Human Resources – Knowledge Workers

Human Resources Management Coursework – Manjeet Singh – 7637434 The Question: “Examine the claim that the management of knowledge workers requires the development of human resource practises that are more suited to the particular characteristics of these workers and their jobs” Introduction The term “knowledge worker” was first used by Peter Drucker in “Landmarks of Tomorrow” in 1959.

A knowledge worker is someone who specialises in a specific field as they possess certain knowledge which has been accrued through specific courses or experience in relevant activities, they usually have some sort of accreditation or documentation to certify that they have accrued this knowledge. They are typically well educated, and with the application of their knowledge it aids them to solve problems for an organisation and it is through problem solving that value is added for the organisation.

As well as problem solving, knowledge workers are also involved in innovation, re-engineering, training etc. although there are certain tasks which would require knowledge workers with specific specialities. Knowledge workers are seen as a crucial asset as with application of their knowledge it can determine the success and reputation of the organisation. “The most valuable assets of a 20th-century company were its production equipment. The most valuable asset of a 21st-century institution, whether business or non-business, will be its knowledge workers and their productivity. (Drucker, 1999, P135) This quote highlights the fact that we are moving away from the traditional mentality that wealth was based on the amount of resources an organisation held in its possession, and more towards how we handle knowledge workers and attain this knowledge. Knowledge workers attract higher banded salaries, with enhanced levels of autonomy in comparison to the normal employee. As a result the turnover of Knowledge workers is typically high, because they are aware of the fact that the knowledge that they possess is of great need and importance to the organisation.

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In many cases the knowledge that these workers have allows the organisation to establish a competitive advantage over their rivals, which is why they are willing to pay the generous salary of these workers. If the workers are not kept happy, then it is easy for them to just move to a different organisation or hold back on the knowledge that they provide for the company. In addition, as the levels of autonomy are high this means that here is an element of self-government, and they have a high amount of freedom, for example they can work from home, this then decreases the amount of control that a firm has over a knowledge worker. Within this report I wish to discuss the different factors that would result in the need for different HR practices for knowledge workers. I will then also highlight which characteristics these workers possess that sets them apart from their colleagues at the organisation where they work and how the characteristics affect the HR practices.

As these workers are of such importance to the organisation, they try their best to keep these workers at the organisation and as their job description differs vastly in comparison to the typical employees, this highlights the need for adaptation in the HR practices that are implemented by the firm as typical employees can be replaced rather easily, through the normal recruitment procedures, however, with knowledge workers, they add value for the organisation, thus, changes would have to be made to keep them happy at the organisation, whilst performing at an acceptable level.

What are the benefits a Knowledge Worker receives? The main technique where we can identify a knowledge worker is by highlighting the benefits that they receive in comparison to normal workers. According to Lowendahl (1997), these workers are offered high remuneration and substantial autonomy, this simply means that there is no one overlooking them constantly and they are highly paid in comparison to others. Knell (2000) & Pink (2002), also describe these workers as “free workers”, this would mean that for them there is a lot more choice as to what they can do.

As they hold all the knowledge which is valuable, it usually means that these workers are a lot less reliant on the organisation that employs him. In addition to this, it is because these workers have access to knowledge and it is them that control it, this then enables them to control the flow of the knowledge, this would mean that they need to be kept happy in order to make sure that the flow of information is suffice and of value to the company. As a result of this, knowledge workers are also offered a lot more freedom in comparison to other workers. As described above, Knowledge workers are offered many benefits due to how aluable they are to the organisation, however, there are challenges that are then forced on HR with the benefits that they offer to these workers. I will now describe these below and show examples of changes and alterations that have been made either for the attracting, motivating or retention of knowledge workers. HRM challenges as an effect of these Knowledge Workers As Knowledge workers are offered such attractive advantages due to the nature of their work, this impacts the normal practices that are in place by HRM. Therefore, managing these Knowledge workers can be challenging for HRM.

These include: Firstly, we can look at the work organisation; this has a major impact on the motivation and productivity of the knowledge worker. If the environment and the organisation is structured in a way that the knowledge worker doesn’t like then this could have a high negative effect on the company, as they need environments where they are comfortable and more importantly a place that offers them new challenges. Another challenge is the constantly changing psychological contract, this is where there are unwritten obligations and expectations that are out of the written contract of the knowledge worker.

The firm should not expect too much of the worker and likewise the worker should not expect too much from the firm, hence the need for contracts to get an understanding of the needs. Thirdly, if the knowledge workers have more than one employer, it is difficult to ensure that these knowledge workers stay loyal. The factor of opportunism can arise here as the knowledge worker would not take into consideration how them leaving or not being productive, can affect the company, instead they will just focus on the benefits that they can take advantage of.

