Using Competencies To Enhance Employee Performance

Several years ago, a study conducted by four large HR consulting firms* demonstrated the connection competencies make with business strategy, the techniques organizations use to build competency models, and the similarities and differences among com­petency-based human resources applications.

The nature of the sample lim­ited the ability to draw widespread conclusions about the workplace in general. But it was still possible to identify im­portant conclusions based on the data. Based on our own research and experience in the field, most are still valid in 2018.

Following are the key findings of this research effort:

• Competencies are used to “raise the bar” on employee performance. Respondents said “raising the bar” is a key objective of competencies, as opposed to using competencies to establish a baseline for perfor­mance. Also, respondents tailor their HR applications to focus on individual performance. Competencies are defined thoroughly (often using high performers and functional experts as a primary source of input), and they often are supported with scaled levels to illustrate in­creasing levels of proficiency. This provides individuals with detailed road maps for increasing their capabilities incrementally.

For staffing applications, competencies are used to hire, place and promote people with the right capabili­ties to help the organization gain competitive advantage. For training and development, competencies are used to identify gaps in each participating employee’s capa­bilities so these gaps can be remedied. For performance management, competencies and results are assessed side by side, reminding employees that how they do things is as important as what they do. For compensation, both competencies and results impact base pay decisions to reward performance and competency development.

Competencies are used to focus on an organization’s culture and values. Many respondents indicated they use competency-based applications to communicate values to the work force and to build the proper culture for success. While these issues may ap­pear somewhat removed from the bottom line, it appears that many organizations recognize the importance of culture in achieving competitive advantage.

Business strategies drive competencies. Competency information comes from multiple sources, and strategy plays a key role in development. The most frequent source of information is senior management and strategic plans. The next most common sources of information are high performers and functional experts. These sources of information often are used in com­bination.

Competencies focus on how performance re­sults are achieved. Competencies are behavioral mod­els that are built upon skills, knowledge and personal attributes. Furthermore, all attributes of competencies should be observable and measurable, and they must contribute to enhanced employee performance and, in turn, organizational success.

Today’s competency applications are evolu­tionary, not revolutionary. This finding is supported by several observations. First, it appears that many competency-based approaches are treated as add-ons and they are not leading to radical adjustments in HR processes. Sec­ond, with regard to specific HR applications, managers continue to make the lion’s share of performance man­agement and compensation decisions. Furthermore, with the exception of the use of behaviorally anchored rating scales, base salary adjustments under competency-based systems are largely made in a traditional fashion. Finally, for staffing purposes, competencies are rarely used when checking references or as the sole basis for rejecting candidates.

Competencies provide a framework for integrating HR applications. Integrating HR applications is a desired outcome for many organizations. Many respondents have more than one competency-based HR application. Those who have applications in place for more than a year desire to expand compe­tencies into additional HR areas. Lessons learned in one area of competency-based HR should be applied to other competency applications.

Compensation is the least common and new­est application. Compensation is the least cited appli­cation in this study, performance management is the most cited application, and staffing and training and de­velopment are in between. Staffing applications tend to be oldest, followed by performance management, train­ing and development, and compensation applications. This may imply that staffing applications represent starting points for many organizations that are interested in competencies. Compensation is seen as an application that can be added once other applications are in place. One reason for why staffing applications are older may be historical; David McClelland and McBer’s early work with competencies was to examine them for selec­tion purposes.

These findings should not be interpreted as a prescrip­tion for the order in which to install competencies.  Many organizations start competencies in different areas of HR and then gradually work their way to other areas. In fact, many organizations also work on more than one application at once. The key is not the order in which applications are developed, but how these applications ultimately are in­tegrated and linked to business strategy.

* Hay Group, Aon Hewitt, Towers Perrin, and Mercer. The American Compensation Association (now WorldAtWork) sponsored this research study, titled “Raising the Bar – Using Competencies to Enhance Employee Performance”.  

You are invited to join a LinkedIn group that I manage, Competency-Based Talent Management https://www.linkedin.com/groups/3714316 Our members would welcome your involvement in the group.

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Using Resource / Expert Panels to Build Competency Models

six steps horizontal 3Step 3 – DATA COLLECTION

A Resource Panel is a three to six-hour facilitated meeting with an agenda that is to similar to but broader than the one covered in a Job Analysis Interview. The participants usually include 3-4 capable job incumbents, 3-4 managers of job incumbents, and 1-2 HR staff who work closely with job incumbents. A Resource Panel has three main purposes: (1) to gather data needed to identify the competencies for the job, (2) to build consensus among a set of key stakeholders about what the job requires, and (3) to build support for the project.

