Knowledge management: HR management systems can help track and distribute information throughout the organization - HR Technology

HR Magazine, Nov, 2003 by Kevin C. Desouza, Yukika Awazu

Much as the industrial revolution changed the nature of work and had far-reaching implications for how we manage human resources in organizations, the current knowledge revolution has far-reaching implications for how we manage knowledge workers. It is widely agreed that a firm's competitive advantage is determined by how well it leverages its organizational knowledge.

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A human resource management system (HRMS), if properly realigned, can play a vital role in contributing to the management of organizational knowledge. These redesigns will help move such systems out of the realm of being just passive support to becoming active aids to organizational members.

We must use technology to meet organizational goals and challenges. One of the central challenges that all managers face is how to manage organizational knowledge. Knowledge workers are specialists ranging from HR and marketing professionals to software engineers, project managers and business analysts. Knowledge is the key component of their work, so they consume and generate it on a daily basis, but they detest arbitrary schedules. Because they are involved with the design of mechanical or logical products using informational systems, they are expected to take in knowledge, process it and disseminate it to other members of the organization.

For an organization to remain dynamic, successful management of this knowledge is key. Knowledge management includes all activities involved with the generation, dissemination and maintenance of knowledge to meet organizational goals. Just as humans must create knowledge, they also consume it. Moreover, their interactions with other humans is a mechanism for knowledge transfer, so when they leave an organization (voluntarily or involuntarily), they take their knowledge--both professional and social--with them.

HR management is central to knowledge management in an organization. Conducting small redesigns to HRMSs will alleviate the traditional hurdles in knowledge management. The most salient questions in knowledge management are:

* How do we promote knowledge contribution?

* How do we identify sources of knowledge?

* How do we appropriately replenish knowledge?

* How do we protect and preserve knowledge?

Each of these questions can be answered with HRMSs.

Knowledge Value

In most organizations, 20 percent of the knowledge workers generate 80 percent of the knowledge. Those who generate and disseminate knowledge do so for the benefit of everyone in the organization, yet they are only rewarded if the knowledge is used. Without sufficient incentives over time, knowledge providers have less reason to generate knowledge. Moreover, unless knowledge contribution incentives are in place, people may hoard such knowledge and use it as a source of power within or against the organization.

Some HRMSs manage compensation and incentive schemes, such as annual bonuses and merit increases. Many of these incentives, however, do not account for whether an employee has contributed ideas or insights; they measure how well employees perform their jobs rather than how much they contribute to the firm's knowledge. To properly encourage knowledge contributions, organizations must realign incentive schemes to accurately account for these vital contributions.

Organizations constantly change. Employees may seek more lucrative or more secure jobs, while organizations downsize or rightsize to reduce cost and meet numbers. In the middle of all this commotion, employees may decide to withhold their knowledge and take such insights when they leave--at the expense of the organization. The most effective way to thwart this situation is to establish a knowledge market.

Knowledge Marketplace

An internal knowledge market is a place within an organization where individuals can buy and sell knowledge. It facilitates and motivates employees to share information while contributing to a climate for organizational knowledge exchange. A market mechanism provides various options for pricing knowledge, which can be used to reward employees. Such markets can be deployed over corporate intranet portals and linked to an HRMS.

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For example, Infosys, a 17,000-employee consulting and information technology (IT) firm based in Bangalore, India, has implemented an internal knowledge market called K-Shop. Employees can submit research papers, project experiences and other types of knowledge goods through a web site. Experts review and publish these documents. Both the reviewer and author are compensated via knowledge currency units (KCUs). Each reader of the document must pay a certain number of KCUs for use of the document. KCUs can be redeemed for cash and other gifts. Thus, these KCUs serve as incentives while rating the quality of knowledge provided.

In 1993, Fujitsu, a technology company based in Tokyo with more than 150,000 employees, started FIND2, a knowledge management or exchange system through which engineers can buy and sell their knowledge. When a "knowledge provider" registers information in the system, he sets the price of that knowledge. A "knowledge seeker" then chooses knowledge options from the FIND2 menu, and their prices appear at a click. If the knowledge seeker decides to purchase the knowledge, the sum of the knowledge price, plus a shipping and handling fee, is charged to the knowledge seeker's department. If the knowledge is available in an electronic format, it is sent on a floppy disk or via e-mail. If not, a copy fee is charged as well. The department where knowledge originated receives the sales fees.