Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3, 57-71 2024 Publisher: Learning Gate DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate © 2024 by the author; licensee Learning Gate History: Received: 8 January 2024; Revised: 23 February 2024; Accepted: 11 March 2024; Published: 19 March 2024 Correspondence: sutrisno@upgris.ac.id The performance of workers through knowledge sharing and knowledge management: A quantitative analysis of SMEs Sutrisno Department of Management, Faculty of Economics and Business, Universitas PGRI Semarang, Central Java, Indonesia; sutrisno@upgris.ac.id (S). Abstract: This research aims to conduct a comprehensive review of the relationship between knowledge sharing, knowledge management practices, and worker performance in the SME sector. This research employs two primary theories, knowledge sharing and knowledge management, along with individual performance constructs, to identify correlations that serve as key findings. Comprehensive results from research are beneficial for academics and can serve as long-term references. The study employed structural Equation Modeling (SEM) and Partial Least Squares (PLS) as its methodologies. It focused on 189 SMEs located in Semarang Regency, Indonesia. Non-random sampling, specifically purposive sampling, was utilized to select participants. Data were gathered through online questionnaire distribution to the chosen respondents. The findings indicate a robust and statistically significant positive correlation between knowledge sharing, knowledge management, and the performance of SME workers. Knowledge sharing and knowledge management ensure the availability and regularity of knowledge that supports day-to-day activities, while effective knowledge access and distribution increase employees' responsiveness to changing market and customer needs. This finding provides practical implications for SME owners and managers in developing strategies to enhance their organizational performance. By implementing effective knowledge sharing and management systems, SMEs can gain a competitive advantage, increase productivity, and enhance adaptability to market changes. Keywords: Employee performance, Knowledge management, Knowledge sharing. 1. Introduction In the contemporary era of globalization and heightened business competition, the Small and Medium Enterprise (SME) sector assumes a pivotal role in a nation's economy [1-3]. SMEs not only foster job creation but also serve as catalysts for innovation and economic expansion. Within the Indonesian context, SMEs consistently yield substantial contributions to the nation's gross domestic product (GDP) on an annual basis. For instance, in 2019, SMEs made a notable impact on the GDP at constant prices, totaling IDR 7,034.1 trillion. This figure marks a significant surge of 22.9 percent compared to the previous year's value of IDR 5,721.1 trillion. Meanwhile, SMEs contributed significantly to the GDP at prevailing market prices, reaching IDR 9,580.8 trillion. This contribution demonstrated a growth of 5.7 percent compared to the preceding year, culminating in a total of IDR 9,062.6 trillion [4]. To effectively compete, SMEs must harness their most valuable asset: knowledge. The expertise possessed by employees within SMEs can serve as a critical determinant in enhancing company performance. An effective approach to leveraging knowledge within organizational settings is the adoption of Knowledge Sharing and knowledge management practices. Knowledge Sharing entails the exchange of insights among individuals or groups within an organization to foster mutual understanding, innovation, and efficiency [5]. Managing this exchange among business professionals necessitates structured practices [6]. According to Ahmad and Karim [7] internal knowledge sharing within a company mailto:sutrisno@upgris.ac.id 58 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate empowers individuals to contribute to organizational benefit through shared insights. The efficacy of knowledge sharing within an organization is contingent upon several interconnected factors. Firstly, the nature of knowledge plays a pivotal role in determining its dissemination and comprehension among organizational members. Secondly, the motivation to share knowledge is paramount in stimulating active participation in this process; without adequate motivation, knowledge sharing may be limited. Additionally, the provision of opportunities for knowledge sharing significantly facilitates this exchange. The availability of tools and platforms that enable effective knowledge exchange enhances both the frequency and quality of interactions. Lastly, organizational culture profoundly influences the knowledge sharing process. A culture fostering collaboration, transparent communication, and trust among members cultivates a conducive environment for knowledge sharing. Consequently, to enhance the efficacy of knowledge sharing within organizations, it is imperative to recognize and comprehend the roles of these four factors and devise comprehensive strategies to manage them effectively. On the other hand, knowledge management is a strategic approach that involves the identification, collection, storage, organization, distribution, and utilization of knowledge within an organization [8]. Knowledge management's main goal is to optimize the use of knowledge owned by individuals or groups within the organization to improve performance, innovation, and adaptability [9]. Knowledge management encompasses the effective management of various forms of knowledge, including explicit knowledge, readily expressed