Competency Management

A Report

Submitted to

Prof. Ajay Majumdar

In partial fulfilment of the requirements of the course

PMIR

On 02/03/2009

By

Tarun Daga (B08039)

Noshin Mamsa (B08040)

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Executive Summary

Organisations have faced big changes over the past decades brought about by trends like globalisation, technological innovation, restructuring and outsourcing. As a result, compared to their counterparts a few decades ago, organisations are now flatter, more flexible, more efficient, more customer oriented, more focused on short-term performance, and more distanced from their employees, who no longer view job security and loyalty as part of the employment contract . In a continuously changing environment, organisations can no longer cope without continually developing their competencies and human resources.

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Table Of Contents

Serial Number Content Page Number

1 Competency Management 4

2 What is Competency Management

5

3 Evolution 6

4 Competencies 7

5 Rating Competencies 8

6 The Need 9

7 Benefits 10

8 Example of Competency Development Process

10

9 Key Outcomes 11

10 Evaluation of Performance & Key Tools

11

11 Best Practices 12

12 Performance & Talent Mgmt

13

13 Global Challenges 15

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Competency Management

At its most basic, competency management is a people asset audit. Anyone who embraces the principles of human capital management knows that the skills, knowledge, and experience contained within an organization constitute some of its key resources. In order to leverage them effectively, organizations need to have a comprehensive understanding of what and where they are. But competency management is more than just a human capital inventory exercise. In fact, it underpins several other human capital initiatives - like succession planning and organizational development - and at a strategic level, it gives companies the insight they need for effective workforce planning.

The Competency Framework Comprises Multiple “families “of competencies:

5U = Universal Competencies: universal competencies needed by every individual to be effective in today’s work environment. Examples may include:

Resolving Conflict Emotional Intelligence Team Skills

M = Management Competencies: business management competencies necessary to execute management (not positional) functions. Examples may include:

Managing Projects Performance Measurement Managing a Budget

L = Leadership Competencies: competencies necessary to execute leadership (not positional) functions. Examples include:

Strategic Planning Strategy to Execution Building Partnerships Change Management

MCF = Mission Critical Function (MCF) Competencies: specific technical competencies necessary to successfully execute a given Mission Critical Function (e.g., Supervision, Acquisition Management,

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What Is Competency ManagementCompetence management is the way in which organizations manage the competencies of the corporation, the groups and the individuals. It has the primary objective to define, and continuously maintain competencies, according to the objectives of the corporation. A competency is ways to put in practice some knowledge, know-how and also attitudes, inside a specific context. Competence management is becoming more and more important: competence has been well recognized as extremely important for the achievement of company goals, complimentary to, for instance, core business processes, customer relationships, and financial issues and so on.

Our current thinking is that competence management can be organized according to four kinds of process (i.e. inside each one, several processes may run):

Competence identification, i.e. when and how to identify and to define competencies required (in the present or in the future) to carry out tasks, missions, strategies; how competence is represented is included here.

Competence assessment, i.e. (i) when and how to identify and to define competence acquired by individuals and/or (ii) when and how an enterprise can decide that an employee (or an individual) has acquired specific competencies; how the relationships between individuals and required competencies are represented is included here.

Competence acquisition, i.e. how an enterprise can decide about how to acquire some competencies in a planned way and when; Competence usage, i.e. how to use the information or knowledge about the competencies produced and transformed by identification, assessment and acquisition processes; for instance, how to identify gaps between require and acquired competencies, who should attend required training, how finding key employees (i.e. holding key competencies) and so on.

Figure 1: Competence Management Process Architecture

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Evolution of Competency ManagementCompetency Management Systems (CMS) are a direct evolution of the Learning Management System (LMS). The LMS is typically a web-based tool that allows access to learning resources. Competency Management Systems tend to have a more multidimensional and comprehensive approach and include tools such as competency management, skills-gap analysis, succession planning, as well as competency analysis and profiling. The CMS tends to focus more on creating an environment of sustainable competency in addition to entering and tracking learning resources in software.

Competency Management Systems are based on the adult learning and occupational task analysis principles, such as DACUM that identify the business processes in a company and break them down into tasks. These tasks are what an individual needs to know to do their job.

