Benefits of an Integrated Competency Based HR System

ATTEND WORKITECT’S BUILDING COMPETENCY MODELS CERTIFICATION  WORKSHOP ON NOVEMBER 7-9 AND LEARN HOW TO CREATE TAILORED COMPETENCY MODELS AND AN INTEGRATED COMPETENCY-BASED HR SYSTEM.

There are many bottom-line benefits of a competency-based HR system. Employee motivation leads to increased productivity and higher profits.  But the real values of an integrated human resource system are more complex–and more powerful.  Focusing on competencies will renew your company.  You’ll uncover startling energies and synergies that can give you the responsive, competitive edge you need.  Here’s what you can expect:

Enhanced Management:  With corporate goals clearly defined and a system of employee rewards in place that supports those goals, managers feel empowered.  They communicate more effectively with subordinates and with each other. Work proceeds more efficiently.  Quality measures go up.

Motivated and Committed Employees:  By involving employees in building your new competency-based system, you  ensure their early engagement with it.  And because the new system rewards employees for overcoming real, daily challenges, workers develop a sense of appreciation and commitment.  Less time is lost to wasteful activities.  Employees put creative energy into completing their tasks.

Increased Organization Effectiveness:  As all levels of your organization align with company goals, overall effectiveness increases dramatically.  And the focus on adding and refining key competencies augments this increase continuously.  Individual employees become more effective and, as a whole, your company becomes more dynamic, more competent.

Easier Cultural Change and Organizational Improvement: 
A competency-based, integrated human resource system supports your company’s strategic direction.  Necessary change becomes simpler when both management and employee goals are defined in terms of the company’s success.  With little incentive to cling to older methods or attitudes, both management and employees participate more willingly when change is necessary.

Increased Resilience to Market Pressures:  Your company responds to outside stresses not as threats but as challenges.  At every level, the goal is not individual survival but group adaptation.  By linking employee well-being to corporate health, you tap the creativity and motivation you need to stay competitive.

Cost Savings and Increased Productivity:  An integrated human resource system cuts redundancy and waste.  It gives overlapping and competing departments incentive to cooperate and coordinate their work.  Individual employees see that they benefit by finding more efficient, effective ways to do their work.  Less time and material are wasted.  Productivity goes up.

Read a white paper on Integrating HR & Talent Management Processes.
Learn more about creating an integrated competency system for your organization.
Contact Workitect for information about our services and products.

Editor’s Note: This post was originally published in September, 2012 and has been updated for accuracy and comprehensiveness.

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How Competencies Drive Performance Improvement

It is probably safe to assume that, unless we are mentally or psychologically challenged, each of us wants to improve our performance and the competencies that will help us perform. So why is it so difficult for organizations to achieve high levels of individual and organizational performance? There are many factors that influence performance. The development of competencies is, in a broader sense, also about improving performance. As employees and managers working to build additional competencies, it may be helpful to understand some of the key concepts about performance improvement and management.

“Systems thinking” has been found in recent years to be a good way to analyze and solve human and organizational performance problems. Books such as ‘The Fifth Discipline” and “Improving Performance” have helped foster this belief. We can think about each of us being a human performance system. This graphic depicts the various components of this “system in which we receive inputs, and then utilize our competencies to generate outputs. 

In a business setting, the inputs we receive come from our customers and environment, internal or external. We also need clear direction on what is required, access to resources and minimal interference. As the performer, we need the necessary competencies (which include attitude and motivation). There needs to be appropriate consequences for our output. We should receive positive consequences or rewards, e.g. a pat on the back for “doing it right” and negative consequences for not doing it right. The standards or criteria for evaluating performance must be consistent and sound. Is the same “benchmark” or measurement applied to each person? And, finally, do we receive timely, adequate and appropriate feedback on how we did?

This same system applies to the performance of a group of individuals who make up a team or an entire organization. Only this time, individuals need to work together to produce output, and issues such as group processes, strategy, information flow and work processes must be managed in order for the team to be productive.

The disciplines of “organizational development” and “performance technology” utilize models like these to help analyze human and organizational performance problems, and improve performance. “Performance management” utilizes the same principles, but focuses on specific organizational and human resource processes such as goal setting, performance appraisal and pay for performance. Career planning, succession planning and progress reviews are often included. Relating back to the performance models, you can see the importance of providing clear direction, selecting and developing competent employees, providing appropriate consequences and frequent feedback.

The ultimate goal of organization development, performance technology and performance management is the same – to improve performance. Developing your own competencies, or those of others, is one of the most important requirements of performance improvement. (In fact, it is depicted as the center of both performance models.) Although the focus of our Competency Development Guide book is on developing competencies, understanding the entire human performance system may give you added appreciation for the importance of receiving clear direction on what is expected of you, obtaining feedback of how you are doing, etc.

In summary, developing additional competencies will not guarantee an improvement in performance. Other factors contribute to performance. If you have management responsibilities, pay attention to all of the factors so you’re able to create an environment where people are motivated to utilize their competencies. The ideas and tools contained in the Competency Development Guide can help you develop the competencies you need to manage the performance of yourself and others.

What examples do you have of job competency models or competency-based performance management systems producing substantial improvements in organizational results?

