SANDIS BABRIS
MANAGEMENT METHODS FOR
INTELLECTUAL WORKERS AND THEIR
IMPROVEMENT
Summary of the Promotion Paper
for promotion to the degree of Doctor of Economics
Branch: Management
Subbranch: Business Management
Riga, 2006
- 38 -
Introduction
Topicality. One of the specific characteristics of current economics is the situation that
traditional factors of production such as land, the labour force and capital are no longer the
main factors ensuring competitiveness and adding value to the organization – it is knowledge
that marks the beginning of a new knowledge-based economics. The result is a new category
– intellectual capital that consists of all nonmaterial values in the organization. The most
valuable part of intellectual capital is human resources, meaning intellectual, knowledgeable
employees; therefore it is very essential to create such an organization in which employees are
willing to share their ideas, find and offer innovative solutions, make their independent
conclusions, but the organization itself is open to listen to and accept them.
It is a visible trends nowadays that physical work is being replaced with intellectual
work, where the most crucial is the ability to gain and work with different information, create
knowledge in order to offer services and products quickly, safely, and with as few expenses as
possible. That means that organizations today need well educated employees who invest their
efforts, knowledge and energy in achieving company goals. Organizations would not exist if
employees were not interested in company business on the whole, if the level of employees’
knowledge and skills were low, if they were not flexible enough towards a changeable market
situation.
As a result of such trends is the fact that they change organizations themselves i.e. we
can see the forming of a new type of organization – intellectual organizations. For those
organizations it is very essential that their employees are creative, work in innovative ways
and are focused on achieving the company’s goals.
One of the leading theorists in management science, P. Drucker, has stressed: in the
20th century one of the most important inputs of management science was employee
productivity increase by 50 times, then in the 21st century the challenge of management
theorists is to achieve an equal increase in productivity of intellectual work.
The inapplicability of management principles and methods used for managing
intellectual employees in a company used in the 20th century was recognized by other
theorists such as M. Beers, E. Purser, S. Cabana et. al.
As statistics reveal in every developed country, intellectual employees are the most
rapidly growing working group in the population, constituting 25-40% of the total workforce.
- 39 As per a profession survey (run by the Statistical Bureau of Latvia) in 2004, around
32.8% of all employees can be counted as the ones doing intellectual work, including
legislators, officials, managers and senior specialists (according to LR Profession classifier).
If the category “specialists” is added then it comes to 46.1% in total. Not going into details
which professions we consider as intellectual profession, we can assume that not less than
30% of the employed in Latvia do intellectual work.
However, the author of the dissertation considers that both economic development in
Latvia and global competitiveness are not dependent only on the number of employees doing
intellectual work; the results achieved and productivity is significant too. Unfortunately, only
19% of all organizations in Latvia have been innovative if compared to EU countries where
the proportion of such organizations is 45% (as per the survey “Development of Innovations”
run in 2002 and 2004, Statistical Bureau of Latvia). The proportion for exports of high-tech
industry products on average makes up only 6% for the last years in Latvia, and there is a
rather small number employed in the science sector because of the lack of financial support
for scientific research. It requires investments to develop knowledge-intensive sectors in the
national economy, as well as on the microeconomical level; as it can be clearly seen in Latvia,
we radically need to improve the productivity of intellectual employees, so that it reaches a
proper level of innovation in all service, production and governmental sectors.
There has been only some general research made on intellectual capital, intellectual
work and intellectual organizations. This issue has been analysed by several theorists: J. Roos,
I. Nonaka, D. Garvin, D. Leonard, S. Straus, J. Quinn, J. Lorsch, T. Tierney, and M.
Alvesson.
Professor and advisor, theorist in management science (USA) A. Amar notes that the
theme – intellectual work, management of intellectual organizations – is very recent and new,
therefore any research made in this field would give significant input to solve different
problematic issues found so far.
The Author of this dissertation agrees with this statement, because in order to find new,
proper management approaches and principles for intellectual employees, at first we need to
explore the attitude of intellectual employees towards management practices used so far and
need to make an in-depth analysis about the motivation system used.
- 40 The research object of the dissertation is intellectual employees in Latvia, the
subject is management methods of intellectual employees, productivity of intellectual work
and opportunities to increase it.
The goal of the dissertation is to develop management principles and methods for
intellectual employees that would foster an increase in productivity of intellectual work.
To achieve the goal the following tasks were stated:

To explore the structure of intellectual capital and its importance in
organizations,

To explore reasons of forming intellectual organizations as well as to identify
their specific features,

To compare the content and characteristics for physical and intellectual work,

To explore the motivation of intellectual employees in Latvia,

To identify elements supporting and/or preventing productivity increase of
intellectual employees,

To develop a pattern for intellectual work productivity management.
The following hypotheses of the dissertation were put forward:

The existing model in labour relations is not motivating for intellectual
employees who constantly work on their own productivity and its increase;

Adding such aspects as freedom of action, the possibility to state and agree with
the supplier on tasks to be done, on volumes needed, costs and competition,
improves the motivation of intellectual employees, supporting their own input in
their work productivity;

Motivation and work productivity of intellectual employees will increase if there
is a possibility to make decisions and availability of resources to organize daily
work;

To assure a high level of motivation for intellectual employees it is necessary to
ensure inner motivation (interesting, consistent job supporting professional
development, freedom of action, communication, new challenges, new
possibilities, pleasant customers and a creative atmosphere) as well as external
motivation (recognition and financial interests);
- 41 •
To increase productivity of intellectual work management should become a
support function where intellectual workers state what kind of management
services they need, and as a client, evaluate management performance;
•
To increase productivity of intellectual work, managers are to fill a new role, a
new function – knowledge management.
The dissertation’s theory and methodology basis is grounded on bibliography,
different publications, scientific articles (particularly USA, EU) and different internet
resources. The major topics and authors cited in the dissertation are as follows:
•
On structure of intellectual capital, its role and importance – Roos J., Horibe F.,
Brooking A., Edvinsson L., Alvesson M., Klein J., Nelson R., Fornell K. etc.;
•
On
intellectual
organizations,
organizations
of
professional
services,
development trends and problematic aspects of their management – Alvesson
M., Horibe F., Amar A., Lorsch G., Maister D. etc.;
•
On specific aspects of intellectual work and management of intellectual
employees – Davis G., Beers M., Drucker P. etc.
In addition, different scientific and general bibliographies about organization
management,
human
resources
management,
management
psychology,
knowledge
management, analysis of statistics (sources: Statistics Bureau of Latvia, LR Ministry of
Economics) and different unpublished materials have been used in the dissertation.
Methods used: content analysis of management literature, modeling, methods of
statistical analysis. For hypothesis development qualitative research methods have been used
– interviews (a list of discussion topics for intellectual employees had been produced,
interviewing 18 employees of different intellectual professions). As result of interviews, many
hypotheses have been put forward, but as they covered similar topics of problematic aspects
of management, they were grouped resulting in 6 hypotheses. The hypotheses were tested
using quantitative research methods – a questionnaire in the internet, covering 379
respondents. For data processing statistical methods of analysis were used (calculation of
average, group comparison, principal component analysis, structural equation modeling etc.).
