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HRM and knowledge management

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HRM and knowledge management

Ingi Runar Edvardsson

HRM and
knowledge
management

University of Akureyri, Akureyri, Iceland

553
Abstract
Purpose This paper sets out, first, to integrate HR strategies into knowledge management (KM)
Received 15 May 2007
systems; second, to examine the type of HR strategies to be pursued and third, it looks at the probable
Revised 4 December 2007
behaviour effects of such a strategy in the creation, distribution and use of knowledge.
Accepted 19 December 2007
Design/methodology/approach The paper discusses recent literature on the link between KM
and human resource management (HRM).
Findings The HRM strategy and the general strategy of a firm make up the general KM strategies.
Two were identified in this paper: exploitative strategy and explorative strategy. Both strategies have
behaviour effects, which have some impact on the KM process. Thus, the exploitative strategy will put
greater emphasis on knowledge storage, technical skills, as well as distributing explicit knowledge via
IT solutions. This increases the risk that firms adopting such strategy will be locked into past design
and to be unable to reach for future applications. Explorative strategy places greater weight on
knowledge creation, as well as on human interaction to transfer tacit knowledge and use knowledge to
increase innovation and new learning. Firms adopting such strategy tend to lack structure and
processes to utilise the innovations into competitive advantages.
Research limitations/implications The analysis of the paper is based on literature review,
therefore the concepts developed in the paper need empirical testing.
Originality/value This paper attempts to integrate HRM into KM systems.
Keywords Human resource management, Knowledge management, Classification
Paper type Literature review

Introduction
Knowledge management (KM) is about developing, sharing and applying knowledge
within the firm to gain and sustain a competitive advantage (Petersen and Poulfelt,
2002). Its popularity has increased rapidly in the last decade, and it has become a
central topic of management philosophy. Also, KM has been widely used recently by
firms and organisations in order to improve decision making, product innovation,
productivity and profits (Edvardsson, 2006). How, then, is human resource
management (HRM) related to KM? Scholars have argued recently that knowledge
is dependent on people and that HRM issues, such as recruitment and selection,
education and development, performance management, pay and reward, as well as the
creation of a learning culture are vital for managing knowledge within firms (Evans,
2003; Carter and Scarbrough, 2001; Currie and Kerrin, 2003; Hunter et al., 2002;
Robertson and OMalley Hammersley, 2000). Stephen Little, Paul Quintas and Tim Ray
go as far as to trace the origin of KM to changes in HRM practices:
One of the key factors in the growth of interest in knowledge management in the 1990s was
the rediscovery that employees have skills and knowledge that are not available to (or
captured by) the organization. It is perhaps no coincidence that this rediscovery of the
central importance of people as possessors of knowledge vital to the organization followed an
intense period of corporate downsizing, outsourcing and staff redundancies in the West in the
1980s (Little et al., 2002, p. 299).

Employee Relations
Vol. 30 No. 5, 2008
pp. 553-561
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DOI 10.1108/01425450810888303

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This paper sets out, first, to integrate HR strategies into KM systems; second, to
examine the type of HR strategies to be pursued and third, it looks at the probable
behaviour effects of such a strategy in the creation, distribution and use of knowledge.
The next section of the paper analyses the theoretical and empirical debates on the
relationship between HRM and KM. General knowledge and HRM strategies are then
summarized in a special section, and the paper ends by discussion and conclusions.

