How learning spillsover in the firm

Champagne pyramidThere has been a general consensus forming in recent years that collaboration amongst employees is a good thing.  I wrote a few years ago about a few of the ways that collaboration is not effective, but a recent paper reminds us of the knowledge spillover that can occur from conversations with our peers.

The paper suggests that this flow is particularly pronounced when we rub shoulders with colleagues that are smarter than us.

The value of smart colleagues

The researchers matched up a bunch of Swedish workers with their firms and peers over a 27 year period.  It revealed that there is considerable knowledge flow from experienced to in-experienced colleagues.

What’s more, this has a big impact on the wages of the employee absorbing this knowledge, with the salary boost persisting for at least five years.

The salary increase from knowledge sharing was found to be approximately 25% of the average wage increase during the study period.

Skills development

This increase was predominantly observed in younger employees, with little impact seen once people passed their 40th birthday.  This is likely to be because younger people have more to learn, and are more likely to invest in their skills development.

The analysis also found that this boost was significantly larger in professions where such collaboration was possible.  So professions such as mining saw very little knowledge exchange, whereas managers showed an awful lot.

One area that did appear to be lacking was in rewarding employees who taught, advised and mentored their peers.  The authors believe this contributes to a reduction in knowledge sharing, and even a lack of investment into employee education more widely.

Overall it’s a paper that poses as many questions as it provides answers, but the topic of knowledge sharing remains one that is popular.

For instance, I wrote recently about a second study that explored the particular circumstances that support knowledge sharing.

The paper found that our likelihood to share information depended on the fit between the type of project and the incentives in place.

For instance, in small companies, there’s more of a collective responsibility, so rewards work best when they focus on this collective element of success.

As companies grow however, there is more of a singular approach to responsibility, with outcomes becoming less risky.  In such a scenario, people tend to follow their individual agenda, with individual performances rewarded by management.

Alas, this second paper was looking at the issue through the lens of a single pharmaceutical company, so whilst interesting it too probably raises as many questions as it provides answers.

A third study published in the Academy of Management Journal may offer a glimmer of hope.  It suggests that there are very real and selfish reasons for sharing knowledge, because if we don’t, then our peers are only going to hide knowledge from us in return.

“More specifically, employees who intentionally hide more knowledge seem bound to receive such selfish behavior in return from their co-workers, which will ultimately hurt them and decrease their creativity,” the researchers say.

So, in other words, it’s good to share.

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