through documents, data, and information, and tacit knowledge, derived from personal experiences, perspectives, and insights. The term "knowledge management practices" refers to a wide range of different actions that are all geared towards the effective management of information within the framework of a company. In this context, the activities encompass the creation and maintenance of knowledge repositories, the facilitation of learning and growth opportunities for employees, the promotion of collaboration among individuals, the facilitation of knowledge dissemination, and the utilization of information technology to improve the availability and exchange of knowledge within the organizational setting [10]. Research from the past has shown a strong link between the act of sharing knowledge, the practice of managing knowledge, and the performance of employees within the context of an organization. In the context of SMEs, it is customary for employees to possess a diverse and valuable array of knowledge. The dissemination of this knowledge has the potential to initiate a reciprocal flow of ideas, foster creativity, and improve comprehension of SMEs' obstacles and prospects. Through the process of knowledge sharing, employees have the opportunity to acquire knowledge from one another, enabling them to circumvent the repetition of errors and engage in the exploration of more effective solutions [11]. This has a positive impact on worker performance, as the knowledge gained from collaboration and experience sharing can help with more efficient problem-solving and better decision-making. Knowledge management, meanwhile, is a complementary and supporting factor for achieving more ideal SME performance, especially for each worker. Sijabat [12] states, by implementing knowledge management practices, SMEs can create systems and infrastructure that support effective knowledge management. This includes creating knowledge databases, process documentation, the use of information technology, and employee training. The availability and easy access to knowledge can enhance workers' performance, as they can leverage the organization's existing knowledge [13]. Furthermore, knowledge management helps to minimize the risk of knowledge loss when employees move or retire. The performance of a worker in SMEs directly correlates with their ability to apply their knowledge in their daily work [14]. Knowledge sharing and knowledge management have a positive impact on workers' performance because they allow them to better understand and overcome challenges, increasing work productivity and efficiency. Employees who have access to relevant and up-to-date knowledge are better able to come up with innovative solutions, avoid avoidable mistakes, and optimize opportunities. However, despite the acknowledged importance of knowledge sharing and knowledge management, their implementation in the SME sector, including SMEs in Semarang Regency, still presents other empirical evidence indicating that it does not always proceed optimally. The primary barrier may be financial, human resources, or technological constraints. Implementing knowledge-sharing and 59 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate knowledge-management practices necessitates investments in systems, employee training, and technological infrastructure that may not always be feasible for SMEs with limited budgets. Additionally, entrenched habits and organizational cultures that do not strongly support knowledge sharing or change could impede implementation. Some SMEs, including SMEs, may foster an environment where employees feel hesitant to share knowledge due to concerns about internal competition or uncertainty about rewards. According to Mohajan [15] various difficulties hinder the process of information sharing within an organization. These barriers include a lack of trust among employees, the impact of organizational culture, ineffective leadership, inadequate reward systems, and insufficient or ambiguous network linkages. Alyafie and Al-Mubarak [16] conducted a study that especially focused on elucidating the obstacles to internal knowledge sharing among employees in SMEs operating within the manufacturing industry. The research findings unveiled that internal hurdles encompass constraints in accessing and analyzing market information, deficiencies in human resource management, financial insufficiencies [17] and challenges in formulating price strategies. Lita and Faisal [18] research elucidates that the challenges faced by SMEs stem from a production approach that prioritizes daily needs over enhancing the organization's performance. Therefore, a thorough examination of how the implementation of knowledge sharing and knowledge management has affected worker performance in the SME sector, including SMEs in Semarang Regency, is necessary. This research aims to conduct a comprehensive review of the relationship between knowledge sharing, knowledge management practices, and worker performance in the SME sector. Through a quantitative study approach and literature analysis, this research will identify various approaches, methods, and findings existing in related literature. By understanding the frameworks, benefits, and challenges of implementing knowledge sharing and knowledge management in SMEs, including SMEs, this research hopes to provide better insights into how knowledge management can enhance worker performance and, ultimately, the overall performance of SMEs. With this research, it is expected to gain a deeper understanding of the importance of knowledge sharing and knowledge management practices in