To understand what the meaning of competency is.
To understand the construct of a competency framework.
To understand how to use competency frameworks in various HR processes.
To understand how assessment centres are designed.
Nowadays, the competition is not between products—it is between people. What is at the core of this is the competence of the organizations. Competence is, however, different from competency. While competence is the ability to do a particular task, competency concerns the underlying characteristics which allow a person to perform well in a variety of situations.
The word ‘competency’ has two relevant meanings:
The entire concept of the competency management is based on the second definition.
A competency is an attribute, knowledge, skill, ability, values or other characteristics that contribute to successful job performance (Figure A1.1). This would mean that the articulation of competencies would translate into the identification of the critical success factors in achieving the organization's mission, vision and strategy, which if not achieved would result in the decrease in the performance of the organization.
An ability based on a work task for a job output is referred to as competence and the ability based on behaviour tends to be referred to as a competency.
Figure A1.1 Defining competencies in terms of behaviours, action and results
A competency model is a grouping of individual competencies, which describes all or most of the requirements for job, function or organizational success.
Competencies could be categorized into two groups:
Technical competencies, also known as functional competencies, are related to a specific area of expertise such as industry, process, technological package or functional area. They represent specific knowledge or skill (e.g., knowledge of supply chain, designing a performance management system, exploration of oil, safety concerns in a chemical plant). These competencies are generally built through some form of training (i.e., formal education, professional course or certification) or through real time ‘on the job’ experience (Table A1.1).
Non-technical competencies are also known as behavioural competencies; these consider the ‘soft skills’ of people and are essentials for effective managerial behaviour. Therefore, these would typically be one of the competencies cited in Table A1.2 or something similar. These competencies are not particular to a certain industry, process, technological package or functional area.
Competencies can be further categorized into clusters called meta competency and sub-competency to make it more focussed and also detailed. In Table A1.2 that discusses behavioural competency, ‘leading others’ and ‘communicating and influencing’ may be called meta competency. Each meta competency is usually a broad combination of sub-competencies which could be measured separately. Providing motivational support, fostering teamwork, empowering others, managing change, developing others, managing performance and fostering diversity are sub-competencies.
Table A1.1 Technical competencies
Industry |
Process |
Technology |
---|---|---|
■ Aerospace and defence ■ Retail ■ Agri business ■ BPO ■ Banking and financial services ■ Manufacturing ■ Life sciences ■ Energy ■ Entertainment ■ FMCG ■ Advertising ■ Telecommunications |
■ Logistics ■ Transportation ■ Inventory ■ Research ■ Innovation ■ Sales and marketing ■ Supply chain ■ Payroll ■ Fund management |
■ IT strategy ■ ERP ■ ERP program ■ Business continuity processes |
Function |
Lead business processes |
|
■ Legal ■ Accounting ■ Public relations ■ Knowledge management ■ Internal audit ■ Treasury operations ■ Research and development ■ Business development |
■ Vision ■ Mission ■ Values ■ Strategy ■ Critical success factors ■ Core competence ■ Competitive analysis |
■ Objectives ■ Goals ■ Social responsibility ■ Key performance measures |
Table A1.2 Behavioural (non-technical) competencies
People |
Business |
Self-management |
---|---|---|
Leading others
■ Providing motivational support ■ Fostering teamwork ■ Empowering others ■ Managing change ■ Developing others ■ Managing performance |
Preventing and solving problems
■ Diagnostic information gathering ■ Analytical thinking ■ Forward thinking ■ Conceptual thinking ■ Strategic thinking ■ Technical expertise |
Self-confidence
■ Stress management ■ Personal credibility ■ Flexibility |
Communicating and influencing
■ Attention to communication ■ Oral communication ■ Written communication ■ Persuasive communication ■ Interpersonal effectiveness ■ Influencing others ■ Building collaborative relationships ■ Customer orientation |
Achieving results
■ Initiative ■ Entrepreneurial orientation ■ Fostering innovation ■ Results orientation ■ Thoroughness ■ Decisiveness ■ Business acumen ■ Global perspective |
