Organisational and Staff Development: A Virtuous Cycle in The Knowledge-Based Economy

Int. J. Knowledge-Based Development, Vol. 5, No.
1, 2014 17
Organisational and staff development: a virtuous

cycle in the knowledge-based economy
Fernando Belfo
Algoritmi Research Centre,
University of Minho,
4800-058 Guimarães, Portugal
and
Polytechnic Institute of Coimbra,
3040-316 Coimbra, Portugal
E-mail: fpbelfo@gmail.com
Abstract: Organisations which are competing in a knowledge-based economy

(KBE) will need professionals with singular qualifications and motivation.
Individuals should be on the centre of the conception of knowledge-based
firms. The development of the KBE depends on the progress of knowledge
careers and accordingly, the planning of adequate incentives especially oriented
to knowledge workers. This paper proposes a virtuous cycle which enhances
organisational performance by one side and the development of knowledge
careers, potentiating its opportunities, by another side. This mutual and positive
influence can be successively incremented, cycle after cycle, creating a virtuous
cycle. This perspective of positive reciprocal feedback is most suitable for
knowledge workers and under a knowledge-based economy context.
Keywords: knowledge-based economy; KBE; human resource management;

recruiting and retention; business alignment; knowledge worker; organisational
development; staff development; virtuous cycle; incentive.
Reference to this paper should be made as follows: Belfo, F. (2014)

‘Organisational and staff development: a virtuous cycle in the knowledge-based
economy’, Int. J. Knowledge-Based Development, Vol. 5, No. 1, pp.17–31.
Biographical notes: Fernando Belfo is a Professor of Information Systems and

Technology at Higher Institute of Accounting and Administration of
Polytechnic Institute of Coimbra for almost 20 years. His experience includes
the development, support and consultancy of management information systems
for multinational industries of paper and pulp. He is also experienced at small
business management. His main research interests are the alignment between
business and information technology, knowledge management, business
process management, project management, people and human factors in IT and
technology innovation. On these research themes, he has made approximately
two dozen publications, including book chapters, journal articles and papers
presented at national and international conferences.
This paper is a revised and expanded version of a paper entitled ‘Development

and career opportunities of information and technology professionals’
presented at Managing Services in the Knowledge Economy – MSKE,
Universidade Lusíada de Vila Nova de Famalicão, Famalicão, Portugal, 13–15
July 2011.
Copyright © 2014 Inderscience Enterprises Ltd.

