Why Competency-based
Talent Management?
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White Paper written by Andy Andrews from Lexonis Limited.
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Executive Summary
Although competencies are not a new concept, it is only relatively recently that they have been
recognized as the foundation to successful Talent Management. This paper considers what is meant by the term “competency-based” Talent Management and why competency management should be the hub for integrated Talent Management solutions.
Introduction
Many have tried to define what competencies are and hence there are many variations on the theme, but it is generally agreed that competencies are a combination of skills, knowledge, attributes and motives that define excellent performance.
In an increasingly competitive business landscape, excellent performers – “the talent” - are one of the key factors that will differentiate successful organizations. Clearly, organizations are extremely interested in excellent performance and hence the competencies that contribute to such performance.
What is Competency Management?
Competency management is about helping organizations to understand the competency profile of each employee, each team and the organization as a whole. It begins with defining employees’ competencies and roles, capturing their assessment and analyzing the results. The results are then used to develop and deploy people based on their competencies.
Typically, competencies are incorporated within a competency dictionary or framework. The competencies are listed by name and in some instances, if there are many competencies, they may be categorized and sub-categorized for ease of use.
A well-structured dictionary includes a short, precise name for each competency and a 2 or 3 sentence description combined with a numerical proficiency level scale.
Figure 1 provides an example of a competency that incorporates a 4 level scale. Each level will incorporate a detailed description of the behavioral indicators required of someone performing at that level.
Figure 1
Job-competency profiles, sometimes referred to as job-competency models, are created by identifying the competencies required for someone to be successful in a role and specifying the degree of proficiency required for each one. The competencies chosen will depend on a number of factors, but will very often be based on the competencies that an excellent performer is already demonstrating in the role. Figure 2 illustrates the competencies and proficiency levels required of someone in a Team Manager role.
To capture the competencies that an individual possesses, and to which level, competency management systems will provide a combination of assessment methods: self, manager, peer and subordinate
assessment.
The Competency-based Approach
Competency management places competencies at the heart of Talent Management. Defining competencies in a consistent manner helps to bind and integrate the organization’s Talent Management processes,
because the competencies act as a common denominator.
Using the same definition to describe a competency means that people are speaking the same language. For example, a competency such as ‘Account Management’ will mean the same for someone working on Recruitment as it will for someone working in Learning and Development.
Figure 3
Using the same language to describe competencies provides an opportunity to share and leverage crucial competency information across the organization. For example, the recruitment, and the learning and development functions are more readily able to compare the cost of developing a current employee against the cost of hiring someone who already has the required competencies.
This centralized approach to competency management also allows organizations to: Improve recruitment by:
Providing a consistent competency-based specification for each job; Facilitating competency-based interviews.
Consistently manage employee performance by:
Comparing people against known competencies for each role; Providing a common language for assessment.
Support career planning by:
Facilitating assessment for future roles;
Identifying competency gaps and hence learning requirements for future roles; Using competency-based profiles to identify future roles for each employee. Enhance the value of the Learning and Development function by:
Ensuring that L & D programs are aligned to business requirements; Increasing the effectiveness of learning management systems. Improve leadership development by:
Defining competencies that are aligned with business strategy. Manage compensation by:
Associating merit increases with improved competency-based performance ratings.
Competency Management Methodology
Figure 4 illustrates a typical competency management methodology, from defining job profiles through to identifying learning requirements and determining organizational capability. The assessment itself will very often include self, manager and peer assessment. Using a competency-based approach provides an
additional benefit in promoting employee-manager discussion on the individual’s capabilities, competency gaps and further development. Furthermore, if the job profiles have been properly defined in accord with business requirements, any learning and development needs identified will be fully aligned with the organization’s business strategy.
Figure 4
Competency Management Benefits
Effective competency management requires the involvement of employees, operational managers, the executive team and HR, and therefore all parties need to benefit from utilization of a competency management approach:
Personal Benefits
For employees, the key benefits of using a competency-based approach are that they are provided with: An understanding of which competencies they require to succeed in their job;
A clear view of what competency and competency gaps they currently have;
A learning and development plan that takes into account competencies for their role; A record of their learning and development achievements;
Recognition of their competencies and opportunities to utilize them on other assignments. Tactical Benefits
Through competency-based Talent Management, managers have access to: A clear picture of the competency requirements of their direct reports; An understanding of the strengths and weaknesses of their direct reports;
An informed basis for career development planning discussions with their direct reports; The ability to develop prescriptive learning and development plans for their direct reports; A facility to identify subject matter experts for assignment-based work.
The HR function benefits through:
Standardized skill-based job profiles; Effective staff deployment;
Succession planning;
Identification of ‘real’ learning requirements;
Effective use of learning and development solutions. Strategic Benefits
Executives need to know that their organization has the competencies to fulfill business strategy. A well-implemented competency-based Talent Management approach provides:
A view of the capability of the organization;
Proof that the organization is meeting regulatory requirements; Learning and development plans aligned with business strategy.
Summary
Talent is an asset that must be managed effectively if a business is to grow and remain competitive. Managing talent can only be undertaken effectively by clearly understanding the competencies of the people who make up the organization’s talent pool. Hence competency –based Talent Management solutions have a critical part to play in helping organizations to understand their people, deploy them effectively and demonstrate the adaptability and agility to be successful in the modern economy.
Competency Management Benefits Summary
Successful implementation of a competency management system helps organizations to:
Execute business strategy by developing competencies that support business objectives Stay competitive by developing and retaining a well skilled workforce
Reduce costs by identifying real training needs
Reduce unnecessary contractor costs by identifying existing internal competencies Maximize workforce ROI by developing and utilizing employee competencies effectively Improve recruitment processes by providing clear role requirements
Mitigate operational risks by identifying competency gaps
Author Biography
Andy Andrews has worked in competency and learning management for most of his career.
Andy was one of the co-founders of British software start-up InfoBasis, a provider of competency management technology and the first licensed SFIA-compliant software provider.
During his time with InfoBasis, Andy led the consultancy team for a number of years and was personally involved with implementing competency models for many notable private and public sector organizations. You can contact Andy by email: [email protected].