improving worker performance in the SME sector. The findings from this research can serve as a foundation for entrepreneurs, managers, and practitioners in the SME sector, including SMEs in Semarang Regency, to adopt more effective strategies for leveraging organizational knowledge to achieve sustainable growth and competitive advantage. At the outset of this paper, the study's contribution lies in elucidating the intricate interplay between knowledge sharing, knowledge management, and worker performance within the SME sector, thus bridging existing research gaps. Structurally, the paper will proceed by first delving into theoretical foundations and empirical insights on knowledge sharing and knowledge management practices. Subsequently, it will outline the research methodology employed, followed by the presentation and analysis of the findings. Finally, the paper will conclude with implications for theory and practice, offering actionable recommendations for SME stakeholders. 2. Literature Review 2.1. Knowledge Sharing The act of sharing knowledge is significant and serves as a fundamental component of knowledge management. According to Sánchez, et al. [19] knowledge sharing constitutes a significant component of knowledge management. According to Šajeva [20] knowledge sharing may be defined as the process of transferring, disseminating, and exchanging knowledge, experience, skills, and important information from one individual to other people within an organization. Lin [21] identifies the implementation of information sharing as the most challenging knowledge management activity for organizations. However, organizations that effectively manage information-sharing activities will attain favorable knowledge management performance, as knowledge-sharing is the primary factor influencing the effectiveness of knowledge management [22]. According to Sołek-Borowska [23] the effective management of information-sharing activities inside an organization can lead to the development of a competitive 60 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate advantage. Therefore, organizations must comprehend the various aspects that impact the process of information sharing. The act of sharing knowledge is distinct from both knowledge transfer and knowledge exchange. People often use the terms "knowledge exchange" and "knowledge sharing" interchangeably, but it's crucial to understand that knowledge transfer includes both the exchange of knowledge from a source and the acquisition of knowledge by a recipient. The concept of knowledge transfer refers to the process of exchanging information and expertise across various units, departments, and organizations [24]. Knowledge sharing is distinct from communication; however, it exhibits a connection to communication and information dissemination [25]. In its essence, knowledge is not a transferable entity; hence, it cannot be freely disseminated like tangible things. Unlike material possessions, knowledge acquisition and dissemination are dependent on cognitive individuals. The process of acquiring knowledge from others necessitates the reconstruction of one's behavior. Knowledge sharing is the utilization of existing knowledge as a means to gain further knowledge. People typically view knowledge sharing as a reciprocal interaction between two entities, with one possessing information and the other gaining knowledge [26]. According to Connelly and Kevin Kelloway [27] knowledge sharing can be defined as the process of exchanging knowledge or engaging in behaviors that assist others in acquiring knowledge. According to Ipe [28] the act of information sharing among individuals entails the transformation of individually held knowledge into a state where it is comprehended, assimilated, and utilized by others. This implies that the act of sharing knowledge is a deliberate behavior, and the individuals or entities possessing knowledge are reluctant to relinquish ownership of that knowledge. Based on the aforementioned description of knowledge sharing, it can be inferred that this construct possesses fundamental attributes. 1) The primary individual behavior under consideration is the act of knowledge sharing. 2) The voluntary nature of knowledge sharing, a proactive attitude, and conscious intentionality are the defining characteristics of this practice. 3) A variety of environmental systems and procedures, such as legal frameworks, ethical standards, codes of behavior, and cultural conventions, influence and govern the act of sharing one's knowledge. 4) The dissemination of information or knowledge between two or more parties is the result of knowledge exchange between two or more parties [29]. The dynamics of the business world are always shifting; therefore, SMEs need to be aware of the crucial role that knowledge sharing plays. The exchange of information is not a straightforward process. It exemplifies the significance of a strong base for the development and continued existence of SMEs in the present day. In the realm of SMEs, knowledge exchange serves as a benchmark for progress. SMEs have the chance to harness the dormant potential that exists within all aspects of their operations by disseminating information, exchanging experiences, and making use of skills. The utilization of skills and the exchange of information can accomplish this. One of the key benefits of this strategy is the encouragement of innovative ideas. SMEs can improve existing problems, develop new products, and broaden the scope of services they provide if they participate in the exchange of ideas and implement industry standards [30]. The act of transferring information also provides opportunities to improve efficiency and output. SMEs can learn from the successes and failures of larger corporations. This practice serves to mitigate the risk of SMEs repeating past errors, thereby enhancing their operational efficiency. According to Ausat and Suherlan [31], Supatmin, et al. [32], Sutrisno [33] and Sutrisno, et al. [34] SMEs can enhance their competitive advantage in a highly competitive market by staying abreast of current trends and acquiring fresh perspectives. 