The following aspects show innovation of the dissertation:
•
The author proposes his own structure of intellectual capital and indicators for
the identification of certain elements of intellectual capital;
- 42 •
The author reveals factors that influence intellectual workers’ motivation and
discovers their relationships in the model of knowledge (white collar) workers’
motivation (research so far was focused on the productivity of blue collar work
employees and analysis of factors impacting employee motivation or analysis of
one certain profession or group of professions such as teachers, doctors,
managers etc);
•
The author has worked out a model for evaluating the performance of managers
of intellectual workers,
•
The author proposes a methodology for setting priorities to improve the
motivation of intellectual workers in Latvia;
•
The author has developed a productivity management model that allows
identifying factors that need to be improved to make intellectual employees
interested in improving their own work productivity.
Restrictions: taking into account that intellectual organizations cover both the private
sector (architects, law offices, insurance companies, advertising agencies etc.) and the
governmental sector (municipalities, ministries, schools, hospitals etc.), the author stresses
mainly the private sector particularly further on. According to the author, intellectual
organizations in the private sector have been more effective in intellectual employees
management, which is explained by higher motivation - the owners of private intellectual
organizations in many cases are their own managers and most experienced specialists, who
know that the development of their own company is dependant on the ability to sell its own
products in a situation of rather tough competition, contrary to governmental sector
organizations, where intellectual workers do not own shares of the organizations.
From the wide range of intellectual professions, the author explored those employees in
the private and public sectors who are not managers, because not all managers are to deal with
the management of intellectual employees. In addition to the process of proving the stated
hypothesis, it was important to find out how employees evaluate current management
practices in Latvia and how they evaluate their own managers.
The Doctoral Dissertation refers to a certain time period from 2002 till 2006, but there
are certain references to bibliography and statistics from the 20th century.
Relevant to the dissertation, the author has the following publications:
- 43 •
Intellectual Capital and Its Importance for Organizations (LU articles nr. 674,
2004);
•
Changes of Marketing Communications in the Aspect of the Electricity Market
Liberalisation Process (LU and VAS “Latvenergo” international science
conference “Energetics, National Economics and the Environment in the Baltic
Sea Region”, articles, 2005);
•
Management of Professional Services Organisations (LU, articles nr. 677, 2004);
•
Features of intellectual work and management of intellectual workers (accepted
for publication for LU articles, co-author O. Stūre);
•
Intellectual employees evaluation of current management practice in Latvia
(accepted for publication for LU articles);
•
Problems of Management Intellectual Work Productivity (submitted for
publication for LU articles);
•
Improving the Motivation of Intellectual Employees in Latvia (submitted for
publication for LU articles).
The Author has presented the content of the dissertation in the following scientific
international conferences:
•
Intellectual Capital and its Importance for Organizations // LU 62. International
conference – R: LU, February 6th, 2004;
•
Changes of Marketing Communications in the Aspect of the Electricity Market
Liberalisation Process // An International Science Conference “Energetics,
National Economics and the Environment in the Baltic Sea Region”, – R: LU
EVF and project of Latvenergo, March 12, 2004;
•
Management of Professional Services Organisations // LU 63. International
Conference – R: LU, February 3rd, 2005;
•
Intellectual Organizations and Problematic Aspects of their Management in
Latvia // Baltic Forum – R: Baltic Forum, April 16th, Baltijas forums, 2005;
•
Intellectual Employees Evaluation of Management Practices in Latvia // LU 64.
International conference – R: LU, February 2nd, 2006;
•
Problems of Management Intellectual Work Productivity // LU 65. International
Conference – R: LU, February 2nd, 2007.
- 44 The author’s ideas and suggestions have been approbated in several companies and
departments:
•
AS „Latvenergo” Marketing and Communications department;
•
SIA „DHL Latvia” Sales and Marketing Department;
•
SIA „Inorek & Grey”;
•
SIA „GCI Latvia”;
•
SIA „Mediacom”.
Main content
The Doctoral Dissertation consists of 5 chapters. The First chapter covers research
about intellectual capital of organizations, specifies the structure of intellectual capital,
analyses elements of intellectual capital and indicators characterizing it. The Second chapter
is devoted to the examination of intellectual organizations: the author proposes a new
definition for intellectual organization and intellectual department, reviews development
tendencies of intellectual organizations in Latvia and worldwide, makes a comparison
between intellectual and traditional organizations, as well as reviews problematic aspects of
the management of intellectual organizations, particularly stressing one of the most rapidly
growing organization sectors – professional services organizations.
In the Third chapter the author has covered development tendencies of the intellectual
labour market in Latvia and worldwide, reviews the specificity of intellectual work and makes
a comparison with physical work, discovering crucial differences in both the content and the
character of the type of work which leads to the need for developing new ways, methods and
principles of management.
The Fourth chapter makes an analysis of intellectual employees in Latvia, developing
hypotheses on changes to be implemented in the management of intellectual workers, while in
the Fifth chapter, the author proves a hypothesis about the necessity to change principles and
methods of intellectual employee management, and develops The method of stating priorities
for improving the motivation of intellectual employees, Model of intellectual employees’
managers evaluation, Intellectual work productivity management model and Motivation
model of intellectual employees.
- 45 -
1. Intellectual capital and its role in organizations
Nowadays knowledge has become one of the most important creators of competitive
advantage in organizations, which is why already in the 20th century, more and more
economic and management theoreticians in Europe and the USA indicated in their
publications that intellectual capital is one of the most valuable resources in organizations.
Discussions about intellectual capital as a relevant part of each organization among
theoreticians in economics and management science started only at the end of the 20th
century. This can be explained historically, since at the end of the 19th century the value of an
organization was determined basically by the value of the company’s own capital (some
authors, for example F. Horibe, name it “book value”) excluding liabilities from assets. In this
case, the value of an organization was set mainly by its own buildings, equipment, resources,
money etc., which were determined elements for the production of goods or giving services
for industrial society till the second part of the 20th century.
However, nowadays such an approach is no longer acceptable. According to the
author’s calculations, intellectual capital is becoming more and more important in a
company’s market value.
But it has to be noted that the value of intellectual capital and its changes in Latvia are
stated only when the company is being sold, but when the company is not planned for sale,
unfortunately nobody is interested in its size and development.
The category of intellectual capital is quite wide. At the same time there is no
consensus among researchers about what elements intellectual capital consists of. Many
scientists have contributed to intellectual capital research, such as J. Galbraith, J. Roos, K.
Sveibey, H. St-Onge and N. Bontis, A. Brooking. In turn, the first companies that started to
turn to the assessment and management of intellectual capital were the Swedish company
“Scandia” (1995) and the USA corporation “Dow Chemicals” (1996).