Typical Agenda for Resource Panel

A typical agenda for a Resource Panel includes the following components:

  • Explain and sell the project.
  • Identify and reach consensus on four or five main responsibilities for the job.
  • For each responsibility, identify:
    • Key tasks
    • Performance measures or criteria
    • Skills and personal characteristics needed
    • Future scan:
    • – Identify ongoing or anticipated changes in the organization, industry, and relevant technology that may affect the job.
    • – Identify what each change implies, in terms of additional skills and personal characteristics that job incumbents will need.
    • Individually review a set of generic competencies and select a subset of these that are most important in the job.
    • Review individual rankings of competencies and reach consensus on a set that panel members consider to be most important for the job.

Advantages and Disadvantages of Resource Panels

Resource Panels have many advantages. They involve stakeholders early in the process and build support for the competency model and its planned applications. Conducting a resource panel is an inexpensive way to build a solid basis for a competency model. But Resource Panels also have some disadvantages. It can be difficult to obtain participation from job incumbents and their managers, especially if people are geographically dispersed. The standard agenda involves an analytical process that is too detailed and time-consuming for many senior managers. Resource Panels are a good method for identifying required competencies, but they usually provide little help in identifying behavioral indicators for the competencies judged to be important.

Considerations in Implementing Resource Panels

Since a Resource Panel may be seen as an important event within an organizational unit, there is a possibility that leaders and other key staff may feel snubbed, if they are not invited. Since the Resource Panel may make decisions that all staff will need to live with, the composition of the panel must have credibility, and key sub-groups within the organizational unit should be represented on the panel.

Facilitating Resource Panels

    • Among the challenges for facilitators are:
    • Capturing detailed responses quickly and legibly on flip chart pages and   posting the completed pages around the room
    • Ensuring a clear conceptualization of the main responsibilities
    • Keeping the process moving
    • Intervening appropriately if the group bogs down or goes off on a tangent
    • Maintaining control of the process

If possible, use two facilitators: one to facilitate and the other to capture responses on flip chart pages. The two can switch roles for different parts of the agenda.

Analyzing Resource Panel Data

Usually, only one Resource Panel is conducted to gather data about a job. After the panel session, the facilitator should transcribe the notes so that each question is listed, followed by the group’s responses. The result is a document that can easily be reviewed by the project team. Another useful addition to a Resource Panel is an administrative person to transcribe the flip chart pages onto a laptop computer, as the pages are being generated.

Variations on the Resource Panel Agenda 

  • Tailor agenda to the needs of the project and to constraints in the availability of panel members.
  • Devote a portion of the Resource Panel’s time to a planned application.
  • If the competency model needs to include technical competencies, members of the project team should spend some time with subject matter experts prior to the Resource Panel.
  • Use a virtual resource panel to allow panel members to provide the information individually and at their own convenience and in their own work location.
  • Focus on a set of jobs within one organizational unit and identify required levels for both technical and non-technical competencies.

 Learn more in Building Competency Models workshop.

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Conceptualizing a Model Building Project

six steps horizontal 3Conceptualizing the Project is the first step in Workitect’s competency modeling process, and is taught in our Building Competency Models certification workshop.

What This Step Involves

The key components of conceptualizing the approach are:

  •   Thinking through the need
  •   Clarifying the need through discussions with the sponsor and other key stakeholders
  •   Developing an approach
  •   Gaining the sponsor’s support for the approach

A. Thinking through the Need.    In thinking through the need, it is helpful to consider the following questions:

  •   What is the business need for the competency model(s)?
  •   What HR applications will be built using the competency model(s) to address the business need?
  •   What is the organizational context?
  •   What business or organizational changes have occurred?
  •   What other competency models exist or are planned?
  •   Has the organization developed a mission or values statement?
  •   What is the organization’s strategic plan or direction?
  •   What aspects of the organization’s culture should be taken into account when considering this work?
  •   What HR applications and programs are already in place for selection, professional development, assessment, and performance management?
  •   Who will sponsor this work? What are the sponsor’s needs and concerns?
  •   What other key stakeholders will be affected by the competency model and its applications? What are their needs and concerns?

B. Clarifying the Need.   You probably will not have answers to all of the above questions and it is likely that the sponsor and other key stakeholders will have perspectives and concerns that you have not thought of. By talking with your sponsor and with some other key stakeholders, you can clarify what is needed. In addition, sounding out key stakeholders and demonstrating interest in their needs, you will begin to build support for the project.

C. Developing an Approach    There are three main approaches to competency model building. When deciding how to approach a competency model-building project, it is useful to consider these three distinctive approaches:

  •    Single Job Competency Model
  •   One-Size-Fits-All Approach
  •   Multiple Job Approach

A project usually focuses on one of these approaches, although it is possible to use a combination of these approaches within one organization. The approaches will be described in detail in the next three issues of this series.

