Competency-based Performance Assessment

Organizational business practices are not getting distorted only for business discontinuities like deregulation, globalization, technological convergence, the internet, etc. In a globally competitive market landscape, today customers compete for value for their money.

For organizations, therefore, ‘customers’ are the ultimate source of competence. It is the customers who dictate their terms, and organizations need to respond to such needs of the customers leveraging their core competencies. Organizational core competencies translate into core products and services, which create a niche in competition.

Concept of Competency

The concept of competency was pioneered by McClelland (1973). McClelland established various competency variables, which can support in predicting the job performance. Competencies in addition to the knowledge, skill and abilities (KSA), also recognise the behavioral aspects. Job performance becomes more effective when employees perform the job with updated competencies. Thus, McClelland’s competency concept states both the KSA and the behavioral inputs for successful performance.

Competencies could be considered to be the right combination of knowledge, skills and behavior that enables the employee, the group or organization to solve task properly. In simple term, competencies can be defined as the blend of abilities, skills and knowledge needed to perform a specific task (Foss et al., 2004). The competencies seem especially important for knowledge-intensive service firms because the use of their service depends mainly on the human talent, knowledge and expertise of organizational members.

More than 80% of Fortune 500 companies with a $1billion training budget, used competency-based processes, and thus reduced their training costs by 50%. It can be used to help to identify optimal candidates in staffing processes; link development and training to sustained high performance and provide valid foundation for recruitment, selection and training (Barker 2001).

Competency mapping are the foundation for important human resource functions—e.g., recruitment and hiring, training and development, and performance management, because they specify what is essential to select for or to train and develop is the process of identification of competencies that contribute to successful job performance.

Organizations do competency mapping following the work breakdown structure (WBS) concept, which breaks the job into other elements and then relate such job elements into the requisite nature of activities along with the requirement of competencies.

---

What is Competency?

Competencies are those behaviours that excellent performer’s exhibit much more consistently than average performers. These are the ability of an individual to do a job properly. Competencies are defined as:

“A measurable pattern of knowledge, skills, abilities, behaviors, and other characteristics that an individual needs to perform work roles or occupational functions successfully.”

“how” we performing job tasks, or what the person needs to do the job successfully (Shippmann et al., 2000).

Competencies can be objectively measured, enhanced, and improved through coaching and learning opportunities. Competencies represent a whole-person approach to assessing individuals and identified behaviors, knowledge, skills, and abilities that directly and positively impact the success of employees and organizations.

Competencies tend to be either general or technical. General competencies reflect the cognitive and social capabilities required for job performance while, technical competencies are more specific as they are tailored to the particular knowledge and skill requirements necessary for a specific job.

Competencies are also defined as the measurable or observable knowledge, skills, abilities, and behaviors (KSABs) critical to successful job performance. These are grouping of behaviours that taken together better describe and communicate performance expectations.

Choosing the right competencies allows employers to:

• Evaluate how they will organize and promote their workforce.
• Examine which job classes best fit their business needs.
• Making recruitment and selection plan for retaining the best employees.
• Provide training and development programmes to employees effectively.
• Assess staff to fill future vacancies. ‰

Core competencies are the collective learning in the organization, especially the capacity to coordinate diverse production skills and integrate streams of technologies.

---

Characteristics of Competencies

Competencies can help fix your attention on key business goals and values, such as improved customer service. It can help you be more flexible in meeting various work requirements.

Based on the organizational experiences, we can identify the following characteristics of competencies:

• A set of unifying principles for the organization and they are pervasive in all strategies. ‰ Strategic thinking and critical/analytical thinking
• Results orientation and drive for performance
• Access to a variety of markets
• Persuasiveness and the ability to influence others
• Critical in producing end products.
• Rare or difficult to imitate. ‰

It is to be understand that, Knowledge and skill competencies tend to be visible and relatively ‘on the surface’ characteristics of people. Self-concept, trait, and motive competencies are more hidden, ‘deeper’ and central to personality. These can be divided into two broader sense, the first one is general competencies and second one is specific competencies.

Generally, competencies are measures of how well you do certain things, taking into consideration your knowledge, skills and attributes. Competencies are generally behaviors that are easily identified and measured. Applying the competencies at work will help you to become more creative in meeting job demands and allow you to quickly adapt to changes at work. Finally, competencies encourage teamwork by promoting cooperation and sharing.

---

Types of Competencies

Daniel Katz (1955) has classified competencies into the following areas:

• Technical or Functional Competencies: These are the knowledge, attitude, and skills related to technical or functional expertise required to perform a role.
  