554
HRM and knowledge management
The core business of the HR function is to develop the employees in accordance with
the business strategy, select and hire people, train and develop the staff, evaluate their
performance, reward them and create a culture of learning (Evans, 2003). The next
section turns to these issues, and focus upon their role in enhancing KM.
KM and HRM strategies
Hansen et al. (1999) argue that there are basically two strategies for managing
knowledge. They term these strategies codification and personalisation. The former
refers to the codification of explicit knowledge that is formal and objective and can be
expressed in words, numbers and specifications. Such knowledge tends to be stored in
databases where it can be accessed and used readily by anyone in the company. Such
organisations invest heavily in ICT for projects like intranets, data warehousing and
data mining, knowledge mapping (identifying where the knowledge is located in the
firm) and electronic libraries. This increases effectiveness and growth (Hansen et al.,
1999, p. 110): The re-use of knowledge saves work, reduces communications costs, and
allows a company to take on more projects. It is thus closely related to exploitative
learning, which tends to refine existing capabilities and technologies, forcing through
standardisation and routinisation, and is risk-averse (Clegg and Clarke, 1999).
Personalisation refers to personal development of tacit knowledge that is based on
insights, intuition and personal skills for solving complex problems. Such knowledge is
mainly shared through direct person-to-person contacts. Dialogues, learning histories
and communities of practice are among the techniques that have to be used in order to
facilitate tacit knowledge sharing. It is based on the logic of expert economics, i.e. it is
used primarily to solve unique problems, where rich, tacit personal knowledge is needed,
such as in strategy consulting. Personalisation and explorative learning are closely
related, where explorative learning is associated with complex search, basic research,
innovation, risk-taking and more relaxed controls. The stress is on flexibility,
investment in learning and the creation of new capabilities (Clegg and Clarke, 1999).
Hansen et al. link both KM and HRM to the competitive strategy of the firm;, i.e. it is
not knowledge in itself but the way it is applied to strategic objectives that is the
critical ingredient of competitiveness. This account stresses the need for best fit
between HRM practices such as reward systems and an organisations approach to
manage knowledge work. According to Hansen et al. (1999, p. 113) the relevant fit is as
follows:
The two KM strategies call for different incentive systems. In the codification model,
managers need to develop a system that encourages people to write down what they know
and to get those documents into the electronic repository [. . .] In fact, the level and quality of
employees contributions to the document database should be a part of their annual
performance reviews [. . .] Incentives to stimulate knowledge sharing should be very different

at companies that are following the personalisation approach. Managers need to reward
people for sharing knowledge directly with other people.

There are, then, at least two strategies for managing knowledge that have impact on
HR practices. Next, we turn to recruitment and selection in relation to KM strategies.
Recruitment and selection
Given that KM is often adopted by organisations in complex, unpredictable
environments, traditional selection and recruitment practices have more often than not
to be modified. In such settings, it may simply be too difficult to specify the requisite
knowledge and expertise in advance (Scarbrough, 2003).
Traditional recruitment and selection practices can block knowledge sharing
between groups or departments in firms organised according the functional principle.
Where assessment centres are functionally focussed they can strengthen the
sub-cultures of functions and make knowledge sharing between functions very
difficult (Currie and Kerrin, 2003).
Other studies highlight the importance of a fit between new recruits and the
organisations knowledge culture. They stress a fit between organisational culture and
hiring of suitable personalities, as well as the socialisation of individuals into the
culture of the firm (Kristof, 1996; Judge and Cable, 1997).
Gloet and Berrell (2003) point out that in firms which adopt the codification strategy
the development of technological solutions are encouraged, particularly in electronic
recruitment and psychometric testing.
Training and development
Continuous professional development is considered to be essential to professional and
knowledge workers. In order to stay at the forefront of their professional fields they
must be constantly aware of developments within their specific disciplines and
professions and they need to participate in activities that offer opportunities to further
their own professional development (Robertson and OMalley Hammersley, 2000).
Many researchers on KM take this as given, and do not devote considerable attention
to it. However, Hansen et al. (1999) and Gloet and Berrell (2003) argue, that firms
adopting codification strategies tend to hire undergraduates and train them in groups
to be implementers, i.e. to emphasise knowledge acquisition, manipulation, and
storage, including the focus on technology. Personalisation firms hire graduates to be
inventors, i.e. to use their analytical and creative skills on unique business problems,
and to share and disseminate knowledge. Once on board, their most important training
comes from working with experienced consultants who act as mentors. If one relates
this to Argyriss (1999) theory on single and double loop learning, then codification
strategy focuses on single loop learning, while double loop learning is emphasised in
personalisation strategy.
Performance management
Performance management identifies who or what delivers the critical performance
with respect to the business strategy and objectives, and ensures that performance is
successfully carried out (Roberts, 2001). Performance management systems can inhibit
knowledge sharing, as much of the conflict between different functions can be due to
the divergent objectives set out for employees in the performance agreements.

