*Aligning Human Resource Management with Knowledge Management for Better Organizational… DOI: http://dx.doi.org/10.5772/intechopen.86517*

developing others. Along similar lines, Narasimha [49] looked at the performance appraisal process as a measurement of innovation level and how an employee has sought to develop knowledge. However, Smith [36] raised the issue of complexity and difficulty in measuring intangible outcomes such as tacit knowledge sharing. That said, Kianto et al. [33] stressed that performance appraisal should focus on development and feedback, rather than taken as an evaluative tool only. Feedback helps to identify gaps between performance and targets.

One of the main outcomes of the appraisal process is the aim to reward employees who contribute positively to KM outcomes and activities. Reasonable failures should be tolerated in order to promote a culture of action and risk-taking [46]. In their case study on a knowledge-intensive organization, Robertson and Hammersley [48] realized that underperformers were endured due to the realization that the knowledge-creation process is inconsistent and unpredictable and holds the possibility that it may not succeed. Olomolaiye and Egbu [39] added that performance appraisal helps to allocate key knowledge holders, which then enables organizations to focus on the retention of those employees. However, all of these aims are based on healthy feedback from management, which requires a high level of specific training for managers on how to develop such skills.

Finally, performance management has been recognized by some as one of the strongest influences on KM as a whole. The topics of debate that have occurred in the literature about this subject can be summarized as follows: how and what is measured in the appraisal process, who should be rewarded and the process to deal with underperformers. In companies with a codification approach, performance management is all about measuring and improving known and expected tasks, which are based around an employee's ability to grasp and implement basic business and IT knowledge. Underperformers can be considered somewhat expendable and easily replaced due to the simple nature of the skills needed for the role. Also, within the codification strategy, efforts associated with systems and technologies are more likely to be recognized and rewarded. Inside such a paradigm, key performance is related to technology, technology application and the volume of data [22]. At the opposite end of the scale, a company with a personalization-based approach is concerned with the breadth and depth of an employee's skills and competencies. Underperformers are tolerated as the tasks they undertake can be considered as relatively more complex, mostly intangible and riskier. Moreover, the personalization paradigm focuses more on people, where key performance indicators are related to people and tacit forms of knowledge as well as the quality of data [22].

### **3.5 Knowledge-based retention management**

Many scholars claim that organizations should value the high levels of tacit and personal knowledge that many people have, and it should be down to HRM to build effectively a good level of loyalty and retention rates [39]. Papa et al. [66] found that employee retention improves the effect of knowledge acquisition and innovation performance. They explained that employee retention increases employee commitment and trust, thus fostering knowledge specialization and fortification and creating an innovation culture. Moreover, employee retention increases knowledge retention and organizational knowledge base. Knowledge retention will even augment when benefiting from the employee knowledge-acquisition.

Developing the knowledge worker's organizational loyalty does appear to be more problematic because of labor market conditions, where the skills and knowledge of knowledge workers are typically relatively scarce, creates conditions for knowledge workers which are favorable to mobility. This is a potential problem because the knowledge possessed by knowledge workers is typically highly tacit [18].

*Current Issues in Knowledge Management*

**3.4 Knowledge-based performance management**

ing, which is in line with some of the previous research conclusion.

That said, performance management systems can inhibit knowledge sharing. Along the performance management lines, Currie and Kerrin [53] recognized that varying company departments have differing performance management systems that tend to reflect an individual department's goal as opposed to a company one. This seems to have caused knowledge sharing to be stronger within the company departments but weakened from department to department. Consistently, Edvardsson [22] found that conflict between different functions can be due to the divergent objectives set out for employees in the performance agreements. In this circumstance, the focus should be given to long-term organizational goals such as learning rather than solely stressing the short-term targets set for departmental performance. O'Neill and Adya [32] stressed the need to involve managers to individually motivate workers to share knowledge, especially that knowledge-sharing as an activity tends to be intrinsically motivating to employees on their own and in the moment. Therefore, orientation coaching and mentoring should be provided by managers in addition to including knowledge sharing in performance appraisals. Olomolaiye and Egbu [39] also argued that performance appraisal should stress intrinsic needs, teamwork and collaboration. Additionally, Brelade and Harman [47] were of the view that the assessment should include the acquisition of new skills and knowledge by an employee and how he or she has taken on new projects and responsibilities, contributed to a community or a team and participated in