  
• Managerial Competencies: These are the knowledge, attitude, and skills required to plan, organize, mobilize, and utilize resources.
  
• Human Competencies: These are the knowledge, attitude, and skills required to motivate, utilize, and develop human resources.
  
  
• Conceptual Competencies: These are the knowledge, attitude, and skills to visualize the invisible, i.e., the thinking at abstract levels and use of the thinking to plan future business.

But competencies are not only blend of KSAs activities but also involves values, motives and traits, and self-concept. Traits are ingrained behaviors that are mostly permanent and difficult to change while attributes can be learned through external experiences. Competencies are simply integration of skills and behaviors and are easily identified and measured.

---

Managerial Skill and Competencies

Skills of the managers have now become important factors to address the global competitiveness at organizational and also at the national level. Obviously, imparting skills through training and development is yet not recognized as an important initiative at organizational level both for the problem of quantification of benefits, and in organizational beliefs that training can hardly help people to develop their skill.

Skill is defined as a coordinated series of actions that serve to attain some goal or accomplish a particular task. Operationally, skills are defined widely as overt responses and controlled stimulation. Overt responses may be verbal, motor, or perceptual. Verbal response typically stresses on speaking (which requires memorization of words); motor responses stress on movements of limbs and body; and perceptual responses stress on understanding of sensory response.

Controlled simulation, on the other hand, are energy inputs to the workers, which we express in units of frequency, length, time and weight.

Technological change and skill requirements have been made a subject of investigation in enormous studies across the world. There is a general consensus that technological change alters the job but the observations differ in its nature and form. Technological changes, per se, require broader variety of skills and higher average skills from the workers.

Thus, the careers of the future will require greater education at the job entry level and will also demand for continuing education to keep pace with technological dynamism. Greater level of technological literary, even for lower skill and low pay-organizations can also achieve effectiveness and excellence.

From this perspective, skill can be categorized either as generic or technical, entry level or advanced. Conventionally, skill can be defined as – that knowledge or those attributes which are deemed vital to organizational success.

There are four general types of skills as follows: ‰

• Technical: This relates to specific concepts, methods, and tools specific to an organization. ‰ Supervisory: This enables one to effectively supervise others.
• Interpersonal: This enables people to communicate and interact
• General business: These lines of business and support effectively. infrastructure.

Technical skills are observable, demonstrable, and testable. The other skill types are softer, more subjective, and difficult to quantify.

---

Performance Management and Competencies

Supervisors must manage employee performance well in order for agencies to accomplish their missions and achieve their goals. Consequently, performance management is one the most important parts of a supervisor’s or team leader’s job.

Performance Management Processes and Related Competencies.

Managing employee performance includes:

• planning work and setting expectations
• monitoring and measuring performance
• developing the capacity to perform
• periodically rating performance in a summary fashion, and recognizing and rewarding good performance ‰

Practicing good performance management requires proficiency in certain competencies. Competencies are observable, measurable patterns of skills, knowledge, abilities, behaviors, and other characteristics that an individual needs to perform work roles or occupational functions successfully.

Performance management competencies that all supervisors (and team leaders) should develop and demonstrate include:

• Communicating: Establishing and maintaining effective communications with each employee not only requires good oral and written communication skills, but it also includes the ability to establish good working relationships. To communicate effectively with employees, supervisors must establish an environment that promotes an open door atmosphere, the sharing of ideas, and employee involvement in decision making processes.
  
  
• Setting Goals: Setting long and short-term goals with employees gives focus to employee efforts. When goal setting is done correctly, employees strive to accomplish those goals and feel confident in achieving them. When goal setting is done poorly, work does not progress as desired. Knowing how to set goals effectively is an important part of performance management. To do this well, supervisors need to be able to clarify expectations and to set realistic standards and targets.
  
  
• Measuring Employee Performance: Credible measures of performance that employees understand and accept are critical for achieving high level performance. Measuring employee accomplishments, using both qualitative and quantitative measures, provides the information that supervisors and employees need in order to monitor performance.
  
  
• Giving Feedback: Feedback should inform, enlighten, and ‰ suggest improvements to employees regarding their performance. Supervisors should describe specific work related behavior or results they have observed as close to the event as possible.
  
  
• Coaching and Developing: Using their coaching skills, supervisors evaluate and address the developmental needs of their employees and help them select diverse experiences to gain necessary skills. Supervisors and employees create development plans that might include training, new assignments, job enrichment, self-study, or work details.
  
