How HR Can Boost Employee Productivity in the Knowledge Economy?

Increasing knowledge worker productivity

Since we have completed our shift towards becoming a knowledge society, increasing the productivity of knowledge workers has become a critical business goal. In his pioneering work, Peter Drucker described this productivity challenge as “the most important contribution management needs to make in the 21st century.” In a nutshell, the challenge of knowledge worker productivity might be the make-or-break factor in the new economy.

But who owns this challenge in an enterprise? Most HR executives would say that productivity is the management’s headache. However, taking into account the overall impact of the HR function on human capital management, companies where HR efforts align with those of management to drive workforce performance will be much better off than their counterparts. So how can HR improve knowledge workers’ productivity?

Provide resources to enhance performance

The first principle for realizing high productivity is to give employees the basic resources needed to perform their jobs, ranging from fast laptops to the right information at the right time. HR has no control over the budgets of the different business functions and cannot influence all the choices. However, the HR function can influence the most important resource: information.

According to a study by McKinsey, knowledge workers spent on average about 20% of their work time searching for internal information. As a result, efficient knowledge management is essential for productivity gains. Very few companies push knowledge management beyond creating a simple document repository. Most have no official owner of knowledge management and the HR function is ideally placed to take on that ownership.

Even without going as far as proper knowledge management, a higher level of transparency and communication flow can boost productivity. Information constraints relating to simple things, such as compensation policies and company performance, increase anxiety and encourage the rumor mill, preventing employees from concentrating on their jobs. The HR function can decrease the barriers to the flow of communications between departments by transforming internal policies and investing in relevant communication tools, such as social collaboration, at the organization level.

Employee training is another resource managed by the HR function that can be transformed to suit the new generation of workers. Whereas traditional training relies on workshops from external training providers, a modern organization needs to evolve towards continuous learning, where individuals learn from each other and the organization solves problems through the synergies of individual contributions. To achieve this, on top of efficient knowledge management that helps individual training and performance, the HR function might consider investing in collaboration tools.

Performance management: The shift from command-and-control to self-management

Most modern performance management systems are still based on the top-down approach where management sets goals and priorities and controls their execution. Periodic performance reviews are structured to help managers evaluate employees against this set of goals. And bonus programs are usually established to follow the market benchmark, without there being any immediate link between individual performance or lack of thereof and monetary incentives.

It has been shown, however, that knowledge workers perform best when they are given some liberty to make decisions. Usually compensated above average, they aspire to other rewards from their work than only their paycheck. They need a clear link between their individual goals and the bigger company picture, the bigger sense of purpose. They prefer being held accountable for the results they deliver rather than for the completion of a set of tasks imposed by the management. The highest performers also want regular feedback and recognition of their achievements as they relate to the company’s objectives, rather than an annual performance review.

In most organizations, some managers naturally adapt to the new performance management philosophy. But only the HR function can inspire and pilot this shift on a larger scale. Introducing small changes in the processes for setting goals and evaluating performance can have a big impact, legitimizing individual management efforts and pushing the others in the right direction. In this respect, social collaboration tools can help the HR function achieve this change, by monitoring individual management practices concerning employee recognition and feedback.

Work environment: Flexibility and trust

Knowledge workers rarely function on a ‘9 to 5’ principle; they take their work home, using their personal time to achieve their goals. For the best performers, the frontier between work and home is blurred. They love their work and do not really begrudge the time. Paradoxically, those performers are also the most productive; they spend less time to achieve better results than their counterparts.

This new type of employee, in particular, the young generation, are protective of their freedom. They value a sustainable work-life balance and appreciate having spare time to pursue personal growth and experiences.

Just as knowledge workers perform poorly under micromanagement, their performance also suffers under rigid work environment rules. Indeed, when an employee is judged on results rather than means (aka time for a knowledge worker), the organization needs to trust the employees’ ability to allocate their time as they see fit.

The HR function can have a strategic impact by attracting high-performance employees, retaining them and boosting their productivity by shifting corporate policies towards more flexibility.

In particular, HR can soften corporate policies on Internet or social media use at work. This would enable employees to use a wide range of external resources, but also take virtual breaks and solve any personal issues while at work. Another idea is to introduce flexible work hours, creating a culture of delivery rather than presence. More and more companies are trying out a home office policy, allowing employees to work from home when they need to or even regularly. Other companies have increased the number of paid vacation days or ensured that taking time off does not penalize someone’s career advancement.

Additional benefits of the above practices are the budget savings. Perks for staying in the office (free dinner after 9 pm, cab fares paid etc.) have a cost. Time and flexibility perks are fully compensated and overcompensated by employee productivity gains, in addition they attract the new generation of high performers.

Investing in modern collaboration tools to promote this mobility and flexibility helps to ensure efficient work anywhere anytime.

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