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Culture, Job Design, and Recruitment Policy

It is essential that we accept the challenge of figuring out how to make the necessary invest­ments so that Shared Learning will secure a place at the core of Amoco culture.

- William Lowrie, President, Amoco Corporation33

KM requires a culture in which knowledge sharing, shared learning, and collaboration are entrenched. The organizational psychology reflected in its culture is what motivates the employ­ees to adopt such values in their daily work. Taking knowledge sharing values to the level of the individual employee involves a number of steps, starting with making it part of the j ob to engrain­ing it in the organizational recruitment and professional development policies. The focus of the recruitment and professional development policies should be the investment in human capital to increase employee learning, satisfaction, and hence loyalty. In the knowledge economy, employee satisfaction does not depend on financial compensation as much as on being intellec­tually challenged, given a chance to develop, and getting recognition. To reinforce a KM-oriented culture, employee compensation, reward, and professional development policies should be aligned.

Job Design and Awards - It's All Part of the Job. If employees do not see that knowledge shar­ing and generation is part of their jobs, for which they will receive recognition, they will not do it even if top management encourages it. Even when knowledge workers demand a higher finan­cial compensation, it is because they see it as a proxy for recognition of their contribution. Research has shown that in organizations in which the culture is right for knowledge sharing and the enabling IT tools are in place, the main hurdle is that there is no time to share knowledge because it is not connected to the job and therefore is not perceived as work.34 A number of changes in the organizational j ob design should occur to make knowledge sharing and collabora­tion part of everyone's job.

First, it should be incorporated into job descriptions. At 3M, time for sharing knowledge and collaboration is accepted as part of the j ob, where employees may devote up to 20 percent of their time to pursue their own projects. Once Dr. Spence Silver invented the coiling adhesive, it was part of his job to go around the organization to brainstorm about possible applications of his invention. If that was not perceived by him, and promoted by 3M as such, he would not have kept doing it for five years. BP, however, realized that moving competent personnel between business units would not be in the short-term interest of any business unit, though beneficial to the whole organization in the long term. Therefore, BP implemented a formal personnel transfer system that ensures geographic mobility of engineers wherein knowledge sharing becomes part of the busi­ness unit work system, and part of the duties of every employee.

Second, appreciation of knowledge sharing should be reflected in employees' performance review and compensation and reward system. In the mid-1990s, PricewaterhouseCoopers added knowledge sharing to the criteria of its performance appraisal. Employees must show evidence of actual knowledge sharing (e.g., "development of methodology, publishing and presenting on top­ics, coaching and mentoring") to be promoted.35 In addition to incorporating knowledge sharing as one of the criteria for promotion, many organizations have an annual knowledge-sharing day, at which time business units display their best practices. Awards are then given for those business units that display outstanding cases of knowledge sharing, with booths where best practices are displayed and offered.

Culture and Recruitment Policy. The same vigor required to incorporate knowledge sharing in the job design is required to develop the recruitment and professional development plan. All organizational dealings with employees should communicate the same consistent values to cre­ate a reinforcing effect. An organization that stresses knowledge sharing as a skill and character that current employees should possess, then recruits new employees, particularly in executive positions, whose values are patently contrary to those promoted by the organization, is never taken seriously. In such a case, leadership's commitment to knowledge-sharing values will be seriously questioned and then ignored, jeopardizing the positive cultural transformation of the organization. This is why most successful organizations focus on prospective employees' atti­tudes, values (not moral but work related), and interpersonal skills as prerequisites to employ­ment. For example, recruiting the right people who fit the culture of Saturn was the main factor behind its success in the automobile industry. Saturn had a careful recruitment process followed by two days of orientation and a substantial investment in training. As a result, Saturn had the lowest turnover in its industry.

Closely related to the recruitment policy is the professional development policy and the orga­nization's view on employee retention. Different organizations view employee retention differ­ently. The majority of organizations prefer to retain their employees as long as possible, given the high costs of recruiting and training. Other organizations promote a lower retention rate as the flow of recruits may enhance innovativeness. This is why it is important that top management thoroughly consider their retention policy to inform decision making as to the kind of employees that will be recruited, trained, and developed as well as outplaced. McKinsey, for example, adopts an "up or out" retention policy wherein young graduates are recruited and trained. Depending on their performance and development they have a number of years and identified stages that they go through, after which they are made partners or outplaced. Once an employee is at the partner position, the company aims to retain the employee as long as possible.

The retention policy or idea should be carefully considered given its grave impact on culture and knowledge sharing. An employee who feels threatened will not collaborate or share knowl­edge, since the element of trust necessary for knowledge sharing is missing from the work rela­tionship. At the same time, the organization needs to address what Sveiby calls the life cycle of employee competence. Sveiby explains that the length of this life cycle depends on the level of creativity required from the employee, which will eventually come to a plateau.37 Most organiza­tions in this situation do nothing, incur future losses, or fire their employees, saving losses yet affecting morale and turnover rates. The solution may lie in training to keep the knowledge worker's knowledge current and fueling creativity in new areas or, alternatively, in retraining to "find an alternative use for the capacity, that is, create an alternative professional carrier as a men­tor, teacher, [or] networker,"38 hence knowledge stewards. An example is the personnel plan of USAA, a global Fortune 500 financial services company, which provides that displaced employ­ees should be retrained, not fired. Turnover is less than 6 percent for the whole organization, and morale is high.

Investments in human capital through training that raises the employee's educational level by 10 percent have resulted in an 8.6 percent increase in productivity, compared to a 3.4 percent increase due to investments that raised the value of equipment by 10 percent.39 Return from train­ing produced two and half times the return accrued from investing in equipment. Training and retraining employees should be part of the overall personnel plan, to create as secure a working environment as possible in which trust is fostered. One way of doing that is by shifting the responsibility of keeping current and getting retrained to the employee him- or herself. The APQC found that best-performing companies use a "pull" philosophy when it comes to human capital development. According to this philosophy, it is the responsibility of employees to make themselves continuously employable by pulling the knowledge resources they need from within or outside the organization.40 Other organizations, like Skandia,41 provide placement services to their outplaced employees to help them explore career opportunities somewhere else.

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