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linking rewards too closely to one kind of output may undermine the overall
contribution that they make. Similar comments apply to the challenge of
dealing with the labour market power and higher expectations of knowledge
workers where responses often centre on better ways of selecting and retaining
employees.
Chapter 2 has already illustrated some of the ways organizations respond
to these challenges. It is precisely because knowledge workers are hard to
control and reward through the usual means that organizations tend to adopt
softer management approaches, including attempts to gain employee com-
mitment. Chapter 2 highlighted some of the structural and cultural features
of such approaches. In the remainder of this chapter, however, we will focus
on the management practices where HRM policy and practice has greatest
influence.

Creating an attractive employment package for knowledge
workers
One important area of HRM policy and practice in relation to knowledge
workers is that of performance management and rewards. Here employers
face some complex challenges because the financial reward of the monthly
pay cheque is certainly important in recruiting and retaining knowledge
workers, but is rarely the most important factor in motivating them to apply
their expertise. As noted above, knowledge workers’ expectations of their
job extend beyond having a good salary, to include interesting work and
opportunities to develop their expertise and status. This means that they are
likely to evaluate their current job not only on its own merits, but as part
of the wider package of benefits coming from the employment relationship.
Because of this, employers who over-emphasize pay compared to other aspects
of employment actually risk undermining employee motivation. One recent
study, for example, found that performance pay had a negative effect on the
performance of R&D staff because it narrowed perceptions of their work
responsibilities (Thompson and Heron, 2006) – a finding which is in line
with previous work highlighting the motivational consequences of extrinsic
rewards (Amabile et al., 1996).
Another important element in the employment package is the career develop-
ment opportunities afforded by a particular employer. Knowledge workers typi-
cally view their current job as one step in a longer term career that will take them
into more senior and highly paid roles over time. One HRM response to this
expectation is to develop specified career tracks within the organization that will
allow the employee progression based on achieving specified performance and
competencies. These tracks will normally involve a move into more managerial
roles over time to gain higher status and rewards. But, where the organization
values highly specialized expertise, it may also support the so-called ‘dual career’
tracks where knowledge workers can progress to more senior positions without
taking on such management responsibilities.

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