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The objectives are, moreover, often short-term and mostly measurable in nature.
The opposite is the case in long-term developmental focus on performance
management found in many knowledge intensive companies (Currie and Kerrin,
2003; Swartz and Kinnie, 2003).
Finally, Gloet and Berrell (2003) emphasise that the KM strategies see effort,
measurement and rewards differently. As a result, within the codification strategy,
efforts associated with systems and technologies are more likely to be recognised and
rewarded. Inside such a paradigm, key performance is related to technology,
technology application and the volume of data. The personalisation 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.
Reward and recognition
Reward systems indicate what the organisation values and shapes individuals
behaviour. 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 (Despres and Hiltrop, 1995; Herzberg, 1997; Horowitz et al., 2003).
Accordingly, mixtures of rewards are needed to motivate knowledge workers. These
include: equitable salary structures; profit-sharing or 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 (Evans, 2003; Despres and
Hiltrop, 1995).
It has already been noted that Hansen et al. (1999) has argued that the two KM
strategies call for different incentive systems. Furthermore, it is worth recalling that
Gloet and Berrell (2003) emphasise that within the codification strategy efforts
associated with systems and technology are more likely to be recognised and
rewarded, while the personalisation paradigm focuses more on people.
KM strategies and HRM practices
In the previous section an attempt was made to integrate HRM practices into KM
systems. Table I integrates KM strategy and HRM practices. The table gives an ideal
typical classification of the strategies and practices. More precisely it designates
abstract elements of reality, which are found in large number of cases. Accordingly,
such concepts enable us to characterise and understand actual economic wholes (Aron,
1970).
Table I expresses a probable trend in modern economy. It shows the fit between
HRM practices on the one hand and the organisations approach to manage knowledge
on the other. The codification strategy deals primarily with explicit knowledge for
effectiveness and speed. In so doing staff selection, training and performance are
geared to that end. The personalisation strategy is primarily considered for tacit
knowledge development in order to foster innovation. Selection of personnel, training
and performance standards serve that end. The KM strategies lead, interestingly, to
totally different behaviour modification among staff. Accordingly, the codification of

KM strategy
HRM practices
Recruitment
Reward

Performance management
(control)
Training
Desired behavioural
outcomes

Codification of explicit knowledge

Personalisation of tacit knowledge

Psychometric testing, job

descriptions electronic recruitment
Varied rewards for people for
documenting knowledge, following
standard routines, using
technology, volume of data
Hard objectives, result-oriented,
short-term, functionally specific
goals
At start, specific skills,
implementer mentality. Single loop
learning
Documenting knowledge, low
risk-taking, specialisation,
effectiveness

Fit into knowledge sharing culture,

personal recruitment
Varied rewards to people for
sharing knowledge, developing
new ideas, creative failures, quality
of data
Developmental objectives 3608
evaluation, group-orientation,
long-term
Ongoing, broad skills, inventor
mentality. Double loop learning
Risk-taking, exchange of ideas,
co-operation, innovation

knowledge encourages people to document their knowledge to databases in order to

re-use knowledge, follow standardised routines and take low risk actions (not change
established work practices), and there is a specialisation of tasks in order to increase
effectiveness and lowering costs. In essence, the codification of a knowledge strategy is
an attempt to mechanise knowledge within firms. The personalisation strategy, on the
other hand, encourages risk-taking (try new things and experimentation), co-operation
and exchange of ideas among people, in order to stimulate new products and services,
and improve work practices.
General knowledge strategies
This paper has concentrated on how HRM practices can encourage knowledge sharing
and re-use. Management practices do not operate alone, divorced from the rest of the
organisation. Practices are, instead, interrelated and require a degree of compatibility
and careful co-ordination. The general strategy of a firm and the HRM strategy,
therefore, make up the general KM strategy.
The KM and HRM strategies presented previously have many things in common.
The codification strategy and low-cost strategy, for instance, both focus on
effectiveness, lowering cost and standardisation. The combined KM and general
strategy of this kind is called exploitative strategy. Similarly, personalisation strategy
and innovative HRM centre on new capabilities, innovation and new ways of working.
This kind of KM and general strategy is termed explorative strategy.
These strategies have an impact on the KM process in general. Accordingly, the
hypotheses is that exploitative strategy, with its desired behavioural outcomes of
documenting knowledge, low risk-taking, specialisation and effectiveness, will put the
main emphasis on knowledge storage (capturing and packaging knowledge). This also
includes distributing knowledge via heavy IT solutions, using already existing
knowledge to lower costs, and increase effectiveness and standardisation. It appears
that very little emphasis is placed on creating new knowledge.
On the other side, there is a hypothetical argument that an explorative strategy will
place greater weight on knowledge creation (innovative ideas in the product, processes

HRM and
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Table I.
KM strategies and HRM
practices

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558

and organisation), human interaction to transfer tacit knowledge and use knowledge to
create new knowledge, i.e. further increase innovation and new working practice.
It is possible, in the end, to draw up broad KM processes, which are based on the
general strategy of the firm. These I term, as already noted, exploitative and
explorative and they incorporate both the HRM and KM strategies which have been
analysed in the paper (Figure 1).
These strategies have vast impact on the long-term operation of firms. The
exploitative strategy tend, as Clegg and Clarke (1999) point out, to stress technical skills
and process improvements, and where learning focus on rapid response to emergencies
and early detection of malfunctions. Processes, however, does not encourage causal
analysis. They conclude their analysis on intelligent organisations, such as Microsoft,
by saying:
Intelligent organizations, paradoxically, can produce dumber people who rely on process
rather than intuitive judgement. And if that intuitive judgement cannot be standardized,
codified and abstracted, then the learning that smarter people achieve will not be generalized
[. . .] Intelligent organizations are not smart enough to know all of what they need to know:
thats why they need people to work in them who are smart enough to know that they need to
know more than they do [. . .] (1999, pp. 197-8).

