Competencies and managerial effectiveness: Putting competencies to work

Competencies and managerial effectiveness: Putting competencies to work To be effective the development of workplace and managerial skills must reflect the current and projected needs of the organization. It is a critical responsibility of senior management to identify the core competencies of the enterprise and to ensure that the competencies required by managers, specialists and the workforce in general are adequate and appropriate. The development of an effective competencies framework and a complimentary performance management program provide an opportunity for enterprise and individual growth, and in the longer term, can also increase shareholder value. The following article illustrates how this is accomplished through training and development, a supportive and motivating culture and management competence.

The current and future success of an enterprise is a reflection of the effectiveness of the senior management team, their vision and leadership, and the combined knowledge and skills of the organization's workforce. This means that the identification of critical management and specialist competencies that will enable enterprises (and countries) to meet the demands of the future has assumed an even more important place as a key responsibility of senior business executives, human resource practitioners, educationalists, public administrators and government leaders.

A major survey of global organizations conducted by The Economist Intelligence Unit found that 61 percent of the respondents from the Asia-Pacific area indicated that there was a need to improve management competencies. They also expressed concern about the need to improve organizational structure, to better utilize corporate strategy to drive change and to strengthen the link between strategic intent and day-to-day implementation.

To be effective the development of workplace and managerial skills must reflect the current and projected needs of the organization. It is a critical responsibility of senior management to identify the core competencies of the enterprise and to ensure that the competencies required by managers, specialists and the workforce in general are adequate and appropriate. Competent people are the key to future success and offer organizations their only sustainable competitive advantage.

The development of an effective competencies framework and a complimentary performance management program provide an opportunity for enterprise and individual growth, and in the longer term, can also increase shareholder value.

High Performance Workforce

The ability to create, apply and extend knowledge in the workplace is one of the critical factors in the future success of enterprises. Around the world increasing attention is being paid by human resource practitioners to the development of a high performance workforce. This means significant change and resistance to change has been identified as one of the major causes of business failure. Unless workplace learning keeps pace with the rate of change within an enterprise, that organization is doomed. If it does not cease to exist entirely, it will be at best a mediocre performer.

Achieving a high performance workplace requires the integration of work, people, technology, and information with an enterprise's strategy and culture. This integrated approach will help focus the effective use of all available resources on the prime task of achieving organizational objectives and will have an impact on the performance of individuals, work teams and the total organization.

Training and development activities play a most significant role in achieving the objective of attaining a high performance workplace. This means that the human resource function must actively participate in the development of workplace activities that are directly in accord with the strategic direction of the enterprise.

Knowledge and Learning

While it is very clear that learning is an important business strategy, which has a significant impact on competitive advantage and can build long term shareholder value, today's performance measures do not place value of knowledge as an asset. The successful organizations of the future will have an environment and culture that actively encourages and rewards learning and the sharing of knowledge within the workplace.

To develop a successful learning organization it is necessary to have a vision for the future, which is communicated, understood, shared and supported. The organization needs to know what core competencies for success are required and those which will be needed in the future. To achieve a real competitive advantage it is necessary to know which critical competencies are applicable to the enterprise and those which apply to specific functions and individuals within the organizations.

Consistent effective and dynamic leadership must be provided, which is transparent and has a senior management team setting an example and practicing the rhetoric.

A positive, supportive, encouraging, and rewarding culture must be created, which motivates staff, facilitates the acquisition of knowledge and encourages innovation and creativity.

Organizational structures and operating processes should be developed that facilitate, rather than hinder or discourage, individual and team achievement. Cut through red tape, minimize bureaucracy and facilitate decision making as close to the action as possible.

People must also be regarded and managed as assets. This means avoiding the double standard of telling the staff that they are the enterprise's greatest asset while telling the media and investment community that people are the greatest cost (which infers the greatest liability) to the organization. While the accounting figures may show that staff-related costs do in fact represent the major item of expenditure, particularly in labor-intensive industries, the semantics and communication processes require considerable care.

Management Competence

Management competency programs are used to improve organizational results by ensuring that critical core competencies required to effectively perform a role are identified. The knowledge and skills of people must be developed and matched with their current and projected future roles in the organization.

Competency frameworks are also used to assist in the alignment of human resource activities with the needs of the organization. The most common current applications of competencies include individual and team development forming an integral part of the performance appraisal system, recruitment and promotion. Projected high growth areas include the use of competencies to bring about cultural change and to increase their application as part of the remuneration process.

The most common reported results of managerial competency programs include an improvement in staff performance and achievement, an increase in staff motivation, development of a more flexible and highly skilled workforce, higher levels of customer service and improved quality levels.

Some enterprises set out to link competencies to their business strategies. This has proved to be more complex and challenging with only around fifteen percent of the enterprises reporting satisfactory achievement at this stage. This indicator needs to be considered in the context of the long-term nature of such an initiative.