An example of a competency management system is the Competency Analysis Profile (CAP). Originally developed by TTG Systems, CAP is based on over 30 years of thought leadership studies which examine how adults learn and how they translate job knowledge to perform work tasks that meet their organization’s standards.

What is the Competency Management System (CMS)? CMS is an Agency-wide application used to measure and monitor the Agency's knowledge base. CMS helps the Agency match the talents and strengths of their employees with the positions that can best utilize those skills.

CAP helps to break down jobs into their critical processes and skills, which employees must perform everyday to standard in order to ensure employee safety, regulatory compliance, and company productivity. The CAP system can be used to:

Define the success measures of a company and how they translate to key performance indicators.

Identify those processes or tasks that are critical to achieving results. Design task knowledge and supervisor observation questions that clearly reflect the

competence standards from a must-know and must-demonstrate perspective. Inventory training resources and align the right resources to the right task. Group processes into jobs and job families. Align jobs with organization units.

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What is CMS used for?

CMS is used for:

Human Capital Management CMS ensures NASA has the competencies needed to complete its mission. Integrated Business Processes CMS provides a frame of reference to map business objectives to competencies. Employee Development CMS helps define training, development and knowledge areas for employees. Expertise Locator CMS eases the search for expertise and knowledge within the Agency's Workforce. Knowledge Management CMS creates communities of practice, a valuable resource for knowledge sharing. Communication Tool CMS provides a consistent language and framework for communications.

What is CMS not used for?

CMS is not used for:

Job Selection CMS is not designed or used as an Agency employment and selection system. Pay Setting Grade and pay are determined by employees' duties and responsibilities defined through the

job analysis and classification process, not through CMS. Performance Evaluation An employee's performance evaluation is based on responsibilities and performance, not

information in CMS. Task/Work Assignments CMS provides supervisors with limited information about an employee - it does not capture

everything a supervisor would need to assign a particular task or job.

What are Competencies?

Competency: Attributes, knowledge, skills, abilities, or other characteristics that contribute to successful job performance.

Technical Competency: Specific knowledge and skills needed to be able to perform one's job effectively

Job specific and relate to success in a given job or job family e.g., knowledge of accounting principles, knowledge of human resource law and practice

Focus on the job

Behavioral Competency: Behavioral competencies describe what is required to be successful in an organization

Behaviours, knowledge, skills, abilities, and other characteristics that contribute to individual success in the organization

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Can apply to all (or most) jobs in an organization or be specific to a job family, career level or position e.g., teamwork and cooperation, communication

Focus on the person Are not part of the job description

There are two groupings of competencies in CMS: Position Competencies and Employee Portfolios. Position competencies identify competency needs of each position to meet the organization's mission, regardless of the incumbent. Employee portfolios are tied to an individual's skills, knowledge and expertise.

There are TWO groupings of competencies in CMS:

PositionCompetencies

The competency needs of each position to meet the organization’s mission, regardless of the incumbent

Assigned by supervisors and managers for the positions of their direct reports

Have a primary competency – the competency that is most often utilized for that position

Often have other required competencies

EmployeePortfolios(Your Story)

Tied to an individual’s skills, knowledge and expertise

Knowledge that one can readily apply without extensive refresher training

Can include NASA competencies, not specifically related to your current job position

Can also include skills and personal experience from previous jobs or education

Rating Competencies

Competency Management can be rated in the following three ways:

1. Use a short rating scale and optional comment for simple competency assessments: "Needs Improvement" to "Exceeds Expectations".

2. Rate detailed behavioral descriptions of the levels of competency demonstration and optional comments.

3. Use a sophisticated matrix to rate competencies using different dimensions and weights. For example, how well was the competency demonstrated, how frequently was it demonstrated, how important is it, etc.

Different types of ratings for different competencies can be used, so that one can mix and match to suit needs.

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 Ultimately, a company's core competencies help define and sustain competitive advantage. Competency Management is critical for assessing employee performance, identifying opportunities for training and development, and cultivating talent pools.

The Need For Competency Management

A competency management framework is recommended if the organisation faces the following organizational challenges or needs:

A System Focus to allow all involved in the system to cooperate with clarity and vision, a shared understanding of leadership, and a common currency of language.