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A competency framework is one which enables organizations to steer their HR strategy with the competencies forming the basis for many HR processes. The essential components of the framework have to be:
The entire universal set of competencies identified for an organization would be known as Competency Dictionary (Figure A1.2). However, this is not merely a collection of the competency names, but a detailed repository of competencies with their definition and description along with behavioural indicators articulated for different proficiency levels of the competency. For example, consider the competency ‘influencing others’. First, merely naming a competency does not ensure the calibration of understanding between all. Hence, a competency needs to be defined and described, so that all are on the same page as far as understanding the meaning of the competency is concerned. This competency is one which can be expected from the ground-level staff as well as the head of the organization. Second, do both the levels need this competency in the same measure? Obviously not—while the ground-level staff would be expected to deliver within a small circle of influence the head of the function has to have it to an entirely different level so as to build successful working alliances to steer business. These different levels in which a competency is articulated are known as ‘proficiency levels’. The behaviour which indicates the presence of the competency at that level is known as the behavioural descriptor. Figure A1.3 is an illustration which can help you understand this better. ‘Influencing others’ is the name of the competency. ‘Gain support from others through influence, negotiation and by forming alliances with other interested parties’ is how it is defined, so that is the competency definition. This competency has four proficiency levels (Level 1 to Level 4). Each proficiency level has a behavioural descriptor. For example, the behavioural descriptor for Level 4 is ‘Builds influential alliances to steer business’.
Figure A1.2 Competency dictionary
Once the competency dictionary is ready, the next step is to prescribe who needs which competency and at which levels. The output of this exercise is what is known as the mapping band matrix.
Refer to Table A1.3 to understand the example explained now. In this example the organization has identified and articulated 12 behavioural competencies. There are three levels of proficiency that have been articulated (1 to 3, where 1 is the lowest and 3 being the highest). The organization has decided to track and develop five key competencies for each band (level or grade or whatever nomenclature) in the organization. There are four bands in the organization namely:
Figure A1.3 Competency name, definition, proficiency levels and behavioural descriptors
Table A1.3 Competency band matrix
Table A1.3 is known as the competency band matrix for the organization. Table A1.4 defines the competency ‘Drive for excellence’. This competency is shown to have three proficiency levels. Each proficiency level is described with detailed behavioural descriptors.
Table A1.4 Drive for excellence
Drive for Excellence |
||
Proficiency level 1 |
Proficiency level 2 |
Proficiency level 3 |
■ Sets high standards of quality for own work. Flawlessly executes responsibilities and consistently delivers on sets goals and targets ■ Is energized when given a ‘stretch’ goal, responds promptly and is able to deliver the stretched goal within the defined time frame ■ Is able to set check points for measuring progress towards goals for self and subordinates |
■ Consistently overachieves on defined targets. Focuses on self delivering quality output on all occasions and ensures that team achieves ‘executional excellence’ in all activities ■ Is comfortable defining ‘stretch’ goals and pushes himself to deliver the same ■ Improvises on set standards at work whether in quality, productivity, systems or processes. Uses benchmarking activities to identify more effective ways of doing work |
■ Consistently exceeds performance targets in multiple and diverse environments and applications ■ Pushes self and others towards delivering results. Thrives in setting and achieving ‘stretch’ goals for self ■ Establishes benchmarks whether in quality, productivity, systems or processes. Develops and applies techniques for reinforcing executional excellence ■ Supports others in their quest for excellence. Measures and rewards individual and group excellence |
As a consequence of the competency band matrix, each ‘job/role’ in the organization will have certain competencies (technical and non-technical) with their proficiency levels identified for them. This is known as the Job/Role Competency Profile. The advantages of having a Job/Role Competency Profile is that it sets a benchmark for many other HR processes in the organization such as selection, performance management, training & development and career management.