A number of organizations have achieved satisfactory progress in using their competency initiative to support their business objectives and have reported increased company growth. The support and growth is linked to effective human resource development programs and to the employees personal growth.

Success Factors

Key factors identified as contributing to the success of managerial competency projects include:

high level of management commitment and support,

considerable staff involvement and input,

commitment of adequate financial resources, and

clearly defined objectives.

Common Problems

The most common problems confronting organizations endeavoring to introduce competency programs include:

difficulty in identifying competencies,

not allowing sufficient time for the project,

resistance by staff, and

lack of time management support and commitment.

Significant factors in project failure appear to be caused by poor communication resulting in a lack of understanding, insufficient available background information, and unmet expectations.

Reasons for Introducing Competencies

The most common reasons given for introducing competencies include:

improve overall enterprise performance and increase competitiveness,

support the introduction of a cultural change program,

increase the effectiveness of training and development,

improve recruitment and selection processes and reduce employee turnover,

clarify managerial and specialist roles and increase focus on business objectives,

assist in career and succession planning,

analyze skills and identify current and projected skill deficiencies,

increase workforce flexibility,

facilitate the integration of enterprise human resource strategies, and

support remuneration and reward programs.

How Many Competencies?

There is a common tendency to produce a very comprehensive set of competency guidelines that end up gathering dust on the office shelves, or taking space in unused files stored on the company's computer system. A sample of over one hundred United Kingdom organizations employing nearly half a million people revealed that the majority of organizations elected to use ten competencies or less. Over one quarter of these enterprises chose to use between three and five competencies with a similar number using between six and nine. Considerable care must be taken when establishing a competency framework. Too many points of reference can be a very effective way of ensuring that a set of competency guidelines are not used, other than for defensive purposes!

A simple guideline in deciding how many competencies to use is to focus on the most critical areas of competence that will really have an impact on performance.

My experience has been that it is very difficult to achieve significant performance improvement in more than two or three areas at the same time. This means that the emphasis must be on the critical elements and the result should be an improvement in performance of the individual, the work unit and ultimately in the overall performance of the enterprise.

Integrating Key Competencies

A project currently being carried out by the Australian Competency Research Center is examining ways of further integrating key competencies into existing training and learning arrangements for vocational education and training. The project recognizes the need to develop flexibility and transferability of competencies as an outcome of training.The following principles were developed during the project:

Key competencies support lifelong learning

Key competencies can be learned and should be taught

Key competencies are transferable

Key competencies build on existing good practice

Key competencies must be integrated into all aspects of training

Key competencies should be assessed and reported in an integrated manner

Key competency performance is variable between contexts

While the competencies were intended specifically for application in the context of vocational education and training they also provide some helpful guidelines for people who may be called upon to lead or participate in a competency identification and development project.

The Learning OrganizationA key responsibility of senior management is to ensure that organizational learning equals or exceeds the rate of change, or that organization will die.

Major factors impacting the effectiveness of learning within an organization include:

the caliber of leadership,

organizational culture, and

enterprise structures and processes.

When discussing learning organizations and knowledge management, it is necessary to clearly understand that organizations do not learn. Organizational culture can facilitate and encourage learning, but it is people who learn.

Competencies and Performance Levels

A national standard, which recommends three performance levels for key competencies, provides a useful guide for organizations that would like to attribute some form of performance levels to the key competencies applicable to their organization. These performance levels are extracted from the Mayer Committee report on Key Competencies published in Australia by the National Training Board.

Competencies and Performance Management

Managerial competencies provide a sound basis for an effective performance management program. Using the information obtained during the review of competencies required by the job and those possessed by the person performing that job, an integrated process can be introduced linking competencies with the annual performance review program and the determination of objectives.

Determining Development Needs

One of the most effective ways to establish individual development needs is to analyze the knowledge and skill required to perform a particular job. By first determining the specific competencies required to perform the job at a fully competent level, then objectively assessing the current level of knowledge and skills possessed by the person performing that role, it is possible to establish the competency gap and develop an action program that becomes an effective individual development plan. Where appropriate this plan can be integrated into the organization's annual performance review program. A simple example of an actual competency review appears in figure 10 on the following page.

When a profile along these lines is complete, the various training and development needs can be analyzed and given a priority rating and appropriate time frame.

Where periodic application of skills and knowledge is required, such as in the preparation of an annual or half-yearly budget, the training activity should be scheduled as close to the actual application of the competencies as is practical to ensure that learning is transferred to the workplace with a minimum of distortion.

Key Features of Competencies

The National Training Board has identified six key features that need to be included in each individual competence. Each individual competence should be:

Related to Realistic Workplace Practices

Competencies should be based on recognizable work activities. They should not be based on based on training activities, tests or simulations, or on subjects or characteristics.