2.2. Knowledge Management Everyone must understand that, in business, a qualified management system is an important key to success. Management encompasses not only operational tasks but also numerous other aspects of business. One example is knowledge management, also known as the management of knowledge. Knowledge management refers to a theory of management, also known as the management of knowledge [35]. All business people, especially those who are still beginners, must practice knowledge management because knowledge and insight are essential components of business development. Optimal management of 61 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate acquired knowledge is crucial for its positive impact on business growth. Then, what exactly is knowledge management? A company uses knowledge management as a series of tools, methods, and strategies to analyze, maintain, share, improve, and organize its information [36]. The purpose of knowledge management is to increase company efficiency and store knowledge. Knowledge management facilitates the acquisition and dissemination of information and expertise across all organizational units, enabling comprehensive understanding and awareness of operational and business activities. Adopting this approach enables the organization to carry out these procedures with increased comprehensiveness and effectiveness, leading to advantageous outcomes. 2.3. Individual Performance In the context of small and medium enterprises (SMEs), employee performance refers to the extent to which individuals can effectively and efficiently achieve organizational goals [37]. This encompasses various aspects, including work productivity, the ability to meet set targets and objectives, the quality of work results, and contributions to the overall growth and sustainability of SMEs. Understanding that the performance of SME employees is not solely based on individual target achievements but also on their ability to collaborate with colleagues is crucial [38]. Additionally, initiatives to seek solutions, as well as the ability to adapt to changes and challenges faced by SMEs, are also determining factors in evaluating employee performance. Thus, the performance of SME employees not only serves as an indicator of individual success but also plays a crucial role in determining the success and continuity of SME businesses as a whole. A team consisting of individuals who can perform at a high level and collaborate effectively will be able to make significant contributions to achieving organizational goals and long-term business growth [39]. Therefore, SME owners must effectively implement performance evaluation and employee development systems to optimize individual and team potential. 2.4. The Relationship Between Variables In the current era of globalization and heightened business competition, Small and Medium-sized Enterprises (SMEs) play a pivotal role in shaping a nation's economy [40]. In order to thrive amidst this intense competition, SMEs must capitalize on their most valuable asset: knowledge. This study aims to conduct a thorough examination of the intricate relationship between knowledge sharing practices, knowledge management, and employee performance within the SME sector. It draws upon two main theoretical frameworks—knowledge sharing theory and knowledge management theory—alongside constructs related to individual performance. Knowledge sharing theory elucidates the process through which individuals or groups strive to convey knowledge to others [41]. Particularly in the context of SMEs, where collaboration and active engagement are paramount, fostering a culture of knowledge sharing emerges as a critical success factor. This theory's social dimension emphasizes the importance of intensive social interaction within potentially smaller SME teams, facilitating seamless knowledge exchange. Effective communication assumes a pivotal role, especially in scenarios demanding critical team coordination and rapid response [42]. Conversely, knowledge management theory focuses on practices designed to manage and harness knowledge within an organization. In the resource-constrained SME environment, efficiency in knowledge management becomes imperative. Given the potential limitations in the knowledge base, we must execute the collection and organization of knowledge effectively [9]. Swift access and dissemination of knowledge are equally crucial to ensuring that each team member can easily access pertinent information, thereby circumventing information barriers that could impede performance [43]. Individual performance constructs revolve around individual work outcomes and contributions within the organization. Within the SME context, individual performance closely intertwines with adaptability, innovation, and productivity in the face of continually evolving challenges. The correlation between knowledge sharing, knowledge management, and enhanced individual productivity underscores the profound impact of each individual's contribution on SMEs. Innovation, fueled by knowledge, emerges as a pivotal factor for SMEs to compete and adapt in dynamic markets [44]. 