Considering the scientists mentioned before and company definitions, and also the
incompleteness of models, the author suggests three components of intellectual capital:
•
Human capital (employees and their knowledge, abilities, talent);
•
Structural capital (organizing structure, culture, communications, procedures and
processes in a company, relationships among the employees, motivation of the
employees);
•
Market capital (brands, patents, copyrights, reputation, image, client loyalty).
- 46 In order to find out more about human capital, structural capital and market capital –
there is a need to regard this matter in more detail.
Human capital does not belong to a company but the employees can work for a
company on their free will, so, part of the company’s value does not abide by the company’s
managerial supervision, but the company has to do everything in order to keep its employees.
The staples of human capital are competence, attitude and intellectual abilities.
Summarizing the cognition of human capital as one of the components of intellectual
capital and as a creator of other intellectual capital elements, the author concludes that there is
a necessity to minimize the labor turnover for each company in competitive conditions, in
order to prevent the outflow of knowledge from the company, as well as the necessity to
invest in employees’ education in order to promote the formation of new knowledge.
Human capital alone is not capable of creating value – there is the need to cooperate
among different work performers both within the framework of a company and cooperation
partners, and also among different interested parties outside the company, which is why the
structural capital is assuming more essential importance in intellectual capital that provides
the necessary internal environment in the company for more effective use of human capital.
If there are no disagreements about human capital as an integral part of intellectual
capital among scientists, then such solidarity does not exist about structural capital. This can
be explained by the fact that many theoreticians do not consider the company’s culture or
organizational structure as value at all. This author disagrees with such an approach, because
a company’s culture can be exactly either a contributing or restrictive factor for creativity and
innovative actions of employees – it is not enough to create a knowledgeable and competent
team only, there is a necessity to create conditions in which employees can and are capable of
investing their knowledge for increasing intellectual capital in the company and increasing
company competitiveness.
We meet similar situation with organizational structure – it can create high expenses,
be inflexible and restrict development, but it can also be effective, flexible and driving
initiative that creates both competitive advantage and lower expenses in the long term as well
as increase the level of innovation in the company. This means that both culture and structure
can create either higher or lower value, which is why structural capital cannot be eliminated
from intellectual capital.
The author regards that major elements of structural capital are employee motivation,
organizational structure, cooperation partners, communications, organizational culture and
development projects as well.
- 47 In opposition to human capital, organizational capital belongs to the company. On the
other hand, organizational capital has been constructed, changed and developed by the
company’s employees, as this capital cannot create itself.
It has to be marked that adding value happens only when certain services or goods
have demand on the market, which is why a relevant part of intellectual capital is connected
with market capital.
Market capital is developed by relationships with clients, suppliers and cooperation
partners, as well as society. Good relationships with clients are key to a company’s success,
because according to experience finding a new client is more expensive than to continue
working with an existing one. That is why every company has to think about how to provide a
high satisfaction level of current clients.
If compared to physical assets, the amount and value of which can be calculated and
assessed quite precisely, there are no single and established methods for the assessment of
intellectual capital.
Recognizing intellectual capital as the most valuable part of a sound company there is
interest in how to develop and assess intellectual capital on the part of many theoreticians.
The Swedish company “Scandia” was the first that tried to describe its intellectual capital and
assess its development, but it has to be admitted that the model of “Scandia” does not give the
possibility to set the size of intellectual capital. At the beginning of the nineties of the last
century, a new strategic management approach was offered by USA scientists R. Kaplan and
D. Norton – Balanced Scorecard.
In the author’s opinion, there is a necessity for additional research on how to assess the
value of a company’s intellectual capital elements, but, while such a unified system has not
been offered by management theoreticians, managers of each company have to design their
own system that sets indicators of intellectual capital. Without using predefined indicators, it
is not possible to evaluate whether a company’s intellectual capital has increased or decreased
during a particular time frame, wherewith – using only financial indicators it is not possible to
evaluate a company’s management effectiveness and intellectual workers’ productivity.
As the role of intellectual capital increases, it is vital to research how such companies
and their operations are changing, and what changes should be carried out to improve the
management of organizations nowadays and especially – how to manage the creators of
intellectual capital – intellectual workers.
- 48 -
2. Intellectual organizations and their development
Looking at macroeconomic changes, the author concludes that nowadays the role of
such industrial fields as the metal industry or the engineering industry is gradually decreasing,
and knowledge and innovations intensive industries, operating in professional services,
finance, logistics or information technologies, pharmaceutical fields – are playing a more and
more important role in developed countries. Similar tendencies can be observed in Latvia too
– a more and more important place in the country’s structure of added value is created by
services (in the last ten years its proportion has increased from 61.2% to 73.4%), but the role
of agriculture, fishery and manufacturing has accordingly decreased.
Adapting to the changes in the external environment, changes are visible in
organizations as well, thus new type of organizations – intellectual organizations – are
developing. Intellectual organizations are completely dependent on knowledge, however
many organizations that the author hereinafter will call traditional organizations still depend
mainly on their physical assets, letting knowledge play a secondary role in the process of
value creation.
Intellectual organizations create new knowledge on their own in order to be able to
survive and develop in the future. Intellectual organizations create knowledge, develop
solutions for the use of knowledge and make up technologies that make the work of
organizations more effective.
Intellectual organizations can be both independent companies and intellectual
departments in traditional organizations (for instance, research and development departments,
marketing departments in manufacturing enterprises, etc.).
Thus the intellectual organization is such a type of organization whose existence
completely depends on its employees’ knowledge and mental facilities. Such a definition
helps to separate intellectual organizations from traditional organizations whose existence
basically depends on physical capital (equipments, buildings) they exploit rather than people
who work for those organizations.
In turn, the author defines intellectual department as a part of a traditional organization
the performance of which is completely dependent on its employees’ knowledge and mental
facilities. Other kinds of differences between intellectual organizations and intellectual
departments can be found also, namely, co-owners of intellectual organizations are their own
most experienced employees and specialists, while in intellectual departments these
- 49 specialists are not co-owners. If the existence of an intellectual organization depends on its
ability to work and sell marketable and knowledge-based solutions or services, at that time the
activities of intellectual departments will be more dependent on the total output of the
traditional organization.
It has to be noted that there are many differences between intellectual and traditional
organizations – in opposition to traditional organizations, the development of intellectual
organizations started during the second half of the 20th century as a result of turning into
knowledge-intensive economics. Those organizations work in a field of science and research,
professional services and consultations, and their most important assets are intellectual
capital, their most important resource – knowledge.
In intellectual organizations mainly intellectual workers are employed, having a high
level of knowledge and education. Employees choose the methods of work themselves, and it
is expected to get creative and innovative solutions from them.