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Add Competencies to Performance Reviews

 

Performance Review

Many organizations are becoming more interested in management and appraisal of competence – the “how” of performance. They are seeking more qualitative assessment, oriented to the future and focused on development. A competency approach brings a different perspective to performance management. Performance is viewed in terms of the process employees use to achieve their job results. It combines planning, management, and appraisal of both performance results and competency behaviors. It assesses what employees accomplished and how they did it (with personal characteristics they possess that predict superior performance in present jobs, or in future jobs).

Performance and competence are balanced in a competency-based performance management system. In a line job, achievement of performance results may be weighted 90 percent and demonstration of competency behaviors only 10 percent. At the other extreme, an appraisal form for a service position might weight competence 100 percent. Performance objectives for a staff job might give equal weight to results and demonstration of competency behaviors.

In traditional systems, achievement of performance results is quantified, past oriented, and tied to unit goals, based on a short term, and used to make compensation decisions. Competency appraisal is more qualitative, longer range, future oriented, and used for employee devel¬opment and career path planning.

PERFORMANCE (“pay for results”)
50%-90%
• “What” of performance
• Quantitative: Tied to unit goals
• Short time frame: One year, past
performance
• Reward oriented

COMPETENCIES (“pay for skill”)
10%-50%
• “How” of performance
• More qualitative
• Longer time frame: Future
performance in present and future jobs
• Development (behavior change)
oriented

Steps in Developing a Competency-Based System

1. Identify competencies required for superior performance in present or future jobs (competencies needed to implement a desired strategic change).

2. Train managers and employees in performance management (e.g., coaching for performance improvement). Performance coaching involves:

a. Agreement between manager and employee on his or her “actual” levels of competence. An employee’s competency levels are most easily assessed with “360 degree” ratings by colleagues “all around” the employee (i.e., by his or her boss, and a sample of peers, subordi¬nates, and customers who know the employee’s work well). The average of these ratings is compared with the employee’s self-assessment of his or her competencies.

b. The employee identifying the “desired” levels of competence he or she wants to develop to meet his or her own performance or career advancement goals.

c. Agreement on a “contract” between employee and manager on
• The employee’s competency development goals and the action steps he or she will     take to attain them
• The help and support the manager will give the employee

This coaching approach uses the principles of “self-directed change” theory, which holds that adults change only when they:

• Feel it is in their own best interests to do so
• Feel dissatisfied with their existing situation or level of performance (“actual”)
• Are clear about a “desired” situation or level of performance
• Are clear about action steps they can take to move from the actual to the desired situation or level of performance

Competency-based performance management systems shift the emphasis of appraisal from organization results achieved to employee behaviors and competencies demonstrated. Diagnosis and problem solving to deal with poor performance takes this form: “If results are not at the desired level, give higher priority to these job tasks, demonstrate these behaviors more often, and develop these competencies” (i.e., model the task priorities, behaviors, and competency levels of the best performers in the job).

The addition of competencies to performance management systems has important implications for management. Managers explicitly commit themselves to provide employees with formal training, coaching, and other competency development activities during the performance period.

The most important factor in implementing a competency-based performance management system is training managers to provide this coaching and developmental assistance. (Studies of effective performance management systems consistently find training to be an important input.) Employee training also helps employees understand how the system works, what their role is, how to assess themselves, and how to contract for competency development activities with their managers. Read about organizational issues.  A Blueprint for Competency-Based Performance Management

Also:
Make Performance Management a Positive Experience

Workitect’s consulting services  for creating competency models and competency-based talent management applications

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Selecting a HR Application for a model-building project

Competencies 4-c [Converted]Competency models have many potential uses – for diverse areas including selection, assessment, development, performance management, training, and planning career paths. Some organizations do not always feel a need to have an initial application in mind when building a competency model. To some, competency models are a novelty, and they want to build one first, and only afterwards think about how to apply it in the organization.

Too often, organizations build a competency model but never get around to applying it. And a competency model alone provides little value to anyone. It is essential to have a particular Human Resources (HR) application in mind when building a model and build the implementation of that application into the initial project plan. It is a important component of Workitect’s Worksheet for Planning a Competency Modeling Project and Building Competency Models workshop.

There are three important reasons for doing this:

1) The nature of the intended HR application can shape the data collection and analysis. For example, in a project to construct a competency model for sales professionals, the competency model would need to be incorporated into a sales training program. Since the training program was to be built around the selling process, it was important to understand how the selling process worked for different types of projects. A day- long resource panel focused on defining the sales processes for both simple and complex sales situations. When the competencies were identified, they were linked to steps in the two sales processes.

2) The planned HR application can shape the format of the model, especially its behavioral descriptors. For example, if the model will be used by managers to assess jobholders’ demonstration of the competencies, as part of a performance appraisal, it is important to include behavioral descriptors of less effective behaviors as well as effective ones.

3) To ensure that money and other resources will be available for the application. If the initial application is not part of the budget for the model building project, there is a chance that financial support will no longer be available when the competency model has been completed. The organization receives little benefit from its investment, until the model is applied in a way that enhances productivity.

Read more in “Seven Key Questions to Answer before Building Competency Models”.

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The Benefits of Competency Based HR Applications

Eliminate HR? No problem? Not so fast.

What value is added when human resource applications are built on a foundation of job competency models?