Due to the autonomy that is offered to these workers, monitoring the productivity and motivating the workers is difficult for the organisation. These workers also have varied desires as some of them go for the more short-term incentives, like money and freedom of work, or some tend to focus on building their career, and it is a must for them to work with well recognised clients. One of the biggest challenges that they face is the challenge of retaining these workers as turnover of these workers is significantly high in comparison to other workers.

So it is critical that the HR department devise correct and well suited practices to make sure that these workers are content. The management of the knowledge is important because the knowledge is held by the workers and it is important to make sure that the flow of this knowledge is not restricted by any other factors that can be controlled or altered by the firm. The knowledge that they have also needs to be up to date as out-dated knowledge would not add maximum value for the organisation.

Defining who owns the knowledge at question is also a challenge for the organisation as there are always boundaries which are often unclear and vague, they would need to know this so that they can clearly see how much knowledge the worker can dedicate to the firm. Also as a result of the worker having the knowledge with them, there is also always the threat of them going away and setting up their own firms and as they typically work with clients directly, they could take the clients with them to their own firm.

As all these challenges to HRM have been described and highlighted I believe it also reveals the need for the differentiated HR practices for these workers as they vary massively to normal workers. Different contexts and organisations The dependency between the knowledge workers and the organisation also varies largely to normal workers as the firm itself is a lot more dependent on the knowledge workers. (Swart and Kinnie, 2003) suggest that this is because of knowledge workers changing the typical trend of the firm owning all the knowledge.

In addition, the work process also differs making the firm more dependent on the workers. An example of this is where the knowledge is at the core of the company so that would mean the knowledge worker would usually be the main source of this knowledge. The knowledge worker is at the centre of the business but this is collaborated with the reputation of the firm and working closely with the worker to main a strong relationship which is strategically vital in that particular type of industry.

As a result of this type of relationship and strategic collaboration, this would mean that both parties involved would be highly dependent on each other as the firm would not have the knowledge they require to do business as the knowledge is with the workers but the worker would need the resources, brand reputation and the clients that the firm has. Pink (2002) describes this as “substantial interdependency” as they are both reliant on each other. The only way this dependency can be reduced is by using knowledge management and outlining boundaries and expectations from both parties.

It is important to look after these workers, as if the workers leave then the value created will also leave with them. It is also difficult within this type of industry to determine how much the knowledge worker did or is needed to add value as it is tacit knowledge, which is hard to measure. Knowledge work also influences the network of the organisation as in traditional employment, there is usually a hierarchy which is implemented and all who are involved in this will adhere and follow this hierarchy (Williamson, 1975).

However, with knowledge work hierarchies won’t work due to the power differences that will be incurred as a result of the hierarchy. With knowledge work it is all about being in the correct networks and building a portfolio of careers (Castells, 2000). This gives them the freedom to go out and expand their knowledge base and they can progress within their career at their own will. It is the responsibility of the organisation to provide the workers with clients that are well recognised to keep them happy and motivated, as it would challenge them more and allow them to utilise their knowledge to their maximum potential.

This is very good for the knowledge worker, however it poses a threat to the firm as they can potentially, take the clients with them if they were to leave because they could have formed a strong bond due to the high level of autonomy that they are granted, thus meaning that the organisation won’t know how close they are. For this reason it is important to evaluate the level of autonomy that is offered to these workers, they would need enough to keep the workers motivated but not too much where the workers can get too close with clients and cause problems for the organisation.

Another factor which highlighted by Horwitz (2003), was how the ownership of the firm (foreign or local) affects the practices and the attraction of these knowledge workers, this shows that the culture of the firm has a major impact on the motivation and attraction of these workers. “Foreign versus local ownership appears, therefore, to reflect differences in certain types of HR practices such as using headhunters and advertising media to recruit and select knowledge workers” (Horwitz, 2003).

This shows us that the differing organisations from different cultures use approaches to which they think is best, and there is not a universal, “one fits all” approach which can be used globally. In addition to this they also found that “both wholly owned foreign and local firms found a fun and informal work environment more highly or fairly effective” (Horwitz, 2003), this shows us that the workers take a preference to an environment which is more informal and again changing from the conventional hierarchical approach.

An example is when Horwitz (2003), describes how there are certain cultural requirements or standards within Singapore (where they did their study), for example they have large respect for the hierarchy and everybody seems to know their positions. This would affect the knowledge workers in the sense that if there is a major emphasis on hierarchies within the organisation, it may push them towards multi-national companies with different cultures.

Also, if a firm is international, this attracts knowledge workers as it allows them to travel and experiment different cultures, whilst working for the same firm, this also builds on their experience and makes them a more valuable worker. Figure 1: Proposed schema for attracting, motivating and retaining knowledge workers Source: Frank M. Horwitz. (2003). Finders, Keepers? Attracting, motivating and retaining knowledge workers. Human Resource Management Journal. 13 (4), 23-44. HR practices

Figure 1 shows a schema which proposed for attracting, motivating and retaining knowledge workers, I believe that the elements that have been taken into consideration within the schema are critical and the schema is accurate, however, Horwitz (2003), says himself that it needs further hypotheses testing to make sure its accurate. In addition to this, it does not take into account anything about differing industries as for each industry, they found that different things motivated or attracted the knowledge workers, this is crucial as it again highlights that there cannot just simply be one standard approach or practice across all industries.