Example of a Job Competency Profile Template
Job title |
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Department |
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Reporting to |
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Job Purpose |
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Key Result Areas |
Percentage of Time Spent |
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KRA 1 |
• |
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KRA 2 |
• |
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KRA 3 |
• |
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KRA 4 |
• |
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KRA 5 |
• |
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Competencies (Specific to the Job)
Name of Competency |
Proficiency Level Required |
Technical Competency |
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< Desired Level> |
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< Desired Level> |
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< Desired Level> |
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< Desired Level> |
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< Desired Level> |
Behavioural Competency |
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< Desired Level> |
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< Desired Level> |
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< Desired Level> |
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< Desired Level> |
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< Desired Level> |
The basis of the usage of competency models in the industry is the fact that they can be measured by an observable behaviour. There are three methods for assessing competence: cognitive tests, simulations and direct observation. An adequate assessment method is the one which stands the test of practicability, reliability, validity and sensitivity. Competency assessment can be done as a part of selection, performance management or development. The method of assessment would change depending on the purpose of the assessment. Some tools used for competency assessment are in-basket exercises, group and team discussions, case study exercises, presentations, paper pencil tests, aptitude tests, psychometric tests, role-plays and interviews. You will note that most of these assessments are the same that are used in assessment centres, described in Chapter 5 (‘Selection’).
Interviews: These are used to explore different facets of the candidate. Interviews are usually used to ratify or confirm what has been found through other tests and exercises. Competency-based interviews are those where every question asked is to evaluate the competence of the interviewee. The competencies to be checked are collected from the Job/Role Competency Profile. The answer is then matched against pre-decided criteria. The downside with this form of interview is that it can only check the competency of the candidate based on their past experience which may not be the best indicator of their performance in the future job.
A human resource management system should be an integrated whole of all its subsystems. Figure A1.4 shows how the competency-based subsystems in combination with an objective-driven performance subsystem can constitute of an integrated human resource management system. This means that all HR subsystems can be a worthwhile whole in themselves if there are a combination of competency-based system and objective-driven performance management system.
Figure A1.4 Competency based HR system
The steps taken to develop a competency-based selection process are:
Traditionally, all companies measure results to assess performance. While there is nothing wrong with this approach, it could be very limiting for the growth of the capability and the overall competence of the organization. Putting it simply, what this means is that if someone is producing results in the current job, it does not mean that they will continue to produce results in the next position when promoted. We have heard about the scores of ace salesmen who failed as sales managers. Competency-based performance management processes can be used to answer this challenge. A competency-based performance management process shifts the focus from mere results to building competency.
Well-designed performance management systems typically include three components:
If an employee fails to meet certain objectives, the competency assessment will typically reveal the reasons why. However, evaluating the employees on the critical competencies for a position does much more than that. Employees can meet their performance targets, yet be rude to customers, disrupt the team and fail to keep commitments. Providing employees with performance feedback on competencies gives them the information that they need to be successful. Given below is an example of how competency assessment can be made a part of the performance appraisal process.
Learning and development inputs can be obtained only after some form of assessment.
As a part of the performance management process as shown above, it can identify competency gaps or developmental areas can be identified. Based on that input, every individual may have a prescribed developmental plan (a sample template is shown below).
Let us understand this with the help of an example:
EMC designed an accelerated leadership development programme in partnership with IIM Bangalore. The programme was called EDGE—an acronym for educate, develop, grow, empower. The EDGE learning curriculum is spread over 15 months and is based on three pillars:
EDGE is a programme designed to develop leadership competencies. This is how they define their leadership competencies.
The leadership competencies are divided into six capabilities (meta competency) and within each capability there are three competencies.
These competencies are then assessed. The method of assessment that EMC follows is an online tool that conducts a 360-degree feedback process. Each assessor has to answer the questions based on the EMC competency model cited above. This feedback is collected from the participant's direct reports, peers and superiors.
The competency assessment through the 360-degree feedback method is used to identify the gaps in competencies. Based on these gaps, a developmental plan is prepared. The developmental plan includes on-the-job development assignment (OJDA) anchored with peer learning groups. After a period of time, the learner has a mid-term learning review (MTLR) followed by an end-term learning review (ETLR) at the end of 15 months. Between 18 and 21 months, the competency assessment is repeated and this time the assessment identifies the competencies which have been successfully enhanced and the competencies which would need more improvement emphasis. This sets in motion a preparation of another developmental plan and thus learning becomes a continuous process.