Career Pathing and Retention

Job Competency Models provide detailed maps for existing employees to follow as they plan their careers and self-development. The model for any given job describes the exact competencies necessary to advance to that job, giving aspirants both secure information and incentive to acquire those competencies. That’s the kind of open opportunity that keeps talented and ambitious people working for you.

Recruitment and Selection

Today you may have all your players in place, but every new day brings the possibility of change. Retirement, outside recruitment, personal difficulties:

These and many other events can leave you with holes to fill–and anxiety about the quality of the people you’ll choose to fill them.

By applying Job Competency Models to the promotion and hiring processes, your senior management can greatly simplify their work. Models identify optimal career paths to look for, simplifying the search for candidates. Models also describe in detail the exact competencies employees will need to perform well in their jobs.

Performance Management

Performance assessments underlie decisions about employee rewards and promotions. Unfortunately many employees feel they have little control over the results of their work. You can counter this perception by linking employees’ rewards to their competent performance in employees’ rewards to their competent performance in defined areas. By doing this you empower workers and encourage cooperative, team-building behavior.

Job Competency Modeling provides an excellent base for performance management. As with development and recruitment, employee assessment is based on accurate, detailed information about job performance. To appraise this performance effectively, your managers need:

  • Accurate job-performance standards
  • Clear descriptions of job behaviors required to perform specific job tasks
  • Indicators of both average and superior job competencies

When you use competency models to provide these data, assessments yield useful, practical recommendations. Competecy–based compensation systems also explicitly tie rewards to the development of key competencies. This gives employees greater control over their professional development and offers incentive for excellence to workers and managers on every level.

Training and Development

Competency modeling provides a truly ideal framework for your training programs. Studies show that competency-based training offers a return on investment (ROI) nearly ten times higher than the ROI of traditional training methods. And improvement of your training is central to Workitect’s purpose. We have developed a process entitled the Competency Acquisition Process (CAP) for managing training efforts through increasing levels of competencies. The CAP consists of seven steps, outlined below:

– Identification of Required Competencies: Job Competency Models supply this information, or a simpler, less detailed system can be used for non-critical jobs.

– Assessment: Employees assess their current competencies and compare them to examples of superior performance. Performance assessments by managers are obvious tools as well. Employees and managers then decide which skills to focus on.

– Observation and Study: Employees study examples or models of superior performance. Trainers provide supporting information to aid participants’ comprehension.

– Practice: After acquiring a basic understanding of the concepts involved, participants move to practical, job-related applications of their new knowledge.

– Feedback: Trainers observe participants applying their new knowledge and offer constructive feedback and reinforcement.

– Goal-Setting: Trainers work with employees to set specific goals and action plans for applying new competencies back on the job.

– On-the-Job-Support: Supervisor and peers reinforce and support each individual’s demonstration of newly acquired skills.

When your employees enter this cyclical process of planning their own development and acquiring necessary training, everyone benefits. They take responsibility for their own career paths, their own job security, and you gain an ever more skilled and competent workforce. Improved performance, bonuses, increased productivity, and career advancement spell success for everyone.

Let Us Help You

Workitect has recently helped organizations in Chicago, New York, and beyond to develop competency models, frameworks, and applications for human resources and talent management.  You can learn how to develop your own models and applications by attending our Building Competency Models workshopContact us today to learn more about how we can help you.

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Creating Competency Based Talent Management Processes

Air CanadaCompetency modeling has received its fair share of criticism over the years, particularly with respect to the level of complexity involved in the process of adapting these models to the many HR-related needs of large organizations. There’s no denying that developing customized competency models that can be applied across many HR applications and a growing multitude of job roles is an arduous challenge; one that requires time, resources and commitment.

Yet, as many organizations continue to focus on education and experience when assessing candidates for a job role, more and more studies show that acquired skills and past experience no longer support organizations’ need to adapt to a modern, rapidly changing, global environment. As groundbreaking technologies make their way into our professional lives at a pace faster than most companies can adapt to, can the simple fact of having learned a certain skill – often years, if not decades, prior – guarantee a company’s future success?

Online resources and public workshops, such as our 3-day Building Competency Models workshop, are effective at educating and training individuals and small teams on the benefits and process of developing job competency models and HR applications. But large organizations tend to deal with very complex and unique issues, and each situation is difficult to address with generic documentation or in a public workshop.

A truly customized program caters to the special needs of an organization, with one-on-one or small group consulting, highly technical competencies, and solutions to address unique organizational issues.

Furthermore, a customized consulting approach can better evaluate and improve on past or existing model building approaches. By focusing on the strategy and implementation of specific applications, companies gain a superior edge in achieving synergy across teams, and ensure consistency in applying model-building methodology.

Case in Point: In late 2012, this large Canadian-based company looked for a consultative competency-modeling workshop that could be built upon its own internal data, and tailored to different segments of its HR department, for a variety of applications. It was also seeking guidance on current best practices for organizations with similar challenges.

Their performance management program already included competencies, but the company was hoping to use Workitect’s dictionary and resources to further refine its models by job role (individual contributor, manager, director level) and branches (sales, marketing, law, finance, human resources, etc.), in addition to separating competencies between generic levels and specialty jobs.

Their competency model had been developed for performance management applications, with 5 core and 17 branch competencies, through a 360-review process for leaders. The response from this process had however been slightly negative and as such, the HR team had been given the mandate to remove ‘behaviors’ from performance management. This eventually resulted in competencies being officially removed from all performance management assessments the following year.

