Introduction - The Case

In an effort to reduce operational expenses, the administration of a university decided to lay off several staff members, including their top computer technician. Shortly after, the university’s main server, critical for its operations, began malfunctioning due to damaged components. Despite multiple attempts by the remaining staff to resolve the issue, the server remained non-operational. This forced the university to seek external help, eventually turning to the same technician they had previously let go.

The technician, equipped with a basic soldering pen, was able to swiftly repair the server, restoring it to full functionality within minutes. However, he charged the university P 50,000.00 for his services, a fee that sparked debate among the administration. While the materials used were minimal in cost, the charge raised questions about the value of expertise and the true cost of specialized technical knowledge.

Why Organization Should Keep Skilled Employees in the Organization

The rapid evolution of technology in the workplace has intensified the demand for specialized skills. In today’s competitive job market, employees who possess advanced or in-demand skills often command higher salaries due to their ability to drive innovation and fill critical competency gaps. The technician's expertise in server repairs likely extends beyond mere mechanical skills; it includes a comprehensive understanding of systems integration, troubleshooting, and the ability to foresee potential issues before they escalate. This depth of knowledge contributes significantly to operational efficiency and organizational success (Is Salary Based On Skills, Title, Or Experience, 2021).

The decision to fire the computer technician, while made in an attempt to reduce costs, represented a significant loss of competency within the organization. By removing a key expert, the university inadvertently compromised its ability to address complex technical problems, leading to operational downtime and inefficiency. This highlights the importance of retaining skilled employees who possess critical knowledge, as their absence can result in costly disruptions and the need to outsource expertise at a premium.

Tacit Knowledge in the Workplace

Nonaka's theory on organizational knowledge creation highlights the significance of tacit knowledge, which refers to the insights, experiences, and intuitions that individuals accumulate over time (Nonaka & von Krogh, 2009). This type of knowledge is often unspoken and difficult to transfer to others, yet it plays a critical role in problem-solving and innovation. In the case of the technician, his ability to quickly diagnose and repair the server was a direct result of his extensive tacit knowledge, built through years of hands-on experience. This expertise, while not easily measurable, was essential to the organization’s ability to maintain operational efficiency.

When the organization decided to fire the technician, it not only lost his technical skills but also the invaluable tacit knowledge he possessed. This knowledge, if retained, could have been shared with other employees, leading to better problem-solving abilities and overall performance improvement. By dismissing the technician, the organization missed an opportunity to leverage his experience for future innovation and growth, underscoring the importance of preserving and utilizing tacit knowledge within a company.

Expertise-Based Compensation Model

The pay-for-performance model can serve as a viable approach for organizations to incentivize and retain skilled employees like the technician in question. By linking financial rewards to the achievement of specific performance goals, organizations can motivate employees to continuously develop and apply their specialized knowledge. In this case, the technician’s high repair charge reflects not just the physical act of repairing the server but also the innovative solutions, knowledge sharing, and intellectual capital he brought to the organization.

In addition to the direct costs of repairs, organizations can address the value of specialized knowledge by offering financial incentives tied to the achievement of expertise-driven performance goals. By rewarding experts not only for task completion but also for their ability to provide innovative solutions, share knowledge, and contribute to the growth of intellectual capital, organizations can ensure that employees are recognized for the depth of their skills, not just their output (Symonds, 2023).

Justifying the Technician's Fee

The claim of a 50,000 peso repair charge can be justified by recognizing the unique value the technician brought to the table. While the actual act of repairing the server using a soldering pen may appear simple, it was the technician's deep expertise that allowed him to quickly identify the problem and apply the correct solution. This specialized knowledge, built through years of experience, is what truly justifies the higher charge. Without such expertise, the organization could have faced extended downtime or further complications, resulting in even greater costs.

Moreover, experienced employees often contribute to higher productivity and require minimal training, which translates to significant time and resource savings for the organization (Newsome, 2023). By failing to retain such talent, the organization not only incurs immediate financial costs but also risks stalling its ability to innovate and stay competitive in a constantly evolving technological landscape. Skilled employees like the technician are invaluable in ensuring operational efficiency and adapting to new challenges.

Conclusion

In summary, the technician's decision to charge 50,000 pesos for the repair is fair when you consider the value of his specialized knowledge and expertise. This kind of knowledge, often called "tacit knowledge," is the kind that isn't easily written down or passed on—it's learned through experience. The organization’s choice to let go of the technician caused them to lose important skills that were crucial to keeping their operations running smoothly. This loss affected their efficiency and weakened their ability to stay competitive.

By understanding and appreciating the skills and knowledge that employees like the technician bring, companies can create an environment where innovation thrives. This not only helps the business grow but also leads to long-term success. Rewarding employees for the expertise they develop ensures that the organization continues to benefit from their valuable contributions, rather than facing costly setbacks when key knowledge is lost.

References

• Is Salary Based on Skills, Title, or Experience (2021). Randstad.com.sg. https://www.randstad.com.sg/career-advice/tips-and-resources/is-salary-based-on-skills-title-or-experience/
• Newsome, P. (2023, September 21). Hiring Experienced vs Inexperienced Employees: Which is Better? 4 Corner Resources. https://www.4cornerresources.com/blog/hiring-experienced-vs-inexperienced-employees-which-is-better/
• Nonaka, I., & von Krogh, G. (2009). Tacit Knowledge and Knowledge Conversion: Controversy and Advancement in Organizational Knowledge Creation Theory. Organization Science, 20(3), 635–652. http://www.jstor.org/stable/25614679
• Symonds, C. (2022, March 7). The Pros and Cons of a Pay for Performance Model. Factorial. https://factorialhr.com/blog/pay-for-performance/