HR IN KNOWLEDGE ERA

• Backgrounder• What is Knowledge• What is Knowledge Management• Knowledge Management & Learning

Organisations• Intellectual Capital• Knowledge Management & HRD• HRM in Knowledge era v/s Traditional Era

BACKGROUNDER

• Over the years progressive transformation of economies has taken place – from agrarian to industrial to information economy.

• Such transformation has been driven by one single factor – Knowledge

• Knowledge belongs to an individual & creation of knowledge is a gradual process.

WHAT IS KNOWLEDGE

• Whereas data is easily transformed into information, it is not the same when information is transformed into knowledge. And knowledge can further transform into intelligence & thereafter into wisdom.

• Further, knowledge can be categorised as “explicit” & “tacit”

WHAT IS KNOWLEDGE - Contd

• Explicit knowledge is the knowledge which individuals can express, using means of communication like visuals, sounds, movement, etc.

• Tacit knowledge is the knowledge which the individual is unable to articulate & convert into information.

• Tacit knowledge is something that we do unconsciously & most of the time are not specifically aware of it. In other words we can know more than we can tell.

WHAT IS KNOWLEDGE -Contd• Certain knowledge can , however be expressed.

“Know What”, which is knowledge about facts

“Know Why”, refers to scientific knowledge, like the principles or laws of nature.

“Know How” relates to skills or capacity to perform – say like, giving a business judgement about market prospects.

“Know Who” involves information about who knows what & who knows how to do that. This knowledge underlines special social relationships enabling access to experts & use of their knowledge.

WHAT IS KNOWLEDGE - Contd

• Knowledge does not suffer from scarcity. In fact, it enjoys the benefits of abundance. While most other resources get depleted upon repeated use, knowledge grows through application & can be shared.

• Secondly, geography has become history & location no longer matters. Virtual market places & organizations can be created which can have round the clock operations & global reach.

WHAT IS KNOWLEDGE -Contd• Thirdly, the trade barriers, laws, taxes, etc., cannot be

easily applied on national basis only.

• Fourthly, knowledge is difficult to quantify & the same information can be of differing value to different people.

• Both, explicit & tacit knowledge are important in the organizational context. In fact, both these interact in a continuous spiral. Such interaction can take different forms, as explained ahead.

WHAT IS KNOWLEDGE - Contd• Socialisation : Where a trainee learns from his/her

superior.• Externalisation : Which facilitates articulating &

codifying the tacit knowledge as in the case of documenting a standard operating procedure.

• Combination : Which helps to convert explicit knowledge into more implicit knowledge like placing a report in a central data repository.

• Internalisation : where external knowledge is put to use, like when any person peruses the report in the central repository to suit his specific needs.

WHAT IS KNOWLEDGE MANAGEMENT

• Knowledge management is the process of identifying, organizing & managing the knowledge resources in an organization.

• Knowledge management refers to the critical issues of organizational adaptation, survival and competence against discontinuous environmental change.

• Essentially it embodies organizational processes that seek synergistic combination of data & information processing capacity of information technologies & the creative & innovative capacity of human beings.

WHAT IS KNOWLEDGE MANAGEMENT - Contd

• In other words, information assets in the form of data bases, policies, procedures & other resources, which could be codified along with the tacit knowledge of employees, needs to be organized, shared & managed.

• Knowledge management is not different from scientific management; aim of both being the same – to capture the knowledge that is available in the heads & hands of employees.

KNOWLEDGE MANAGEMENT - Contd

• Knowledge management plays a crucial role in improving organizational efficiency. If the organizations can identify the knowledge resources, capture them & codify them, efficiency gains could be significant.

• In a way, it would also help in recycling & reusing the knowledge available within the organization instead of reinventing the wheel.

KNOWLEDGE MANAGEMENT & THE LEARNING ORGANISATION

• As competition hardens, organizations are looking at ways to take the best out of its people. This calls for continuous learning & applying the knowledge already gained in formulation of business strategy.

• We must remember that employees of an organization have abundant experience & everyday they interact with customers, learn about competition & sort out relevant organizational issues. This experience by itself, is a source of knowledge creation which can be profitably applied to improve the organization’s productivity & profitability.

Knowledge Management & Learning Organizations - Contd

• As situations change rapidly, organizations will have to constantly learn & this is what “Peter Senge” calls the “Learning Organization”.

• According to him, Learning organizations are those organizations where people continually expand their capacity to create the result they truly desire, where new & expansive patterns of thinking is nurtured, where collective aspiration is set free & where people are continually learning to see the whole together.