A few years later, the company decided to re-introduce ‘behaviors,’ but this time by incorporating Leadership Competencies and Corporate Values into its performance management program. Competencies were developed in house, and some branches even launched their own competency-based initiatives. A specific group hired consultants to develop branch competencies by level and use assessments, while another moved to implement a series of workshops focused on the development of leadership skills, based on the Learning Organization theory (The Fifth Discipline, Peter Senge).

However, these leadership competencies were not correlated to the many HR applications, and the company was then looking for experienced consultants to help integrate its HR processes to all aspects of workforce management: recruiting, performance management, professional development, succession planning, etc.

When the company came to us at Workitect, the team was already equipped with a project plan and timeline. The company requested that the workshop be customized to ensure that its HR professionals gained a thorough understanding of various competency modeling approaches, but also that, from a recruiting perspective, they learned how to extract critical competencies required for positions from the intake session with hiring manager, as well as how to select the right behavioral competency questions for interviews.

In order of priority, the company wanted to focus on:

  1. Succession planning
  2. Leadership development
  3. Assessment and selection decisions
  4. 360° feedback instruments
  5. Training design and development
  6. On boarding
  7. Performance management, review and appraisal

The company also requested consulting on using competency models to the benefit of optimizing client consultations and interventions, e.g., rightsizing, learning programs, job descriptions, leadership development, employee/candidate assessment, etc.  The company needed to provide its key players with a ‘toolkit’ that could be used for designing processes and solutions for its clients.

Process Using the basis of our 3-day competency-modeling workshop, we modified the content to focus more on the implementation and integration of various competency-modeling approaches to different applications within the organization.

Twelve participants attended the workshop; 1/3 of which were HR advisors, 1/3 covered key areas such as recruitment and talent acquisition, and 1/3 focused on development and succession planning. This group covered the entry and employee lifecycle within a company.

Using select generic competencies from the Workitect dictionary, the team focused on defining key competencies that were suited to their needs and reality, including:

  • Providing motivational support
  • Fostering teamwork/empowering others
  • Managing change
  • Interpersonal effectiveness (influence)
  • Analytical/forward/Strategic thinking
  • Fostering innovation
  • Customer/Results orientation
  • Decisiveness and self-confidence
  • Adaptability
  • Flexibility
  • Personal accountability
  • Personal credibility

Implementation The implementation process was handled internally, with Workitect’s consulting advice and plan. The company began the process with live sessions to senior management teams, followed by “people manager” training, both with very positive feedback from attendees.

Let Us Help You

Workitect is a leading provider of competency-based talent development systems, tools and programs. We use “job competency assessment” to identify the characteristics of superior performers in key jobs in an organization. These characteristics, or competencies, become “blueprints” for outstanding job performance. Competencies include personal characteristics, motives, knowledge, and behavioral skills. Job competency models are the foundation of an integrated talent management system that includes selection, performance management, succession planning, and leadership development.

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Why your talent management is key to organizational success

42-25498443bAs we enter the third quarter of 2014, most organizations are preparing to kickstart the financial planning process for 2015. If your intentions are to gather a few key executives, discuss the competitive landscape, review market demand, trends and innovations, and develop strategies based on these findings, you should probably expect to encounter a few challenges.

Why? Simple: Your chances of success are driven by your employees’ ability to adequately execute the strategies you develop, because even the best course of action or the most accurate market analysis cannot yield the right results if you do not have the talent to execute it with precision.

Companies cannot afford to overlook talent, particularly in the current economic environment. It is now more than ever critical to consider your workforce’s ability to take on new challenges and adapt to changing directions before deciding on the very strategies that will take you where you want to go.

To do so, companies need to get HR involved in their annual planning exercise: first to provide a precise account of the skills, competencies and expertise readily available in-house, and then to identify any gap that need to be remedied in order to support the goals and strategic direction of the organization going forward.

By enlisting HR’s expertise in planning for the year ahead, companies grant themselves the opportunity to optimize the effectiveness of their strategies, as well as the organization’s competitiveness and overall performance.

Talent as a key differentiator

Talent has become the ultimate differentiator and a critical source of competitiveness for organizations around the globe. Nevertheless, very few executives grasp the intricate dynamics of talent development and business strategy. In fact, a survey conducted for The Talent Imperative states that “fewer than one in ten executives from midsized private companies say their talent strategies are intimately aligned with overall strategic planning.”

According to the study and a supporting Forbes article, if talent is often overlooked as a source of competitive advantage it is simply because it isn’t made a priority at the C-suite level. Rather, executives seek out new market opportunities, without first evaluating if their current workforce can support these ventures. Such a course of action typically translates into sub-par results because, as previously mentioned, it is your workforce’s ability to execute your strategies that is key to success… and a healthy bottom line.

Executives must stop assuming that their employees will be able to adapt and perform in exact alignment to the strategies they develop, but it is still HR’s job to plead that case, to demonstrate the importance of accurate workforce assessment and effective development programs in achieving your organization’s objectives over time.