62 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate By amalgamating knowledge sharing theory, knowledge management theory, and individual performance constructs, this research establishes a substantial positive correlation between knowledge sharing practices, knowledge management, and SME employee performance. Knowledge sharing practices foster a collaborative work culture, elevate operational efficiency, encourage continuous learning, and stimulate innovation. Knowledge management also aids in the effective organization and management of organizational knowledge, ensuring prompt access to pertinent information and mitigating the risk of losing valuable knowledge. Collectively, these two practices synergistically reinforce and bolster employee performance facilitating business adaptation, and fostering SME growth. These findings not only enrich the existing literature but also offer practical insights for SMEs seeking to harness the potential of knowledge sharing and knowledge management to enhance their long-term performance and competitiveness. H1: Knowledge sharing has a positive and significant effect on the individual (worker) performance of SMEs. H2: Knowledge management has a positive and significant effect on the individual (worker) performance of SMEs. 3. Research Methodology As required by scientific inquiry, this study uses a quantitative approach that involves gathering numerical and statistical data. This is because science needs things to be concrete, objective, measurable, logical, and follow good research practices. In this inquiry, Knowledge Sharing and Knowledge Management are posited as exogenous variables, whereas the performance of employees within Small and Medium-sized Enterprises (SMEs) constitutes the endogenous variable. This framework is informed by the premise that the promotion of innovative behavior within individuals and organizations can be accelerated through the stimulation of certain perspectives, particularly those associated with Knowledge Sharing and Knowledge Management, as delineated by the theoretical underpinnings of this study. The author contends that these perspectives, underpinned by Knowledge Sharing and Knowledge Management, serve as fundamental catalysts for the advancement of both the business operations and the workforce competencies of SMEs situated in Semarang Regency. Consequently, SMEs are encouraged to recognize the critical imperatives of contemporary business practices, such as adaptability to evolving market dynamics and consumer preferences, fostering collaborative endeavors, and augmenting performance and competitive edge. Such imperatives are elucidated through the prism of two primary predictor variables. The operationalization of research variables is explained in Figure 1. Moreover, the adoption of purposive sampling is intended to delineate unique selection criteria encompassing parameters such as company size, asset base, turnover, and workforce size, as delineated in Table 1. Additionally, we target enterprises with a minimum operational tenure of five years, based on the observation that SMEs adept at operationalizing novel ideas or concepts typically exhibit a certain level of maturity, particularly within the creative domain of woven fabric production, as outlined in the introductory segment. Conversely, the author posits that the advancing age of SMEs engenders a progressive shift in their cognitive paradigms, owing to the cumulative experiences and knowledge assimilated over time. Consequently, the evolving contours of business processes compel SMEs to exhibit greater adaptability, thereby leveraging the competencies of their workforce as invaluable assets. Therefore, the researcher's foundational objective underpins the adoption of purposive sampling in this research. This method aims to identify samples that meet specific predetermined criteria, including the operational longevity of SMEs. This is in line with the author's contention that the role of collaborative ventures in business has only become prominent in the past five years. An online questionnaire, structured around the Likert scale, was administered to the research subjects, namely SMEs operating in the food sector, Semarang Regency, spanning the period from November to December 2022. Of the 220 responses garnered, 31 were deemed ineligible upon screening, thereby yielding a final sample size of 189 respondents. Table 2 summarizes the demographic profile of the survey participants. It is noteworthy that the respondents who completed the online questionnaire 63 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate were identified as representatives of SMEs, with all respondents presumed to be proprietors of these enterprises. The study used the SEM-PLS (Partial Least Squares Structural Equation Modeling) statistical method and SmartPLS 3.2 software to look at the collected data and test its hypotheses after collecting it. The SEM-PLS analysis looked at two main types of relationships: outer relationships and inner relationships. Outer relationships looked at convergent validity, discriminant validity, and reliability, while inner relationships looked at R-square, Q-square, and hypothesis testing within the structural model. Figure 1. Theoretical basis of research construct relationships. Table 1. SMEs criteria. Enterprises scale Asset Omzet Number of employees Small enterprises >Rp 50–Rp500 million >Rp 300 million–Rp2.5 billion 5-19 people Medium enterprises >Rp 500 million–Rp10 billion >Rp 2.5 billion–50 billion 20-99 people 64 