A new type of company can be separated among intellectual organizations – the
professional service company. This is a company that provides services to other companies
using the knowledge of its employees in a particular field. Such companies do not produce
anything physically and do not give services such as transport, telecommunications or setting
technical equipment, but they provide services like strategic planning, creation of ideas,
solutions development, and consultations in different fields created by their employees that
help the client to work more effectively and improve competitiveness.
Professional service companies are one of the fastest growing groups of companies both
abroad and in Latvia. Unfortunately this group of companies has not been investigated much,
and only a few analytical publications could be found on the topic. Two authors can be
mentioned as an exception – J. Lorsch and T. Tierney – that have conducted research in
eighteen different international professional service companies. According to the authors
mentioned above, the most important management issues of professional service companies
are to develop the strategy of the company, develop the organization (work with employees,
organizing structure and administration), implement organization culture and provide
leadership for employees.
In the author’s opinion, the above-mentioned theoreticians observe the management
issues of professional service companies too superficially, because the main problem has not
- 50 been resolved – how to achieve the situation in which each employee of a professional service
company is working at full return, like the owner of the company does.
The author considers that there are many unresolved issues concerning the management
of professional services:
•
How to provide strategic planning process in such organizations (for companies
with many owners that are employees at the same time, it is very hard to find
consensus and agree on the distribution of power as well),
•
How to ensure a high level of motivation among all employees (there is the
possibility for high-level or long-term employees at professional service
companies to become co-owners, while the majority of employees can only hope
about it),
•
How to provide knowledge sharing among employees and to ensure the training
of new specialists, as there is competition among the employees and
organizations to gain or serve more clients who provide income for them.
Another problem appears in the J. Lorsch and T. Tierney research – the professional
service company management practice is described without trying to go more deeply into the
specific work of intellectual employees, their motivation and assessment of the current
management system that does not allow to define universal principles that could be used for
managing all intellectual employees apart from the organization where they work. That is why
the author will focus on studying the content of intellectual work, character features and on
employees’ needs and motivation as well.
3. Intellectual workers and their job content and features
Terms like “intellectual work” and “intellectual worker” does not exist in English, but
on the other hand, there are such terms as “knowledge work” and “knowledge worker”. At the
same time such a terms like “intellectual organization” does not exist in English, as examined
in the second chapter. Since employees work in intellectual organizations, and they use not
only their own knowledge but also their mental abilities and talents, the author suggests to use
new terms, such as “intellectual work” and “intellectual workers”, as they are much broader
than pure “knowledge work” and “knowledge worker”.
In Latvian it was accustomed to use such terms like “mental work” and “performer of
mental work”, but in the author’s opinion these terms are rather narrow and do not specify the
- 51 necessity of human mental ability and talent and also do not specify the role of knowledge for
performing such work.
Wherewith the author suggests the following definition of intellectual workers:
intellectual workers are such employees who use their own knowledge and mental
abilities in order to create value for the employer. In its turn the most important factor for
performers of physical work is to acquire necessary skills, but, it is becoming harder to draw
the line between intellectual and physical work, because nowadays we can observe the
merging of those categories – also for accomplishing physical work there is a need for a wider
knowledge base, as equipment and materials are becoming more and more complex in their
nature.
Intellectual workers deal with very complicated tasks and problems that is why it is
always hard to describe and evaluate intellectual work processes, because the process is
varied on its own, and it is difficult to analyse or divide it into separate events or processes. In
most cases the process of intellectual work is unique, unprecedented, and it is carried out by
professionals or technical employees who have a high level of skills and knowledge.
For various kinds of intellectual work there are many common features that differ from
physical work. According to the author’s opinion, the most important differences are:
•
Intellectual work is done during a time limit that can be both shorter and longer,
but there is no proportional eligibility observed for the time limit,
•
Intellectual work cannot be observed externally quite often because the largest
part of intellectual work does not express itself as physical activity,
•
Intellectual workers can often be leading off the job objectives as unstructured
work often varies with structured work.
Consequently intellectual work is work with knowledge and it can express itself as
follows:
•
Knowledge use (for the instance of finance auditing),
•
Knowledge research (for the instance of exploration of information for doing
business),
•
Knowledge collection and classifying (for the instance of client data base
creation),
•
Knowledge formation (for the instance of scientific research to create new
medicine, etc.).
- 52 The author concludes that the content and character of intellectual work differs
completely from physical work, which reveals that largest part of management principles and
methods created by leading management theoreticians in order to increase the productivity of
physical work, is not addressable for managing intellectual employees.
However, many scientists doubt whether intellectual workers who like working
autonomously and dealing with complicated solutions or performing creative activities are
manageable at all, and whether they need external management at all, or should managers
provide only a service and coordination function. The author partly agrees to that, but he
doubts that intellectual workers can survive without management at all.
4. Factors influencing intellectual work productivity in Latvia
Nowadays the need to increase intellectual work productivity is one of the main issues
for theorists working in the management field. To discover what factors influence work
productivity of intellectual workers, the author has developed research that consists of two
parts:
•
first part - to put forward a hypothesis and identify factors influencing work; a
qualitative research method has been used – interviews;
•
second part – to prove the hypothesis, a quantitative research method has been
used – questionnaire in the internet.
The interview consisted of 26 topics, 18 respondents were interviewed, representing
intellectual professions – architects, doctors, financial analysts, IT specialists, lawyers,
marketing specialists, PR specialists etc. As the aim of this research was to find out the
attitude towards existing management practice and intellectual workers’ motivation in Latvia,
only non-managerial intellectual workers were interviewed. Interviews were made from
August 22nd till September 2nd, 2005.
To prove the hypothesis, the author has used quantitative research methods as
qualitative methods that do not allow generalizing research findings.
The questionnaire (in the internet) – was run using SIA “InMind” data basis that has
been formed on quota principles by the research company “InMind”. The data basis consisted
of 5362 persons, 30% of them matched to the research criteria (1607 respondents were
performing intellectual work). In the questionnaire, 6 groups of questions were included: the
first group would allow proving or disproving the first hypothesis, the second group – second
- 53 hypothesis etc. Out of 1607 respondents, 379 answers were received or
23.6% sent
electronically filled questionnaires.
The first group of the hypothesis refers to a labour relations issue, therefore it was
named “labour relations model”, which clearly shows certain changes in labour relations from
the legal point of view – stepping from employee to owner – selling its products to the
customer (employer). Regarding this model, the author will prove two hypotheses (using a
quantitative research method):
•
the existing model of labour relations is not motivating intellectual workers to
improve their own work productivity;
•
adding to the job content of intellectual workers’ entrepreneurial features
(freedom of action, ability to negotiate with the customer on actions to be
performed, amount to be done, time frame and price for the service, as well as
competition) would increase the motivation of intellectual workers to improve
their own work productivity.
The second group of the hypothesis refers to the authority of intellectual employees to
make decisions. As a result all hypotheses were combined in one: motivation of intellectual
workers, as well as their productivity, will improve if they will have all the resources and
decision making authority regarding their own job.
