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The author’s software system for planning and

selection of personnel in SME

Justyna Patalas-Maliszewska

University of Zielona Góra, Poland/Vienna University of Technology, Austria

Abstract: The strategic management of intellectual capital

in-volves rethinking how the companies creates value from a knowledge-centric perspective and redesigning and orchestrat-ing the role of staff knowledge in the firm’s strategy. This paper presents the author’s software system for facilitating decision making at a strategic level in terms of the profitability of invest-ment in staff knowledge. This software is a computer implemen-tation of the method for planning and selection of personnel in SME.

Keywords: intellectual capital, strategic knowledge management

1. Introduction

The advantage of a company in the SME sector (small and medium sizes enterprises) is determined by effectiveness and the extent of the knowledge-workers' involvement. The role of intellectual capital management consists in striving to increase the share of immaterial resources (at the costs of the material ones) in the generated products, services, and the total market value of an organization (Król and Ludwiczyński, 2007).

To manage of intellectual capital more systematically, the firm must devise an agenda for transforming from an organisation simply comprising knowledge able individuals to a knowledge–focused organisation that stewards the creation and sharing of knowledge within and across internal business function and that orchestrates the flow of know-how to and from external firms.

Many studies have focused on knowledge management strategies and methodologies from an organizational pers-pective (Barthelme et al., 1998), (Basu, 1998), (Carayan-nis, 1998), (Drew, 1999). Many useful studies on the de-velopment of information sharing systems and collabora-tive tools to support intra-organizational processes and teamwork also exist (Chen and Liang, 1999). However, both the methodology and software system functionality for knowledge management are highly dependent on the process characteristics and the knowledge involved. The competitive advantage of companies, especially SMEs, decide to increasingly knowledge and innovation potential. Knowledge is a broad concept, embracing both the knowledge formalized (explicit) and non-formal knowledge (hidden). Looking at the relationship between data, information, management information and knowledge (Senn, 1990) should be regarded knowledge as a strategic resource company. Application of information

systems that support knowledge management in SMEs can give guarantees a constant competitive advantage in the market.

The article presents the description of strategic knowledge resources in companies and author’s method for plannig and selection of personnel in SME (see section 2). In the third chapter the author’s software system for facilitating decision making at a strategic level in terms of the profitability of investment in staff knowledge is pre-sented on example of the decision-making situation in which an innovative SME is considering the employment of a new m-th employee. The summary shows the directions of the further work.

Author's method for planning and selection of strateg-ic knowledge resources in SME

While resources are important to the performance of a firm, according to a resource-based view, whether or not an organization gains a competitive advantage and any associated returns, depends on the strategic planning used to leverage those resources (Chrisman et al., 2003); (McGrath and MacMillan, 2000).

The need to describe a strategic-knowledge resource was motivated by the concept of resource management (Sirmon and Hitt, 2003), as well as competence manage-ment (Berio and Harzallah, 2005) – see Fig. 1:

So, the following personnel SME usefulness function Wnm for the m-th employee in the SME is proposed:

Wnm = f1(GK) +f2(PK) +f3(A) +f4(E) +

f5(P) + f6(C) + f7(R), where: n, m∈ N,

The linear form of this function Wnm is chosen because

all elements are independent and equally important to assess the effectiveness and efficiency of investment in knowledge. It is possible to receive indispensable data for account of value personnel usefulness function from com-panies belonged to reference model of SMEs (Patalas-Maliszewska, 2009) by an interview in each enterprise. Each employee should complete the questionnaire. On the basis of an algorithm for testing solutions for each em-ployee it is possible to receive a specific value of the per-sonnel usefulness function and each of the parameters of this function.

A four-element method for the planning and selection of strategic knowledge resources in SME has been built. The four elements are:

A reference model of an SME-sector company,

The value of the personnel usefulness function for each m-th employee in SME,

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An algorithm which will enable the connection of the value of strategic resources of knowledge to the value of the qualifying criteria for an innovative company – GMDH.

The method was created on the basis of methods for the assessment of capital value and on the characteristics of innovative companies. It combines available knowledge gained from literature, and experiences of SMEs which have the potential for innovation.

The method allows for making an assessment of the future value of the decision about the selection of an em-ployee in the relation to increasing innovation in a SME-sector company.

The next chapter presents the author’s software system for facilitating decision making at a strategic level in terms of the profitability of investment in staff knowledge, which considers all elements of the presented method.

Rys. 1. Określenie strategicznych źródeł wiedzy w systemach

MPS

Fig. 1. Definition of strategic-knowledge resources in SMEs

2. The author’s software system

for facilitating decision making

at a strategic level in terms of the

profitability of investment in staff

knowledge – example of using

The decision regarding the selection of an appropriate employee requires the company management to assess the efficiency of this investment. The application of the model makes it possible to obtain a forecast of the value of the strategicknowledge resources within a given organisation.