  
• Recognizing: Effectively recognizing employees is another performance management competency. Being able to genuinely acknowledge a job well done is critical for strengthening employees’ commitment to do their best. Supervisors should be skilled at using formal awards programs as well as using informal recognition techniques, including personal thank you and voicing verbal appreciation in staff meetings.

---

Competency Identification and Assessment Process

To diagnose competencies, organizations adopt several approaches. It starts out on the organizational level where core competencies of an organizational unit are distinguished from competencies of individual employees.

At this stage the required competencies are identified and defined both for the individual job and for the job family. The competency requirements are identified in terms of required technical skills and knowledge, management skills, and social and personal skills. All these are understood from the critical success factors (CSF) of job requirements and, accordingly, competency models developed. After the process of identification and the definition of competencies, assessment of existing competencies is made for individual employees.

Identifying and assessing the level of improvement of an executive’s during a performance year, or quarter is becoming increasingly important for business organizations. So, competency identification or assessment is a continuous process of persistently building knowledge, skills, etc. As sustainability of an organization in a given business has become at stake, for the purpose of dynamism, they are focusing more and more on assessing competencies of their employees.

Competency assessment process is so designed that it gets integrated with the performance evaluation process, and also facilitates self-assessment by the employees themselves. Assessing competency is a form of assessment that is driven from a specific set of outcomes – general and specific, which is helping employers, employees and stakeholders to make reasonable judgments with respects to employees’ achievements and non-achievements of these outcomes; and certifies or evaluates on the basis of demonstrated achievements of the outcomes.

The idea behind is to make the employees aware where they stand vis-à-vis their competency requirements. The competency integrated performance appraisal process also helps in strategic decision- making of the organizations, as organizations can make future plans and programmes leveraging their employees’ capabilities

The focus of identifying and assessing competency is based on actual skills and knowledge that an employee demonstrates at workplace. The purpose is to verify that an employee possess the competency, though doesn’t necessarily means that the competency of that employee is applicable to the specific task.

Steps of a Competency Identification Process

A typical process of identifying and assessing competency can be as followed:

• Examining the purpose and setting of competency modeling.
• Selecting a position and a group of employees.
• Selecting the set of performance outcomes.
• Performing competency elicitations.
• Obtaining individual competence-performance structures.
• Obtaining organizational competence-performance structures.
• Validating the results. ‰

Advantages of a Competency-based Approach

Following are the advantages of a competency based approach:

• Recruitment and Selection: Knowing the requisite competencies for a particular role helps the interviewers in assessing the candidates better and maintains consistency in case of multiple interviews.
  
  
• Performance/Potential Assessment: This would help map the current set of competencies of an individual with the expected set of competencies required for him to perform his next role in a new position or in a higher rank.
  
  
  
• Compensation Management: Competencies can help in developing job families and linking it to job worth can allow better compensation management.
  
  
• Training: This can help in identifying the training needs of an individual/role and help design and evaluate it better.

---

Competency Mapping and Performance Management

Competency mapping is a process of identification of the competencies required to perform successfully a given job or role or a set of tasks at a given point of time. It consists of breaking a given role or job into its constituent tasks or activities and identifying the competencies (technical, managerial, behavioral, conceptual knowledge and attitude and skills, etc.) needed to perform the same successfully.

A competency map is a list of an individual’s competencies that represent the factors most critical to success in given jobs, departments, organizations, or industries that are part of the individual’s current career plan.

Objectives of Competency Mapping

Competency mapping serves a number of purposes. It is done for the following functions:

• Gap Analysis
• Role Clarity
• Succession Planning
• Growth Plans
• Restructuring
• Inventory of Competencies for Future Planning ‰

Steps in Competency Mapping

The following steps may be followed in competency Mapping:

• Role Competencies: To start at the basic level we need to understand and define role and role competencies mean a set of competencies required to perform a given role, each competency further has a skill set.
  • Identification of Role Competencies
  • Structure and List Roles
  • Definition of Roles
  • Job Description
  • Competency Identification
    
    
• Competency Assessment: Once role competencies are studies we come to this next step of competency assessment.
  
  Following methods are used for this.
  • Assessment/Development Centre
  • 360 Degree feedback
  • Role plays
  • Case study
  • Structured Experiences
  • Simulations
  • Business Games
    
    
    Using the above mentioned methods like for e.g. 360 degree approach would involve assessment by self and others. Others may include internal and external customers, boss, and peers, subordinate.
    
    ‰
• Competency Development: After understanding the role and identification of the competencies and further assessing the competencies for their viability, feasibility and requirements. We need to identify the existing competencies and develop the newfound ones.
  
  
• Competency Mapping: The competency mapping now will involve strategic structuring of the organization. Here the human resource department has to ensure competencies in each role. The steps are as follows.
  