Firms relying on an explorative strategy are good at activating causal analysis and
smart people, thereby implementing changes in production techniques and innovation.
However, they tend to lack structure and processes to utilise these potentials into
competitive advantages, as the freedom and autonomy of staff may cause resistance to
top-down policy implementations (Daft, 2007). The dilemma here is to construct a
knowledge strategy that can make up effective structures and processes at the same
time as firms can reach for future unknown applications.

Figure 1.
KM strategies and
behavioural outcomes

Discussion
As has already been noted, the general strategy of the firm has a significant impact on
both KM and HRM strategies. Although there can be tension as well as contrasting
ideologies related to the general strategy and both KM and HRM strategies (Gloet and
Berrell, 2003). It is clear then, that there are at least two strategies associated with KM.
Strategies can be mixed within firms, such as an explorative learning strategy being
dominant within R&D, while exploitative learning strategy being common within
production departments. Hansen et al. (1999) emphasise that the general investment in
ICT, the hiring of particular staff, their training, as well as job design, usually mean
that one strategy becomes dominant within firms. Hansen et al. also argue that firms
that offer standardised and mature products and services tend to choose the
exploitative strategy, while firms offering customised and innovative products tend to
choose explorative strategy. Gloet and Berrell (2003) argue that there is a tendency for
the implementation of an exploititive strategy, as people feel at ease in such an
environment. It also offers more structure and precision to deal with explicit rather
than tacit knowledge. Other studies on KM show a different picture: the utilisation of
both documentation and personalisation strategies reap the greatest rewards in firms
(Scarbrough, 2003; Kluge et al., 2001; Davenport and Prusak, 2000). Traditional
research in organisational studies also indicates that knowledge strategies, and work
organisation in general, are dependent on national culture, sector of industry,
professional norms, level of unemployment, management culture, as well as trade
unions and class struggle (Dobbin and Boychuk, 1999; Edvardsson, 1994; Horowitz
et al., 2003; Lane, 1989).
KM and the role of HRM in KM are still in their infancy. Most of the research
conducted so far is based on case studies and interviews, so generalisations of results
are problematic. Future research would thus benefit from longitudinal studies,
cross-national comparisons, as well as industrial sector differences. Also, basic
concepts of the debate have to be defined and theories developed. Future research
should address these shortcomings and in this paper I have attempted to push the
theoretical framework further ahead. An empirical testing of the theoretical model
presented here is urgently needed.
Conclusions
Given the growing importance of KM this paper has attempted to integrate HR
strategies into KM systems, to examine the types of HR strategies to be pursued, as
well as analyse their behavioural effects.
The HRM strategy and the general strategy of a firm make up the general KM
strategies. Two were identified in this paper: exploitative strategy and explorative
strategy. Both strategies have behaviour effects which, generally speaking, have some
impact on the KM process. It was therefore hypothesised that the exploitative strategy
would put greater emphasis on knowledge storage (capturing and packaging
knowledge), as well as distributing explicit knowledge via IT solutions. Explorative
strategy, on the other hand, places greater weight on knowledge creation, as well as on
human interaction to transfer tacit knowledge and use existing knowledge to create
new knowledge, i.e. further increased innovation and new working practices.
The two strategies have potential impacts on the operation of firms and
organisations. The exploitative strategy stresses technical skills and process

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improvements instead of causal analysis, and thereby increases the risk to be locked
into past design and to be unable to reach for future applications. The explorative
strategy stresses innovation and new learning, but lack structure and processes to
utilise these into competitive advantages.
In order to increase our understanding on the subject we need further research,
particularly of empirical nature where these concepts can be tested.

560
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About the author
Ingi Runar Edvardsson is a Professor, Faculty of Business and Science, University of Akureyri,
Iceland. His research interests and publications include: knowledge management, regional
universities and innovation, labour markets and learning strategies. Ingi Runar Edvardsson can
be contacted at: ire@unak.is

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