Establishing the Key Performance Indicators of Knowledge Management

Knowledge represents humans’ perception about solving problems in association with their environments. It is a powerful foundation for creating personal and organizational competitive advantage, and therefore enterprises must strive to effectively utilize knowledge for creating value and achieving business objectives. The approaches of management performance measurement developed previously were mainly for the industrial-based era, which are no longer suitable for the knowledge-based age. The key to business success is decided by the knowledge added to products and the value it creates. The knowledge-based economy leads to global competition, and therefore, product value enhancement has become the core issue of business. Traditional performance assessment primarily stresses the previous performance of an organization, which is not a proper means for the KM era. This study intends to discover the main elements related to the Key Performance Indicators (KPI) of knowledge management, which can be divided into two categories according to recent research literature (2002): (1) Interim performance: including strategies and planning, implementation and procedure; (2) Final performance: performance evaluation. This article also proposes examples of items that must be considered when evaluating both short-term and long-term knowledge management performance.