The third group of the hypothesis refers to employee’s motivation – to improve the level
of motivation of intellectual workers, it is necessary to provide both internal motivation
(interesting and constant job, supporting carrier aspirations, freedom of action,
communication, new opportunities, pleasant customer and creative environment) as well as
external motivation (recognition and financial interest).
The fourth group of the hypothesis refers to necessary changes to be made in the
manager’s role in general, and in work content too. This group covers questions related to the
fact that work productivity of intellectual employees improves if management realizes a
supporting function, where the employee notes what kind of support actions are needed, and
can evaluate the manager’s performance. The second hypothesis of the group is: to increase
work productivity of intellectual workers, managers shall perform a new management
function – knowledge management.
The first hypothesis, existing model of labour relations is not motivating intellectual
workers to improve their own work productivity, can be supported by quantitative
- 54 research data showing that 65% of respondents think about their own work productivity on
monthly basis or more frequently, but only 19% of respondents implement at least one of their
ideas per month on how to raise their work productivity.
That which motivates intellectual employees to implement ideas of increasing
productivity is carreer potential growth. It improves person competitiveness and increases the
value of the employee in the market; it gives a chance to earn more too. Also personal factors
are important – to express oneself as a creative and innovative specialist, the willingness to
compete and win. But there are factors preventing intellectual workers to improve work
productivity – lack of time, lack of financial interest, lack of authority and resources to
implement their ideas.
The majority of respondents consider that an increase of work productivity would
financially positively influence only the employer (18%), or in major cases the winner would
be the employer (37%). 36% consider that the winner would be both the employee and the
employer; only 2% of respondents are sure that the winner would be the employees
themselves, or in major cases, themselves (7%). Here contradiction of the labour model
reveals – from one side the employer (manager) obtains all financial benefits from increased
work productivity, but he is aware of intellectual employee work only partly (or not aware at
all), that is why the employer (manager) is incapable of developing methods to systematically
improve intellectual work productivity.
68% of intellectual workers would be more interested in working on their own work
productivity, if they would have freedom of action to implement their own ideas, to use
methods they choose. More than half of all respondents have assured that they would increase
their work productivity if they could independently decide (with the customer) on time limits,
prices, resources to be used, workload etc. by themselves, if they could work in their own
company with guaranteed incomes, constant job, etc. After some minor changes, the second
hypothesis was proved – adding to the job content of intellectual workers entrepreneurial
features (freedom of action to choose work methods, ability to implement one’s own ideas,
authority to make a decision on job content, volumes, time limits, prices etc. with the
customer, constant job and regular income), would increase motivation of intellectual
workers to improve their own work productivity.
The third hypothesis – the motivation and work productivity of intellectual employees
will increase if there is a possibility to make decisions and availability of resources to
organize daily work, proof basis on the following statements:
- 55 •
by other equal conditions, 85% of respondents would rather work for an
organization where they have rights to make decisions on how to do and
organize their work,
•
82% of respondents would be willing to choose by themselves which specialists
to involve rather than accepting one that was appointed by a manager or set by
the organizational structure,
•
75% of respondents would rather do work when the budget for activities is
known in advance and they can plan how to use it independantly.
The biggest problems disturbing intellectual workers’ normal workflow is overload or
lack of time, bureaucracy procedures and formalities, other employees not meeting deadlines
or completing their work slapdash, and ineffective coordination within the organization. As
all the issues mentioned are under the organization’s managers’ charge, it has to be concluded
that the current division of duties among managers and performers of intellectual work should
be revised, as there are too many unresolved problems obstructing the increase of intellectual
workers’ productivity (much time and other resources are being wasted for solving problems
mentioned above).
The fourth hypothesis to improve the level of motivation of intellectual workers, it is
necessary to provide both internal motivation (interesting and constant job, supporting
career aspirations, freedom of action, communication, new opportunities, a pleasant customer
and creative environment) as well as external motivation (recognition and financial interest)
is proved by the following research findings:
•
less than ¼ of respondents would be interested to work well paid work
permanently if job lacks some of motivators (the work is not interesting,
employee has no rights to make decisions himself, employee get only blame
instead of recognition, the work does not promote the employee’s professional
growth). It means external motivation cannot substitute internal motivation.
•
only 13% of respondents would be ready to work their “dream work” if it is
poorly paid; that shows that internal motivation cannot substitute for the lack of
external motivation.
In order to find out the general level of motivation of intellectual workers in Latvia
respondents were asked to evaluate their current level of motivation. The results of the inquiry
show that 4% of respondents evaluate their level of motivation as very high, 29% - as high,
49% - as neutral (not high and not low), 14% - as quite low but 4% - as very low.
- 56 Consequently the medium indicator as the level of motivation of intellectual employees’ is
average. According to the author’s opinion, such a situation is not acceptable, because
intellectual workers who are moderately, weakly or very weakly motivated (in total 67%) will
not be interested to improve their work productivity.
The matter of wage was evaluated most negatively because respondents regard that the
wage is low. Also freedom of action, atmosphere of creativity, bureaucracy, limited abilities
to get recognition, no possibilities to try something new because of routine at work were rated
rather low. But intellectual workers evaluate more positively communication possibilities and
job content (job is interesting, not boring), relationships with direct managers and freedom of
action.
Respondents were asked to evaluate what criteria are relevant for them that make the
job they do more motivating. According to the respondents’ opinion, the most relevant criteria
for increasing their motivation are wage. Next follow such criteria as interesting work, pleasant
and cooperative manager, possibility to see the results of their work, professional growth, etc.
The intellectual employees evaluate such criteria as self-dependence, possibility to gain
recognition, and creative atmosphere very highly.
Knowing that there are many factors that negatively affect the motivation of intellectual
employees, the following question comes up – which factors should be improved first, as the
improvement of each factor demands not only much time but also financial means and other
resources, and a variety of organizational changes as well. That is why the improvement of
the factors mentioned above should be done gradually starting with the most important ones.
For a solution of this matter the author has created The method of motivation factors
identification and prioritization, which helps to determine which motivation factors should
be improved first to increase the motivation of intellectual workers at a maximum level (see
figure 4.1.).
Consequently, to improve the motivation of intellectual employees in the short term and
to gain maximum effect, priority should be given to factors which have a high level of
importance and a low average score – it is the fourth quadrant of the plane (indicated in
yellow) on the top left side of the plane.
In their turn, factors that are placed in the first quadrant of the plane (right side top) are
evaluated comparatively highly and the level of importance is also high, so there is no need to
change anything but manages to keep the existing level high. Factors placed in the second
quadrant (right side bottom) are evaluated quite positively, but the level of importance is
relatively low, that is why these factors can be sacrificed for the improvement of factors that
- 57 -
Figure 4.1. Setting priorities for improving factors influencing intellectual workers’
motivation in Latvia
are located in the fourth quadrant, if there is such a necessity. On the other hand, the factors in
the third quadrant (left side bottom) are evaluated comparatively low, but the level of
importance is also low, that is why there is no need to put them forward for immediate
improvement.
