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Competency-based Management That Works!

Guest post by: Suzanne Simpson

Article Overview: Competencies are enjoying a resurgence of popularity with the development of affordable enterprise-wide systems software and are identified as a wave of the future for organizations that want to gain the full value out of their human capital investments. Research shows that implementing a Competency-based system can make a considerable difference in the efficiency and profitability of the company, the productivity of the workforce and the amount of time managers and HR staff spend on HR issues.

Competency-based Management That Works!

Competencies Overview

Competency-based human resource management became popular in the 1990s principally because it offered employers a new way of defining and assessing those hard-to-measure traits, or “soft skills” that so often make the difference between superior performers and the rest of the crowd - for example, initiative, adaptability, drive for achievement, etc. Competencies also provided fundamental building blocks for ensuring that all of the “people” processes in the organization could be fully integrated. No longer would there be one set of criteria for selection, another set for performance management, and yet a third set for learning and development. “Competencies” were proclaimed as the one common set of standards to be used for all HR processes.

Competencies Today

Unfortunately, organizations often experienced difficulties implementing and reaping the full benefit of Competency-based human resource processes because they were primarily paper-based. Today, competencies are enjoying a resurgence of popularity with the development of affordable enterprise-wide systems software. These systems make it easy for managers to use competencies in planning for, acquiring, developing and promoting the talent needed to make their organizations more successful. Likewise, information on the knowledge, skills and abilities employees need to be successful in their jobs and careers, as well as on-line competency assessment and learning tools make it easier for employees to take ownership of their careers and develop themselves in ways that will advance their job skills and careers. Finally, these talent management systems make it easier for human resource professionals to move away from time-consuming transactional personnel activities, and refocus their efforts on the value-added strategic management of the human capital of the organization. In fact, research firms such as The Gartner Group, Bersin and Aberdeen have identified enterprise-wide Competency-based talent management systems as a mainstream trend and a wave of the future for organizations that want to gain the full value out of the investments they have made in their human capital.

Why Use Competencies?

Companies are using competencies for recruitment and retention, developing competency profiles for jobs and job families and using interview guides based on the desired job competencies as selection tools. Using well-defined job competency profiles along with a good selection process, including Competency-based interviewing, significantly improves a company's chance of getting the right person the first time. Selection for promotion also benefits from having well-defined competency profiles for the jobs in the company.

Performance management programs are also being refocused on establishing and measuring performance expectations not only for “what” employees must accomplish (traditional performance objectives and standards), but also on “how” (competencies) they must perform in delivering results for the organization.

Learning becomes more directed based on the organization's needs. Managers and employees can have more meaningful discussions about strengths and gaps in employee competencies, allowing the employee to take actions for improvement and managers to support employee efforts through directed learning activities and programs that are Competency-based.

Competencies for Management

Managers can also compare and rank order the employee pool available within the organization against competency requirements for specific positions – for example to support filling immediate vacancies or when planning for successors. Managers can view the whole resource pool that is available and not just those employees who are known to the manager. As a result, the organization benefits from the best employees being selected and promoted, and employees in turn are given more equitable opportunities for career development and growth within the organization.

The Competency-based Management Advantage

From a career planning perspective, Competency-based talent management systems also allow employees to compare the competencies they possess with those required in the various jobs in the organizations. Employees can then decide on career options they would like to pursue and develop plans to address gaps and progress in their careers.

Planning for longer-term strategic workforce requirements becomes a less complicated with the analysis and reporting capabilities that are built into the new talent management systems. These systems allow senior managers to easily compare the current workforce capacity and capabilities with the talent requirements to achieve the organization’s strategic goals. Based on this analysis, management can then put in place strategies and programs to address gaps and position the organization to achieve its goals.

Lessons Learned

There have been a number of lessons learned in designing and implementing Competency-based talent management systems over the past ten to fifteen years. First, the implementation of a Competency-based management system cannot be driven solely by the Human Resources Department. Senior and line management must have a compelling reason for implementing Competency-based management and see the value that it will be bring in supporting the organization's strategic goals. Further, they must be prepared to visibly support, fund and champion the initiative within the organization. The organization must commit the necessary resources to make it happen - it cannot be a secondary duty to be performed off the side of an already overworked HR professional's desk. There must be a well-articulated and staged plan for development and implementation, and employees have to be involved in the process and understand the benefits of CBM for them. This means designing and implementing a good communications plan. Finally, designing, implementing and gaining a full return on investment for Competency-based management takes time. However, quick gains can be made in many areas if managers and HR staff examine the organization's pain points and use Competency-based tools and processes to address these as quickly as possible. Having a well-designed talent management system will expedite this process.

The use of Competency-based management systems affords companies the opportunity to concentrate on their operations without sacrificing the need to have a well managed workforce. Recent research is showing that organizations can reap major financial gains through Competency-based management. Implementing a Competency-based system can make a major difference in the efficiency and profitability of the company, the productivity of the workforce and the amount of manager and HR staff time spent on HR issues, thereby providing a competitive advantage in the market place.

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Article Tags: competencies, competencybased management, human resource management



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