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USING COMPETENCY MODELS FOR PERFORMANCE MANAGEMENT

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Abstract

The development of HR competency models continue to be an area of interest to practitioners, researchers, academicians, employers and consultants.New HR models are necessary because the business world is changing at an unprecedented rate. Since HR activities directly impact on an organization's ability to compete, HR competency models need to be continually researched. The intensity of globalization has somewhat forced the HR professionals to reexamine their practices and change accordingly to suit to the changing needs and challenges.Competency model covers ability, personality, skills and knowledge.In A fully-integrated, competency-based human resource system, the competences identified as required for effective performance are used to select, develop, manage, reward, and compensate employees of an organisation. It is contended that the workforce should be best segmented on a skills basis. After all, skills are the new currency in the 21st century workplace. As global business competition shifts from efficiency to innovation and from enlargement of scale to creation of value, management needs are oriented towards the strategic use of human resources. A critical factor related to an organization's long term success, is its ability to measure how well employees perform and to use that information to ensure the tangible results. The identification and application of the competencies required for effective job performance has become a complex and sophisticated endeavor as experience with this approach has furthered in business and industry. HRM is an organic field with great challenges and this study is carried out to bring about a value in HRM. COMPETENCY MODEL Competency models are created to illustrate how competencies lead to performance. The models illustrate personal and job related characteristics, the organizational context, and the interrelationship of those elements that result in performance in relation to the predetermined standards. A competency model is an organizing framework that lists the competencies required for effective performance in a specific job, job family (e.g., group of related jobs), organization, function, or process. The model is organized into tiers of competencies and includes descriptions of the activities and behaviors associated with each competency. Competency models are often highly tailored to the organization.. Customization includes not only the specific competencies developed but also the way in which the competencies are described. The context includes all those factors that influence the employee behaviors the model is trying to improve, including the organizational culture,
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USING COMPETENCY MODELS FOR PERFORMANCE
MANAGEMENT
Reenu Mohan
Research scholar, Pacific Academy of Higher Education and Research, Udaipur,
Rajasthan, India
Email: hr.reenu.india@gmail.com
ABSTRACT
The development of HR competency models continue to be an area of interest to
practitioners, researchers, academicians, employers and consultants.New HR models are
necessary because the business world is changing at an unprecedented rate. Since HR
activities directly impact on an organization’s ability to compete, HR competency models
need to be continually researched . The intensity of globalization has somewhat forced the
HR professionals to re-examine their practices and change accordingly to suit to the
changing needs and challenges.Competency model covers ability, personality, skills and
knowledge.In A fully-integrated, competency-based human resource system, the competences
identified as required for effective performance are used to select, develop, manage, reward,
and compensate employees of an organisation. It is contended that the workforce should be
best segmented on a skills basis. After all, skills are the new currency in the 21st century
workplace. As global business competition shifts from efficiency to innovation and from
enlargement of scale to creation of value, management needs are oriented towards the
strategic use of human resources. A critical factor related to an organization’s long term
success, is its ability to measure how well employees perform and to use that information to
ensure the tangible results. The identification and application of the competencies required
for effective job performance has become a complex and sophisticated endeavor as
experience with this approach has furthered in business and industry. HRM is an organic
field with great challenges and this study is carried out to bring about a value in HRM.
Keywords: Competency Model, Performance Management, Implementation, Challenges
COMPETENCY MODEL
Competency models are created to illustrate how competencies lead to performance. The
models illustrate personal and job related characteristics, the organizational context, and the
interrelationship of those elements that result in performance in relation to the predetermined
standards. A competency model is an organizing framework that lists the competencies
required for effective performance in a specific job, job family (e.g., group of related jobs),
organization, function, or process. The model is organized into tiers of competencies and
includes descriptions of the activities and behaviors associated with each competency.
Competency models are often highly tailored to the organization. .
Customization includes not only the specific competencies developed but also the way in
which the competencies are described. The context includes all those factors that influence
the employee behaviors the model is trying to improve, including the organizational culture,
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life stage, market, customers, employee relations, presence of a union, and strengths and
weaknesses of its management. Competency-based HRM is a core strategy to help align
internal behavior and skills with the strategic direction of the organization as a whole.
Competency models translate organizational strategies, goals and values into specific
behaviors.