Before adopting a new course of action, you must therefore:

  1. Conduct an accurate assessment of your employees’ competencies – this can only be achieved with an objective and effective performance evaluation process.
  2. Identify what (if anything) is lacking and how to fill that gap to achieve your goals – this requires transparent top-down and bottom-up communications to understand the strategic direction of the organization, as well as the potential/motivators of your workforce.
  3. Implement a talent development strategy based on your findings – assuming you have clear channels of communication and objective performance assessors.

5 steps to injecting talent into your corporate objectives

If you agree with the above, then you already know that the characteristics of your current talent pool, along with your talent development and career mobility programs, should be key influencers of your top-level objectives. Developing strategies is one thing; executing them is another.

To ensure that your workforce possesses the skills, competencies and drive needed to propel the organization forward, HR must work with other executives to:

  1. Identify the roles and positions where performance can differentiate your organization from its competitors
  2. Establish metrics to define what success looks like in these roles, as well as how performance should be measured
  3. Fill those positions (recruiting or developing) with the right talent with the help of competency models that accurately identify the skills, knowledge, and personal characteristics of the top performers
  4. Develop targeted training and performance optimization programs that are aligned to your organizational goals and talent pool
  5. Enhance engagement and motivation by improving communication with respect to these goals and by building career paths for your employees

We recommend competency modeling as a basis for achieving this because a competency framework supports the idea that results are tied to performance. Not only does it ensure that the right people with the right skills are placed in the right roles, but a competency-based talent management process also facilitates career-pathing, promotes engagement, and fosters skills development; all of which serve to improve bottom-line performance and minimize turnover costs.

We invite you to read this white paper to learn how an integrated, competency-based HR system can serve various applications for selection, succession planning, career pathing, performance management, and training, as well as serve as a key tool to drive organizational change.

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Benchmarking is not Competency Modeling

Human capital management is a relatively new science, but there is no denying that this practice has made tremendous progress over the past few decades, particularly in terms of recognition and efficiency within a greater organizational context.

Modern scientific advances, namely within the fields of behavioral and cognitive psychology, have helped support the development of many human resources theories that sought to establish a pattern to building and managing a workforce in a manner that sought to produce continuously superior results.

Of all the human resources theories to emerge over the years, competency modeling and benchmarking have probably been some of the most scrutinized. Strangely, it appears that the two schools of thought have grown to oppose each other, as if one couldn’t exist alongside the other.

But could it be that rather than taking sides, HR professionals – and consequently, organizations at large – could stand to gain by incorporating both approaches into their practices?

Let’s take a closer look.

Benchmarking, or the ‘grass is always greener’ theory

The Global Benchmarking Network characterizes benchmarking as “the systematic search for efficient procedures and better solutions for complicated problems and processes.”

Benchmarking ProcessUnder a more generic definition, benchmarking could be defined as the comparative study of processes within a precisely segmented group to identify best practices. Let’s remember that benchmarking can be external or internal, meaning that the group under review could range from an entire industry to an organization’s own branches, departments or teams.

Regardless of the group surveyed, the objective of benchmarking is to allow an organization to measure its ‘relative success’ as a means to improve and, ultimately, optimize its results.

Within an HR framework, we find that the most common metrics measured through benchmarking are recruitment costs, compensation, training expenses, and turnover. For example:

  • What is the lowest/average cost per hire within my industry?
  • How are my competitors achieving better results?

In this case, you are benchmarking your cost per hire to your competitors, and attempting to gather data to understand what they are doing to outperform you so that you can improve.

Looking inward: A customized approach to performance

Then, at what many believe to be the other end of the spectrum, we find competency modeling, which refers to the development of groups of related competencies that together describe successful performance, within a given job context – e.g., the competencies necessary to achieve superior performance in a senior production management role within the textile industry.

It is important to note that the term ‘competencies’ includes knowledge, skills, behavior, personal characteristics, interests and values – all of which combine to set the standard against which to measure an individual’s chances of success within a specific job role.

The fact that competency models can be used to assess a worker’s potential in a particular position has often led to the assumption that competency modeling mainly served recruiting purposes. Yet, in reality, these models carry a much broader definition, and can be applied to a variety of organizational processes (succession planning, performance management, training and development, compensation, etc.).

Much like benchmarking, the metrics obtained from competency modeling are the result of empirical and comparative studies based on a segmented group’s best practices; the exception being that competency models tend to be more focused on the performance metrics of the people behind the processes, rather than the processes themselves.

Understanding this difference is key to grasping the full potential of integrating competency models with a benchmarking approach.

Power to the people…or processes?  The chicken-egg paradox

While the intent of this article isn’t to argue which is more important: the process or the people implementing the process, it is nevertheless imperative to understand that even the most optimal process can fail if the people responsible for its execution do not possess the skills to implement it as intended. Similarly, even the most qualified executives may not deliver the intended results if the processes they must apply are not optimized for performance.

Acknowledging that both people and processes are instrumental to a company’s success makes it much easier to see how benchmarking and competency modeling can work together to provide an invaluable competitive edge for any organization.

Benchmarking can be an important component to optimizing organizational output, as it gathers data about the competitive landscape. But once you have become aware of your industry’s best practices, you need a strategic plan to not only replicate them internally, but hopefully also to build upon them to eventually set the bar within your sector.

Here’s where the input of benchmarking can be used.

Competency modeling can use the data gathered through benchmarking to develop models of superior performance that are customized to your organization’s unique descriptors, characteristics and goals.