A competency-based human resource system can help career planning too. In a competency-based system, various elements integrate to facilitate career planning. Each ‘Job/Role’ in the organization will have certain competencies (technical and non-technical) with their proficiency levels identified for them. This is known as the Job/Role Competency Profile. All employees know the competency descriptions for the given jobs. Employees also have a way of knowing their competency profile if the organization has a system of competency assessment in place. This assessment can be facilitated through development centres, online 360-degree feedback systems etc. Employees can match their proficiency in competencies with the competencies and proficiency requirements of various jobs. Based on the match, the employees can apply for various jobs and based on the gaps they could identify the developmental opportunities for themselves and have a conversation about it with their line manager or HR. Such a system helps employees manage their career proactively.
The same process can be used by HR for succession planning. A combination of the employees’ performance analysis and competency assessment would help HR in identifying potential successors for the key positions in the organization. The gap can be used to design a developmental plan and a learning path for the identified employees.
The history of assessment and development centres (ADCs) can be traced back to the Second World War when it was used by the UK War Office Selection Boards to judge candidates. In 1956, Douglas Bray introduced the first industrial application of the assessment centre at AT&T. It was the first private company that commenced using it for management selection. Soon Standard Oil, IBM and others followed suit.
Now, HR professionals are widely using ADC for driving objectivity and transparency and for avoiding subjectivity and bias in their decisions. These decisions could be about selection, promotion, training and a variety of other reasons. When the exercise is done for the purpose of selection of the right candidates, it is known as an assessment centre. When it is done as part of a development initiative, it is called a development centre. A development centre uses the same approach as an assessment centre—the difference is only in the objective and the results. While an assessment centre uses the objective to evaluate a capability against a standard for the process of selection, a development centre uses it to identify training needs and the potential to be nurtured. While an assessment centre identifies the ‘competency gaps’, a development centre works out individual development plans (IDPs).
An assessment centre is a multi-dimensional approach which is designed to provide reliable information about the range of competencies which are necessary for the employee, in order to enhance their skills and achieve the set objectives. ADCs are multiple assessment procedures. In this, a group of candidates/employees take part in a variety of different exercises, while they are monitored by a team of observers who are assessors. Each candidate is measured against a number of predetermined competencies (Table A1.5).
ADCs not only aid in finding the right kind of candidate for specific roles, but also help in the areas where they may be lacking. Due to their strategic advantage ADCs are being used in promotions, as it is a completely objective method.
Table A1.5 Difference between assessment and development centres
Assessment Centre | Development Centre |
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An ADC uses multiple evaluation techniques, including various types of job-related simulations, and sometimes interviews and psychological tests. Some of the common job simulations used in assessment centres are as follows:
The assessment centre method is a proven and valid technique that is extremely effective for making the selection and promotion decisions and for diagnosing employee development needs. Applied traditionally, it is most appropriate for the organizations that process groups of employees. The reason why they are so successful and reliable to use for selection and promotions is that they assess their candidates on their performance in future jobs.
For example, Gati Ltd. has introduced an assessment development centre process at all levels of the organization since 2003. All promotion decisions are decided using this approach. When it was introduced, many of the senior employees started criticizing it; soon, they realized that how crucial this technique was for their development. The employees who were eligible were encouraged to experience the process. Even those who did not perform well were also encouraged to undergo the development centre process, where they could develop the required competencies and opt for a structured training. In a short span, the ADC was accepted as an important HR initiative for developing future leaders. Many organizations in India are moving towards a selection of subsystems (especially learning and career management) based on competencies. Organizing subsystems using a common set of dimensions/competencies produces substantial benefits because the subsystems reinforce one another in the total system. Because each element in the subsystem can be built around a common set of dimensions/competencies and rating scales, the entire subsystem becomes more efficient and effective. This reduces training time and expense and makes implementation and follow-through efforts more effective. In spite of all its merits, driving competency-based system needs rigour in implementation and discipline in maintenance, which is why only those organizations who are truly people-oriented are adopting these.
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