The model can provide identification of the competencies employees need to develop in
order to improve performance in their current job or to prepare for other jobs via promotion
or to transfer. The model can also be useful in a skill gap analysis, the comparison between
available and needed competencies of individuals or organizations. It is a diagnostic and
formative tool to be harnessed in experiential learning. It has the power to aid understanding
of the complex interaction between the numerous factors which can affect professional
learning. It is the basis for dialogue between employer and employee. Competencies can be
used in different parts of employee management applications, having an important role in
each one of them. Competency models are widely applicable in Human Resources
management processes for instance in recruitment and selection, learning and
development, career planning. The benefits from using them include employees having a
clear understanding about the behaviours and attitudes encouraged in the organisation ,
transparency and fairness of the performance management and talent identification and
development processes.
LIERATURE REVIEW
Competency modeling becomes a popular management topic (Alldredge, & Nilan, 2000;
Bartlett & Ghoshal, 1997; Kochanski, 1997; Mirabile, 1997; Pickett, 1998; Punnitamai,
1996; Shippman. Ash, Battista, Carr, Hesketh, Pearlman,hien, & Sanchez, 2000; Winterton,
& Winterton, 1999).Thousands of organizations throughout the world have joined the quest
for competencies studies (Bemthal & Wellins, 2001; Cooper, 2000; Dubois, 1998). A task
force was commissioned several years ago by SIOP to study the state of competency
modeling (Schippmann et al., 2000). Task force findings were based on an extensive
literature review as well as 37 interviews with a diverse sample of subject-matter experts
(SMEs). A primary finding was that competency modeling was typically far less
methodologically rigorous than job analysis.
Competency models are too often a ―hodge podge‖ of job and worker-oriented KSAOs
―ill-defined concepts with no clear meaning‖ (Sackett & Laczo,2003). Competency modeling
does not inherently lack rigor. However, most early efforts were conducted by less
methodologically rigorous consultants who were not researchers. They had many key
advantages such as a broader view of management and perhaps better rapport with
management because of this. Further, Spencer & Spencer (1993) introduced with visible
(skills and knowledge) and hidden (self-concepts, traits and motives) competencies, which in
principal can be referred to as soft and hard. Lepsinger & Lucia (1999) divide all abilities
into inherent and acquired. The inherent abilities serve as a foundation that determines a
prospective acquirement and usage of a particular kind of skill or knowledge.
Competency model is a behavioral job description that must be defined by each occupational
function and each job (Fogg, 1999).Depending on the work and organizational environment,
a group of 7 to 9 total competencies are usually required of a particular job and depicted in a
competency model (Shippman, et. al., 2000).Clifford, (1994), defined KSA‘s in a
hierarchical way. First, skills can be defined as being able to perform a job as well as having
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already performed certain work. Second, knowledge is having the knowledge to perform
certain work but not having performed it yet. Finally, ability is having the physical,
emotional, intellectual, and psychological ability to perform the work, but neither having
done the work nor having been trained to perform the work. Cunningham, (1996), defines
KSA‘s in slightly different way. He divides knowledge and skills (KSs) as a generalisable
content for (defined) occupational groups, which include basic education, communication,
social, letter and report writing, and problem solving. A competency model is a set of core
competences that present the core values of an organisation in current and future role
(Draganidis & Mentzas, 2006).
As competencies establish the requirements needed to perform a job, competency models
can be used: as an employee recruitment and selection tool; as an employee assessment tool;
as a tool to develop employee training and orientation curriculum; as a coaching counseling,
and mentoring tool; and as a career development and succession planning tool (McLagan,
1996). For competency models to be useful, competencies must be correlated to job activities
(Parry, 1998). A competency models help to strengthen HR systems, improve overall
performance, and increase business impacts over time (Cook & Bemthal, 1996; Parry, 1996,
1998). The models always comprise of associated knowledge, skills, abilities, and other
characteristics abbreviated as KSAOs which represent effective work behaviors (Kierstead,
1998). These KSAOs are grouped into clusters, labeled, and defined in a systematic manner.
The models can be developed through in-house or imported, started either from scratch or
with a validated competency model or both (Alldredge & Nilan, 2000; Lucia & Lepsinger,
1999).A competency model can be designed for an organization overall or for a position,
role, level, function, or job within the organization ( Zwell, 2000).
