The use of strategic human resource management in the management of knowledge can provide organisations with a significant competitive advantage. Strategic human resource management refers to the process of incorporating human resource management systems and processes into the strategic management of an organisation (Wright, Dunford, & Snell, 2001). It is through the use of such strategies that organisations can foster innovation and competitive advantage (Kazmi & Ahmad, 2001). However in order to harness the capabilities of organisational knowledge, it is necessary to strategically manage that knowledge.
There is no simple definition of knowledge. The meaning of knowledge depends on both the organisation and context (Alvesson, 1993). Knowledge extends beyond information, into the realm of human thinking. With information, humans are able to think, process and share knowledge (Ardichvili & Seung Won, 2009; McDermott, 1999). Without such a human aspect, knowledge would be merely information. Knowledge management, therefore, is the development and implementation of strategies to create, maintain and share knowledge, in order to achieve organisational goals (Edvardsson, 2008). Knowledge management is not a new concept, having been discussed at least 30 years ago (Henry, 1975). Early research conducted into knowledge management focused on the use of information technology concepts, designed to assist knowledge creation, capture and sharing (Edvardsson, 2008; McDermott, 1999; Petersen & Poulfelt, 2002). As time has passed, an increasing amount of research has focused on the human element of knowledge management. This paper focuses on progress of that human element, particularly theoretical and empirical literature related to the link between strategic human resource management and knowledge management.
Most knowledge management systems focus on using information technology to capture, store, distribute and make available information; this does little to improve organisational knowledge. Information systems focus on a singular aspect of knowledge, information, failing to address the fact that knowledge, being the result of human thinking, goes beyond mere information or data. McDermott (1999, p. 104) suggested that the use of information systems was “the great trap in knowledge management”. Rather than solely information systems, human resource systems and information systems need to be combined to manage knowledge. The best use of knowledge can be made by focusing on the human aspect of knowledge, rather than the specific knowledge content itself. Developing communities in which knowledge if effectively and efficiently shared drives innovation, resulting in increased competitive advantage. McDermott further suggests that through planning the organisational structure and culture with knowledge management in mind, knowledge could be created, shared and leveraged. A large amount of modern literature agrees that human elements are at least as important as information systems to knowledge management (Ardichvili & Seung Won, 2009; Edvardsson, 2008; Lopez-Cabrales, Pérez-Luño, & Cabrera, 2009).
Although the human factor in knowledge management is generally accepted, there are many alternative thoughts on integrating human resource management systems into knowledge management. Robertson and Hammersley (2000) conducted exploratory research into human resources practices and knowledge management within a single organisation. The organisation studied used few formal human resource management practices, and it was found that the employees were still motivated to share their knowledge. The organisation was also still highly competitive in the marketplace, despite the lack of traditional human resource practices. The results of their research suggest that, in some knowledge intensive organisations, regular human resources strategies are inadequate or ineffective. Hislop (2003) posited that the reason the organisation studied by Robertson and Hammersley had succeeded in knowledge management was the commitment of employees to the organisation. Where employees are highly dedicated to their job and organisation, knowledge is shared organically without further managerial processes. In some cases, it is necessary to treat employees who work in knowledge intensive organisations differently to regular workers, possibly as they expect a deeper level of autonomy and independence in their work (Robertson & Hammersley, 2000). Rejecting regular human resource management practices and processes in favour of informal, unofficial and subjective approaches to human resource management could lead to improved performance. Edvardsson (2008) also found that regular human resource management processes may need to be modified in knowledge intensive organisations, because those organisations are by nature complex and irregular. Rigid processes such as recruitment, performance management and reward programs can limit knowledge sharing, stifling creativity, with a negative effect on competitive advantage.
Petersen and Poulfelt (2002) agree that different strategies are required, depending on the type of workers and organisational culture. Whilst the study was primarily focused on factors external to human resource strategies, it was also concluded that performance management and incentive programs contribute considerably to the success of knowledge management. For strategies to create and store knowledge to be successful, incentives and rewards must be used to encourage both the creation and sharing of knowledge. For example, incentives for documenting systems and processes should be used in conjunction with incentives for actually sharing information with other workers. This concept has since been agreed by a number of other theorists and researchers (Edvardsson, 2008).