Benchmarking is not Competency Modeling

In step 3 of Workitect’s competency modeling process*, it is necessary to identify the superior performers in a job for which the model is being developed, and then collect data to determine the skills, knowledge, and personal characteristics of those superior performers. One of the methods used to identify the top performers and collect data is a resource panel, also known as an expert panel.  In addition to studying people who are top performers today, the panel needs do a “future scan” to:

  • 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

To illustrate more specifically to a job role, benchmarking would allow you to identify the best practices with respect to a CFO’s duties (key tasks and performance measures), while a job competency model will use the data gathered to identify the skills, knowledge, and personal characteristics required to perform these key tasks as intended, at the most cost-effective ratio for your organization, in accordance with your constraints.

*The building of job competency models, making use of benchmarking data, is included in Workitect’s Building Competency Models certification workshop.

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Optimize your performance management system

performance2Lately, there’s been a lot of press about the lack of value performance reviews bring to a talent management process. Some claim they are simply too subjective and that as a result, only serve a compensation purpose; while others say that because the process only takes place sporadically throughout the year, with little follow-up, it doesn’t help employees achieve better results.

In a recent post, we also acknowledged that performance reviews can indeed be time consuming for both managers and employees. Yet, our experience shows that the main reason why performance management systems rarely deliver on their intended promise is that management often fails to either 1) understand the true value and purpose of the reviews, or 2) utilize the process in an objective and result-driven manner… Or both.

What’s more, the very results that many companies seek to obtain from performance reviews are often quantitative (e.g., number of sales, revenue generated, etc.), whereas the real value of performance management resides in providing both a qualitative and quantitative assessment of an employee’s skills and competencies within an organizational context. In other words, companies primarily use performance reviews to determine compensation, rather than using them as strategies to generate additional value and optimize their output.

Let’s take a closer look.

The performance evaluation conundrum: Results or competencies?

One of the most common flaws of performance review processes is that they focus on evaluating workers’ quantitative output, rather than their competencies. There’s no denying that your workforce needs to generate value for your company, but are you evaluating your employees’ actual contribution to your success or focusing solely on financial results over which they may have very little to no control?

This line of questioning is critical as we move into a new era of workforce planning, one that is now past most of the hurts and pains caused by the financial crisis, which had many employees suffer the burden of additional responsibilities being assigned to them via employers’ cost-cutting strategies. And as we enter a brand new age of having to do more with less, it is even more critical to focus on the real value (i.e., current contribution and potential for future contribution) that your employees bring to your organization, rather than isolated financial targets.

A competency-based performance management system combines planning, management and appraisal of both performance and competencies by assessing not only results and accomplishments, but also the methods used to get there. This shift from evaluating quantitative results to rating desired behaviors and skills makes the performance management process more valuable in the sense that it becomes a tool to empower employees in their development of new skills, as well as a way to distinguish between ‘performers’ – one who executes as anticipated – and ‘bar raisers’ – one who contributes to the productivity, growth and competitiveness of your operations.

Many organizations shy away from a competency-based performance management system simply because it is easier to hold employees accountable for hitting or missing quantitative targets, rather than attempting to measure their qualitative input, especially when the bottom line is running thin.

But there is a big financial value in assessing overall contributions, as opposed to only focusing on specific financial results. An employee may be highly productive and provide great value for a company – be it in the form of peer motivation/inspiration or taking on additional responsibilities at no additional cost to the organization – but not necessarily hit his/her intended financial targets for the period under review. This ‘bar-raising’ behavior should be remarked and rewarded, as it may be contributing to maintaining a lower turnover ratio and/or overall human capital expenditures.

When you integrate competency models into your performance review process, it becomes easier to evaluate the metrics that really make a difference. Plus, it motivates employees by providing them with both feedback that takes notice of their input at many levels and opportunities to develop and advance; two distinct drivers of superior performance.

All things being equal: Past performance as a deterrer of future output

We cannot and won’t argue that past performance isn’t an important metric, or that it shouldn’t be included in a performance review process. But penalizing an employee for failure to meet a quantitative target may also come at a cost – as mentioned above, this employee may be adding tremendous value in other ways and not recognizing it can lead to a lack of motivation or desire to ‘go the extra mile’.

Where performance reviews solely or mainly based on past results fail is that they typically go on the assumption that management can predict an employee’s future performance based on what has been accomplished in the past. This ‘ceteris paribus’ assumption rarely bears any credibility in matters of human capital because while it is possible to draw fairly accurate conclusions when attempting to predict the behavior of individual X when placed in context Y, this assumes that we already know the characteristics of X and Y.

Yet, in an organizational context, these values (particularly Y – which can be time, operational processes, or workforce turnover, to name a few) are in constant movement. As a result, we are no longer attempting to predict the behavior of, say, an entry-level employee of 25 years of age with a college degree (etc.) to a specific environmental context. Rather, we are attempting to predict the behavior of an evolving individual as he/she experiences variations of Y, thereby making the ‘ceteris paribus’ assumption obsolete. It is therefore nonsensical to ‘bet it all’ on your managers’ ability to predict an employee’s future performance based on what has been observed in the past.

Competency assessments to ensure organizational success

The success of competency models as a basis for performance reviews is that they work to describe emerging and anticipated skill requirements, rather than skills that have been effective in the past. As such, customized competency models allow you to rate an employee’s strengths (competencies, skills, behaviors and interests) in accordance with what is required for your organization to succeed going forward.

