P. Arun Prasad is a Ph.D. candidate at the Indian Institute of Technology’s Department of Management Studies in Madras, India. At ICCS 2004, he presented a paper co-authored with Dr. T.J. Kamalanabhan which explores the human resource practices that lead to a learning driven culture in the workplace. Creating that culture, Prasad argues, is how companies can maintain a sustained competitive advantage in their market. What follows is a summary of the key ideas presented in his talk:
Keys to sustained competitive advantage
- Learning Processes
- Learning Culture
- Knowledge Practice
Human resource practices are requisites to deepening and sustaining these behavior.
Conceptual model for understanding the link between effective people management and a learning driven culture
Prasad argues that there is a relationship between Knowledge Strategy and Human Resource Practices, and between Human Resource Practices and Learning Outcomes.
The concept of Knowledge Strategy comes from emerging theories that focus on resources as a key component to maintaining a sustained competitive advantage; one of the most important resources a firm possesses is the knowledge of its individual employees. It follows then that the techniques and strategies used by a company to manage that knowledge, i.e. Knowledge Strategy, is as vital as the resources themselves.
Human Resource Practices generally include training, selection, compensation, employee participation, internal labor market, and recruitment. The link between effective HR and a learning driven culture is actualized in these specific practices: Staffing, Training and Development, Performance Appraisal, Rewards and Compensation because these are viewed as learning enabled human resource practices.
As you’ll see in the following examples of the types of learning organizations, the HR practices a firm employs is a corollary to its success as a learning organization. Firms that incorporate learning into HR — whether it be peer reviews as part of the appraisal process, or encouraging a self-directed development program as part of a training program; organizations that literally make learning part of HR — create learning driven culture.
Types of Knowledge
Explicit Knowledge: shared, communicated and documented knowledge used by firms to perform.
Tacit Knowledge: an employees ideas, thoughts, suggestions, experiences, feedback, etc.
The ability of companies to convert tacit knowledge to explicit knowledge is at the core of a learning organization. Companies that aren’t able to extract the knowledge of its employees to the collective knowledge base are typical of Zero and First-loop learning organizations.
Types of Learning Organizations
These are organizations that fail to take corrective steps when fresh problems and imperatives arise.
Referred to as Disintegrators in management literature, employees at these organizations traditionally don’t receive feedback and thus never take corrective actions. There is no relationship between the individual’s knowledge and the knowledge of the collective firm. Disintegrator type organizations traditionally function in highly repetitive and routine based ways.
HR characteristics for Disintegrators: Selection and recruitment in these organizations is usually carried out through unstructured interviews that focus on manual skill sets. Training and feedback is usually policy based, and appraisal mechanisms are hierarchical in nature.
Single-loop learning typifies organizations where activities and problems add knowledge to the firm’s knowledge base without altering fundamental processes. Known as Consolidators, individuals of single-loop learning organizations receive feedback and adjust accordingly, but they simply correct the problems as they occur, rather than avoid the same challenges in the future. “Learning through mistakes” typifies this behavior. Individuals of these organizations are characterized by simple adaptive responses and incremental learning that slowly increases the firm’s knowledge base.
HR characteristics for single-loop learning firms are as follows: Selection is based on technical skill and structured interviews; training is based on problem solving an communications; appraisal is based on numerous performance measures and reward stability; compensation is based on performance and also tied to individual incentives.
These are firms whose individuals literally change the collective knowledge base and breadth of skills available. Known as Transformers, employees at these firms are empowered to change the routines and processes that govern their duties. They re-frame problems, contribute to changing policies and procedures, and take risks in their work.
HR characteristics for Consolidators: selection is based on hard and soft skills, attitudes toward learning, responsibility, teamwork and sharing; training is based on personal development where employees engage in self-directed learning; performance appraisal comes from above and below; compensation is based on mentoring and information sharing, and on group and longer term incentive structures.
These are firms that have developed single and double-loop learning, and have moved on to learning and developing structures for how they learn. It’s when a firm thinks about strategies for learning as part of their core processes. Referred to as Co-Inventors, these firms incorporate process evaluation into their invention of new procedures and compare success of past and present inventions/changes.
HR characteristics for Triple-loop learning are as follows: selection is based on attitude toward reflective learning, cognitive thinking. sharing ability; training is based on peers teaching peers, appraisal and past performance; compensation is based on profit sharing and stock option plans.
Prasad cites work that says that to confront the challenges of the knowledge economy, organization have to “transform their HRM function by removing the old silos of the past” and enabling it to “embrace the new roles of human capital steward, knowledge facilitator, and rapid deployment specialist”.
In other words, the practices of HR described above — Staffing, Training and Development, Performance Appraisal, Rewards and Compensation– must be the mechanism that brings employees together to share and convert tacit knowledge to explicit knowledge.