Human resource management challenges in knowledge-intensive sectors and solutions - Essay Example

?Human resource management challenges in knowledge-intensive sectors and solutions Human resource management (HRM) is of crucial importance for the optimum functioning of the organisation, irrespective of whatever sector they operate in. As the organisations in all the sectors including knowledge-intensive sectors will have humans or employees, human resource management is inevitable. With the organisations in the knowledge intensive sectors maximally dependent on the employees and their intellectual assets than other sectors like manufacturing, service, etc., (which could have use of infrastructures and machineries), HRM has to play a major role to solve all the HRM centric challenges. In any organisation, Human Resource Department (HRD) in association with other departments will play a variety of roles. HRD as part of HRM will select of the right people for the right jobs or designations through aptly conducted recruitment drives. Then, they have to provide a healthy and effective work environment for them to exhibit high productivity. Effective work environment in the sense, the employees can be made to work as part of teamwork, can be involved more in the decision making processes and importantly could be given timely incentives so that their efficacy levels are always at the peak. All these key aspects have to be taken by the organisation or the management with good inputs from the HRD in line with optimum HRM. Workers are the integral part of any successful organisation and that includes Knowledge-Intensive Firms (KIP). This paper will discuss the HRM centric challenges and problems that will normally arise among the employees in KIPs, and importantly discuss how it can be solved, thus making the employees provide optimum productivity and thereby keep the operations of those firms, running in a smooth, well lubricated manner. Knowledge-intensive sector or Knowledge-Intensive Firms (KIPs) The concept of KIFs is apparently distinct from other organisational categories or organisations in other sectors. This is because in other traditional organisational categories, the emphasis will be more on the raw materials, capital, machineries, etc., with employees and their intellectual assets playing a complementary role. However, in the case of firms in the Knowledge intensive sectors, their entire operations will depend on humans and their knowledge. “KIFs are generally considered to be diametrically opposite to traditional manufacturing firms in that the knowledge rather than physical or financial capital is central to the companies’ existence” (Jorgensen, Becker and Matthews 2009, pg. 451). Thus, the firms operating in the Knowledge Intensive sector carry out their operations based on the professional knowledge exhibited by their employees. That is, using the knowledge of the employees, they mainly provide knowledge based support, service and even products for other business processes. As stated by Rylander and Peppard (2005, pg.4), “KIFs are characterized as organisations where well-educated and qualified employees form a major part of the work force and engage in mainly “intellectual work”. Certain organisations, which do and provide these types of works or services comes under this knowledge intensive sector. For example, consulting organisations, financial companies, law firms, private banks, architecture companies, etc., comes under this sector because these companies will use their employees’ knowledge and data analysis skills to provide service to the other businesses or clients. Because of this main focus on the employees and their knowledge, more than their physical skills, their mental abilities will be focused. Thus, these firms will have a different employment structure than the traditional firms. For example, “their employment structures are heavily weighted towards scientists, engineers, auditors and other experts in specific fields.” (Metcalfe and Miles 1997, pg. 8). Thus, it is clear that the organisational and employment structure, functioning and even the clients of the KIFs will be different from other traditional firms Role of employees in KIFs and the HRM challenge Although, nowadays organisations are functioning mainly with the aid of technological tools particularly Information technological tools, the fact is, organisation need to have optimum intellectual assets to aptly use those tools. That is, in an organisation intellectual assets or even knowledge ‘banks’ could take multi-dimensional perspective, as various living and non-living aspects constitutes these assets. Among these assets, human capital in the form of employees and their knowledge plays a prominent role. This is because, knowledge of employees only “have economic value for the organisation”, as they only enable it to be productive and adaptable” (Kontoghiorghes and Frangou 2009; Misirian). This clearly shows the vitality of the employees. Irrespective of the number of advancements in employing scientific technology towards automation of processes in organisations including the ones in knowledge intensive sectors, no one could deny the fact that the physical and mental abilities of the workers can never be counted out. This role of employees and their knowledge as an asset is particularly important to the KIFs, so much that they “are classified as Gold Collar workers, highly demanding and receiving good terms and working conditions, particularly regarding flexibility.” (Demortier and Delobbe 2011). The employees in these organisations will maximally use their knowledge, gained from academic qualifications, experience, external sources, logical reasoning, etc., to develop solutions, products and services. The employees will use their mental ability to transform the available data into knowledge solutions or assets for the clients. This was pointed