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Competencies & Performance

[ Copyright Steven Lesser, Posted: October 10, 2008 ]


The purpose of this article is to describe how competencies can improve human performance in the workplace. It begins with a brief overview, followed by a description of how competencies support each of the following areas:

  • Selection
  • Succession Planning
  • People/Career Development
  • Performance Management
  • Training
  • Rewards and Recognition

What are competencies

Competencies are the combination of skills, knowledge and behaviour necessary for individual and organisational success now, and in the future. The identification of the competencies important to a company's success, both at the corporate and individual level, helps a company leverage its investment in its people. In order to be effective, the competency framework should meet the following six criteria:

Criteria for Effective Competency Framework
1. Scope Provides a single vocabulary for the entire company
2. Complexity Simple enough to encourage use, yet indentifies the broad specturm of knowledge, skills and behaviours required for success
3. Precision Allows people to clearly identify specific opportunities for improvement
4. Utility Easy enough to understand and apply, so that people will use competencies whenever appropriate
5. Credibility The look and feel of the final product gives people confidence that competencies will help them be more effective
6. Validity The competencies must reflect the most important requirements of the corporation, both now and in the future.


How competencies provide leverage for Improvement

Competencies allow individuals to increase the precision of thought and communication about individual performance. They allow and encourage people to make objective, fact-based decisions about performance by focusing on specific desirable behaviours rather than general, abstract ideas about what constitutes excellent performance. The following describes how competencies can be used to improve various performance-related functions.

How do competencies provide leverage in Selection?

Competencies should provide the foundation for any selection process by identifying the criteria to be considered for selection as well as a framework with which to collect and organise information about the job and the candidate.

One important role competencies should play in selection is to assure that assessments are based on job-related behaviours, whether evidenced in previous positions or demonstrated as part of the selection process. Since competencies are defined in terms of specific, observable behaviours, they greatly enhance a user’s ability to assure behavior-specific assessments.

A second important role played by competencies is the picture of the job they provide to potential candidates. As candidates are introduced to the competencies during the selection process, they are able to obtain a much clearer picture of what the job entails. In addition, the quality of a competency-based interview is often recognised and valued by exceptional candidates because it provides them with additional proof that both they and the job are being taken seriously.

How do competencies provide leverage in Succession Planning?

Succession planning necessarily requires business judgments to be made in a context of uncertainty. Uncertainty is unavoidable because succession planning involves prediction about the future, both in terms of the future needs of the corporation and the future potential of individuals.

Competencies will enhance the quality of such business judgments by providing a concrete vocabulary and framework that can be used to focus discussions about individuals on factual observations and logical arguments rather than relying primarily on intuitions. In this way, judgments about individuals are more open to discussion and debate. Thus, competencies help decision makers clarify the nature of their judgments and the rationale for them.

How do competencies provide leverage in Career/People development?

Most people are interested in personal and professional growth. Often, they are uncertain about the steps they need to take to develop further. While individual supervisors may have a general idea about areas of inadequate performance, they often lack the ability to identify the underlying competencies that impact performance, or to discuss these competencies in specific, actionable terms.

A competency “dictionary” allows individuals and their supervisors to analyse on-the-job performance in terms of the specific behaviours associated with the various competencies. This specificity makes it possible to design focused developmental plans for individual growth.

How do competencies provide leverage in Performance Management?

Performance management involves the employee and supervisor agreeing on clearly defined business outcomes for which the employee is responsible, and assessing the degree to which the outcomes have been achieved. Achievement of these objectives should be rewarded. Objectives that are not achieved should be analysed in terms of root causes, and remedies should be developed. Although competencies are not equivalent to performance objectives, they can play a significant role in the successful accomplishment of business objectives. Performance objectives describe what needs to be accomplished; competencies describe the knowledge, skills and behaviours required to accomplish the objective.

Clearly-defined competencies enhance the power of performance management by enabling employees and their supervisors to translate on-the-job performance into specific competency-related behaviours which can be used to describe:

  • What behaviours are required to accomplish the objective
  • What behaviours need to change to achieve success
How do competencies provide leverage in Training?

Competencies play an integral role in all phases of the training and training development process, including:

  • Analysing performance gaps in terms of root causes, some of which may include a lack of specific competencies
  • Designing strategies for individuals to acquire required competencies
  • Providing guidance and support to individuals developing specific competencies
  • Providing job aids and follow-up strategies to assure transfer of learning to actual job situations
  • Assessing the achievement of competencies and their application on the job

All aspects of training should be rooted in the competencies. This allows for the development of an integrated curriculum and coordinated learning strategies so that competencies may be acquired in the most cost-effective manner. It also provides for the development of coordinated and focused strategic plans for the development of personnel.

How do competencies provide leverage in Rewards and Recognition?

Competencies and Rewards

The possession or accrual of competencies should not generally be translated directly into rewards such as salary or bonuses. Salary and bonuses should relate to on-the-job performance and the value of that performance to the corporation.
Salary is also controlled by the price required by the market to obtain people capable of performing at a certain level. This is particularly true of individuals from established professions such as accounting or law. In this sense, it can be said that the corporation links salaries to competencies, but the emphasis should still be on “pay for performance” rather than pay for “credentials”.

While the competencies possessed by an individual partially predict that person’s future performance, it should be recognised that a variety of other factors also influence performance, including personal motivation, a clear vision of the desired result, the required tools, the appropriate business environment, etc.

Competencies and Promotion

Promotion from one level to the next may require the acquisition of a specific competency not required in a current position. In most cases, however, many of the competencies required of one level of an organisation are very similar to those required by the next. In general, difference between levels are not defined primarily by which competencies are required for success, but rather by how they are applied. That is, when higher-level personnel apply the competencies, compared to lower-level personnel, they apply the competencies to problems of:

  • Broader scope- With a longer time horizon, a wider span of control, affecting a broader segment of the organisation;
  • Greater complexity- Involving more staff and customers, with a greater diversity of concerns, interacting with a larger variety of related problems, requiring more complicated solutions;
  • More uncertainty- Making decisions in a more ambiguous environment, accepting a higher degree of risk, dealing with only partial information;
  • Greater breadth of technical knowledge- Being familiar with a wider variety of technical knowledge required by the various lower level positions.

These difference in how competencies are applied from one level to another can be significant-even though the specific required competencies are often similar. Thus, it is important, whenever possible, to provide opportunities for individuals to test their abilities to apply specific competencies in more demanding situations in anticipation of higher level positions.

Practical guidelines for using competencies

In general, competencies should be used as a benchmark against which on-the-job behaviours can be compared to increase the overall objectivity of discussions about an individual’s strengths and weaknesses. The following general guidelines describe how competencies can be used to improve performance, whether in selection, succession planning, people/career development, performance management, training, or rewards and recognition:

  • Use competency detail (such as a competency “dictionary”) to describe what competencies are of concern and how each competency will be recognised.
  • Focus on the desired behaviours required by competencies, as they are described in the “dictionary”. In order to go beyond general characteristics of excellent performance, think carefully about the specific, observable behaviours that are required by the job.
  • Encourage others to use clear, explicit descriptions of specific behaviours when describing the competencies of an individual.
  • Use as many source of information as you can, including direct observation, results created on the job, and the perception of the individual, in order to understand an individual’s competencies.
  • Insist on fact-based decisions regarding an individual’s competencies. Encourage those making decisions about people to back up their judgments with factual information that reflects the actual behaviours required by the job

Copyright © Steven Lesser, InfoWorks International Pty Limited 2008.