Recruitment and Hiring to ensure new employees are able to present the characteristics that will foster success for your company.

Staff Deployment to assist in the matching of people with jobs. Performance Management to measure results against job expectations promotes growth,

improve performance or prepare for career moves. Succession planning to identify, prepare and select potential leaders for future roles. System-Sponsored Employee Development to develop needs assessments, provide data for

planning, and establish the resources that must be secured. Human Resources Management to provide a consistent approach and common language for

the integration of human resource management functions.

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Benefits of Competency Management

Establishes standards of performance that distinguish average from exemplary performance aligned to support the organization’s business strategies.

Provides in-depth information about current, as well as future predictors of performance on the job, which assists to increase job.

Satisfaction by providing employees with a clear vision about what the performance expectations are for them.

Creates standardized training and development programs to address skills gaps. Provides the means for employees to substantiate their qualifications for their job. Provides the means for organizations to effectively manage competency vitality at all levels

within the organization.

An example of Competency Development Process

GeoLearning’s Competency Development Process

Phase 1: Develop the Project Plan • Establish Requirements/Parameters• Identify the Key Players/Stakeholders• Assemble the Project Team• Develop the Project Work Plan• Develop the Implementation Plan

Phase 2: Analysis • Establish the Criteria (Standards of Performance)• Conduct Behavioral Event Interviews• Obtain preliminary information.• Obtain performance information.

Phase 3: Planning • Validate the Established Criteria• Validate content relative to reliability and validity with Subject Matter Experts.• Obtain performance information.

Phase 4: Development• Construct Competency Development System• Create the Competency Dictionary• Create the Competency Development System

Phase 5: Technology Integration• Integrate the competency content with competency management technology• Test the applicationPhase 6: Implement • Implement the competency management system with the organization.

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Phase 7: Evaluate• Evaluate the competency management system.

Key Outcomes Of Competency Management

• Achievement of business goals.• The organization’s employees use the competency application.• Positive results for client surveys.• Positive formative feedback from training programs

Critical Success factors• Competencies must produce outcomes that are consistent with the organization’s

business needs.• There must be a single point of contact to act as a sponsor or driver who can

leverage the project.• There is a need for end-user ownership (employees must view that this is for them

and will assist them to be successful with their on-the-job performance and enable them to substantiate their qualifications on the job).

• Must be simple so that employees can access and use easily.• Must be flexible so that it can complement existing human performance

management systems within the organization.

Evaluation Of Performance & Competency Management Tools

The comparison of the different instruments used in practice confirms the assumption that there is no instrument like the other. Even though the instruments differ in the construction and the process there are several approaches which are the same in all instruments. The performance evaluation is mostly based on a management by objectives in which the targets are set according to the SMART rule. The objectives are weighted so that the employee does know which target is of high priority. However, the achievement of the objectives is evaluated by scales which differ in each instrument. Concerning the competency evaluation the empirical analysis shows that the degree of the description of the competencies varies widely. Whereas some instruments provide an exact explanation of what to evaluate others do give occasion for own interpretation. Having a look at the linkage between the performance and the salary it appears that small and medium-sized companies do grant incentive payments according to the perception of the superior whereas the large companies do determine the incentive more on a calculative basis.

The elaborated best practice criteria showed that there are no best practice methods for all the items within an instrument but for the process. The most important thing while constructing and implementing a new instrument is the inclusion of the line management. In addition, the competencies to evaluate should always represent the company’s philosophy. Furthermore, the evaluation has to be done fair and efficient and has to be transparent.

There is no clear best practice criteria for the scale applied within the evaluations. However, a scale with a gradation of 5 seems to be most appropriate. Further, the scale should consist of letters as numbers can be considered as school grades. In addition, the evaluators have to be trained how to

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apply the instrument and should talk to each other in order to diminish gaps in the understanding of how to apply the scale. Finally, the evaluations should be conducted regularly in order to prove the development.

 

Graph:Instruments to measure performance and competency

Best Practices for Competency Management

Ensuring your staffs has the proper skills and competencies to consistently perform the tasks required of them are sometimes a daunting challenge. Managing and tracking individual skill levels in regulated environments is a continuous process. World-class organizations use competencies to articulate and leverage exceptional organizational performance. From a value-added perspective, competency-based management systems enable the realization of business strategy and provide a distinctive, enduring advantage for the organization.