The author concludes that using this method it is necessary to improve the following
three factors in order to increase the average level of intellectual employees’ motivation in
Latvia:
•
To provide an adequate salary level for intellectual workers,
•
To provide the possibility for intellectual employees to see the results of their
work,
•
To improve job content so that according to the intellectual workers’ opinion,
their job promotes their professional growth.
The fifth hypothesis: work productivity of intellectual workers would improve if
management realized supporting function, where employees state what kind of support
actions are needed, and can evaluate a manager’s performance, has been supported by the
fact that standard management practice, where a manager has all the functions and power to
solve organizational issues daily, has not proved as effective enough, as there are too many
different organizational issues preventing intellectual employee work to be done more
productively. The reasons are different – the manager does not have time, there is other
- 58 priorities, or the manager is not aware of the problem, or the manager has no motivation to
solve these issues.
In its turn, if employees could note by themselves what kind of problems are needed to
be solved by managers, or they would have the power and freedom of action to solve the
issues, productivity would improve immediately.
To assure that management fills a supporting function, as a first, an intellectual
employee should have the authority and resources available to state certain tasks to be done or
certain problems to be solved to his/her manager. Secondly, the evaluation system of
managers’ performance should be executed that would directly refer to the manager’s
motivation system (salary, career aspiration etc.). And thirdly, the intellectual worker has to
have the choice and authority to choose a manager for particular support functions and the
ability to agree on timings, payments, and work conditions (it could be one or more persons,
or none if some functions have been filled by the employees themselves).
Evaluating managers of intellectual workers in Latvia, the survey shows that in a 5 point
scale the evaluation of different attributes varies from 3.09 to 3.59. The highest average score
was given to managers’ ability to solve organizational issues, but as it was mentioned earlier,
there are too many obstacles and organizational issues that prevent intellectual workers from
working more productively. It leads to the conclusion that 62% of managers are able to solve
these issues very well, but they do not. If management would provide a support function and
intellectual employees would have the authority to request from them tangible results, many
organizational issues would be solved.
The other factor evaluated highly is the manager’s ability to express criticism (3.56
points). The ability to set precise goals and tasks to be done receives 3.46 points. The ability
to merge different opinions and to state one common goal receives 3.40 points and the ability
to listen to employees and support their initiative on the average has been evaluated with 3.35
points. The results given allow to make the conclusion that the current model, where
employees can only suggest solutions needed for improvement, is not really effective in
practice, as there are rather few managers who would listen to and support employee
initiative, therefore employees have to deal with the issue by themselves or to find managers
who would perform supporting functions as discussed earlier.
Managers are not very good at providing recognition – 3.25 points, and the ability to
create a team received only 3.20 points, rather poor results for their ability to state certain
- 59 criteria for the evaluation of intellectual employee’s work. However, the ability to inspire
people got the lowest score.
The authors’ conclusions are as follows: managers of intellectual workers middlingly
fill their managerial duties, thus preventing problem solving, as well as badly influencing
productivity; this does not give a good example of how to deal with their own duties and
responsibilities. Intellectual workers know how to deal with daily issues, therefore they need
an authority and freedom of action, available resources and the possibility to make decisions
to deal with problematic issues by themselves, or to look for a supporting function from
management to whom they could state their own timings, services needed, quality standards
and ability to pay for these services.
The author has used structural equation modelling to develop a model that evaluates
factors and their relationships that influence opinion about intellectual workers manager’s
performance that directly or indirectly influences employee satisfaction with their manager’s
performance. Results are given in figure 4.2.
Figure 4.2. Model for evaluating performance of intellectual workers’ managers
Intellectual workers’ managers’ performance evaluation is influenced directly by the
ability to harmonize different opinions and to set one common goal (b=0.36), the ability to
listen and to support intellectual workers’ initiative (b=0.30) and the ability to inspire and to
affect people (b=0.20).

Linear regression coefficient marked as b further in the text
- 60 The ability to harmonize different opinions and to state a common goal influences other
variables such as – skills to express recognition (b=0.48), the ability to solve organisational
issues (b=0.36), the ability to inspire and affect (b=0.32) and the ability to set criteria for
evaluation of performance and results.
The ability to listen and to support employees’ initiative has been influenced by
variables such as skills to express recognition (b=0.45), the ability to harmonize different
opinions and to state one common goal (b=0.32) and the ability to solve organizational issues
(b=0.17).
The ability to listen and to support employees’ initiative influences a manager’s
performance evaluation as well as his capabilities to shape a team (b=0.20) and his ability to
set criteria for evaluation of the performance of his subordinates (b=0.20).
A very important conclusion comes out of the results – the ability to shape a collective
or team is not cohesive with overall managers performance assessment (as these results do not
give statistically important correlation), that means that these are two different categories,
although the ability to shape a team has been influenced by three similar indicators as for
overall managers’ performance assessment: the ability to inspire and affect (b=0.29), the
ability to listen and support employee initiative (b=0.20), but the 3rd indicator differs –
capabilities to state job objectives and tasks (b=0.21).
Skills to express recognition have no direct impact on overall managers’ performance
assessment, but they influence it indirectly through other variables. Skills to express
recognition influence the ability to set criteria for the evaluation of performance or results
(b=0.29); recognition skills also influence the ability to inspire and affect employees (b=0.24),
as well as the ability to solve organizational issues under his/her responsibility (b=0.14).
Similarly, we can make an analysis of other criteria, therefore this model is useful to see
a manager’s overall assessment from the intellectual employee’s point of view. Following to
the results several suggestions can be put forward:
•
To improve intellectual workers’ satisfaction with their managers, managers
should be able to harmonize different opinions and state one common goal, they
should improve their ability to listen to employees and support their initiative, as
well as to improve the ability to inspire and affect their people;
•
To improve managers’ ability to set criteria for evaluation of performance or
results, their ability to give recognition should be improved, as well as
- 61 capabilities to clearly state job objectives and tasks, the ability to listen and to
support intellectual workers’ initiative, and also the ability to harmonize
different opinions and set one common goal should be improved;
•
To improve managers’ ability to solve organizational issues, a manager should
be able to harmonize different opinions and state one common goal; a manager
should be able to express recognition and inspire his people;
•
To improve managers’ ability to inspire and to affect his people, a manager
should be able to harmonize different opinions and state one common goal, he
should also be able to express recognition and be able to clearly state the job
objectives and tasks;
•
To improve managers’ ability to listen to employees and to support their
initiative, ability to express recognition, ability to harmonize different opinions
and state one common goal, as well as ability to state job objectives and tasks
should be improved;
•
To improve managers’ ability to shape a team (collective), managers should also
improve their capabilities to inspire their subordinates, develop ability to express
recognition and to set clear job objectives and tasks, and improve ability to listen
and support employees’ initiative;
•
To improve managers’ ability to express recognition, ability to harmonize
different opinions and state one common goal should be improved;
•
To improve ability to set clear goals and tasks related to the job, ability to solve
organizational issues and give recognition should be improved.