  Structure Role congruence:
  • Vertical and horizontal role congruence Ensure core competencies for each task Link all the above and position to bring in competitive advantage

Effects of Competency mapping on other HRD Systems

Competency mapping has considerable effect on the following HRD systems:

• Recruitment & Selection: Competency-based recruitment is a process of recruitment based on the ability of candidates to produce anecdotes about their professional experience which can be used as evidence that the candidate has a given competency.
  
  
  A competency based approach to recruitment and selection of staff can help an organization, to make it an effective and successful investment of time, money and expertise.
  
  
• Performance Management System: Integrating competencies within the performance management process supports the provision of feedback to employees not only on “what” they have accomplished (i.e., performance goals), but also “how” the work was performed, using competencies for providing feedback.
  
  
  Integrating competency with PMS helps:
  • Employees in understanding performance expectations and enhancing competencies.
  • To provide a mechanism for providing positive feedback about an employee’s training achievements and on-the-job performance
  • To provide job standards for performance appraisal
  • To provide clear direction for learning new job skills
    
    
• Training: Competency Based Training focuses on what the participant is expected to be able to do in the workplace as opposed to just having theoretical knowledge. An important characteristic of Competency Based Training is that it is focused not only on the actual jobs that are required in the workplace, but also the ability to transfer and apply skills, knowledge and attitudes to new Situations and environments.
  
  
• Development: All businesses are based on some key competencies. The main reason for an organization to create a competency-based development system that focuses on having the right people with right skills at the right time is that it helps in accomplishing business targets. Competencies are the need of the hour and designing appropriate competency development models is a necessity.
  
  
• Compensation Management: Competency-based pay fits this new environment. It provides an ongoing incentive to employees to enhance their ability to perform their jobs. Employees are rewarded with salary increases when they add new knowledge or skills or when they demonstrate higher level competence on existing capabilities.

---

Competency-based Performance Management

David Martone (2003) defined a competency-based performance- management system as a documented and well-structured model that considers the skills and behaviours for successful performance in the present and so also the future job roles. By making it transparent, it helps employees to understand the job expectations from their organizations. Also it becomes the competency-based performance- management system and becomes the framework to align employees’ job performance with the organizational goals.

Competency-based performance management approach also helps the organization to develop the performance criteria for all the cross- section of employees. This process then becomes the basis for the employees to understand what competencies need to be mastered for their self-learning and career advancement.

With a competency-based performance-management system in place, organizations can successfully manage the talent pool, do succession planning, and develop the bench strength for the future. Additionally, it will create a basis for recognition and reward, merit increases, and promotions.

Essential Elements of Performance Based Competency

Following are the key elements that should be considered in designing and implementing a competency-based performance management system. ‰

• Establish Competencies: Employers need to specify the set of competencies that they expect their employees to possess. It is pertinent to mention that for the same job profile, competency requirements may vary. However, there may be some commonality also. From organizational perspectives, we can broadly classify competencies into two types—cultural and organizational.
  
  
• Set Goals and Performance Expectations: After establishing the competencies and meeting the competency gap, if any, of employees, organizations select goals not exceeding five for the employees, keeping pace with the nature of work they need to perform and that helps organizations to achieve the results.

---

Key Terms

• Performance: It is behavior and should be distinguished from the outcomes because they can be contaminated by systems factors.
  
  
• Competency: Skills and abilities, described in behavioral terms that are coach able, observable, measurable and critical to successful individual or organization’s performance.
  
  
• Competency Mapping: Competency mapping is the process of identification of competencies that contribute to successful job performance.
  
  
• Competencies: Competencies are those behaviours that excellent performers exhibit much more consistently than average performers.
  
  
• General Competencies: They reflect the cognitive and social capabilities (e.g., problem-solving, interpersonal skills) required for job performance in a variety of occupations.
  
  
• Technical Competencies: They are more specific as they are tailored to the particular knowledge and skill requirements necessary for a specific job.
  
  
• Core Competencies: They are the collective learning in the organization, especially the capacity to coordinate diverse production skills and integrate streams of technologies.
  
  
• Self-concept: A person’s attitudes, values, or self-image.
  
  
• Knowledge: Information a person has in specific content areas.
  
  
• Skill: The ability to perform a certain physical or mental task.
  
  
• Competency Assessment Process: Competency assessment process is so designed that it gets integrated with the performance evaluation process, and also facilitates self-assessment by the employees themselves.
  
  
• Competency-based Performance Management: It is an approach also helps the organization to develop the performance criteria for all the cross-section of employees.