else, should have an idea of their strengths and weaknesses. Employees should be trusted with their choices and consequently make it their own personal responsibility to integrate training activities into their schedule without interfering with their workload and productivity. A parallel view of this theory was found by Filius et al. [44], who noted that firms seem to prefer unstructured training. However, many scholars argue that such freedom offered to workers should be infrequent and training direction should be disseminated from the top of an organizational hierarchy downwards. There are also positive aspects to such structured training, which consist of the ability to build a common understanding of a workforce that helps lower "barriers" when developing a work culture. Bearing these factors in mind, it can be hypothesized that structured training best serves firms that have a codification-based approach. For firms that have an underpinning personalization-based strategy, unstructured training can act as a primary teaching tool, with structured training acting as a secondary training method.

When compared with other HRM practices, performance management seems to have the strongest impact on the activity of knowledge sharing within an organization [53]. Criteria that are measured send a message to employees of what is valued in the organization; therefore, performance management can hinder or support KM activities within and across organizational agents. Hannula et al. [45] stressed the use of this practice in measuring various competencies, as it tends to be a strong indicator for assessing KM activities within a firm. Olomolaiye and Egbu [39] went one step further by stating that performance appraisal should measure its outcome in terms of knowledge sharing and not simply through inputs and processes. Yahya and Goh [46] also emphasized its importance in changing employees' behavior towards KM and also in highlighting the knowing-doing gap. The outcome of such an assessment should then act as an input to the KM process. Additionally, Arunprasad [25] found that performance evaluation, in addition to other HRM practices, contributes significantly to the organizational learning dynamics. He added that performance evaluation contributes to individual and team level learn-

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Horwitz et al. [42] found that retention management was a useful tool for retaining organizational knowledge. They added that high retention rates help to protect the cultural fabric, competitive capability and intellectual capital of an organization. Moreover, Kase and Zupan [35] mentioned that, in certain networks, there are individuals who are placed in a central position that makes them essential for KM activities. With that in mind, effort should be made to retain, train and develop such personnel. This could require changing the HR strategy to an organization that is more learning-based. Studies on knowledge workers have found that they tend to have a high need for autonomy, significant drives for achievement, stronger identity and affiliation with a profession than a company, and a greater sense of self-direction. These characteristics make them likely to resist the authoritarian imposition of views, rules and structures [22].

Retention management is currently facing many challenges, one of which was raised by Young [67]—the aging workforce issue. This particular problem has been intensified because of increasing competition to attract younger employees and complications that have arisen from passing knowledge from one generation to another, as well a lack of age diversity in an organization [42]. Some of the solutions that have been suggested for knowledge retention in these circumstances are: the codification of retirees' knowledge, potentially offering them part-time or flex-time jobs, undertaking succession planning, making early identification of potential leaders for the organization and training them in mentoring programs and, finally, phased retirement options. Another issue is the higher turnover rates of knowledge workers. Knowledge workers have higher turnover rates that result in them costing 2.5 times more than other workers due to re-employment costs [42]. It has been noted though that the new generation, generally, tends to have less organizational loyalty [67].

Smith [36] suggested that retention management should be about retaining knowledge rather than people. For this purpose, some organizations have created formal knowledge-retention methods in order to capture the existing level of knowledge held by experienced personnel who are due to leave. Some firms conduct exit interviews and knowledge-capture sessions, while others opt for even more systematic and scheduled knowledge-retention approaches. The knowledge that is acquired by these means can be utilized to set up various beneficial company practices. However, the ability of organizations to transform tacit knowledge into explicit knowledge is still considered to be problematic and there are still many academics who question the effectiveness of using formal methods to capture tacit knowledge.