Hislop (2003) suggests that knowledge management has not fully employed human resource management strategies and concepts. He further suggests that the level of commitment of employees to the organisation contributes directly to the effectiveness of knowledge management, and that this may be attributable to human resource management policies and processes. Strategic management incorporating techniques to motivate employees may contribute to commitment, ultimately driving competitive advantage. While much literature focuses on the storage and sharing of knowledge, Hislop contends that the attraction and retention of employees may be just as important as knowledge sharing in the use of knowledge management in fostering innovation. As modern organisations employ larger numbers of higher skilled workers, they are at risk of losing those workers to other organisations, or even being unable to recruit those skilled workers at all. As such, it is vital that organisations develop strategies to manage human resources with knowledge in mind. This includes strategies to manage recruitment and selection to find and hire new skilled workers, who will bring valuable new knowledge. Without such strategies, even a small turnover rate can quickly lead to a loss of organisational knowledge.
Attempting to integrate strategic human resource management with knowledge management, Edvardsson (2008) makes a clear delineation between technical strategies and human based strategies, referring to them as codification and personalisation. Codification strategies focus on structuring of knowledge systems such as databases to store and distribute information within an organisation. Critics of codification strategies note that the information stored lacks context, leading to “information junkyards”, where the stored information is never used (McDermott, 1999, p. 104). Personalisation refers to those strategies that recognize that knowledge has a human aspect, focusing on recruiting and retaining knowledgeable staff, and fostering communication. While both strategies try to effectively control organisational knowledge, codification tends to focus on getting information out of employees and into databases, whilst personalisation focuses on getting and keeping key knowledgeable employees. Human resource strategies to influence knowledge management vary depending on the knowledge management strategy chosen. For example, in performance management, codification strategies call for short-term goals related to the amounts of information documented or stored (Edvardsson, 2008). In contrast, with personalisation strategies, goals are developmental rather than results based, more long term, focusing on creativity and innovation. In reality, a combination of both strategies is usually required (Petersen & Poulfelt, 2002). A prime example of differences in these strategies is the difference in recruitment strategies. With codification, recruitment tends to be very formal, based on written job descriptions, with a focus on testing and evaluating candidates (Edvardsson, 2008). Conversely, a personalisation strategy involves a less formal, more subject approach to recruitment, where the focus is more on determining whether candidates fit within the knowledge sharing culture of the organisation. These theories tend to align with the research of Robertson and Hammersley (2000).
Recent empirical research has further determined that the strategic human resource management of knowledge can improve the knowledge within organisations (Lopez-Cabrales, et al., 2009). Specifically, human resource systems allow organisations to develop and improve on employee knowledge, as well as provide direction to employees to ensure the knowledge is utilised to achieve organisational goals. The use of a human resource strategy to manage knowledge contributes to the creation of unique knowledge; however Lopez-Cabrales, et al. suggest that there is no best practice for the use of human resource processes to manage knowledge. In some ways this research follows on from Wright, Dunford, & Snell (2001), who suggest that any competitive advantage does not stem from the human resource systems, but that the human resource systems provide a framework to store and communicate knowledge. They propose expanding the usual concepts in human resources management processes to also encompass the organisational knowledge, through allowing human resources more input into a wide range of work processes.
However, it has been argued that perhaps regular human resource practices are not relevant in modern knowledge based organisations (Chasserio & Legault, 2009; Minbaeva, Foss, & Snell, 2009; Robertson & Hammersley, 2000). Chasserio & Legault (2009) go so far as to suggest that strategic human resource management may be entirely irrelevant in some modrn, high technology companies. In studies of a variety of knowledge intensive organisations they discovered that few human resource management strategies and policies were in place. Human resources is instead relegated to operational procedures, such as ensuring compliance with industrial relations instruments. In organisations in which this occurs, there is very little in the way of human input into strategy. This lack of strategy opposes research by Petersen and Poufelt (2002), who found that Knowledge management is most effective in organisations where the knowledge management strategy is precise and supported by the organisational structure, culture and general business strategies. Chasserio & Legault speculate that the concepts of commitment, such as those argued by Hislop (2003) and others, require further analysis, particular with regard to highly skilled workers.
The use of strategic human resource management to manage knowledge is a newly established practice. A large amount of existing literature is theoretical in nature, and much empirical research is based on statistically insignificant samples or anecdotes. With the current level of research the link between strategic human resource management and knowledge management is largely context dependent. There are many areas within the field that would benefit from further longitudinal research. The impact of human resource management systems and processes on knowledge management will be better understood through research into aspects such as the influence of job design, organisational culture, career opportunities, and appraisal and reward systems. Additional research into employee commitment will ensure that human resource strategies focus on the areas where most gains can be made, and have a minimal footprint where they are of little benefit. What is clear from the research is that effective knowledge management can and does deliver significant competitive advantage. Where organisations are able to direct their knowledge toward innovation, competitive advantage will follow.
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