The combination of traditional job analysis and competency modeling methods can allow for
a highly robust approach to competency modeling.There are many methods that can be used
to include future-oriented job requirements in competency modeling projects. Although they
vary in methodological rigor, all might yield some useful insight. One simple approach is to
conduct a literature review (Rodriguez et al., 2002) of emerging business models and their
associated competency requirements.Which type of model an organization employs depends
on its needs and objectives.Given the fact that, there is no one single correct way to develop
competency models. Several organizational context factors and other operational parameters,
for examples, - timeline, financial and personnel resources - need to be taken into accounts.
STRATEGIES FOR BUILDING COMPETENCY MODELS
In an organization with many different jobs there are two approaches for building
competency models Universal and Multiple model approach.
Universal approach -This is a one size fits all approach. It involves creating a single model
with one set of competencies applicable to all jobs.These are less related to specific job or
function and more related to values and skills.
Multiple approach -This method creates multiple models depending on jobs and levels.
This method is used when all the jobs do not have anything in common.
To go ahead with creating models that are of use, the organizations has to be more specific
on the potential uses of the model. The model can be used for multiple reasons. First,
competency modeling is an important innovation in that it is a way to get organizations to
pay attention to job-related information and employee skills in the management of
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employees. Second, they are often intended to distinguish top performers from average
performers (e.g., Parry, 1996; Olesen, White, & Lemmer, 2007). They focus less on and may
even omit descriptors of tasks or KSAOs that do not help understand employee performance
(but cf., Lievens, Sanchez, & De Corte, 2004). Third, they often include descriptions of how
the competencies change or progress with employee level (e.g., Martone, 2003; Rodriguez et
al.,2002).Fourth, the KSAOs are usually linked to the business objectives and strategies (e.g.,
Green, 1999; Martone, 2003; Rodriguez et al., 2002).Fifth, they are developed top down
rather than bottom up like job analysis. Sixth, competency models may consider future job
requirements either directly or indirectly (e.g., Parry, 1996; Rodriguez et al., 2002;
Schippmann et al., 2000). They do not document the status quo but attempt to look into the
future. Seventh, competency models are usually presented in a manner that facilitates ease of
use. Designing for ease of use often includes the utilization of organization-specific
language.
The value of competency models is that a whole-person assessment or holistic approach
(Mansfield, 1989; and Rodriguez, Patel, Bright, Gregory, & Gowing, 2002) can be
developed to examine the competencies that an individual possesses and may still need to
acquire as required by a given industry or occupation. With global competition and
technological advances, organizational success is depending more on team efforts. A team
competency model is proposed by )), with performance being assessed on nine
competencies. Finally, a competency framework must be robust, dynamic, fluid, and flexible
to change with technological, economic, and other changes (Dubois, 1993; and Lucia, &
Lepsinger, 1999) and should be re-evaluated and refined, along with the selection and other
human resources tools developed and used with the competency model (Egodigwe, 2006;
Lucia, & Lepsinger, 1999; and Patterson, Lane, Ferguson, & Norfolk, 2001).
PERFORMANCE MANAGEMENT
Performance management programs are set up to provide feedback to employees on how
effectively they are performing in their jobs. Such programs normally include a set of goals
or objectives the employee must accomplish within the review period as well as the
standards or criteria for determining whether the defined goals have been accomplished.
Performance management is about achieving results in a manner that is consistent with
organizational expectations. Integrating competencies within the performance management
process supports the provision of feedback to employees not only on ―what‖ they have
accomplished, but also ―how‖ the work was performed, using competencies for providing
feedback. Assessing competencies as a part of performance management is an important
means of assisting employees in understanding performance expectations and enhancing
competencies. Performance assessments or tests measure task performance in the job
environment and serve as a mechanism for determining task qualification.
Effective performance management include the following features:
Linking individual goals to the corporate and work unit business plans and goals;
Focusing on results, behaviours and process improvement.
Regular reviews and updating of performance plans to address changing demands;
Training for both managers and employees on how to effectively give and receive
feedback;
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Training for managers on how to provide performance evaluations that are fair and
unbiased.