1. Integrate competencies into training and development programs.

2. Assess and build team competencies.

3. Reengineer performance management processes with competencies that account for the highest performance variance.

4. Determine the return-on-investment or economic value of competency initiatives.

5. Implement competency-based organizational transformation and change strategies.

6. Assess and develop leadership competencies.

7. Recruit and select top performers.

8. Implement succession planning and executive development processes.

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9. Strengthen functional or technical competencies.

10. Link individual or team-based competencies with core competencies and strategic intent.

11. Design and implement a comprehensive competency-based system architecture and process.

Performance & Talent Management

The Executive Perspective

An organization makes a tremendous investment in its workforce. In fact, employees consume a staggering 70% of a typical company's budget. So it is of utmost importance that the business is getting the absolute most out of its substantial investment in people

To implement Competency Management the Company can:

Get everyone focused on the work that's most critical to the business. How to take a well-crafted business strategy and actually drive it to execution?

By keeping the entire company focused on the things that contribute most to the company's success.

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Improve the efficiency of operations. The average employee spends 50% their time on non-productive work? It is important that the Company plug this resource drain by making sure people are working at peak levels of efficiency and effectiveness -

Hold onto the top performers. A Company must retain its top performers by making sure they stay both engaged and happy in their work - plus appropriately rewarded for their stellar efforts.

Weed out underperformers. Employees who simply aren't up to snuff bleed precious resources from your company. Hence it’s important to identify the weakest links in the organization so that appropriate corrective actions can be taken.

The Manager’s Perspective

A manager wants to make sure that people are working on the right tasks at all times. He also needs to be able to clearly communicate the company’s goals as well as how the employees in charge can help achieve them. Not to mention making sure that the staff is happy in their jobs and feeling justly rewarded for their efforts.

To implement Competency Management the Company can:Keep everyone focused on the work that makes a real difference to the company. Most managers spend a great deal of time in one-on-one meetings with employees getting updates on work in

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progress. It is important that the Company tracks the goals of each individual employee, rolling them up into team goals, and ultimately, company goals.

Boost the day-to-day productivity of staff.

Get consistent performance from the team all year long. Why wait for company’s official once-a-year review period to begin tracking the performance of people? The organisation can collect meaningful feedback on individuals throughout the year, including 360-degree evaluations from other team members.

Reward your top employees for a job well done. At the end of the day, the staffs just want to be recognized and fairly compensated for all their hard work. Hence the organisation can create a true “pay-for-performance” environment.

The Employee’s Perspective

Interest in development of careers /goals of individuals is of prime importance and hence the organisation must ensure that workers are rewarded handsomely. The organisation can ensure the following for its employees:

Get fairly compensated for hard work. It is important to establish a true “pay for performance” culture at the company to ensure that extra efforts get noticed - and rewarded.

See career path more clearly.. The system should match your current skills with potential future roles at the company, and then provide the guidance required to get there.

Understand why work the matters. Employees feels more engaged in the job if they know how their work related to the manager's goals and those of the organization

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Global Challenges

With the global economy in flux, today’s businesses are beginning to rethink their talent development strategies—and with good reason. Workforces demographics are shifting as baby boomers retire, and the need to hire, retain, or streamline to the most highly skilled employees is more critical than ever to corporate success. Yet as companies focus more intently on delivering knowledge and services, we also face a new challenge: How do we objectively recognize the skills and competencies that make our workers desirable? Are competency models even relevant anymore?These are crucial questions to answer, primarily because your competency model guides the end-to-end management of your organization’s talent base—from performance assessments and goal achievement, to training and development, workforce planning, and recruiting. More than any other department, Human Resources (HR) has the power to leverage a well-built competency plan to generate high-impact reports and analytics. This data provides tremendous value to executives and significantly improves a company’s ability to identify needed skills and attract key employees. Not surprisingly, then, your competency model should be the cornerstone of your organization’s talent development strategy. Here we offer ten best practices that help define competencies today, craft an effective competency plan, and ultimately use that plan intelligently in conjunction with the performance management system. The result? The organisation is better equipped to engage, develop and retain the greatest assets the company has—its employees.

