The Effect of Performance Management Indicators on Knowledge Management: An Empirical Investigation

Abstract

Knowledge Management consists of making sure that the teams and individuals have the know-how they need, to make their task easier and to improve their performance. Knowledge management therefore feeds performance management, and knowledge is also derived from performance. Performance and knowledge management can form a closed loop. As organisations has become increasingly aware that knowledge management is among their most valuable strategic assets, they will be forced to re-evaluate the way in which they engage with the source of that knowledge to underpin their sustainable development. Key indicators that measure the performance of knowledge management integration are needed. They need to measure both effectiveness and efficiency. KM is now an integral part of an organisation’s business processes. The effective implementation of KM strategy needs to measure current performance and guide the organisation toward its changing image of the future. KM and particularly its performance measurement dimension has become the most important economic task for most organisations. This study is based on research conducted in a large construction company. The paper provides an understanding of indicators of performance management that have an effect on knowledge management. The result shows that all indicators of performance management in the study have a positive significant relationship with knowledge management.