A competency is defined as a behavior or set of behaviors that describes excellent performance in a particular work context (e.g., job, role or group of jobs, function, or whole organization). These characteristics are applied more and more by organizations because they provide significant help with key problems such as:
clarifying workforce standards and expectations
aligning individuals, teams, and managers with the organization's business strategies
creating empowerment, accountability, and alignment of coach, team member, and employer in performance development
developing equitable, focused appraisal and compensation decisions
What is a competency model?
A competency model is a set of success factors, often called competencies that include the key behaviors required for excellent performance in a particular role. Excellent performers on-the-job demonstrate these behaviors much more consistently than average or poor performers. These characteristics generally follow the 80-20 rule in that they include the key behaviors that primarily drive excellent performance.
They are generally presented with a definition and key behavioral indicators. (See example below): Competency Title: Customer Service OrientationDefinition: Responds to customer's needs in a manner that provides added value and generates significant customer satisfaction.
Demonstrates a deep understanding of internal and external customers and their needs
Mobilizes the appropriate resources to respond to customer's needs
Takes personal responsibility for customer satisfaction (e.g., focuses value-added interactions)
Builds credibility and trust with the customer through open and direct communication (e.g., uses effective listening skills, provides timely. feedback, etc.)
Ensures that customers believe their issues and concerns are given highest priority
In contrast, competencies do not include "baseline" skills and knowledge (i.e., commonly expected performance characteristics such as finishing assigned work, answering the telephone, writing follow-up letters, etc.), job tasks, or unusual or idiosyncratic behaviors that may contribute to a single individual's success.
How do competencies differ from skills and knowledge?
Competencies only include behaviors that demonstrate excellent performance. Therefore, they do not include knowledge, but do include "applied" knowledge or the behavioral application of knowledge that produces success. In addition, competencies do include skills, but only the manifestation of skills that produce success. Finally, competencies are not work motives, but do include observable behaviors related to motives. (See figure below for an illustration of these key points.)
Why is a competency model important?
The model is important because it provides a "road map" for the range of behaviors that produce excellent performance. It helps:
Companies "raise the bar" of performance expectations;
Teams and individuals align their behavior with key organizational strategies; and
Each employee understands how to achieve expected performance standards
How are competency models developed?
Competency models are developed through a process of clarifying the business strategy and determining how the models would be used (e.g., hiring and selection, assessment, performance management, training and development, and career development). Then, data is gathered in structured interviews.
Next, data is analyzed and used to develop strawman models of success criteria. Then validation surveys are administered and models refined based on feedback. Finally, models are finalized and translated into appropriate, end-user tools and applications.
What is meant by "Integrated Human Resource Practices"?
Organizations are using competencies in virtually every human resource domain. They provide criteria that can be applied to each of the human resource practices shown below:Integrated Human Resource PracticesCompetencies are used as the "key criteria" for implementing each application. In other words, competencies are framed into a specific tool and accompanied by guidelines defining how managers and employees use the tool to produce results in each of the above areas.
How can performance management work in a competency-based system?
Ideally performance management is positioned as a process comprised of steps that include planning, managing, evaluating and rewarding performance. Often, the competencies used in performance management are either a subset of the total competency model, or the definition. In addition, the performance appraisal process includes goals, expected results, and competencies. It is an ongoing process that aligns and integrates the objectives of the organization, business units, teams and individuals. Competencies specify precisely how individuals can align their activities to the key strategies of the organization.
What are the benefits of implementing a competency-based approach to developing professionals?
For The Company, competency-based practices:
Reinforce corporate strategy, culture, and vision.
Establish expectations for performance excellence, resulting in a systematic approach to professional development, improved job satisfaction, and better employee retention.
Increase the effectiveness of training and professional development programs by linking them to the success criteria (i.e., behavioral standards of excellence).
Provide data on development needs that emerge from group and/or organizational composites that are an outcome of multi-rater assessments.
Provide a common framework and language for discussing how to implement and communicate key strategies.
Provide a common understanding of the scope and requirements of a specific role
Provide common, organization-wide standards for career levels that enable employees to move across business boundaries.
For Managers, competency-based practices:
Identify performance criteria to improve the accuracy and ease of the hiring and selection process.
Provide more objective performance standards.
Clarify standards of excellence for easier communication of performance expectations to direct reports.
Provide a clear foundation for dialogue to occur between the manager and employee about performance, development, and career-related issues.