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate Table 2. Demographic respondents. Demographic Frequency Percentage Enterprises scale Small 101 53% Medium 88 47% Total 189 100% Enterprises age 6-10 years 97 52% 11-15 years 33 18% 16-20 years 24 13% >20 years 32 17% Total 189 100% Gender Male 118 62.43% Female 71 37.57% Total 189 100% Age of respondent 21-30 years 30 15.87% 31-40 years 66 34.92% 41-50 years 69 36.51% >51 years 24 12.70% Total 189 100% Skill collaboration Yes 189 100% No 0 0% Total 189 100% Table 2 illustrates that among the 189 respondents surveyed in Semarang Regency, 101 are categorized as small businesses, while the remaining 88 fall under the medium-sized business classification. Furthermore, the data reveals that out of the total respondents, 71 are female and 118 are male. These findings suggest a predominant contribution from male participants to the study's outcomes. Additionally, concerning the duration of business operations, the study highlights that 97 respondents have businesses aged between 6 and 10 years, indicating their significant role in the study's outcomes. Moreover, regarding the utilization of SME employee skills for business success, all respondents reported employing these attributes. 4. Result 4.1. Outer Model As shown in this study, the first step in the SEM-PLS analysis is to look at the outer model and rate its convergent validity, discriminant validity, and reliability. 4.1.1. Convergent Validity The principle of convergent validity posits that indicators of a construct should demonstrate strong correlations. It is very important that the loading factor of each manifest variable within a construct is more than 0.70 [45] when using Smart-PLS 3.0 software to check the convergent validity of reflexive indicators. The results in Table 3 show that all indicators associated with the constructs have loading factor values greater than 0.70, signifying validity and satisfying the criteria for convergent validity. 4.1.2. Discriminant Validity In evaluating discriminant validity, the comparison between the square root of the Average Variance Extracted (AVE) for each construct and the correlation value between constructs is essential. When the squared AVE value surpasses the correlation value between constructs, it fulfills the criteria for 65 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate discriminant validity [45]. According to the output presented in Table 4, the model meets the established validity criteria. 4.1.3. Reliability Test In the reliability testing, Cronbach's Alpha and Composite Reliability are examined, with a value above 0.60 indicating a passing result for variables with reflexive indicators [45, 46]. Table 3 presents the results of the reliability test. As shown, all Cronbach's Alpha and Reliability values surpass 0.60, affirming the reliability of all research constructs. Table 3. Measurement model analysis. Variable Item Factor loading Cronbach’s alpha Composite reliability AVE Knowledge sharing (X1) X1.1 0.841 0.789 0.854 0.782 X1.2 0.908 Knowledge management (X2) X2.1 0.877 0.866 0.808 0.752 X2.2 0.815 Individual performance (Y1) Y3.1 0.942 0.821 0.773 0.735 Y3.2 0.871 Y3.3 0.709 Table 4. Discriminant validity. Var/Ind X1 X2 Y3 X1.1 0.885 0.490 0.522 X1.2 0.792 0.423 0.420 X2.1 0.320 0.888 0.472 X2.2 0.506 0.726 0.434 Y1.1 0.463 0.402 0.955 Y1.2 0.451 0.533 0.929 Y1.3 0.411 0.418 0.861 4.2. Inner Model Testing the inner model is the next step in the SEM-PLS analysis, and this study uses R-square, Q- square, and hypothesis testing to demonstrate this. 4.2.1. R-Square The R-square value compares the contribution of exogenous constructs to endogenous constructs. Table 5 presents the R-square result, revealing a value of 0.546. This indicates that the variables of knowledge sharing and knowledge management can explain 54.6% of the variance in individual performance variables, with factors outside the study's scope accounting for the remaining 45.4%. The R- square value of 0.546 confirms the suitability and robustness of the SEM model[45]. Table 5. R-square. No Variable R-square 1 (Y1) 0.546 66 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate 4.2.2. Q2 Predictive Relevance The examination of the structural model involves assessing the Q2 (Predictive Relevance) value. A model is deemed to possess adequate predictive relevance if the Q2 value exceeds 0 [45]. The formula for computing Q2 is as follows: Q2 = 1 - (1 - R12). Q2 = 1 - (1 - 0.546). Q2 = 1 – (0,454). Q2 = 0, 546. The Q2 value of 0.546 indicates the degree of success with which the model and its estimating parameters accurately predict the observed values [45]. 4.2.3. Hypothesis Testing If the path coefficient value exceeds 0.1 and is statistically significant at a P-value of less than 0.05, the hypothesis is considered to exhibit a positive correlation. Table 6 presents the results of the hypothesis testing. Table 6. Hypothesis testing results. Hypothesis Variable Path coefficient P-values Decision H1 (X1) -> (Y1) 0.427 0.000 Accepted H2 (X2) -> (Y1) 0.439 0.000 Accepted 5. Discussion The dimension of sociality plays a crucial role in the context of knowledge sharing variables within an organization such as SMEs in the food sector. Sociality refers to the extent to which individuals or groups within an organization interact, share information, and communicate for the purpose of learning and exchanging knowledge [47]. In this context, the dimension of sociality creates an environment that supports collaboration and the exchange of ideas, enhancing employee engagement in the process of knowledge sharing. When employees feel comfortable interacting