Competencies can be integrated into the regular Performance Management (PM) process in
one of two ways:
A) By defining the competencies needed to perform each Goal / Objective:
The manager and employee identify the key competencies required to achieve each
performance goal / objective. At the end of the performance cycle, the employee‘s
performance is evaluated in relation to the performance goals / objectives as well as the key
competencies associated with each goal. Using this approach, the competencies included in
the employee‘s performance plan may or may not completely coincide with the standard
competency profile for the employee‘s role. The advantage of using this method is that the
competencies being assessed are entirely consistent with the employee‘s performance goals
for the performance review cycle. The disadvantage is that not all competencies within the
competency profile for the employee‘s role will necessarily be assessed within the cycle.
B) By integrating the competencies for the employee‘s job into the PM process:
In this case, the performance plan includes the performance goals / objectives for the review
period as well as the complete set of competencies from the competency profile for the
employee‘s role. The performance goals / objectives address ―what‖ must be accomplished
during the review period, and the competencies measure ―how‖ the employee conducted
him/herself to accomplish their work. The advantage of this method is that all competencies
defined in the competency profile for the employee‘s role / job are evaluated. The
disadvantage is that due the specific nature of the performance goals / objectives, key
competencies for the effective performance during the review cycle, but not included in the
competency profile, will not be assessed.
The results are compiled and a report is provided to the employee. The report includes the
results for all competencies, highlighting both the competencies that are strong as well as
those rated lowest by the different stakeholder groups. In almost all cases, individual ratings
from others are combined in such a way so as to protect the anonymity of the individuals
providing the feedback. The report is set up to show similarities and differences in ratings
across the different stakeholder groups. The results of the process are normally used to
develop learning and action plans for improvement. They can also feed into broader
assessment programs to support employee career development and succession management
within the organization.
IMPLEMENTING THE MODELS
The performance management process becomes stronger when employees are appraised on
both objectives (what) and behavioral performance (how), referred to as the "mixed model".
The "mixed
model" provides a shared understanding of what will be monitored and measured, and
ensures an understanding of how the work gets done in addition to what gets done.The
following stages are included while implementing competency models within Performance
Management on a corporate-wide basis:
Stage 1:
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Determine policy for integrating competencies within the Performance Management
process
Design a Performance Management process consistent with the policy (as required)
Design communications and training program to support implementation
Pilot the process
Revise and finalize ready for full implementation
Stage 2:
Communicate and implement the Performance Management process
Review and evaluate the process during the first cycle of implementation and make
revisions.
CHALLENGES IN USING THE MODELS
Competency models are not the sole solution for every hiring and selection decision or other
managerial functions (Cockerill, Hunt, & Schroder, 1995), nor should they be the only tool
utilized in meeting education and training needs (Dalton, 1997). Ashworth and Saxton
(1990) explain that framing competencies as an outcome can ignore the mental and personal
processes that are utilized in developing and exhibiting skills and utilizing knowledge.
Despite the efforts to assess the competencies associated with personal characteristics, traits
and motivation, such competencies are difficult to define and therefore difficult to assess.
Such competencies cannot be directly measured in behavioral terms, but more accurately
there are behaviors associated with these competencies.Organizations often invest
considerable resources in the initial development and implementation of their competency
models; however, equal consideration should be given to maintaining the currency and
usefulness of the models over time. Many aspects of competency models can change over
time, such as organizational objectives, senior management,environment, likely future, and
language. So having a plan for updating is critical.
Organizations should validate the models to avoid risks of having irrelevant and outdated
profile which may lead to legal implications. The more extensive applications of the models
to HRM activities, the greater degree and time require for the validation. There are several
techniques to verify the usefulness, the appropriateness, and the meaningfulness of the
models. To mention a few, some less onerous examples are informal feedback from
observations, employee survey, audit sampling, and managerial validation methodologies
used to designing the models involve :
1. analyzing target job or position under changing business strategies,
2. identifying effective and ineffective behaviors from below, average, and "star"
performers,
3. collecting data by using balanced approaches,
4. analyzing the data and formulating an interim competency model, and finally
5. Validating the appropriateness of the model.
Particular attention has to be paid to defining the scope of the different competencies
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identified so as to determine competency areas that cover the spectrum of trends and core
capabilities and strategy. Next, the ‗generalisability‘ of the identified competencies should be
examined so as to separate more generic ones forming competency areas, from more specific
ones constituting detailed job-related competencies. One of the major causes of failure of
large-scale organisational change efforts is poor communication.As a result, employees often
have difficulties in understanding the messages being diffused. Competencies proved to be a
powerful tool by enabling HR managers and change agents to communicate change
objectives and management expectations regarding new ways of working.