The decision-making situation, in which an innovative SME is considering the employment of the m-th employee, is presented in the diagram:

Rys. 2. Sytuacja podejmowania decyzji, w której innowacyjny

MSP zastanawia się nad zatrudnieniem nowego m-tego pracownika

Fig. 2 The decision-making situation in which an innovative

SME is considering the employment of a new m-th em-ployee

The two databases created on the basis of the replies of respondents in a questionnaire-based survey, the experiences of 10 Polish SMEs:

Database of values of the personnel usefulness function: Wnm

for each m-th employee in area Fn n,m∈N,

• Database of the values of the characteristics of innovation: xi in SME for k-companies i,k∈N

The decision-making model for the assessment of the efficiency of the selection of the m-th employee for an SME:

• Built on the basis of a defined database with the use of GMDH,

• Combined selected indicators.

Is an employee being sought who guarantees that the SME may gain the desired values of the qualification criteria for an innovative company?

Stage 1:

The implementation of data which is characteristic for an SME-sector company in a computer program (consistent with the reference model)

Stage 2:

The application of a defined decision-making model with use of the imple-mented data of a company with the aid of a computer program

Stage 3:

The forecasting of the value of strategic knowledge resources in an innova-tive SME (the value of personnel usefulness function); depending on the defined values of the innovation characteristics

Stage 4:

Conducting an interview with a potential employee using the program – establishing the current value of the value of personnel usefulness function

Stage 5:

The comparison of the forecasted value of a strategic resource of knowledge with its current value

Stage 6:

The recommendation of the m-th employee (in terms of the smallest discrepancy between the forecasted value of a strategic resource of knowl-edge with its current value)

Strategic Knowledge Resource: personnel SME usefulness function Wnm for

the m-th employee in the SME:

Wnm = f1(GK) +f2(PK) +f3(A) +f4(E) + f5(P) + f6(C) + f7(R),

where: n, m∈ N,

• f1(GK) – the general knowledge function for the m-th

em-ployee in SME,

• f2(PK) – the professional knowledge function for the m-th

em-ployee in SME,

• f3(A) – the professional abilities function for the m-th

em-ployee in SME,

• f4(E) – the experience function for the m-th employee in SME,

• f5(P) – the patents function for the m-th employee in SME,

• f6(C) – the clients function for the m-th employee in SME,

• f7(R) – the m-th employee’s personality in an SME.

Resource:

collective knowledge and capabilities that reside in the organization [Hamel and Prahalad, 1994].

Resources:

critical resources in a company represented by the knowledge, skills and capabilities of individu-als [Hitt et al., 2001].

Strategic Knowledge Resource in SMEs:

unique resources of individual employees which allow SMEs to gain a sustainable competitive advantage

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The decision-making situation of the SME sector has been presented; this decides on the employment of new employees in sales. Also the author has described the example of the company A2, which is looking for an em-ployee to the fill the position of ‘regional assistant’. The company expects to retain its current level of innovation. Stage 1:

Using the proposed system, it is possible to check to see whether the company complies with the specified reference model. A potential new employee selects actions that will be performed in the company. The developed reference model will help companies to determine the work place for a new employee.

Rys. 3. Przykład użycia oprogramowania Autorki Fig. 3. Example of using the author’s software system

Rys. 4. Przykład użycia oprogramowania Autorki Fig. 4. Example of using the author’s software system

Rys. 5. Przykład użycia oprogramowania Autorki Fig. 5. Example of using the author’s software system

Stage 2:

Through the use of the tool known as the system to sup-port decision making at the strategic level with regards to the assessment of knowledge in an innovative SME, which is the implementation of the method for planning and selection of personnel in SME, the following information was produced:

For m4 – Regional Assistant:

m4*= -0,6490+3,4592X7-2,2539X13

-2,0984X721,7486X132+3,8323X7X13, where

X7 - number of employees with scientific degrees,

X13 - the number of purchased and used licenses.

Stage 3:

For the new potential employee as a ‘Regional Assistant’, by using the decision model we obtain the following fore-cast of the personnel usefulness function, the company's request for the sample of A2’s values of characteristics of innovation:

m4*=-0,6490+3,4592X7-2,2539X13-2,0984X72

-1,7486X132+3,8323X7X13, where

X7 - number of employees with scientific degrees,

X13 - the number of purchased and used licenses.

Stage 4:

Using the the author’s software system, the actual value of the personnel usefulness function for a new employee is checked (see Fig. 6):

Rys. 6. Przykład użycia oprogramowania Autorki Fig. 6. Example of using the author’s software system

Stage 5:

Then we compare the actual value of the personnel use-fulness function with the expected new employee. If these values are similar, it is assumed that the employment of the employee will allow us to maintain the current level of innovation within the company.