On the subject of why a company may have a high retention rate, the cause among some knowledge workers is a supportive working environment [48]. They state that recommendations should be made to companies to trust employees to manage their own time and tasks as well as offering them the freedom to choose the projects they are willing to work on based on their judgment of their own ability to contribute to a project. High retention rates could be achieved through motivating employees by using an incentive system that rewards the sharing of knowledge and provides recognition [42]. They added that job satisfaction is the result of a fair salary, the nature of work undertaken and future employability prospects along with good quality relationships with peers. Similarly, Gope et al. [8] found that many companies provide high professional training, career opportunity and high compensation packages to attract the employees and enhance their ability and motivation for acquiring knowledge. If the company succeeds to retain their employees, then the organization benefits from the knowledge embedded within them. Besides, the organizational and dynamic culture based on individual empowerment, reciprocal engagement and flexible benefit encourages employees to continue to work in the same organization. Accordingly, mixtures of rewards are needed to motivate knowledge workers. These include: equitable salary structures; profit-sharing or

**95**

*Aligning Human Resource Management with Knowledge Management for Better Organizational…*

equity-based rewards; a variety of employee benefits; flexibility over working time

For many knowledge workers it is as motivating to have free time to work on knowledge-building projects, going to conferences or spending time on interesting projects, as monetary rewards [22]. Haesli and Boxall [19] realized, through empirical evidence that organizations that follow a personalization-based approach do tend to emphasize the retention of employees as a methodology for maintaining overall competency levels. The retention process can be achieved through understanding employees' particular needs and by meeting their expectations, engineering an adequate compensation system, providing challenging work and autonomy and linking payments to an individual's performance and capabilities. However, firms must be aware that retention is not the "be all and end all," i.e., complete focus must not be placed on only retaining personnel skills as recruiting new employees is still a powerful method of enriching the current body of knowl-

Alvesson [68] managed to identify two forms of loyalty. The first is institutional loyalty, which is formed through the working culture, the social norms and supporting practices within a particular group or company. The second type of loyalty is called communication loyalty. It is formed by creating an identity for oneself through a group and by forming strong interpersonal relationships and sharing common interests. Both can be considered important; however, for the knowledge workers group, communication loyalty seems to act as a stronger retention factor. Additionally, Brelade and Harman [47] emphasized the importance of the psychological contract with an employee and the addressing of personal aspirations and lifestyle issues in relation to retaining knowledge workers. They added that knowledge workers are more inclined to leave due to the leadership and managerial styles

Companies with a codification-based approach seem to be less concerned with

employee retention, with the exception arising when it comes to keeping key experts who contribute to their explicit knowledge body. Companies that have a personalization-based approach place more value on personal and tacit knowledge and tend to be keener to engage in the struggle for high retention rates. In other words, codification-based companies tend to concentrate on pure knowledge retention whilst personalization-based companies place a greater emphasis on

Career management is the personal and organizational responsibility for employee professional progression by increasing their knowledge base and allowing them to progress within the organizational hierarchy. The changing nature of work towards knowledge work has resulted in a major transition in the shape of careers and their management within organizations and novel approaches for the management of careers evolve, at both the individual and the organizational levels [69]. Many scholars emphasize that knowledge sharing is enabled through functional teams and individuals who act to decrease the potential barriers between different divisions or departments. Yet, such adjustments, especially when it comes to lateral movements that are needed to form such teams, are somewhat risky in nature, as there is a risk that some individuals may leave their organizations due to this situation [53]. The conscious choice of an employee to leave in this situation is down to their personal preference to stay within their expertise area. Examples of other causes may include fear of losing power and status, lack of awareness of potential benefits and lack of trust. So, it has been suggested that such movements should be

and location, as well as being given credit for significant pieces of work.