Recent Trends in Competency Modeling
Automation of competency modeling- In an effort to streamline and make the process of
competency modeling /job-analysis more efficient, Mason and Lin (2008) advocate the use
of online data warehouses of competency models, web-based focus groups, and the use of
online surveys to gather data from subject matter experts (SMEs) and incumbents.
Strategic job analysis - Strategic job analysis involves attempting to identify the relevant
tasks, behaviors, and KSAOs for a job as they are predicted to be in the future (Schneider &
Konz, 1989). This approach represents a change from descriptive job analysis (with a focus
on describing the job as it currently exists) to predictive job analysis (which focuses on how
the job is expected to be in the future). The need for strategic job analysis is becoming more
apparent because of the dynamic nature of modern-day organizations.
Personality-oriented job analysis- The use of personality as a predictor in selection is
becoming more and more common in today‘s organizations. Countless meta-analyses have
demonstrated that a number of broad personality traits are associated with high performance
on the job.
Cognitive task analysis - The identification and analysis of cognitive processes that underlie
task performance, has been offered as a supplement to traditional task analysis. With the
advent of the Internet and the great increase in technology across the workplace, today‘s jobs
contain more cognitive complexity than ever before.
CONCLUSION
The functioning of an organization largely depends upon several remarkable components,
with the talented employee occupying the central role for the accomplishment of
organizational goals .The present economic situation encourages more and more
organisations to review and further develop their competency models or plan its introduction
if they do not have one already. The need for a forward-looking and proactive approach to
competency modelling is driven by the increasing pace of change in the business
environment. Competencies provide a clear signal to employees regarding encouraged
behaviours and attitudes, guiding them towards achieving high results. Different parts of the
competency model complement each other to enable the harmonious functioning of the
processes in the organisation. Competencies will continue to receive close attention as
companies migrate to organization designs that view jobs as excessively rigid and limiting.
Competencies offer a powerful opportunity to communicate new values and directions.
Competencies can be used for translating strategy into job-related and individual skills and
behaviours that people easily can understand and therefore implement. The challenge is not
only to be able to define the organisational core competencies required for a business to
compete successfully, and then define the right mix of skills and behaviours that the
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individuals would need to possess in order to produce and support those core competencies.
With the knowledge and use of the information contained within a competency model and
awareness of their individual competency strengths and weaknesses , individuals may
manage their future job or career success, navigate their current chosen career pathway, or
apply the information to examine new career opportunities, considering the utilization of
transferable competencies.
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The competency approach to human resources management is based on identifying, defining and measuring individual differences in terms of the abilities that are critical to successful job performance. 1 The concept of competency lies at the heart of human resources management, enabling a coherent approach to the management of people by integrating key HR activities such as selection and assessment, performance management, training, development, and reward management. 2 In this article, we analyse and discuss a novel approach to competency modelling explicitly aligned with strategic business needs and oriented to long-term future success. We draw on recent experience from a longitudinal case study of one of the top five Greek banks, illustrating the step-wise development of a competency framework with the objective of supporting and communicating strategy and change. We discuss key impacts from the implementation of the competency model during a large-scale change project. THE NEED FOR A NEW PERSPECTIVE ON COMPETENCY MODELLING The need for a forward-looking and proactive approach to competency modelling is driven by the increasing pace of change in the business environment. In this context, competencies can be used for translating strategy into job-related and individual skills and behaviours that people easily can understand and therefore implement. The challenge is not only to be able to define the organisational core competencies required for a business to compete successfully, and then define the right mix of skills and behaviours that the individuals would need to possess in order to produce and support those core competencies. Still more important is to be able to use these definitions in order to communicate and implement strategy and organisational change. A central issue of concern is that the competencies defined most often end up as being backward-looking rather than future-oriented with respect to strategy and organisational change. 3 Competencies are defined according to the skills needed to continue doing what the organisation already does, instead of focusing on what is needed to perform effectively in the future. 4 As a result, the organisation rewards behaviours that already from the outset may be obsolete and constitute obstacles to strategy implementation. In this sense, competency models hardly differ from the traditional approach of selecting and retaining employees who can perform a set of well-defined tasks, usually focusing on technical knowledge and skills.
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