Applications of competency-based HRM
The Competency and Emotional Intelligence 2006/7 survey found that 95 per cent of respondents used behavioural competencies and 66 per cent used technical competencies. It was noted that because the latter deal with specific activities and tasks they inevitably result in different sets of competencies for groups of related roles, functions or activities. The three top areas where competencies were applied are:
- Recruitment and selection: 85 per cent.
- Learning and development: 82 per cent.
- Performance management: 76 per cent.
Only 30 per cent of organizations linked competencies to reward. The ways in which these competencies are used are described below.
Recruitment and selection
Competencies are used in many organizations as a basis for person specifications set out under competency headings developed through role analysis. The competencies defined for a role are used as the framework for recruitment and selection, and competency-based interviews are structured around the competencies listed in the specification.
Learning and development
Role profiles, which are either generic (covering a range of similar jobs) or individual (role-specific), can include statements of the competencies required. These are used to assess the levels of competency achieved by individuals and so identify their learning and development needs. Learning events can be based on competency analysis related to an organization’s competency framework.
Competencies are also used in development centres, which help participants build up their understanding of the competencies they require now and in the future so that they can plan their own self-directed learning programmes.
Competencies in performance management are used to ensure that performance reviews do not simply focus on outcomes but also consider the behavioural aspects of how the work is carried out that determine those outcomes. Performance reviews conducted on this basis are used to inform personal improvement and development plans and learning programmes.
Competency-related pay relates additional awards to assessments of competency but it has never become popular. However, more frequent use is made of contribution-related pay, which provides for people to be rewarded according to both the results they achieve and their level of competence.
Developing a competency framework
A competency framework should be as simple to understand and use as possible. The language should be clear and jargon-free. Without clear language and examples it can be difficult to assess the level of competency achieved. When defining competencies, especially if they are used for performance management or competency-related pay, it is essential to ensure that they can be assessed. They must not be vague or overlap with other competencies and they must specify clearly the sort of behaviour that is expected and the level of technical or functional skills (competencies) required to meet acceptable standards. It is helpful to address the user directly (‘you will…’) and to give clear and brief examples of how the competency needs to be performed.
Developing a behavioural competency framework that fits the culture and purpose of the organization and provides a sound basis for a number of key HR processes is not to be undertaken lightly. It requires a lot of hard work, much of it concerned with involving staff and communicating with them to achieve understanding and buy-in. The steps required are described below.
Step 1. Programme launch
Decide on the purpose of the framework and the HR processes for which it will be used. Make out a business case for its development, setting out the benefits to the organization in such areas as improved performance, better selection outcomes, more focused performance management, employee development and reward processes. Prepare a project plan that includes an assessment of the resources required and the costs.
Step 2. Involvement and communication
Involve line managers and employees in the design of the framework (Steps 3 and 4) by setting up a task force. Communicate the objectives of the exercise to staff.
Step 3. Framework design – competency list
First, get the task force to draw up a list of the core competencies and values of the business – what it should be good at doing and the values it believes should influence behaviour. This provides a foundation for an analysis of the competencies required by people in the organization. The aim is to identify and define the behaviours that contribute to the achievement of organizational success, and there should be a powerful link between these people competencies and the organization’s core competencies .
The list can be drawn up by brainstorming. The list should be compared with examples of other competency frameworks, to avoid replicating other lists. It is essential to produce a competency framework that fits and reflects the organization’s own culture, values, core competencies and operations, but referring to other lists will help to clarify the conclusions reached in the initial analysis and serve to check that all relevant areas of competency have been included. When identifying competencies, care must be taken to avoid bias because of sex or race.
Step 4. Framework design – definition of competencies
Care needs to be exercised to ensure that definitions are clear and unambiguous and that they will serve their intended purpose. If, for example, one of the purposes is to provide criteria for conducting performance reviews, then it is necessary to be certain that the way the competency is defined, together with supporting examples, will enable fair assessments to be made. The following four questions have been produced by Mirabile (1998) to test the extent to which a competency is valid and can be used:
- Can you describe the competency in terms that others understand and agree with?
- Can you observe it being demonstrated or failing to be demonstrated?
- Can you measure it?
- Can you influence it in some way, eg by training, coaching or some other method of development?
It is also important at this stage to ensure that definitions are not biased.
Step 5. Define uses of the competency framework
Define exactly how it is intended that the competency framework should be used, covering such applications as recruitment and selection, learning and development, performance management and reward.
Step 6. Test the framework
Test the framework by gauging the reactions of a balanced selection of line managers and other employees to ensure that they understand it and believe that it is relevant to their roles. Also pilot-test the framework in live situations for each of its proposed applications.
Step 7. Finalize the framework
Amend the framework as necessary following the tests and prepare notes for guidance on how it should be used.
Step 8. Communicate
Let everyone know the outcome of the project – what the framework is, how it will be used and how people will benefit. Group briefings and any other suitable means should be used.
Step 9. Train
Give line managers and HR staff training in how to use the framework.
Step 10. Monitor and evaluate
Monitor and evaluate the use of the framework and amend it as required.