out by Despres and Hiltrop (1995, pg.4), who stated, that work in KIFs is very intellectual done with specialized skills, and based on the clients’ expectations, as the it depends “almost exclusively on the uniquely human ability to manipulate symbols via cognitive processes—to effect the transformation of data into information, and information into meaningful knowledge.” Due to this optimum role for the employees in the KIFs, there is a view that, employees and not the organisation nor its management who run and dictate the production process inside the organisation. “The process of production is largely owned by the employee in a knowledge-intensive environment, not by the organisation.” (Despres and Hiltrop 1995, pg.4). When employees are given such prominence in knowledge intensive sectors, it is natural that HRM has to play a major role to manage them aptly. That is, with such high focus on employees, there will be high expectations from them and that leads to sizable grievances exhibited by the employees, causing more HRM challenges than in traditional organisations. In any organisation, particularly in KIFs, the main motive or purpose of HRM is to actualize an optimal organisational culture and continually monitor the employees by making them part of the decision making process and work as a team, then continually motivate them by giving rewards and even training, so they are exhibit good productivity and continue to work for the organisation without leaving it. This perspective was validated by Jackson and Schuler (1995, pg.241), who stated that “all costs related to eliciting productive behaviors from employees in KIFs – including those related to motivating, monitoring, and retaining them – constitute human capital investment made in anticipation of future returns”. Although, KIFs could face somewhat similar HRM challenges as in the traditional organisations, the challenges could take different perspectives due to the more focus on the employees. That is, as stated by Demortier and Delobbe (2011) the key HR practices, which may arise as a challenge in KIPs include the expectation of the employees to have more autonomy during teamwork, decentralization of the decision making, expectation of a “comparatively high salary driven by results” and need for extensive training. This perspective was also pointed out by Rodwell and Teo (2002) who stated “specific examples of HR practices include: selective staffing, training and providing equitable rewards” and HRM’s purpose is to design and implement these practices and policies, so the KIPs can “successfully harness the firm’s human capital.” HRM centric challenges in Teamwork and decision-making in KIFs In any organisation particularly in the organisations in the knowledge intensive sector, successful work teams with positive team dynamics has to be successfully established, so all the knowledge and potential of the employees can be combined and accentuated. That is, when the knowledge and the analytical abilities of the employees are ‘pooled’ into the problems or task in hand, then there high possibilities of coming up with optimum solutions. This perspective was validated by Jackson et al. (2006) who stated that teamwork or teams in KIFs “may provide organisations with strategic advantage, as they can provide an arena for knowledge-centred activities (e.g. acquisition, sharing, combining, creation, and revision of knowledge).” However, the HRM centric challenge that might arise when teamwork is being implemented is the non-cooperation by some employees, particularly the experienced ones. In KIFs, teams can be actualized only if the knowledge and qualified employees, shedding away their in-built superiority complex, decide to cooperate and work as a team. This point about cooperation and teamwork was pointed out by Jackson and Schuler (1995), who stated, “like other assets, human capital has value in the market place, but unlike other assets, the potential value of human capital can fully realize only with the cooperation of the person”. However, when the employees become non-cooperative, lethargic during team work and importantly want more autonomy, causing impediments, then effective teams with positive team dynamics cannot be done. Among these attributes, the need for autonomy will be prominently existent in KIFs, leading to challenges. That is, as all the employees or even maximum employees in KIFs are aptly knowledgeable and equipped, there would not be much of an organisational hierarchy, with every employee having equal standing and contributing equally to the processes. (Boxall and Purcell 2008). In addition, although, all these employees contribute or pool to the organisational targets and processes, each employee will carry out a particular module of those processes, and so they would maximally want autonomy with less of teamwork. “The nature of the work they perform often requires and authorizes a high degree of autonomy” (Robertson et al., 2000). This was further validated by Robertson and Swan (2003, pg. 832), who stated “these kinds of ‘knowledge workers’, and this kind of work, are expected to demand high levels of autonomy”, creating HRM centric dilemmas regarding how “to balance autonomy with control and uncertainty and flexibility with efficiency.” Although, this want for autonomy is a not a detrimental demand among the employees in the KIFs, as it could lead better productivity, in certain occasions, teamwork could provide more optimal results. That is, as discussed above, team work with equal and excessive autonomy among the employees could provide a forum for them to discuss and come up with apt analysis or solutions. On the other hand, if the employees are given heightened autonomy particularly the experienced staffs, it could lead to HRM related problems. This is particularly visible in KIFs, and needs more focus and management than the traditional