How to pay for knowledge: illustration within an IT planning context

Abstract

With the advent of knowledge-intensive environments, organizations have become ever more dependent on their knowledge workforce to plan appropriately for their information technology resources. IT planning effectiveness will depend a great deal on harnessing the knowledge and skills of knowledge workers. This paper looks at a critical variable in determining the extent of utilization of such knowledge and skills, namely the formal reward system in the organization. Four attributes of the reward system; fairness, competency, group performance, and openness were tested for their indirect effect on IT planning effectiveness. Except for competency where the scale did not achieve external validity, the three other attributes of the reward system were found to have a significant impact on IT planning effectiveness by increasing the level of utilization of knowledge workers' knowledge and skills. Implications for the management of knowledge workers are provided in light of the results of the study.