and communicating with their colleagues, they are more likely to share knowledge and experiences [48]. Strong sociality also facilitates the formation of robust networks among employees, enabling a faster flow of information and knowledge. Positive sociality also fosters a culture that values knowledge sharing. Employees feel encouraged to share their ideas, experiences, and knowledge because they feel socially connected to their coworkers and appreciate the benefits of information exchange. Furthermore, sociality strengthens a sense of collective ownership among employees [49]. When individuals feel engaged in strong social networks in the workplace, they tend to feel a shared responsibility for the organization's success [50]. This can enhance motivation to contribute to knowledge sharing because employees realize that increasing knowledge and collective performance will benefit all parties involved. Therefore, the dimension of sociality has a positive and significant impact in explaining the phenomenon of knowledge sharing in SMEs in the food sector, forming the basis for effective knowledge exchange and improved employee performance. The dimension of communication plays a crucial role in the context of knowledge sharing among SMEs in the food sector. Employees can freely share information when communication is open, fostering a barrier-free exchange of ideas and experiences. A high frequency of communication, both through formal and informal channels, facilitates a smooth flow of information among employees [51]. To ensure that the recipient fully understands the conveyed knowledge, clear and relevant communication is crucial [52]. Additionally, engagement in communication fosters a sense of ownership over the shared knowledge, encouraging employees to actively participate in the knowledge sharing process. Good communication skills are also necessary for the sharing process to be effective, including the ability to express ideas clearly and listen attentively [53]. A strong communication dimension can enhance the overall performance of the organization at SMEs in the food sector by creating an environment that promotes collaboration and 67 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate shared learning. Therefore, it is important to pay attention to and strengthen these aspects of communication in order to improve the effectiveness of knowledge sharing and employee performance. Two dimensions, namely sociality and communication, play a significant role in influencing knowledge-sharing practices at SMEs in the food sector. Sociality creates an environment that supports collaboration and knowledge exchange among employees, while open and quality communication facilitates the smooth flow of information and ensures good understanding. Both contribute to enhancing employee performance through indicators such as productivity, innovation, and business adaptation. Sociality strengthens employee engagement in the knowledge-sharing process and fosters a culture of sharing knowledge that is considered valuable. Meanwhile, effective communication enhances the sharing process's effectiveness by promoting collaboration and shared learning. Therefore, paying attention to and strengthening the aspects of sociality and communication are key to improving the effectiveness of knowledge sharing and employee performance at SMEs in the food sector. The knowledge management variable's collection and organization dimension pertains to the process of collecting, storing, and organizing knowledge within an organization, emphasizing the efficient access and utilization of knowledge from diverse sources. SMEs in the food sector can efficiently store various types of information, including processed ingredients, packaging, customer data, and other business processes, for quick access by employees, thereby enhancing productivity and responsiveness. Additionally, a well-executed collection and organization dimension also ensures the availability of easily accessible information to all employees, promoting transparency and open access to knowledge across the organization, and ensuring that available knowledge becomes more structured and well-managed [54]. Thus, employees feel more confident in sharing their knowledge, encouraging more active knowledge exchange and enhancing the quality of knowledge sharing among them [55]. Moreover, easy access to well-collected and organized knowledge also stimulates innovation and the development of new products, thereby enhancing the company's overall competitiveness. Therefore, the collection and organization dimensions have a positive and significant impact on improving the performance of employees at SMEs in the food sector through optimizing knowledge management to create a work environment that supports active and sustainable knowledge exchange. The access and distribution dimension within the knowledge management variable is a highly crucial aspect of enhancing the performance of employees at SMEs in the food sector. This pertains to the ease with which employees can access and distribute knowledge within the organization. Effective access and distribution of knowledge have a positive and significant impact on knowledge sharing and employee performance. One of the key benefits of a well-executed access and distribution dimension is that employees can easily access various knowledge sources, including internal databases and firsthand experiences from colleagues, thereby facilitating more active and sustainable knowledge exchange within the organization [56]. Easy access also enhances employee responsiveness to market changes and customer needs, enabling them to quickly find solutions to emerging problems and make informed decisions, thus improving the operational efficiency of SMEs [57]. Moreover, easy access also strengthens collaboration among employees, promotes a collaborative work culture, and supports innovation. Overall, the access and distribution dimension within the knowledge management variable contributes positively to the performance of employees at SMEs in the food sector, creating a dynamic and innovative work environment that supports the company's long-term growth and success. By ensuring that knowledge is readily available and well-distributed, SMEs can create an environment that supports active knowledge exchange and enhances overall employee performance. 