D. Gaining the Sponsor’s Support for the Approach     Before you can begin a competency-modeling project, you need to have your sponsor’s support, first for the general conceptual approach and later for a project plan that specifies the time, money and other resources that will be required. Before developing a detailed plan, it is useful to ensure that the sponsor supports your general conceptual approach. Therefore, you need to share your approach with the sponsor and check to see if you have your sponsor’s support. You can do this in an in-person or telephone meeting.

Question for readers: What challenges have you had in following these steps? Are there steps that should be added?

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Key Concepts of Career Development

Career GoldWhether functioning as a supervisor, coach or employee, a review of several concepts relating to career development helps pave the way to new levels of understanding, insight and growth – and the development of competencies needed for success in an organization.

1. Not Just For Promotion — It is important to recognize that employee development is not limited to upward mobility. Becoming more knowledgeable, proficient and professional in the performance of current responsibilities can represent career development just as much as moving to a different assignment. Also, there is potential for increasing the responsibilities in a position as the employee grows into them.

2. Personal Responsibility For Growth — The employee must assume responsibility for career planning and personal development. The company cannot help to develop an employee who does not wish to develop. Consequently, it is important that the employee know him or herself. He/she must define personal goals, determine whether these goals are attainable, take time to evaluate the skills and knowledge needed to achieve these goals and set priorities for starting on the chosen path. Only the employee can answer the crucial questions of “Where do I want to go?” and “How much of myself am I willing to invest in order to get there?”

3. Interdependent Roles — There is a dual effort in this process. While it is the individual’s responsibility to achieve the level of success desired, the organization has a responsibility to provide the necessary coaching, counseling, personnel structures, and other support to the individual, so that he/she can make progress toward his/her goals.

4. Honesty — Both the organization and the employee must be honest with themselves. The employee must realistically assess his/her abilities, skills, knowledge, and potential as well as the level of his/her personal commitment to the chosen career path. At the same time, the company must be honest with the employee as to whether career objectives are feasible or probable in terms of future organizational needs. The manager needs to make it very clear that the company cannot make any promises to the employee. All the company can guarantee is that it will do its best to provide resources that will facilitate employee growth that is in keeping with the attainment of corporate objectives.

Source: Competency Development Guide, page 19

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The Evolution of Competency Modeling

The first ten years of competency modeling were dominated by consultants trained in the McBer approach. This approach involved a rigorous research methodology, which included identification of criterion samples of superior and average performers, behavioral event interviews, thematic analysis of transcripts of half the interview sample, and cross validation through coding and statistical analysis of the other half of the interviews. During this period, competency models were most often used to guide selection and professional development. Workitect uses the same methodology to develop job competency models.

Today, 40 years after the first competency model, more than half of the Fortune 500 companies are using competency modeling. Consultants working in the McBer tradition are still building many models, but these consultants have been joined by many other consultants using different methodologies. With market pressures to build models more quickly and less expensively, there is less emphasis on methodological rigor.

Over the last two decades, organizations have begun to use competency models in new ways. Many organizations that have redesigned their work processes and restructured their jobs have developed competency models for newly designed jobs for which there are few, if any, job incumbents with experience. These new competency models, of necessity, describe emerging and anticipated skill requirements, rather than skills that have been effective in the past. Many organizations have taken a “one size fits all” approach to competency modeling, by developing one competency model, usually for leaders, and applying this model to a large set of jobs, sometimes even non-managerial ones. Other organizations have moved in the opposite direction, by simultaneously developing multiple competency models for different jobs within an organization.

Competency models are still most often used to support selection and professional development, but developmental assessment – “360 feedback,” competency assessment by self, manager, peers, direct reports, and customers – has become a significant human resources application in its own right.

In the past twenty years, there have also been changes in the workplace which affect competency model building. Because organizations are changing more rapidly, the “shelf life” of a competency model has diminished. Frequent reorganizations change job roles and make existing job descriptions and competency models obsolete. Competency models are often needed for new and critical jobs, even though there are few employees with experience in these jobs and fewer still who could be considered outstanding performers.

Staff functions, such as human resources, have become leaner, so that the remaining staff have more responsibilities and job pressures and less time for discretionary, additional activities such as investing time in competency model building. Thus, more of the model building work falls to external consultants. At the same time, human resources staff are under more pressure to produce results quickly, and this means implementing a useful human resources application, not simply developing a competency model. The budget for the development of a new competency model must therefore compete with the budget for its applications.

Organizational changes have also affected employees, who are the “end users” of competency models. The increased intensity and pace of work make it more difficult to get employees to participate in model building activities, especially resource panels and focus groups. Perhaps because of the pace of work, employees’ attention span, their tolerance for complexity, and their willingness to read have diminished. As a result, competency models need to be leaner and simpler, with high-impact language that holds the reader’s attention.

What has impacted the way you do models today? How are you doing them now?

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