Employee Retention

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Human Resource policies and not Technology as a measure for successful Knowledge Management

Literature Survey

Knowledge as an asset is gaining more and more recognition as we progress towards a more competitive and open market. Firms want to capture the knowledge that the workers have, to save costs, propel growth and fertilize cross learning. Mckinsey Consultants Susanne Hauschild, Thomas Licht, and Wolfram Stein, (Mckinsey Quarterly, Number1 2001), compared fifteen financially successful firms against fifteen less successful companies. They found that the more successful companies build a corporate environment that ensures continual application, distribution, and creation of knowledge. Most of the successful companies had incentives to reward the knowledge workers. Distribution was achieved through strategic staffing and job-rotation so as to capture the tacit knowledge within a firm. In the article entitled “Is knowledge Management the future of HR”[1], the author describes how the loss of talented personnel can lead to considerable knowledge erosion. The author is also of the opinion that interview processes should be modified to identify more accurately the prospective employee who can help maximize collaboration. Therefore the article concludes the need for a comprehensive interviewing and retention strategy. Margaret Barchan quotes[2], the example of a Swedish company (Celemi), measuring the knowledge within a firm indirectly by assessing performances across several dimensions. The growth is measured in percentage terms to arrive at a net percentage change, which is taken to stand for the change in the knowledge held within the firm. The literature survey indicates that there has been a move towards identifying HR policies as the key drivers of the KM-initiative; however there has been little effort towards establishing a concrete measure for the success of the KM-initiative by using HR-policies as a basis.


The paper hypothesizes that firms with a good HR-policy are likely to succeed to a greater extent than firms without one, even though they are both technologically sound.

Methodology for collecting data

For the purpose of this research a questionnaire was designed, addressing various aspects of the HR subsystem. The questionnaire was sent via E-mail, to one employee and one manager in each firm. Eventually, five firms returned completed questionnaires TISCO, Redington, IBM, SUN Microsystems – USA. Two responses one from the employee and the other from the manager was thought to be important because the manager’s perspective might have a factor of bias towards the company policies and might be at variance with the actual practices.

Description of parameters

A firm can be classified as going through the
• Evolution phase
• Transforming phase, or having reached the
• Realization stage
Of its knowledge management practice based on the HR practices that it follows. For the purpose of this paper the practices considered are (in order of priority)

1 Interaction Factors

This section was designed to find out how often the firm attempts to get the employees together. This was considered the most important because bringing employees together can circulate the tacit knowledge within the firm. The process does not lead to a formal documentation, however it is widely opined that circulation of knowledge can enhance the level of contribution.[3]

2 Selection process and orientation

This subsystem was focused upon to find out, what aspect of the candidate receives maximum weight-age during selection, and the orientation that each employee gets to the KM- practice. Orientation can introduce the employee to the knowledge culture and encourage him to contribute further.[4]

3 Training

This section aimed at finding out whether cross-functional training was provided to the employees. This was done to assess whether the firm wanted to...
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