Making Sense of Competencies

No matter what country, sector or industry your business is operating in; the main goal of any business is to grow sustainably. There are many theories and techniques claiming to be the answer to long term sustainability, all of which have a common golden thread running through. This golden thread lies in recognising the significance of your company’s human resources. People are the most important component in any business strategy. Without competent people implementing your strategies and plans, you will always fall short on sustainable growth. There have been a lot of development in the Human Resource Management (HRM) domain and most businesses have realised the important role this division plays. An effective HR strategy gives direction to so many intertwined necessities in business, including its ability to adapt to change and be resilient. Building these HR strategies on a competency model is also popular.

This article will try to answer the following questions:

• Is competencies new?

• What exactly are competencies?

• Why is it so popular in HR practices?

The concept of competencies can be traced back many centuries; it is not a new world concept. There is evidence that Roman soldiers were selected based on certain competencies identified in their most successful militaries. Even though competency profiling can be dated back it really only hit a nerve in the human sciences quite recently with David McClelland’s work in the late 1960’s. He is seen as the pioneer in competency-based methodology (Kierstead, 1998). McClelland’s aim was to identify variables which will predict job performance without being biased. He found job-related performance aspects above and beyond the individual’s intelligence, knowledge and skills. Thereafter two famous publications brought competencies to the world of work namely, The Competent Manager: A Model for Effective Performance, by Boyatzis in 1982 and Competence in Modern Society, by Raven in 1984. During the 1990’s competencies became even more popular and are seen as the glue that keeps many human resources methodologies together today.

What are competencies?

“A competency is an underlying characteristic of an individual that is causally related to criterion-referenced effective and/or superior performance in a job or situation” as defined by Spencer and Spencer (1993).

Looking at the above definition, competencies indicate ways of behaving across situations and are enduring for a reasonably long period of time. JvR defines competencies as: “the underlying traits, attributes and characteristics of a person that form the foundation for his/her occupational success” (CAS manual, 2010) There are various definitions of competencies, although the idea that certain competencies are critical for successful job performance is a central concept.

Another way of looking at competencies are known as KSAO’s (Knowledge, Skills, Abilities & Other characteristics’), with behaviours used to describe or illustrate the observable actions on the job as a result of the competencies. According to Spencer and Spencer’s research (1993) there are 5 types of competencies. These competencies can be depicted in the layers of an iceberg:

• Starting at the bottom of the iceberg, least visible, with Motives which involves things people consistently think about or want, that cause behaviour.

• The second layer would be Traits which are physical characteristics (reaction time, or eye sight) as well as behaviour which are consistent and stable such as an individual’s emotional self-control. One would categorise personality traits into this category as well.

• The third layer, coming closer to the surface (more visible behaviours for others) is Self-concept which is a person’s attitudes, values or self-image (a person’s values are respondent or reactive motives that predict what he/she will do in the short term or where others are in charge-leadership).

• Above the surface one can see the second last layer which is known as Knowledge explained as the information a person has in specific content area. Knowledge is found to be rather complex to measure and many say that it often does not predict job performance.

• Last but not least is Skill which is the ability to perform a certain physical or mental task (include analytical and conceptual thinking). Skills and Knowledge are the easiest to train, whereas the bottom three layers of the iceberg is the most difficult to change or train.

To further understand competencies, one can identify strategic competencies, otherwise known as organisational core competencies which are "those few internal competencies at which you (organisation) are very, very good, better than your competition, and that you will build on and use to beat the competition and to achieve your strategic objectives" (Fogg, 1994). One would identify the organisation’s strategic competencies and build the rest of the competency model right down to the individual level. Furthermore it is important to know that when selecting certain competencies you may want to consider both threshold competencies (essential characteristics that everybody in a job needs to be minimally effective) as well as differentiating competencies (factors distinguishing superior from average performers) in order to make sure that job performance will be the end result (Spencer & Spencer, 1993)

An organisation’s competency model should be:

• Manageable: Too many competencies will become confusing and inefficient, clouding rather than clarifying an organization's priorities.

• Defined Behaviourally: Competencies should be described in terms of specific, observable behaviours

• Independent: Important behaviours should be included in just one, not multiple, competencies.

• Comprehensive: No important behaviours should be excluded

• Accessible: Competencies should be written and communicated in a way that is clear, understandable and useful to those outside of the HR world

• Current: Competencies should be up-to-date, and reviewed regularly to keep pace with industry and company changes.

• Compatible: Competencies should "fit in" with a company's vision, values and culture.

(Michael A. Campion, Alexis A. Fink, Brian J. Ruggeberg, Linda Carr, Geneva M. Phillips, Ronald B. Odman, 2011)

Why are competencies so popular?

1. We can use competency modelling to simplify the hiring of new employees by using assessments and other selection procedures that measure the competencies.

2. We can streamline the training of employees by creating courses aimed at the development of certain competencies.

3. We simplify the evaluation of employees’ performance by structuring the appraisal instrument around competencies;

4. furthermore we can promote employees by using the competencies to establish promotion criteria.

5. Developing employee careers by using the competency models as well as managing employee information becomes easier.

6. We can compensate employees by using the competency model to structure pay differences and manage retention of critical skills through the identification and measurement of competencies tied to current and future organisational objectives.

7. Lastly competency models can support organizational change efforts by developing broad systematic support of future-oriented competencies

(Michael A. Campion, Alexis A. Fink, Brian J. Ruggeberg, Linda Carr, Geneva M. Phillips, Ronald B. Odman, 2011). Competency models often attempt to distinguish top performers from average performers and provides descriptions of how the competencies change or progress with employee level. Furthermore, competency models are usually directly linked to business objectives and strategies and are typically developed from top down (start with executives) rather than bottom up (start with line employees).

Competency models are likely to consider future job requirements being presented in a manner that facilitates ease of use (e.g., organisation-specific language). Usually, a limited number of competencies are identified and applied across multiple functions and are aligned to the rest of the HR systems. The effectiveness of the competency methodology depends on the quality of the design and implementation of this approach. Competencies should not only be written-up in policies and documents but should be alive in an organisation. It should be the language and culture of the organisation, and only then one is likely to pick the fruit of the competency methodology.