6. Conclusion In the context of SMEs in the food sector, the dimensions of sociality, communication, knowledge collection and organization, as well as knowledge access and distribution, play crucial roles in enhancing knowledge sharing practices and employee performance. Sociality creates an environment supportive of collaboration and idea exchange, while open communication facilitates smooth information flow. Knowledge collection and organization ensure the availability and organization of knowledge supporting 68 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate day-to-day activities, whereas effective knowledge access and distribution enhance employee responsiveness to market changes and customer needs. In light of the aforementioned points, it becomes evident that the success of SMEs in the food sector hinges on the establishment of a collaborative and communicative work environment. By investing in initiatives that bolster teamwork and streamline communication channels, these SMEs can significantly enhance their knowledge-sharing practices, thereby boosting overall employee performance. Furthermore, effective knowledge management strategies must be implemented, necessitating the prioritization of systems and processes geared towards facilitating seamless knowledge collection, organization, access, and distribution. Such measures not only fortify day-to-day operations but also empower these SMEs to swiftly adapt to evolving market dynamics. Ultimately, the cultivation of a work culture that fosters collaboration, open communication, and continuous learning emerges as a cornerstone of success. SMEs in the food sector can foster sustained growth and innovation by nurturing an environment that motivates employees to share ideas, communicate transparently, and actively participate in knowledge-sharing endeavors. Acknowledging resource constraints, particularly beyond the Semarang region and across different SMEs, suggests that organizations may encounter challenges in implementing recommended changes due to limited financial, human, or technological resources. Recognizing potential resistance from employees implies that efforts to promote knowledge sharing practices may face opposition from those accustomed to existing work practices or skeptical about the benefits of change. Additionally, considering external factors such as market conditions and industry competition underscores the potential difficulties organizations may encounter in implementing recommended strategies if external factors pose challenges or constraints beyond their control. These limitations highlight the complex landscape in which SMEs operate, as well as the need for careful planning and strategic management to navigate effectively through potential obstacles and ensure successful implementation of initiatives aimed at improving organizational performance. Future research suggestions include recommendations for conducting qualitative studies that highlight the importance of delving into employees' perceptions and experiences regarding knowledge sharing practices. Exploring motivations, barriers, and facilitators of knowledge sharing from employees' perspectives can provide a more comprehensive understanding. Additionally, suggesting cross-regional studies aims to assess the transferability and generalizability of findings beyond the Semarang region. Understanding how contextual factors influence knowledge sharing practices in different geographical locations and cultural contexts is crucial for a holistic perspective. Furthermore, proposing longitudinal studies aims to examine the long-term effects of implementing knowledge management initiatives on employee performance. Assessing the sustainability and effectiveness of interventions over time can offer valuable insights into their long-term impact, guiding future strategies and initiatives in the field. Funding: This study received no specific financial support. Institutional Review Board Statement: The Ethical Committee of the Universitas PGRI Semarang, Indonesia has granted approval for this study on 3 October 2022 (Ref. No. 069/LPPM-UPGRIS/X/2022). Transparency: The author confirms that the manuscript is an honest, accurate, and transparent account of the study; that no vital features of the study have been omitted; and that any discrepancies from the study as planned have been explained. This study followed all ethical practices during writing. Competing Interests: The author declares that there are no conflicts of interests regarding the publication of this paper. 69 Edelweiss Applied Science and Technology ISSN: 2576-8484 Vol. 8, No. 3: 57-71, 2024 DOI: 10.55214/25768484.v8i3.1092 © 2024 by the author; licensee Learning Gate Copyright: © 2024 by the author. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/). 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