*DOI: http://dx.doi.org/10.5772/intechopen.86517*

edge in an organization.

retaining people.

exhibited in a company rather than salary issues.

**3.6 Knowledge-based career management**

### *Aligning Human Resource Management with Knowledge Management for Better Organizational… DOI: http://dx.doi.org/10.5772/intechopen.86517*

equity-based rewards; a variety of employee benefits; flexibility over working time and location, as well as being given credit for significant pieces of work.

For many knowledge workers it is as motivating to have free time to work on knowledge-building projects, going to conferences or spending time on interesting projects, as monetary rewards [22]. Haesli and Boxall [19] realized, through empirical evidence that organizations that follow a personalization-based approach do tend to emphasize the retention of employees as a methodology for maintaining overall competency levels. The retention process can be achieved through understanding employees' particular needs and by meeting their expectations, engineering an adequate compensation system, providing challenging work and autonomy and linking payments to an individual's performance and capabilities. However, firms must be aware that retention is not the "be all and end all," i.e., complete focus must not be placed on only retaining personnel skills as recruiting new employees is still a powerful method of enriching the current body of knowledge in an organization.

Alvesson [68] managed to identify two forms of loyalty. The first is institutional loyalty, which is formed through the working culture, the social norms and supporting practices within a particular group or company. The second type of loyalty is called communication loyalty. It is formed by creating an identity for oneself through a group and by forming strong interpersonal relationships and sharing common interests. Both can be considered important; however, for the knowledge workers group, communication loyalty seems to act as a stronger retention factor. Additionally, Brelade and Harman [47] emphasized the importance of the psychological contract with an employee and the addressing of personal aspirations and lifestyle issues in relation to retaining knowledge workers. They added that knowledge workers are more inclined to leave due to the leadership and managerial styles exhibited in a company rather than salary issues.

Companies with a codification-based approach seem to be less concerned with employee retention, with the exception arising when it comes to keeping key experts who contribute to their explicit knowledge body. Companies that have a personalization-based approach place more value on personal and tacit knowledge and tend to be keener to engage in the struggle for high retention rates. In other words, codification-based companies tend to concentrate on pure knowledge retention whilst personalization-based companies place a greater emphasis on retaining people.

#### **3.6 Knowledge-based career management**

Career management is the personal and organizational responsibility for employee professional progression by increasing their knowledge base and allowing them to progress within the organizational hierarchy. The changing nature of work towards knowledge work has resulted in a major transition in the shape of careers and their management within organizations and novel approaches for the management of careers evolve, at both the individual and the organizational levels [69].

Many scholars emphasize that knowledge sharing is enabled through functional teams and individuals who act to decrease the potential barriers between different divisions or departments. Yet, such adjustments, especially when it comes to lateral movements that are needed to form such teams, are somewhat risky in nature, as there is a risk that some individuals may leave their organizations due to this situation [53]. The conscious choice of an employee to leave in this situation is down to their personal preference to stay within their expertise area. Examples of other causes may include fear of losing power and status, lack of awareness of potential benefits and lack of trust. So, it has been suggested that such movements should be

*Current Issues in Knowledge Management*

views, rules and structures [22].

Horwitz et al. [42] found that retention management was a useful tool for retaining organizational knowledge. They added that high retention rates help to protect the cultural fabric, competitive capability and intellectual capital of an organization. Moreover, Kase and Zupan [35] mentioned that, in certain networks, there are individuals who are placed in a central position that makes them essential for KM activities. With that in mind, effort should be made to retain, train and develop such personnel. This could require changing the HR strategy to an organization that is more learning-based. Studies on knowledge workers have found that they tend to have a high need for autonomy, significant drives for achievement, stronger identity and affiliation with a profession than a company, and a greater sense of self-direction. These characteristics make them likely to resist the authoritarian imposition of