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The actual value of the function: Wm4 = 19 The forecast value of the function:

Wm4*= -0,6490+3,4592X7-2,2539X13+2,0984X72

-1,7486X132+3,8323X7X13 = 19,6231 for

X7 – number of employees with scientific degrees – X7 = 2,

X13 – the number of purchased and used licenses – X13 = 1

The company can decide to recruit new employees for the position of ‘Regional assistant’ because the predicted value of the personnel usefulness function for the new employee is in line with the actual value of the function, which would allow the company to maintain a certain level of innovation.

3. Conclusion and direction for further

work

This paper presents the author’s system for supporting decision making at the strategic level with regards to the assessment of knowledge in an innovative SME. Through the example of using this system, the author shows how the forecasting of the values of strategic knowledge re-sources (values of the personnel usefulness function for the m-th employee) will be carried out. The current state of advancement of research allows the application of this system for SME sector in line adopted reference model (the reference model of SME is strictly defined in the other works of the author). The selection of employees using the proposed system is characterized by objectivity, methodical and uniformity, fairness and impartiality, professionalism.

Acknowledgements

The research leading to these results has received funding from the European Community's, Seventh Framework Programme [FP7/2007-2013; FP7-PEOPLE-IEF-2008], under grant agree-ment n°[ 235585] “SKnowInnov”.

References

1. Król H., Ludwiczyński A.: Human Resource Man-agement, PWN, Warszawa 2007 (in Polish).

2. Barthelme F., Ermine J. L, Rosenthal-Sabroux C.: An architecture for knowledge evolution in organizations. “European Journal of Operational Research”, 1998. 3. Basu A.: Perspectives on operations research in data

and knowledge management. “European Journal of Operational Research”, 1998.

4. Carayannis E. G.: The strategic management of tech-nological learning in project/program management: the role of extranets, intranets and intelligent agents in knowledge generation, diffusion, and leveraging. “Technovation”, Elsevier, vol. 18, no. 11, 1998, 697-703.

5. Drew S.: Building knowledge management into strate-gy. Making sense of a new perspective. Long Range Plan,1999.

6. Chen Y.M, Liang M.W.: Design and implementation of a collaborative engineering information system for

allied concurrent engineering. “Int. J. Comput. Inte-grated Manuf.”, 1999.

7. Senn J.A: Information Systems in Management. Wadsworth CA. 1990.

8. Chrisman J. J., Chua J. H., Zahra S.A.: Creating wealth in family firms through managing resources: Comments and extensions. “Entrepreneurship Theory and Practice”, vol. 27, no. 4, 2003, 359-365.

9. McGrath R., MacMillan I.: The entrepreneurial mindset. Boston: Harvard Business School Press. 2000.

10. Sirmon D.G., Hitt M.A.: Managing resources: linking unique resources, management and wealth creation in family firms, “Entrepreneurship Theory and Prac-tice”, vol. 27, no. 4, 2003, 339-358.

11. Berio G., Harzallah M.: Knowledge management for competence management. “Journal of Universal Knowledge Management”, 2005, no. 1, 21-38.

12. Patalas-Maliszewska J.: The concept of system sup-porting decision making enabling to asses and fore-cast of knowledge in SMEs – research results. “Ap-plied Computer Science”, Zilina, Slovak Republic. 2009.

Autorski system informatyczny wspomagający podejmowanie decyzji w zakresie planowania

i doboru personelu w MSP

Streszczenie: Strategiczne zarządzanie kapitałem

intelektual-nym w przedsiębiorstwach, w szczególności w sektorze MSP, wymaga właściwego postrzegania wartości wiedzy oraz pracow-ników wiedzy. W artykule przedstawiono autorski system infor-matyczny wspomagający podejmowanie decyzji w zakresie planowania i doboru personelu w MSP. System ten stanowi implementację autorskiej metody planowania i doboru personelu w MSP.

Słowa kluczowe: kapitał intelektualny, strategiczne zarządzanie

wiedzą

dr inż. Justyna Patalas-Maliszewska

Dr nauk ekonomicznych, trener REFA, Akredytowany Konsultant Funduszy Europejskich z 8-letnim doświadcze-niem. Specjalizuje się w: zarządzaniu strategicznym oraz opracowywaniu strategii rozwoju dla przedsiębiorstw, zarządzaniu wiedzą, zarządzaniu projek-tami. Stypendystka międzynarodowych stypendiów naukowych (m.in. w ramach

7 PR UE, MNiSW). Ma na swoim koncie liczne prace i publika-cje. Prowadzi wykłady i zajęcia na uczelniach wyższych w Polsce i za granicą (Uniwersytet Zielonogórski, BTU Cottbus, Uniwersy-tet Techniczny w Wiedniu, Austria).

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