This process makes it a lot easier to optimize your workforce planning strategy, as it helps you determine whether or not an employee is

1)     Suited to the organizational culture and strategic direction

2)     Possesses the competencies to master his/her current role or the potential to develop skills required by a different role (one in which he/she would deliver more value)

But evaluating competencies does not only serve the needs of the organization; it also allows employees to feel valued within their professional environment, as they are given an opportunity for development and mobility, in accordance with their skills and interests.

We recently wrote that one of the most common myths of succession plans is that companies believe a successor has to be ready now. This also applies to your performance management system, on the basis that a viable top performer is developed with this very purpose in mind.

Granted, this has important implications for management, as it explicitly commits them to provide employees with formal training, coaching, and other competency development activities. But the rewards are significant. In fact, this sort of competency-based system uses the principles of the “self-directed change” theory, which holds that adults change only when they:

  • Feel it is in their own best interests to do so
  • Feel dissatisfied with their existing situation or level of performance
  • Are clear about a “desired” situation or level of performance
  • Are clear about action steps they can take to move from the actual to the desired situation or level of performance

So where do I start?

Implementing a competency-based performance review system from scratch is a complex process, but here is an overview of the steps involved:

  1. Design the core of the performance management process, including the objectives of the process, senior management expectations, frequency of performance discussions, etc.
  2. Determine weighting for performance on the competencies, and identify the competencies required for superior performance in present jobs.
  3. Train managers and employees in the new performance management process. The training should include all the information identified above, as well as the competencies used as part of the performance management system.
  4. Provide training in performance coaching to all supervisors, including how to assess employees on their “actual” levels of competence. Managers should be able to objectively explain the reasons for their ratings, and show that they have considered feedback from peers to establish the ratings.
  5. Organize formal sessions during which employees are given the opportunity to identify their “desired” levels of competence to meet their career goals.
  6. Implement or enhance corporate professional development tools and programs to ensure that employees are given the tools they need to develop the competencies they need to succeed in both their current and future job roles.
  7. Schedule regular coaching sessions during which developmental progress is evaluated.

Of course, these steps only serve as guidance. You can learn more about competency-based performance management on our website’s dedicated area, where you will find valuable articles and downloadable PDFs, or by contacting us for a private consultation.

If you are ready to start developing a competency-based system, we invite you to read more about our onsite workshops and consultancy support for building and implementing competency models for a variety of applications in your organization.

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Workforce Planning: Do More with Less

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The latest criticism to come out of the Affordable Care Act relates to the idea that the law is motivating workers to work less in order to retain their eligibility for federal subsidies. Conversely, some companies – particularly small businesses – have been reported as claiming that the ACA may force them to either halt their hiring/growth strategy or cut their employees’ hours, both in order to avoid the penalty for not offering health coverage under Obamacare.

And to top it off, the prospect of minimum wage increases now has several employers squeezed between having to absorb increased costs or raise prices, either of which could lead to a reduction in labor and/or consumer demand.

The debate rages on and whether the widely anticipated workforce reduction will come from workers’ decision, the aging of the population or a drop in businesses’ demand, the fact remains that numerous organizations are now faced with the conundrum of having to do more with less in order to remain competitive and relevant in today’s highly globalized marketplace.

Here are 3 solutions to consider:

Don’t reinvent the wheel; learn to use it better

Research shows that when dealing with limited resources, companies find more benefits from repurposing their existing processes, rather than attempting to create new ones, which too often only serve to further weigh down operations.

Case in point: Performance reviews are a time-consuming chore for both your managers and employees and while many argue that it is quickly becoming a dated practice, our experience shows that the main challenge of performance management resides in understanding its true value and purpose: i.e., not just evaluating past performance but mainly improving an individual’s productivity, which in turn, leads to improved organizational performance. (Read more about how performance reviews can actually add value for your company.)

What’s more, since the financial crisis, many mid-level employees have been assigned additional responsibilities in light of their employers’ cost-cutting strategies, and most now claim they can’t physically sustain the pace at which they have been working. This is extremely unhealthy for companies because while your bottom line may not yet suffer the consequences, the resulting costs can be exponential over time, namely in terms of healthcare, as well as the impact of stress and fear of layoffs on employee morale and productivity.

One counter measure to this scenario consists in combining processes, for instance, by merging your performance reviews with your recruiting strategy. The concept is rather simple: Performance reviews, when done right, serve to assess your current workforce’s output and plan for future actions that will allow you to reach your business objectives. By using the data gathered through performance reviews to pinpoint the specific areas where you are lacking talent, you can quickly identify the very competencies that are necessary to your future success. Your performance reviews could therefore be used to support your coaching and professional development needs, as well as identify those competency gaps that are preventing you from achieving an optimal output rate, i.e., your recruiting needs.

In other words, combining your workforce planning and management processes into one globally strategic practice is a much more cost-effective solution than requesting that your already-overloaded mid-level managers attempt to define your company’s needs – a costly hit-or-miss strategy when not based on real insights. In fact, by using the data already gathered through an existing process, rather than handling recruiting, reviews and development separately, companies are more likely to observe an amplified workforce planning, reduction, and management ROI for minimized and more targeted efforts – a win-win strategy for both employers and employees.