1. Consolidate the core.Core competencies apply to all employees and typically relate to the company's high-level values. Examples include items such as communication, integrity, and time management. Begin by taking an inventory of any existing core competencies used in your company and consolidate down to a manageable list of 10 to 15. Your final list should reflect the most high-impact competencies that tie in well to your corporate culture.

2. Specialize.With core competencies established, you can now delve into the detail of functional competencies. As their name implies, these competencies are more inclusive and apply to specific job functions. For example, functional HR competencies might include those items that represent the basic tasks within HR, such as employee relations, benefits, and compensation. Obviously, creating these lists for each job function can be a daunting task. Start small, focusing on a single department or on jobs that have the highest number of incumbents. Enlist a sponsor to assist in the project—ideally someone with specific knowledge of the department or job under discussion.

3. Develop profiles.The next step is to use the information you’ve developed to draft competency profiles. Each profile reflects a combination of the core and functional competencies specific to a department or job. For example, a simplified profile for an HR Manager II might list the following:

Communication (core) Decision-making (core) Conflict resolution (core) Employee relations (functional) Compensation (functional) Hiring (functional)

How your company’s core competencies relate to all departments or jobs is up to you. Remember, however, that limiting the overall number of competencies in a profile will make performance appraisals more manageable. For the simplest approach, start with one profile per high-level

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department. Over time, dig deeper and develop profiles for each job code. The more profiles you develop, the more efficient your performance management capabilities will become.

4. Set proficiency levels.After completing the competency profiles, you might consider adding the next level of detail: proficiency levels. For some organizations, this step is optional, but those looking to generate greater success within an overall talent development strategy should pay close attention. Why? Because proficiency levels represent your company’s expectations for mastery across all of the different competencies within a profile—and armed with this information, employees are better prepared to make progress in their careers. Proficiency levels will vary by position, and will also vary within the same position over different job levels. Although counterintuitive, some proficiency level expectations will actually decrease as the position becomes more strategic and less tactical. This is particularly true for functional competencies. A vice president within the HR department, for instance, might only require a basic skill level for compensation, as the HR staff below the executive will likely deal with compensation-related processes. Compiling these details is, no doubt, time-consuming—but ultimately, the process is worthwhile if employees use the data to develop their skills and become more valuable resources for the company

5. Don’t just assess competencies, develop employees.Remember that your greatest assets are your employees. HR should assist managers with identifying individual employee gaps and developing employees one by one. Incorporate these gaps into performance appraisal reports, and use the data to generate each employee’s personal development plan. After all, a performance appraisal is simply a measurement of what has already happened; development plans and follow-up action are the catalysts that actually improve individuals’ performance, which should in turn positively influence the organization’s overall performance.

6. Guide career development and succession plans.In addition to assisting in individual development, competency performance data can also be used to identify your high and low performers. This is where career development plans come into play. Critical for all employees, these plans have proven to further engage employees by giving them a clearer career path and a commitment to their own development. In fact, with a straightforward picture of their gaps in skills or competencies, employees can see a domino-like progression of how to fill those gaps and move forward. An HR Manager II, for example, can clearly see how further training in decision-making and compensation might prepare her for an HR Manager III position.

10. Recruit with competency in mind.While HR departments in today’s economy are certainly focused on developing and retaining existing employees, we cannot disregard recruiting by any means. All open positions should ideally use a competency profile along with the job description as a starting point for locating both internal and external candidates. When screening resumes, first look for candidates with all your key competencies—and screen out those who do not make the grade. When interviewing begins, design questions that deal with five to 10 target competencies. This type of planning helps ensure that new hires come to the table with the appropriate skill sets and proficiency levels for their jobs, making performance management much easier down the road. Clearly, competencies impact every phase in the employee lifecycle—from recruitment through career development and beyond. While the legwork in defining and establishing competency plans might be extensive, the end results hold tremendous potential in terms of ramping up employee calibre, rating and building employee skills, and identifying and bridging gaps. By combining a properly constructed competency model with a full-featured performance management system, HR departments can systematically generate, apply

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and leverage competency data across a comprehensive talent development strategy, ultimately boosting business results through a stronger, more productive workforce.

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