For Employees, competency-based practices:
Identify the success criteria (i.e., behavioral standards of performance excellence) required to be successful in their role.
Provide a more specific and objective assessment of their strengths and specify targeted areas for professional development.
Provide development tools and methods for enhancing their skills.
Provide the basis for a more objective dialogue with their manager or team about performance, development, and career related issues.
What is the business impact of competency-based systems?
Often leadership programs or performance development interventions are seen as important, but focused on "soft skills" that may not affect business results. One of the most important developments in human resources is the clarification of the "business value" of key programs. Some of the measurable benefits of competency-based performance development are listed below. These kinds of impacts improve talent levels, save money, and improve business performance.
Specific Improvements Related to Using Competency-Based Systems
5-10% in rate of hiring successful candidates.
15-20% in retention of desired employees.
15-25% in morale as measured in employee surveys.
20% in goal completion by individuals and teams.
How do you gain management commitment to support a competency-based system?
On-going management sponsorship is one of the most important factors predicting success in competency-based practices. Some of the most important methods for ensuring support include: early involvement in the profile-building process, maintaining focus on the business payoff (i.e., cost/rework savings, improved efficiencies, better alignment between individual and team behavior and strategies), involving managers in early pilots (e.g., 360° assessments), and enlisting managers to support the integration of competencies into development plans and performance management tools.
How can competencies be used in a coaching/self-assessment process and tool?
Competencies can be formatted into a coaching/self-assessment tool that allows employees and/or managers to rate competencies for performance level and degree of importance, and to provide evidence (e.g., noting specific accomplishments or evidence of potential performance problems) to support their ratings.
What are the advantages of using this coaching and self-assessment tool?The primary advantage of this assessment tool is that it can be used in the course of day-to-day activities.
Managers may apply it to assess overall performance (e.g., as an adjunct to an appraisal), conduct a dialogue comparing ratings with a direct report, or to focus on one or more competencies in a short coaching session. Individuals can apply it as an observation checklist to evaluate role models, as a quick method for personal assessment, or as an ad hoc multi-rater tool (by soliciting inputs from managers, colleagues, etc.).
Teams can use it as a vehicle to introduce the concept of competency standards and to determine total team strengths and vulnerabilities.
What are the benefits of the coaching and self-assessment tool?
The most important benefits of the assessment tool are that it:
Helps the manager focus coaching and development discussions, perform them faster and more objectively, and involve their direct reports in more self-directed assessment and development;
Helps individuals take realistic responsibility for their own evaluation and development; and
Helps teams maintain their focus on critical success factors, and target and confront overall team vulnerabilities.
When can and should a 360° assessment process and tool be used?
This process can be used by anyone in an organization for whom there is an appropriate competency profile. However, a 360° assessment process works best when used selectively. The tool can provide very accurate evaluation data when relatively unbiased information is collected from a range of people who observe an individual's work. This form of assessment requires data processing, incurs costs, and requires time from several people to complete ratings.
Therefore, it should be used in specific situations, such as:
A major career transition or job change;
A reorganization or major realignment of a team or organization (to target new performance criteria);
Developing objective evidence about and feedback for a problem employee;
Developing a plan for leveraging the talents of excellent employees (e.g., high potential groups); and
Developing plans for high-impact groups (e.g., managers, executives, boards of directors)
360° assessment works as well for teams as it does for individuals. Composite reports for whole teams and business units are excellent vehicles for evaluating group vulnerabilities, strengths and for developing total team competence.
What are the benefits of a 360° assessment?
The 360° assessment process provides more accurate, objective, and extensive feedback than other forms of competency evaluation. It is an excellent method for gaining relatively unbiased insights into development targets and for clarifying differences of perception between an individual and their managers, colleagues, direct reports, and customers. In addition, individuals can access development advice related to competency gaps and create development plans at their own unique homepage. Individuals can share their data, reports, and development plans online with their manager.
Who usually participates in the 360° assessment process?
The 360° assessment process is most effective when an individual receives feedback from a diverse group of individuals (6-10) who directly observe an individual's work (e.g., manager, dotted-line manager, internal and/or external customers, colleagues, and direct reports as well as themselves). While a larger and more diverse data pool provides more valid assessment, the desire for rich data needs to be balanced against the time and resources required to complete the tool.
How does an individual receive their feedback report?
