Competency Development and Performance Management - Competitive Advantage for the future
The current organizational landscape is changing as companies increasingly focus on human capital as a competitive advantage. To achieve business success, companies are expecting their employees to perform at higher levels, to be more customer responsive, more process oriented, more involved in shared leadership and responsible for creating the knowledge that adds value to an organization's distinguishing capabilities.
This new environment has profound and far reaching implications for human capital management. In particular, human resource professionals are now embracing the responsibility for developing and sustaining interventions centred around:
- Aligning individual and team behaviour with organizational vision and strategy
- Integrating performance development systems
- Building and retaining the intellectual assets of the organization
Visionary business leaders understand the significance of individual competencies and their impact on the organization. Volumes of research in this area of management suggest that worker knowledge enhancement can lead to productivity increases in the range of 16%. Given that the talent pool globally is shrinking, and competition for this scarce resource is increasing, sourcing, developing and retaining intellectual capital will be the key challenge for an organization that is desirous of successfully implementing it's business strategy.
Performance and Competency
Whilst most of us have a rudimentary understanding of what constitutes a competency, it is difficult to actually define exactly what a competency is. Competency Development generally includes the following components:
- Strategic Focus : The desire to improve bottom line results and increase the profitability of an organization
- Core competencies: Clarification of the technical competencies, individual to the organisation's business which differentiates it from it's competition.
- Organisational competencies : The identification of the behavioural competencies that embody the organisation's mission, values and expectations
- Technical competencies : The technical capabilities that are needed by employees of the organization to fulfill requirements of the job and meet the objectives of the organization.
- Behavioural competencies : The work habits and actions that employees need to demonstrate in their work environment in order that they are successful in their jobs.
Identifying competence that predicts exceptional performance in an organization requires examining performers in specific job roles. Performance analysis is accomplished through the following steps:
- Compare actual, quantifiable performance to expected and desired performance
- Gather, and collate data on performance
- Apply root cause analysis to determine causes of performance (deficiency or over performance)
- Include performance management in future performance related interventions
Before an analysis of performance can commence, an organization needs to determine performance standards. These are typically called many things, including performance objectives, performance criteria etc., but essentially they all define the expected, required level of performance and are then utilized in benchmarking analysed performance. Performance standards generally exist at 4 different levels:
- Organisation level
- Work Process level
- Job level
- Individual level
All 4 levels must be addressed when analyzing performance.
Comparing demonstrated performance to desired performance : Once expected performance standards are known and have been quantified, analysis follows automatically. Through this assessment it is easy to pinpoint where actual performance is deviating from desired performance and a subsequent analysis will determine remedial action for the identified gap. It is also prudent that organizations examine over achievement with respect to performance so that the same is reinforced and continues.
Gather data on performance : Data is typically collected through interviews, document reviews, observable behaviour and surveys or diagnostic instruments. Each method needs to be employed based on the specific performance problem.
Apply root cause analysis : It is imperative that an organization distinguish between root causes and symptoms of problems to be able to effectively correct the performance problem. Many organizations address only the symptoms of poor performance and are then forced to live with the problem on a continuing basis. There are several root cause analysis tools that work well for performance problems including case and effect diagrams. Irrespective of the method used, different types of causes of performance problems, including a lack of a motivational environment, insufficient resources, personal problems, disabilities and interpersonal conflicts can be identified.
Determining interventions and solutions: Once the organization has developed root causes for performance problems, the performance analysis is completed. However, the key activity of the process needs to be done which is the improving of performance. To improve performance interventions need to be developed to continuously manage performance.
Therefore, in summation, a competency can be defined as a behaviour, or set of behaviours that describe excellent performance in a particular work context (for example job, role, groups of jobs, functions or the entire organization). These characteristics are increasingly applied because they provide significant help with key problems such as:
- Clarifying workforce standards and expectations
- Aligning individuals, teams and managers with the organisation's business strategies
- Creating empowerment, accountability, and alignment of coach, team members, and employer in performance development
The linkage between Strategy and Business Results
In this integral step of competency determination, it is imperative that there is a clear understanding of the organisation's strategy. What are the top level strategic goals of the organization? What is top management's primary interest? Finally, what are the results that are required to be produced by each business unit to attain these strategic goals or objectives?
Once this has been determined, articulated and documented, each business unit would need to be examined to determine what performance would be required to meet the goals. From this analysis would flow questions concerning capabilities required to meet strategic goals. After critical capabilities have been identified, the task of linking competencies to strategy and business results becomes easier. The linkage may be determined by asking the following questions:
- What human resource competencies will we require to ensure that we have the level of strength needed in each of the critical capabilities identified?
- Which of these competencies is of the most criticality for success in each capability area?
Asking questions such as these, help identify the critical human performance competencies that will be required to ensure that the organizational capabilities needed are available.
Once this has been accomplished, it is possible to align the workforce competencies with the organisation's strategy by:
- Understanding which competencies to hire for, or otherwise acquire
- Determining the level of proficiency in each required competency area across the organization
- Identifying capability gaps
- Putting development and learning plans in place to bridge gaps in critical areas.
Competency - Its influence on performance
In any organization, top performers are able to produce high value accomplishments and results primarily because they have the required competencies and know how to complete tasks in a more productive fashion than others. Competencies are abilities and traits that predict and enable effective or exemplary performance of a job within a specific organizational context. To be recognized as competent, a performer must have requisite skills, and the appropriate body of knowledge, and traits or personal characteristics that contribute to success.
Competencies alone cannot ensure effective job performance. Organizational support can increase the likelihood of effective performance. Organizational support might include the following:
- Environment and culture - the physical environment in which work occurs, and the mindset and shared belief system of the organization
- Job Design - the way particular jobs are designed to spread responsibility and accomplishments across the workforce.
- Management practices - how management acquires, develops, reinforces and retains competencies.
Consequently, the existence of competencies alone does not ensure performance at the desired level. Not only must requisite competencies be available but also the organization must do all it can to increase the likelihood that competent performers produce the desired outcomes of value.
A competency model is a means by which an organization organizes the skills, knowledge and traits that result in effective performance.
Competency models can be useful to an organization or enterprise as it attempts to do the following:
- Link performance to business results
- Develop a mindset about what is important in a job, what will be monitored, and what should be measured.
- Develop behavioural interviewing techniques and a model against which it would be possible to assess candidates in terms of the organizational requirements with respect to competencies.
- Identify priorities for development to fill the gap between the competencies an individual has and those which are needed to perform a job at the desired level of proficiency
- Facilitate more effective performance feedback, review and appraisal
- Help in the planning of individual career development
- Provide links from a needed competency to appropriate learning resources or available interventions
A competency model is a valid observable and measurable list of the knowledge, skills and attributes demonstrated through behaviour that results in competent performance in specific job.
The competency model of a contact center Philippines establishes a standard of performance for a specific job. The standard represents the knowledge, skills and attributes that each employee must have in order to be successful in their position. The model would typically reflect the competencies that will be required for future success within the company. A model includes the competencies an individual must have in order to contribute to the company's overall strategic business goals.