1. The Competency RomanceThe reality of the competency approach Leanne MarkusPerformance Group International; Centranum Systems Frank OConnor RAP Consulting

2. OverviewUse and emphasis of competency modelsRisks: Development & validation in practicePerceived purposesAchievement of benefitsRisks and reality - common problemsThe way forward 3. Uptake of competency modelsUSA & NZ 30% of organisationsIncreasing rate 65% use or intend to use.Less popular in Asia/Europe why?Larger organisations with HR staffMore common in local/central government thanprivate sector (In NZ 85% versus 12.5%) Research from Performance Group, MetaGroup, NZ State Services Commission 4. Predominant emphasisStrategic shape behaviour to core valuesPerformance management + compensationBehavioural repertoiresidentifying the successful performerSimple, universal competencies Contextual OCBs, prosocial behaviours Management Risk 3 Conscientiousness (5F personality model) Homogeneity . 5. Prevalent Competency modelsDefinitionsRisk 3 - homogeneity 5-12 competencies, 3-6 standards Education subheadings, multiple standards, multiple levels E.g. NZQA standards 6. Risk 1 - Methodology IdealActualNeeds analysed. Relevant toShrink wrapped competenciesorganisations goalsClearly defined criteria for Highly variable quality - lack ofselection of competenciesclarity Actions and intents aligned withQuality descriptorsorganisational commitmentDocumentation of methodNo or little documentation of methodOngoing review Frequent review due to dissatisfaction 7. Risk 2 ValidityWhat are we measuring?Competency headings with no explanation -Customer ServiceCompetency headings with explanationJob qualityExcellence in workmanship, completeness of work produced,accuracy, neatness, attention to detail. Compliance withpolicies, standards, regulationsCompetencies defined by standards statementsSkilledValues time and uses it effectively, highly productive, prioritises,able to multi task. UnskilledDisorganised and unfocused, easily distracted, little planningand prioritisation, reactive not proactive 8. Mixture of behaviours, abilities,personality traits, knowledge TeamworkIdentifies when others needassistanceAbility to recognize value ofteamworkCo-operativeCreates strong morale in teamUnderstands and supportsdiversity in the team Communicationthe ability and desire to expressand convey information effectivelyto other people 9. Measurement lacks sensitivity Rating schemesMost common 4 levelsDoes not meetexpectationMeets expectationMeets or exceedsOutstandingOverlapping definitions 10. Promised benefits of competency modelsUniversal common denominator for work andperformanceCommon language for leadership and developmentProvides framework for Selection Learning and development, coaching 360 degree feedback Succession career planning Individual Performance management Organisational effectivenessFrom vendor websites 11. Assessing the benefits Common language?Lack of cohesive application across adiverse audienceLinking across internal cultures difficult attimesLiteral usage by managers abdication ofjudgement 12. Added value for Selection ?Only 25% of our NZ client sample used competenciesconsistently for recruitment and selection (Markus et al 2005)Many competencies listed in person specifications areenduring characteristics known to predict superior jobperformance ( Psychometric testing simpler, cheaper, more accurate).Surveys of top performing salespeople showSmith & Rutigliano (2003) Most rate highly on only one or two sales competencies. The highly rated competencies not the same for all successful salespeople. Some successful salespeople rated very poorly on some competencies. 13. Framework for Development ?Majority combined performance appraisal anddevelopment planning/tracking. (Markus et al 2005)Use of competencies for development is notsystematic.(State Services Commission 2002)Competencies are a standards based approachCriterion validity issues in achieving fair and consistentassessment of achievement Risk 2 14. Framework for 360 degree feedbackRisk 2 - Validity and Reliability? Assessment may be more related to relationship with subject than to competence or objective job outputs. Problems with use of untrained observers, lack of opportunity to assess a particular behaviour and interpretation of criterion statements 15. Competencies and job performanceshaping behaviour! " #$%! " 16. Effect on job performance outcomes Lack of objective (outcome based) measures of job performance, ? assumption that defined behaviours will cause effective job performance Supervisor estimates of job performance correlate with ratings of citizenship behaviour BUTLittle correlation between citizenship behaviour,(contextualperformance), and objective measures of job performance. (Hunter & Schmidt 1998) Lominger research competencies with most frequent correlation to performance are synonyms for IQ (intellectual horsepower) and conscientiousness (e.g. drive for results, perseverance) 17. Organisational effectiveness ?presumption rests more on its plausibility than direct empirical support Erroneous assumption that Individual competencies will aggregate to team or Individual performance. Almost no studies with robust scientific methodology. Those which do have small samples. Podsakoff and McKenzie (1997) studies Correlations with organisational effectiveness very small ( .15 to .29 ) Explains 2 - 8 % of variance 18. Organisational effectiveness Everything comes back to people ?Employee engagement (fromleadership competencies)Assessed against a composite ofprofitability, productivity, customersatisfaction/loyalty, employeeturnover, safety.Correlation on average .22accounts for only 5% of thevariance in business performancePeople may be more engagedbecause the company issuccessful. & 19. Watson Wyatt - Human Capital Index studiesClear Rewards andDevelopmental training forAccountability career advancementExcellence in RecruitmentHR technology for softerand Retentiongoals such as improved culture and/orA Collegial, FlexiblecommunicationWorkplace 360-degree feedbackCommunications Integrity programs andFocused HR Technologypotentially adding up to 47% potentially draining shareholderto shareholder value value up to 33.9% 20. The problemsStaff & management perspectivesOrganisational wallpaperNo common understandingNot aligned with organisational prioritiesToo prescriptiveAdministrative burden, cumbersomeDoes not address performance on the jobAppraisals not fair, consistent, constructiveInadequate basis for distinguishingtop, average and poor performers.( % )* +$% ,, 21. SummaryFailure to address key purpose of theorganisation or competitive edge Generic lists almost identical across firmsLittle validity for selection, developmentor performance management High level vague descriptors, different interpretations Multiple factors bundled together Over simplified rating scales Lack of expert observers 22. Where to from here? Focus on relevance to core competenciesImprove validity and reliability How?Outcome based measures Avoid over simplification andUse technology to provide simple intelligent interface 23. ReferencesAberdeen Group Business at Risk Is employee performance management theantidote? March 2004Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business Unit Level RelationshipBetween Employee Satisfaction, Employee Engagement, and Business Outcomes: AMeta analysis. Journal of Applied Psychology, 97(2) 268-279.Hunter, F.L. & Schmidt, J.E. (1998) The Validity and Utility of Selection Methods inPersonnel Psychology , Practical and Theoretical Implications of 85 Years ofResearch Findings. Psychological Bulletin Vol. 124, No. 2, 262-274Markus, L.H, Cooper-Thomas, H.D, & Allpress,K.N. (2005) Confounded byCompetencies? An Evaluation of the Evolution and Use of Competency Models. NZJournal Psychology,34Meta Group The state of Workforce Management Solutions 2004 A multi client studyPodsakoff, P. M., & McKenzie, S. B.(1997). Impact of Organizational CitizenshipBehaviour on Organizational Performance: A Review and Suggestions for FutureResearch. Human Performance 10(2) 133-151.Smith, B. & Rutigliano, T. (2003) Incompetencies Gallup Management JournalAugust 14 2003NZ State Services Commission (2002) Current Practices on Competencies in PublicService Departments in New Zealand; Feedback Report to Departments. http://www.ssc.govt.nz 6/6/04