Expressed as an Outcome

An outcome is the result of an activity, not the method or procedure used to achieve it. Specifying procedures can hide a number of complex skills and processes.

Capable of Demonstration, Observation and Assessment

A competence is described as a tangible outcome or behavior that allows direct assessment. Words like "understand" and "appreciate" do not describe the outcome or behavior. Catch-all phrases like "follow hygiene procedures at all times" should be written to generate specific outcomes or identify behavior.

Complimentary to its Performance Criteria

A competence will be assessed against its performance criteria. The required performance is defined by these criteria so the competence itself should not contain evaluative statements.

Sensible to Trainees, Supervisors and Potential Employees

A competence must be written in language that makes sense to the people who have to use it. It should not be vague, nor subject to diverse interpretations. It should also not be simplified -- learning technical words is part of the process of becoming competent.

Concerned with the Ability to Transfer--with Personal Effectiveness as well as Specific Occupational Skills

Competencies should be general enough to describe activities that have the potential for transfer to other organizations, and where relevant, to other industries or occupations. A general rule is that a competence should group together activities that have the same criteria associated with them.

Implementing a Managerial Competency Program: An Executive Guide to Action

Project Planning: Define the objectives of the program.

Use the following list of questions to help define and focus the project. To avoid waste of resources and managerial time it is very important to clarify the various items listed below at the outset of the project to help define the nature and scope of the proposed competency initiative.

What do you want to achieve?

What levels of management do you wish to cover?

How can you link the proposed competency project to existing company programs, including the organization's strategic business plan?

Are appropriate human resource management and human resource development applications (such as an annual performance review program) already in place or do they need to be developed before you can obtain the real benefits of a managerial competency program?

What time frame do you anticipate?

When will you start and when will you complete the management competencies program?

How will you introduce the initial program?

How will you launch the outcomes of the competency study?

What internal communications processes will you use?

Who will be responsible for the oversight of the project?

Who will conduct the work required to develop the competency profile?

Do you need external assistance or can your internal staff cope without any significant disruption to their day to day activities?

What obstacles need to be addressed?

Do you intend to develop your own competency profiles or to utilize and adapt an existing framework?

Communicate the Program

Inform all potential participants of the new initiative, outline the process that will be followed, highlight the potential benefits and gain their support for the program. Stress the importance of their role and support. It is essential that this step in the process leads to a very clear understanding of the project, how it is to be conducted, who is involved and how the outcomes will be utilized. Potential benefits should be emphasized, but care should be taken to keep these in perspective. Expectancies relating to the project outcomes should be realistic and achievable.

Conduct Executive Briefing

Ensure that the organization's most senior executive group (board of directors, executive committee, management committee) are fully briefed and understand the project. Provide this group with an overview and answer their questions. Be prepared to consider modifying the project if suggestions made at this level add further value to the potential outcomes. Senior executive support is an important success factor.

Brief Operating Management Team

Provide the Operating Management Team an expanded version of the briefing given to the organization's most senior executive group. In smaller enterprises the executive briefing and operating management team briefing can be combined as the senior executives are also the operational managers of the business.

Obtain Input to Competency Outlines

Conduct small group discussions during which participating managers and specialists are invited to identify the specific knowledge and skills required to competently perform their current role. If the enterprise is undergoing organizational or operational change it can be productive to spend some time on the identification of competencies that will be required, or are expected to be required, in the future. The number of participants and composition of these groups needs to be determined.

Consolidate the Information

Develop a basic competency framework and build on this to reflect both the specific requirements and terminology of the enterprise. As a general guide competency documentation should be written and presented in the same style as existing policy and procedure manuals. Wherever possible the competency project outcomes should be integrated with existing company programs. This helps minimize the amount of paperwork required and can reduce the amount of time busy managers are required to spend to obtain potential benefits. This step in the process should reflect the objectives established when planning the project.

Applying the Competency Outlines

In most cases the most productive application of the management competency framework is in relation to the matching of the competencies relating to a particular position with those possessed by the person holding that position. This process can be incorporated into the organization's annual performance review program where one exists. In organizations which do not already have an effective performance review program in operation, the competency initiative provides an opportunity to either upgrade an existing but unsatisfactory performance review system or to introduce one where none currently exists. By combining current year unit and position based individual performance targets or objectives with the review of position based and individual competencies, the performance review can be transformed into a powerful management tool. This practical approach provides an opportunity to either introduce or enhance an integrated process by which individual performance can be formally reviewed against agreed objectives on a quarterly, half yearly or annual basis as required.

In addition to the development of key performance objectives for the coming year, a practical individual development program can be prepared for each manager.

An analysis of the individual development needs identified during the review also provides a sound work-related basis for the preparation of the company's annual training and development plan.

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By Les Pickett,