18 F. Belfo
1 Introduction
Organisations that want to be competitive in a knowledge-based economy (KBE) will

need professionals with singular qualifications. More skilled workers should be
sufficiently educated with new and specific knowledge, appropriate approach about
knowledge processes, ability to use and expand supporting tools like knowledge
management systems (KMS) and also an open-minded with regard to knowledge
acquisition. Also, if organisations need more qualified professionals, then those
professionals will develop the perception that the new economy will value these
personnel qualifications and will try to increase those skills. Individuals should be on the
centre of the conception of a knowledge-based firm. The interaction with each other
transcend each one boundaries and causes personal changes. Additionally, if knowledge
is mostly a social creation through the synthesis of the different views of different people
(Nonaka 1991; Nonaka et al., 2008), than, the new economy, an economy based on
knowledge, is led by multifaceted people, with both business and technological skills.
Among a wide range of factors that influence the knowledge management (KM),
there are some that are consensual among researchers: culture, leadership, technology,
organisational adjustments, motivation and external factors (Holsapple and Joshi, 2000;
Metaxiotis et al., 2005). Of the several factors, it can be highlighted the group of
managerial influences that emanate from organisational participants responsible for
administering the management of knowledge. These influences may come from four
main factors: exhibiting leadership in the management of knowledge, coordinating the
management of knowledge, controlling the management of knowledge, and measuring
the management of knowledge (Holsapple and Joshi, 2000). Across these factors, it
comes the importance of preserving the knowledge of the individual’s knowledge
workers (KWs) (Drucker, 1999). Some questions related with this knowledge
preservation are: What is needed to attract and to hold the KW? What is needed to
increase their productivity? How to convert their increased productivity into performance
capacity for the organisation?
The expansion of the KBE depends on the progress of knowledge careers and
consequently, the planning of adequate incentives especially oriented to these KWs. The
development of an employee career should take into account the enhancement of each
one skills and competences (Wong, 2005). This improvement process should centre on
organisational needs and strategy. Employees are supposed to be trained or to be included
into different schemas oriented to the increment of knowledge, like mixed meetings
between information and technology (IT) and business or several months’ stages in other
units playing other activities to ‘feel’ its context, difficulties and opportunities of change
and improvement. Career ladders and pathways may also represent an important
opportunity to either business or IT workers.
According to WorldatWork, a total rewards strategy is needed. Such strategy should
define “the monetary and non-monetary return provided to employees in exchange for
their time, talents, efforts and results”. The concepts concerned with reward have
experienced different phases from Wage concept to Total Reward. Nowadays, people do
not work simply for pay, they also want get chances for individual development through
which they’re able to obtain new knowledge and apply their own talent and valuable
skills. ‘Total compensation’ includes pay, benefits, flexible schedules, education
assistance, training courses, and workplace opportunities to help employee get the most
out of his/her career and personal life (WorldatWork, 2008). The higher phase, ‘total
Organisational and staff development 19
reward’, sometimes slight differentiated from Total Compensation, considers all the
elements that employees’ value in working for their employer. It emphasises the integrity
of remuneration and is put forward in contrast to total compensation. Although at most
times it is thought as the same as total compensation, total reward remains the most new
word in the category of remuneration or reward (Jiang et al., 2009).
Among other dimensions, the development and career opportunities is one of the
main areas which can represent an incentive to any professional. These opportunities are
a group which is composed by learning experiences, planned to develop employees’
practical skills and competencies, and by employee plans to precede their own job goals
that may include advance into a higher responsible place in an organisation. These
incentives hold opportunities like learning, coaching, mentoring or advancement
(WorldatWork, 2008). Yet, these personal return weights may differ from employee to
employee, and knowledge professionals may have some specificities and particular
priorities that should be taken into account within recruitment and retainment. The
development of new skills is part of this incentive dimension. Studies found that this
incentive may represent the most important job characteristic in IT employees. On the top
of most important job characteristics it appears the “development of new skills and
talents” and the “professional development”. From the employees’ point of view the
company’s willingness to help him or her develop new skills and talents will contribute to
professional advancement, very much a desired end in terms of these findings (Jordan
and Whiteley, 1994). The specificities of the emerging knowledge economy strengthen
the importance of the development and career opportunities among knowledge
employees. Although nowadays almost all employees value more and more these types of
incentives, the knowledge employees, by the nature of their work and their cognitive
profile, are those who value them more.
This article establishes a set of what can be defined as incentives for KWs. Moreover,
it supports that a virtuous cycle can be established, enhancing organisational performance
by one side and the development of knowledge careers, potentiating its opportunities, by
another side. This mutual and positive influence can be successively incremented, cycle
after cycle, creating a virtuous cycle. This perspective of positive reciprocal feedback is
mostly probable for knowledge professionals and under a KBE context.
This paper also discusses implications of the KBE at organisations workforce, the
career of its professionals, namely the knowledge ones and their contribution to the
organisation value creation. Motivated KWs, utilising the appropriate means to transfer
and use knowledge, can better support the business, contributing to a better alignment
with business at several dimensions, and thus contributing to improved organisational
productivity and competitiveness.
2 The establishment of a virtuous cycle for organisational development at

the KBE
While the most valuable asset of the 20th century organisations was the production
equipment, the most valuable asset of 21st century organisations are their KWs and their
productivity (Drucker, 1999).
KWs are frequently perceived as “human objects whose cognitive dimension is
targeted with knowledge management systems”. Although the meaning of KW is still
being debated, major KW roles have already been identified. The typology of the KW

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Int. J. Knowledge-Based Development, Vol. 5, No.

Organisational and staff development: a virtuous

Abstract: Organisations which are competing in a knowledge-based economy

Keywords: knowledge-based economy; KBE; human resource management;

Reference to this paper should be made as follows: Belfo, F. (2014)

Biographical notes: Fernando Belfo is a Professor of Information Systems and

This paper is a revised and expanded version of a paper entitled ‘Development

Copyright © 2014 Inderscience Enterprises Ltd.

Organisations that want to be competitive in a knowledge-based economy (KBE) will

2 The establishment of a virtuous cycle for organisational development at

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