Evidence of the sixth hypothesis – to increase work productivity of intellectual
workers, managers shall perform a new management function – knowledge
management – is associated with different considerations and research results. Intellectual
employees cannot provide professionally good performance in the long term because of lack
of knowledge on the latest trends, research findings, and methods in their corresponding field.
The organization is interested in regular improvement of professional knowledge of its
employees in order to increase their professional performance.
Respondents had to evaluate how often they learned the latest methods, investigations
or trends in their professional field in comparison with the top-level specialists in their field in
Latvia. As the results of this inquiry proved – the situation in the field of management of
knowledge is highly critical – 37 % of respondents had got close but no information on the
- 62 latest methods, research or trends in their professional field, 40 % of respondents admitted
that it happened very rarely. It means that every organization in Latvia that employs
intellectual employees should ensure the accomplishment of a new function of management –
management of knowledge.
The situation is crucial to evaluate the sources of knowledge – intellectual employees
had got information on their field mostly from informal sources. A second source of
information was newspapers, magazines, special literature in their field, but it happened very
rarely. It was quite complicated to access special data bases and corresponding internet sites,
and the possibility to attend conferences and workshops outside the organization was limited.
This leads to the conclusion that intellectual employees in Latvia have difficult accessibility to
professional information, and it leads to situations in which they have to solve problems by
themselves, they waste their time and other resources, and it certainly cannot raise the
productivity of intellectual workers.
The author made the conclusion that there is a connection between accessibility and the
professional level of staff – the more often they can get the latest information, the greater is
the possibility that they are higher level professionals and vice versa.
As the hypotheses have been proved, there is a necessity to investigate what is the
impact of factors on the competence of intellectual employees and on their motivation to
improve their productivity. The author used the method of structural equation modelling to
develop a model for management of productivity of intellectual workers. The developed
model and coefficient of regression is presented in figure 4.3.
The model developed proves that realised ideas in the field of improvement of labour
productivity are affected by the frequency of consideration of similar ideas (b=0.42), level of
motivation (b=0.20), creativity of personality (b=0.13) and authority and resources to perform
those improvements (b=0.12). It means – to increase the number of realised ideas in the field
of improvement of labour productivity, it is necessary to achieve the frequent consideration of
these ideas, they must have a high level of motivation, they have to be creative and they must
have authority and resources to perform improvements.
- 63 -
Figure 4.3. Model of intellectual workers productivity management
The frequency of consideration of ideas in the field of improvement of labour
productivity is affected by creativity of personality (b=0.18), authority and resources to
perform those improvements (b=0.17), and obstructive factors on the labour process (in this
case – lack of coordination among employees b=0.16). It means that intellectual employees
can detect reasons for non-effective labour organization by themselves, and it leads them to
develop the ideas on improvement of labour productivity to escape the obstacles, but the lack
of authority and resources sometimes lead to the situation that these ideas are not realised. To
improve the frequency of consideration of ideas in the field of improvement of labour
productivity, it is necessary to improve creativity of employees and to award them with
necessary authority and to allocate the resources to perform improvements.
The model discovers two connections which have a negative impact on the following
points - authority and resources to perform improvements reduce the problems in the field of
coordination among employees (b= – 0.20) and increase in motivation level reduces poor
coordination among employees (b= – 0 .18).
The model gives the answer to the question why intellectual employees are not
interested in implementing ideas in the field of improvement of their work productivity – it
does not give them the opportunity to earn more or to develop their careers in the
organization. The only benefit they can get from this difficult process is to increase their
competitiveness and value in the labour market (b=0.13), which means that they can earn
more in the future (b=0.59).
- 64 This leads to the conclusion that the only way the intellectual employee can get reward
for the activities in the field of improvement of his work productivity is to look for new job
opportunities outside the organization. From the author’s point of view – if there is not a
strong connection between the improvements of labour productivity (activities to improve it
are included) and the possibility to earn more and to make their professional careers in the
organization, the motivation to increase their labour productivity will be low. The employees
who have shown high initiative to improve their labour productivity more likely implement
these activities to increase their competitiveness and value in the labour market and to seek
new job possibilities after a certain time, because they do not see the possibilities to make
their careers or to earn more within this organization.
The level of motivation has positive impact on the number of implemented ideas in the
field of improvement of labour productivity (b=0.20), it improves the coordination among
employees (b=–0.18) and it leads employees to get authority and resources to perform these
improvements (b=0.22). It shows that the research of the level of motivation and its
improvement is highly important. For this reason the author developed a model for intellectual
employees’ motivation. The author used the factor analysis method and developed the
following factors:
•
Factor “Satisfaction and Acknowledgement”;
•
Factor “Creative and Innovative Labour Environment”;
•
Factor “Independence and Freedom of Action”.
The other items were not associated and were left as arguments. All items or factors
were included in the model because they proved important connections among the items or
factors. The developed model is represented in figure 4.4.
- 65 -
Figure 4.3. Model of intellectual workers motivation
This model proves that the motivation of intellectual employees is affected by
fulfillment and recognition (b=0.20), how interesting is the job (b=0.19), salary level (b=0.16)
and the possibility to improve one’s professional career (b=0.14).
To improve the intellectual workers’ satisfaction with the factor “Fulfillment and
recognition”, it is necessary to provide them with an interesting job (b=0.25), with enjoyable
clients or assignment providers (b=0.22) and to ensure them with a high level of
independence and freedom of action (b=0.13), and also satisfaction with their manager is
important (b=0.10).
To make the content of a job more interesting to intellectual workers, it is necessary to
provide a creative and innovative job environment (b=0.39), and to ensure that the job
increases the professional level of the employee (b=0.27) and provides communication
opportunities among employees (b=0.12).
It is very important that the evaluation of a professionally interesting job is affected by
all three factors: “Fulfillment and recognition” (b=0.39), “Creative and innovative work
environment” (b=0.28) and “Independence and freedom of action” (b=0.19).
The developed model proves that salary level is perceived to be higher if employees get
fulfillment and recognition with the job (b=0.36), and if a creative and innovative work
environment is provided.
- 66 This model shows how to organize a creative and innovative work environment – it is
necessary to ensure fulfillment and recognition to intellectual employee (b=0.36) and to
provide him with enjoyable customers or task givers (b=0.27) who give freedom of action and
provide evaluation (recognition) to the employee.
Only one of the factors in this model “creative and innovative work environment” –
gives a statistically significant impact on the factor “Independence and freedom of action”
(b=0.55), which proves the thesis – both elements are to be seen together, as they both interact
(directly, indirectly) and are mutually influenced through other factors – the more creative and
innovative a work environment is the bigger freedom of action and independence is observed.