Knowledge Management & Learning Organizations - Contd

• In order to benefit from knowledge, organizations need to foster knowledge.

• Knowledge carried by an individual only realizes its commercial potential when it is replicated by an organization & becomes organizational knowledge.

• Knowledge creation & its sharing has therefore to be embedded in the organizational structure & systems.

• In other words, learning efforts should permeate the whole organization & failure to communicate to the people about the need for continuous learning will result in resistance from employees.

Knowledge Management & the Learning Organizations - Contd

• Learning organizations need a new view of leadership, where leaders act as designers, stewards & teachers.

• As knowledge management & learning in an organization go side by side, both can be seen as two sides of the same coin.

WHAT IS INTELLECTUAL CAPITAL

• The idea of “intellectual capital” was first used by “Skandia” of “Sweeden”, one of the world’s leading providers of quality solutions.

• The intellectual capital model is used for creating

value.

• The intellectual capital comprises – Human Capital, Customer Capital & the Organizational Capital.

What is Intellectual Capital - Contd• Human Capital refers to the skills &

competencies of the organization’s employees’ & their ability to create products & services to meet customer requirements. But it is more than individuals; it includes the way people work together in the organization.

• Customer Capital is the strength of customer relationships, level of customization of solutions, customer loyalty, satisfaction, image, reputation, brand distribution networks, delivery channels, etc.

What is Intellectual Capital - Contd

• Organizational Capital is the capabilities of the organization, including technological resources, business processes, the knowledge bases, the shared values, cultures & norms.

• Scandia’s HR strategy uses two focus areas, viz, Talent Investment & Cultural Development.

What is Intellectual Capital - Contd• Talent Investment focuses on optimizing & developing

employees’ skills & building teams of employees who complement each other’s work so that the company benefits from the diverse pool of experience & knowledge.

• Cultural Development focuses on creating an enabling environment for employees to maximize their contribution to the business, identifying the renewal & development actions required for continuous development of the companies’ culture & using the power of the group for developing methods for tapping & sharing the tacit knowledge of the employees. The ability of an organization to use knowledge helps in building intellectual capital & eventually for value creation.

KNOWLEDGE MANAGEMENT & HRD

• The process of managing knowledge in an organization is closely linked to its human resources management policies.

• HRM practices need to be tailored to suit the specific requirement of knowledge management within the organization.

• There should be an effective link between HR practices & knowledge management, so that the organization is able to leverage on its knowledge resources for creating value.

Knowledge Management & HRD - Contd

• Two strategies are suggested in the context of knowledge management, ie, Codification & Personalization.

• Knowledge can be codified & stored in data base to be used by anyone in the organization; & knowledge which is closely held by one person can be shared through one to one interaction.

• Codification & personalization would call for different strategies

Knowledge Management & HRD - Contd

• Where knowledge is to be codified, organizations will have to invest in suitable information & communication technology & provide connectivity to employees.

• Besides, a reward system should be evolved to incentivise knowledge sharing & contributing to the data base.

• Under the personalization strategy, people would require one to one monitoring & the experts need to be rewarded for sharing their knowledge with others.

• The role of the Chief HRD & the Chief knowledge Officer has therefore to be complementary.

Knowledge Management & HRD - Contd

• Within the interaction of knowledge management & HRM, two aspects are crucial. First, HRM practices should recognize that measuring knowledge output is quite difficult; more so when it is coming out of team effort rather than at an individual level. It may also be possible that people are unwilling to share knowledge, notwithstanding any incentives to do so. The reason could be that people may feel that they will lose their power, once they share knowledge & they view knowledge hoarding as legitimate. Second, knowledge is difficult to manage & control. There cannot be a clear cut input-output relationship in knowledge work, as the outcomes of such work are often unpredictable.

• For achieving best results, it is therefore necessary that Chief of HRD & Chief Knowledge Officer work in unison.

HR in Knowledge Era v/s HR in Traditional Era

• Democratic mode of management

• Educated & Knowledgeable work force

• R & D savvy & futuristic

• Less Unionized

• Freedom to Experiment

• Retention management is important

• High Investment in IT & knowledge advancement.

• Command & control mode of management

• Skilled, less skilled & un-skilled work force

• Traditional & routinistic approach

• Unionized atmosphere• Structured work env.• People by & large stay

longer on their own• Average Investment in IT

& knowledge areas