Usually, individuals receive their feedback report online at their homepage and bring their report to a specific debriefing session facilitated by a person certified in the process of debriefing 360° assessment feedback. During the debriefing session, an individual evaluates the results, and creates an action plan that helps them set goals for leveraging their strengths and developing in areas where they need improvement. They can also go back to their homepage at the Voyagerä site and explore different options for development. 360° assessment feedback is most effective when it is:
Debriefed in a safe context (e.g., separate from performance appraisal);
Debriefed by trained facilitators;
Linked to an important human resource process or goal (e.g., a performance management process, leadership training, etc.);
Translated into specific development goals and actions that are tracked over time; and
Dialogued with managers and the individual's team in follow-up discussions.
What are the potential pitfalls of 360° assessments?
360° assessments are a powerful tool, but can have several unintended negative effects. For instance, sometimes individuals try to manipulate the data by selecting participants whom they think will provide them with the most positive feedback. In other instances, individuals feel betrayed if leaders try to use numerical 360° assessment data in appraisals or for de-selection decisions (Note that individual numerical data is provided only to the assessed individual). In addition, 360° assessment requires time and resources to implement and can be used to avoid rather than promote dialogue. Finally, 360° assessment reports have all the advantages and disadvantages of numerical data (i.e., they provide a relative assessment about WHAT might be vulnerable, but do not offer information about WHY there is a problem).
How balanced are 360° assessment tools as they relate to bias, gender, and nationality?
While 360° assessment feedback does not eliminate all forms of rater bias, well-constructed competency profiles focus on successful behaviors of excellent performers written in neutral language and, therefore, tends to "level the playing field" and eliminate significant bias.
How are 360° assessments related to performance management?
360° assessments are an excellent early application of competencies since it focuses on required standards of excellence and provides positive, helpful input. After performing 360° assessments, many organizations imbed competencies in the coaching and performance appraisal process as a logical next step. This sequencing of applications helps individuals become aware of and committed to the new standards prior to being evaluated against them.
How does performance management work in a competency-based system?
Ideally performance management is positioned as a process comprised of steps that include planning, managing, evaluating and rewarding performance. It is an ongoing process which aligns and integrates the objectives of the organization, business units, teams and individuals of which competencies are the engine.
Can competencies be tied to compensation (e.g., base pay or incentive pay)? Most often competencies are not tied to compensation. However, many organizations are beginning to include competencies in both the appraisal process and pay decisions. Approaches range from informal influence to specific, calculated approaches.
How does such a competency-based system influence pay?
More often than not, competencies are used with other factors to narrow the range of appropriate pay. Most companies reward both competencies and results, though the mechanisms for doing this vary from organization to organization depending on their philosophy and practices around rewards and recognition.
Do companies implement 360° performance appraisals?
Some organizations commit themselves to 360° performance appraisals. This should be done separately from the 360° assessment process. In other words, 360° assessments should not be used as part of the appraisal process. 360° appraisals are an excellent method for improving accountability and gaining better insights into strengths and vulnerabilities from the range of people who observe other's work most directly. However, these systems require levels of commitment, honesty, and effort that are often difficult to sustain over time.
What is the difference between a 360° appraisal and a 360° development plan? The 360° appraisal focuses on a multi-source data gathering process for performance evaluation. 360° assessments limit the purpose of data gathering to development and usually makes the numerical data and comments, if solicited, the property of the feedback receiver only.
What's the best method for interviewing?
The best available method for overcoming potential vulnerabilities in the interview process and for identifying specific behavioral criteria for excellence is a behaviorally-anchored evaluation. In order to perform this type of interview, a model that describes objective criteria of success for a specific job role (e.g., a success template) is used. In addition, an excellent hiring intervention should focus on:
Traits and leadership skills that are most difficult to develop on the job through training and development.
Those skills that are critical for top performance in a specific job category.
This method of hiring and selection helps interviewers perform the most significant part of the screening by using an objective scoring procedure.
What are best practices for individual development?
It is important for individuals to view their own development as a continuous improvement process. Most personal change initiatives fail because of a lack of follow through. To succeed, individuals should:
Keep focused on targeted improvement areas
Clarify what excellent performance looks like in action (e.g., discuss excellent performance with manager/coach/team members; identify models to emulate)
Arrange for frequent behavior practice
Solicit frequent feedback
Revise and update improvement strategies
Track progress by reviewing objective evidence for improvement/continuing development needs