According to Kinnear and Sutherland (2000), some researchers have found HR practices which they believe are vital for retention of knowledge workers and decrease the turnover of these workers. However, how could this be possible when there are so many factors that affect the different requirements of these workers and the HR practices required to accommodate these workers? The nature of work is exceedingly different, although there may be tensions between the two types of worker simply because, the knowledge workers are granted such high benefits and salaries.

Again as per Figure 1, we can see that there is no consideration of normal workers, this implies further that these practices should be altered and suited for the knowledge workers. With altered practices it also shows that there is a possibility that it could affect the current employees’ chances of progression to get to the level of knowledge workers as the firm would invest so much into the recruitment of these knowledge workers, they would expect to find people that already have the knowledge and don’t require the training to work, simply just to settle in to the culture of the organisation.

On the other hand, Frost (2002), goes on to also talk about how employers can distinguish between the two types of workers and thus, supports the claim that HR practices need to be different for the types of workers and this will allow them to both be happy and progress accordingly.

In addition to this, Despres and Hiltrop (1995), state “traditional approaches to work remuneration and reward are no longer appropriate in a post-industrial knowledge economy” (Horwitz, 2003) this further reinforces the idea that new and fresh approaches are needed for knowledge workers and the industries need to move away from this old fashioned mentality as the industries are evolving more and more towards knowledge based organisations.

A key thing that Horwitz (2003) found was that the most popular HR practices implemented by the organisations were not always the most effective, this can be questioned as the study was in Singapore, but I believe that it just simply reinforces that the culture of each country and organisation varies and thus would affect the wants and needs in HR practices from the knowledge workers. In addition to this, they say “There is increasing evidence that particular organisations are beginning to acknowledge that distinctive HR practices lead to better knowledge worker performance. (Horwitz, 2003) this again shows the link between altered practices for these workers has a positive impact on the work and the morale of the workers. The design of the job was stated as being high important as part of the satisfaction of the knowledge workers, as if it designed correctly, then this can have a positive impact on the morale, productivity and behaviour of the knowledge worker (Thompson and Heron, 2002). This again shows the importance of different practices for these types of jobs and not to just let them have a monotonous job style like the normal employees. Conclusion

In conclusion, I agree with the initial claim that HR practices should be altered for knowledge workers. I have discovered the real sheer importance of these workers to organisations and how they add value to organisations, for this reason I believe the benefits that are afforded for them are fair and deserved and although they do require some changes which organisations are not accustomed to, for example, losing hierarchies, partnership style working, allowing them to work from home and other challenges the pose to HR, there are certain ways to attract, retain and motivate them.

They also can be risky for a firm, with the ambiguity of their tasks and lack of control from the organisation, but if the firm can keep them happy and monitor in a suitable way, then the worker would be kept happy. Knowledge based companies especially should recognise the importance of tailoring HR practices for these workers, as they are what would give them the competitive advantage, they are also characterised as being innovative and this is key to any firm.

Finally, I believe that these workers will shape the industry in the coming years, so firms should invest into finding the best HR practices which suit their own culture and organisations based also on their industry. References Castells, M. (2000). The rise of the network society: rise of the network society. Oxford, Blackwell. Despres, C. and Hiltrop, J. M. (1995), "Human resource management in the knowledge age: current practice and perspectives on the future", Employee Relations, Vol. 17 No 1, pp. 9-23. Drucker (1999). Managing Oneself,” Management Challenges for the 21st Century. Frost, M (2002) `Managing knowledge workers’. HR Magazine, May, 47: 5, 124-126 Horwitz, F, 2003. Finders, Keepers? Attracting, Motivating and Retaining knowledge workers. Human Resource Management Journal, 13/4, 23-44. Knell, J (2000) Most Wanted: The quiet birth of the free worker. Futures reports Kinnear and Sutherland (2000) `Determinants of organisational commitment amongst knowledge workers. ’ South African Journal of Business Management, 32: 2, 106-111.

Lowendahl (1997) Strategic Management of Professional Service Firms Pink, D. H. (2002). Free agent nation: the future of working for yourself. New York, Warner Books. Swart, J. & Kinnie, N. (2003) knowledge-intensive firms: the influence of the client on HR systems. HRMJ, 13 (3) 37-55 Thompson, M. and Heron, P. (2002). `The employment relationship and knowledge creation: evidence from R&D based high technology firms. ’ EURAM Conference, Stockholm (May), 1-10. Williamson, Oliver (1975), Markets and hierarchies, analysis and antitrust implications Word Count : 3,242 including references

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