Retention management is currently facing many challenges, one of which was raised by Young [67]—the aging workforce issue. This particular problem has been intensified because of increasing competition to attract younger employees and complications that have arisen from passing knowledge from one generation to another, as well a lack of age diversity in an organization [42]. Some of the solutions that have been suggested for knowledge retention in these circumstances are: the codification of retirees' knowledge, potentially offering them part-time or flex-time jobs, undertaking succession planning, making early identification of potential leaders for the organization and training them in mentoring programs and, finally, phased retirement options. Another issue is the higher turnover rates of knowledge workers. Knowledge workers have higher turnover rates that result in them costing 2.5 times more than other workers due to re-employment costs [42]. It has been noted though that the new generation, generally, tends to have less organizational loyalty [67]. Smith [36] suggested that retention management should be about retaining knowledge rather than people. For this purpose, some organizations have created formal knowledge-retention methods in order to capture the existing level of knowledge held by experienced personnel who are due to leave. Some firms conduct exit interviews and knowledge-capture sessions, while others opt for even more systematic and scheduled knowledge-retention approaches. The knowledge that is acquired by these means can be utilized to set up various beneficial company practices. However, the ability of organizations to transform tacit knowledge into explicit knowledge is still considered to be problematic and there are still many academics who question the effectiveness of using formal methods to capture tacit knowledge. On the subject of why a company may have a high retention rate, the cause among some knowledge workers is a supportive working environment [48]. They state that recommendations should be made to companies to trust employees to manage their own time and tasks as well as offering them the freedom to choose the projects they are willing to work on based on their judgment of their own ability to contribute to a project. High retention rates could be achieved through motivating employees by using an incentive system that rewards the sharing of knowledge and provides recognition [42]. They added that job satisfaction is the result of a fair salary, the nature of work undertaken and future employability prospects along with good quality relationships with peers. Similarly, Gope et al. [8] found that many companies provide high professional training, career opportunity and high compensation packages to attract the employees and enhance their ability and motivation for acquiring knowledge. If the company succeeds to retain their employees, then the organization benefits from the knowledge embedded within them. Besides, the organizational and dynamic culture based on individual empowerment, reciprocal engagement and flexible benefit encourages employees to continue to work in the same organization. Accordingly, mixtures of rewards are needed to motivate knowledge workers. These include: equitable salary structures; profit-sharing or

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undertaken at the early stages of careers, so as to establish a "norm" within a career plan. This could potentially aid the new recruits from the outset, in forming their internal network and utilizing it as they progress later on.

Hansen et al. [21] suggested that different KM strategies require different methods of career management. Companies that have adopted the personalization approach like to promote upward movements: it is either "up or out" for some. Some scholars claim that knowledge workers have primary responsibility for their own career development [69]. Employee seen as especially valuable to the organization are developed more proactively by the organization and this often includes a stronger role for the organization in planning their careers and facilitating careers moves-now part of 'talent management' [70]. Along the same line, Gope et al. [8] revealed that companies encourage their employees towards self-choice career development and unhindered growth and provide them with flexibility and opportunities to enhance individual learning capabilities for creating new knowledge and sharing it in different functions and divisions. This is consistent with other studies on knowledge acquisition and knowledge sharing. Subsequently, some firms have created two hierarchies as a response to the personal career needs: a managerial hierarchy and an expert-oriented hierarchy. However, the increasing willingness of knowledge workers to stay in their domain of expertise mixed with the onset of increased organizational de-layering (which forces a reduction in the numbers of middle managers), there is a relative drought occurring of managerial talents that are needed to fill senior positions. Accordingly, firms are looking outside their own firms and recruiting externally to fill top managerial positions. This is increasing the personnel cost due to the labor market shortage and the decreasing retention rate.

This is at odds with a codification-based company, where progress is limited due to emphasis being placed on routine job roles [21]. Hierarchal movements are also limited for low-skilled employees. There is always difficulty in sparking interest in career progression in such mundane environments.

Overall, however, most scholars believe that career adjustments should always concentrate on involving KM roles and functions and then altering them to filling the knowledge gaps within the organization.