Achieving this isn’t all that complex, but it does require a thorough understanding of the variety of competencies and what they mean for your organization and business sector.

If you already have a competency-based recruiting or evaluation approach in place:

  1. Start with your most comprehensive competency model
  2. For every position, combine the skills, behavioral traits and objectives you may have spread across different documents (performance evaluation, recruitment, salary revisions, succession planning, etc.)
  3. Eliminate duplicates and remove obsolete data
  4. Streamline the competency descriptions with the use of a competency dictionary, and try to narrow it down to a maximum of 10 competencies per position (the higher the responsibility level, the more competencies you may require)
  5. Stress test your new model across different processes with the use of resource panels and event interviews
  6. Implement!

If your company doesn’t use competency models, first begin by determining the approach that is best suited to your needs. Then make sure you have the right tools at your disposal; generic competency dictionaries are often times crucial to the development of such a framework, and they allow you to build and implement integrated talent management systems. But beyond the dictionaries, you may also want to look into acquiring competency development tools, such as eDeveloper™, 360° survey instruments and interview guides. Many of these tools can be purchased or licensed, and can prove to be indispensable to your modeling process.

Once you have determined your approach and selected the tools to help you, follow the steps highlighted above.

At any time, you may contact us for advice or the development of a customized solution for your business. You may also attend one of our popular competency model building events, or book one of our expert consultants to visit your head office for a tailored onsite workshop.

Let go of the control

Silos can be destructive to a company’s productivity and as stated in a Forbes article “it is the duty of the executive leaders and management to prepare and equip their teams with the proper mind-set to break down this destructive organizational barrier”.

Over the past decade, numerous organizations have restructured specifically to avoid this very configuration, mainly because it created an unbalanced workload at the conjunction point of the silos, which was generally at a managerial level (e.g., approvals, sign-offs, strategic planning, etc.).

Such a blockage caused by an individual’s time constraints has dire consequences on the rest of your operations. When your mid-level managers cannot find the time to properly evaluate, review, optimize, and support their teams, they get caught in inefficient labor-intensive processes, and the benefits of having recruited great strategic thinkers are practically – if not entirely – erased.

Instead, try redistributing some the workload in a manner that allows your best non-managerial performers to oversee, or at the very least help manage, your recruiting and development processes. A recent Wall Street Journal article discusses how Amazon has implemented such bar-raising practices, which lie on the following premise:

Bar raisers are skilled evaluators who, while holding full-time jobs at the company in a range of departments, play a crucial role in the hiring process by interviewing job candidates in other parts of the company.

By empowering your top employees to select and coach new talent, you help ensure that your workforce planning, recruiting, reviewing and professional development processes (now that it’s all combined into one) is:

  • Cost-effective (your top performers being ‘on the clock’ already)
  • Fitting to your organizational culture (who better to understand the behavioral traits that will strengthen or harm the welfare of other employees than those who take your success to heart)
  • Optimized to the task at hand (top performers understand what others lack and what is required to get the job done right)
  • Productive (freeing your managers and HR staff of some responsibilities to focus on areas of more pressing importance)

Many companies feel reluctant to implementing such a process when it is first brought to their attention; after all, letting go of the control means giving your employees the opportunity to fail. Yet, keep in mind that those you are giving power to are the same individuals who, day in and day out, exemplify the ability to change, accept extenuating circumstances, ask the tough questions, and earn a reputation for success… all without expecting extra compensation.

When dealing with having to do more with less, this delegation of responsibility opens up a whole new level of job performance, on which it is difficult to place a price tag.

Make time for strategic thinking to boost productivity

According to Mark Sanborn, president of Sanborn and Associates and best-selling author of The Fred Factor and You Don’t Need a Title to be a Leader, most executives don’t think as much as they react to their environment.

The ability to think strategically is one of the most prominent competencies sought out in leaders, surpassing innovation; yet, a survey published on Talentlens.com reported that the competency most next-generation leaders lack the most is strategic thinking, followed by vision and the ability to understand the total enterprise, i.e., how the parts work together.

It may seem counter-productive to invest time each day to rethink operational processes when you are struggling to do more with less but remember that if you want to remain relevant with less resources, you need to fully leverage your executive expertise with the objective to draw up more cost-effective solutions.

In fact, a certifiedceo.com article reminds us that:

“Critical thinking enables leaders (…) to understand the impact of their decisions on the business as a whole, and ensures both alignment with organizational goals and accountability for results.”

If you’re not focusing on the big picture, there are very few chances that others will. What results from this are inefficient and outdated processes and reduced productivity for less-than-optimal results.

If there are always 3 sides to a story, there are always 3 solutions to a problem: your way, your competitors’ way and the right way. Critical and strategic thinking allows you to play the devil’s advocate to your ‘old’ ways, critique your competitors’ choices, and gather these results to find opportunities to carve your way forward. Creativity may seem to be key to doing more with less but in order to concoct creative solutions, you first need to sit down and think.

If you find yourself unable to make time to think, consider delegating some of your responsibilities to one of the employees you have identified as a potential successor. Of course, this requires you to have a valid succession planning system in place already, but we can help you with this as well. Click here to read a recent article about the development and implementation of a succession-planning program that ties into your competency-based multi-purpose approach described earlier.

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