As per the model – creative and innovative work environment – has an impact on
communication opportunities too (b=0.39), but the role and evaluation of the manager in the
model of intellectual employee’s motivation is rather low – stating that the manager can only
guarantee or provide fulfillment and recognition for an employee (b=0.10), but the manager’s
evaluation is dependant on his ability to ensure a creative and innovative work environment
(b=0.22). This evaluation could be impacted by the manager’s ability to ensure interesting and
enjoyable clients and supervisors giving job tasks (b=0.40).
Consequently, to influence intellectual workers’ motivation it is not enough to work
only on improving one or just several elements separately; analysis should cover all the
factors in their interaction.
As proved hypotheses and developed models show, existing managerial methods are not
applicable for the management of intellectual employees, as they do not support employees’
willingness to work on their own productivity. Rather, significant resistance could be faced
against establishing the author’s proposed management principles, because these changes
expect the management function to become a support function with less power, where
employees could choose a management services provider by themselves as well as give an
evaluation for a manager’s performance or even could resist manager services entirely.
According to the author’s opinion, there is a necessity to continue research on providing
the possibilities of implementation of the most appropriate management principles for
intellectual employees in Latvian intellectual organizations and intellectual departments, but
for this matter there is the necessity to realize the variety of actions on both levels –
macroeconomic and management of a particular organization (see suggestions).
- 67 Managing measures for developing such a system that provides greater power for
intellectual employees and improves their motivation to care about productivity of their work
are not only a few. At the same time, each activity that was given by the author for changing
the management system requires deeper and more detailed production of methods for
implementation of particular sections. Consequently there is a wide range of alternatives for
both public administration and business administration scientists, for economists,
psychologists, sociologists, pedagogues and scientists from other fields of science.
Improvements of physical work productivity were realized in the 20th century gradually, but
the same process will not be possible to be realized quickly in relation to intellectual work.
But it is important to remember – nowadays knowledge is the most important resource, in its
turn knowledge belongs to a particular person. Only when the owner of knowledge will be
dominant in comparison to the owner of physical capital, not vice versa, it can be expected
that holders of knowledge – intellectual employees – will be interested in investing their
knowledge so as to increase the productivity of their own work.
General conclusions and suggestions
As the result of his research the author has come to the following conclusions:
1. Nowadays an increasing proportion of value is created by knowledge marking the
formation of new economics – knowledge-based economics. It influences organizations
too – the most valuable part is intellectual capital in the company. The author describes
basic elements of intellectual capital: human resources, organizational capital and market
capital;
2. New types of organizations are forming – intellectual organizations and intellectual
departments within traditional companies, as the importance of intellectual capital
increases;
3. An intellectual organization is dependant on its employees’ knowledge and mental skills.
Within intellectual organizations professional services companies need to be stressed, as
this type of company is one of the fastest growing company types both in Latvia and
abroad;
4. As intellectual organizations and departments are forming, the demand for intellectual
workers – specialists who use their knowledge and mental skills for adding value –
increases. The number of intellectual employees is rapidly increasing in all developed
countries, also in Latvia it exceeds 30% from all employed and the trend is growing;
- 68 5. Intellectual work features and its growing proportion feed a grounded need of increasing
productivity of intellectual work to ensure competitiveness in the market. To identify
factors positively or negatively influencing work productivity of an intellectual employee
the author put forward and proved six hypotheses.
Suggestions, targeting the theoretical basis of improvement of intellectual employees
management, are as follows: the author has developed and offers to use Method of motivation
factors identification and prioritization as well as three more models: Model for evaluating
performance of an intellectual workers’ manager, Model of intellectual worker productivity
management, Model of Intellectual workers’ motivation:
1. As per Model for evaluating performance of an intellectual workers’ manager –
manager’s assessment has been directly influenced only by three factors: the ability to
harmonize different opinions and state one common goal, the ability to listen and support
employee’s initiative and the ability to inspire and affect people;
2. Reasons why intellectual workers are not interested in increasing their own work
productivity as per Model of intellectual worker productivity management are the
following: a number of ideas realized to increase work productivity do not increase
income level or improve career aspirations;
3. As per Model of intellectual worker productivity management, a number of ideas
realized to increase work productivity are impacted by the following aspects – frequency
of considerations related to improvement of productivity, motivation level, creativity and
innovativeness of the person, as well as authority and resources to implement changes;
4. In accordance with Intellectual workers motivation model, motivation has been
influenced by receiving fulfillment and recognition, as well as an interesting job, salary
level and career aspirations.
To use a theoretical basis for improvement of intellectual workers management the author has
given several suggestions:
1. The LR Ministry of Economics is to make an action plan for the improvement of
intellectual work productivity in Latvia. The first step for developing such a programme
would be research on work productivity of intellectual employees;
- 69 2. Certain changes need to be made in management study programmes in universities by
adding such programmes as management methods of intellectual employees, intellectual
capital, intellectual organizations, etc. The LR Ministry of Education and Science in
cooperation with Latvian universities are to develop and support lifelong education
programmes that would support intellectual employees and their managers’ education
during their working life;
3. Senior management should develop an intellectual capital evaluation system that would
help to follow changes in the value of intellectual capital in the company;
4. To add certain HR functions, i.e. by adding training programmes for intellectual
employees and managers on features of intellectual work, management specificities and
necessity of increasing work productivity, as well as methods and principles used in
management;
5. HR are to develop and promote an evaluation system for managers of intellectual
employees by using Model for evaluating performance of intellectual workers’
managers proposed by the author;
6. At the beginning of changes in intellectual organizations management it is advised to use
formal planning methods as management content changes essentially. Each manager
shall develop a plan describing how to implement entrepreneurial features in daily work
for intellectual employees;
7. HR together with management and employees are to develop an action plan describing
gradual adoption of management functions by intellectual workers – authority, resources
for doing the job, as well as describing conditions under which intellectual workers will
sell their services to the company;
8. HR is to develop a methodology to evaluate motivation (internal, external) of intellectual
workers, but managers are frequently to have discussions with their employees to
discover factors positively or negatively influencing their motivation and make the
improvement afterwards. Major concerns in Latvia are related to salary, lack of feedback
and rather poor support on career aspirations. To improve the motivation system in the
company, the author offers to use Method of motivation factors identification and
prioritization;
9. HR are to improve the motivation system for intellectual employees, so that they are
financially interested in increasing their own work productivity;
- 70 10. HR together with management and employees are to develop and implement procedures
ensuring management acting as a supporting function, prescribing how an employee
could assign job tasks to the manager and control results at the end, as well as how
intellectual employees control managers’ performance and on what terms both parties
agree on terms and pay on the ending result;
11. Managers are to perform a new management function – knowledge management that
covers development of the system of learning, exchanging experience, knowledge and its
development issues (internal knowledge exchange portals, data basis, seminars, training,
conferences etc.). Also it has essentially to conduct research on how to motivate
intellectual employees to share their own knowledge.