organisations. According to Robertson and Hammersley (2000, pg. 242), the key characteristics of human capital that is visible in KIFs is the need autonomy among the employees and this will “pose particular challenges when managing knowledge workers”, thus necessitating HRD to adopt “distinctive approaches to people management that differ considerably from traditional models of HRM” Senior or experienced employees, who could have been working in the same KIFs for many years, could exhibit these attributes, if they think they are being sidelined without sizable autonomy during the team work, and that new forces are taking charge. To correctly manage these challenges, HRD in association with top management has to come up with strategies that will assuage the insecurity among the experienced employees. They have to be given confidence that their knowledge plus experience will be a key intellectual asset to the company, and they have to utilize it aptly for the benefit of the company as well as themselves. In KIFs particular, there should be gradual entry of ‘young blood’, without offending the experienced staffs. Thus, the teams have to be arranged effectively, so that it has a right mix of effective persons with prior experience as well as competent employees who specialize in any of the many technical strands, needed for the KIFs. (Swart and Kinnie 2003; Dicker 2003). This cooperative attitude among all the employees can lead to strong teams, and thereby strong solutions. The other key strategy that can be adopted to promote teamwork, even without diminishing the autonomy of the employees, is involving all the employees optimally during the decision making processes. If each employee is given responsibility and made accountable, they would incorporate critical thinking to take the best. (Allwood and Selart 2001) Also, if the workers particularly the newly recruited ones, keep on participating in all the important decision making process with responsibility, they will begin to comprehend all the intricacies of organisation functioning. In KIFs, as said above, there would not be intimidating organisational structures, so the workings particularly during decision making will be more of collegial than supervisory, thereby enabling sharing of information and delegation of responsibility among all the employees. (Ishak, Eze, and Ling 2010). By this way, they will utilize their knowledge and skill to come up with effective objectives and strategies for the well functioning of the KIFs. Employees for their part will gain maximum confidence, because they will be happy with the thought, that they have put in something purposeful to the groups’ or organisation’s decision making process. Plus, acknowledgement of their contribution by the management and the leader will further optimize their motivation level and responsibility towards the organisation, thereby their contribution to the organisation. HRM centric challenges in Rewards and incentive system in KIFs Rewards and other incentive systems are one of the key HRM centric challenges that could be seen in Knowledge intensive sector, like in traditional organisations, but with different expectations. That is, in traditional organisations, the rewards will be mainly in the form of monetary rewards, but in the case of KIFs, the employees will expect more of non-financial rewards like praises, promotions, allocation of status symbols, etc. “While traditional compensation and reward systems pivot on the disbursement of monies,” those located in KIFs environments do not, and instead focus on non-monetary rewards particularly the “symbols of personal and professional excellence.” (Despres and Hiltrop 1995, pg.11). The challenges that could arise, is when incompetent employees due to favoritism, bias, etc., are given such rewards, while the high performing workers are not rewarded aptly. To solve this problem, appraisal process has to be carried out genuinely and effectively, and the rewards particularly non-monetary rewards given ethically. Adonis (2006) writes that genuine and performance appraisal has to be carried out because it motivates employees, it creates consistency and finally it is a prompt for managers to review and recognise good performance. To further improve this appraisal process, certain KIPs apart form the management and HRD would involve “teammates, peers and even customers in the evaluation of an individual's performance.” (Despres and Hiltrop 1995, pg.11; Scullion and Collings 2006). This will provide multi-perspective appraisal and could also be ethical. When it comes to non-monetary rewards, here also HRD in line with optimal HRM policies should provide them to apt employees, after correctly appraising them. “Such arrangements make it a point to recognize achievement…offer the praise, acknowledgement and independence which have been found critical to innovation.” (Mustapha and Daud 2011). Conclusion From the above analysis, it is clear that organisations in the Knowledge intensive sector function distinctly from the traditional organisations, particularly in relation to the employees. Employees are given more prominence in KIFs, and that leads to more HRM applications and the resultant challenges. With employees’ knowledge or intellectual assets used as a key aspect for the functioning of KIFs, the employees’ mental wellbeing has to be taken with HRM. The productivity of those employees are accentuated by actualizing team work, even without restricting their autonomy, by giving major role in decision making and by providing apt and ethical rewards. To conclude, it could be said that, if the HRM aspects in KIFs are managed in a effective manner, the employees will be highly motivated and will exhibit optimum performance, thereby placing the organisation on the success path. References Adonis, J., 2006. MANAGERS dread them. 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