowledge management: just another office in the executive suite?”,
Accountancy
Ireland,

December.