Competency Development Guidebook
Table of Contents:
Introduction 2
Section 1: Brief Theoretical Background 3
Section 2: Concepts of Competency 6
Section 3: Developing Competency Catalogue 17
Introduction
This manual is
aimed at providing a general guideline in developing competency model. The
manual will be started by brief description about the research background upon
which the concept of competence was originally invented and developed.
Then, section
two will provide a general understanding of competency concepts. Several issues
that will be addressed are: definition and elements of competency; types of competency and competency model
framework.
Section three
will explore detailed activity for each step in developing competency catalogue
and competency profile. Specifically, there are four elements addressed in each step:
Description of activity
Key inputs to the process
Key activities performed (including tools and
template used)
Key deliverables
In the appendix section, we will provide interview
guideline for focus group discussion and behavioral event interview technique.
Section 1
Brief Historical & Theoretical Background
Despite a growing interest of competency among
mangers and human resource professionals in recent years, the modern competency
movement in industrial-organizational psychology actually dates from the
mid1950’s and early 1970’s.
In that regard, John Flanagan’s work (1954) and
Dave McClelland’s studies (1970) might be cited as two landmark efforts that
originally invented the concept of competency.
A Precursor of Competency
Modeling : The Work of John Flanagan.
A seminal
article published by John Flanagan in 1954 established Critical Incidents
Technique as a precursor to the key methodology used in rigorous competency
studies. Based on studies of US Air Force pilot performance, Flanagan concluded
that “the principle objective of job analysis procedures should be the
determination of critical requirements. These requirements include those which
have been demonstrated to have made the difference between success and failure
in carrying out an important part of the job assigned in a significant number
of instances”. From here, critical
incidents technique was originally discovered.
Critical
incidents itself can be defined as a set of procedures for systematically identifying
behaviors that contribute to success or failure of individuals or organizations
in specific situations.
Flanagan’s work, while not
strictly about competencies, was important because it laid the foundation for a
new approach to examining what people do. In a later form, the critical
incidents technique would resurface to focus around significant behavioral
events that distinguish between exemplary and fully-successful performers.
It is Flanagan’s critical incidents technique that
sixteen years later inspires David McClelland to discover and develop the term
of “competency”.
The Concept of Competency : The Work of David McClelland. The movement was originally propelled by dissatisfaction
among researchers about the value of personality traits tests in predicting job
performance. For instance, Ghiselli (1966) and Mischel (1968) found that
testable personality traits have little correlations with job performance, and
consequently research on these variables was of questionable value.
Simultaneously,
an increasing number of studies were published which showed that traditional
academic aptitude and knowledge content test, as well as school grades and
credentials did not predict job performance; and were often biased against
women and persons from lower socioeconomic strata.
These findings led McClelland (1973) to conduct
research in order to identify “competency” variables which did predict job
performance and which were not biased by sex or socioeconomic factors.
The most
important of these principles were:
Use of criterion sample: compare people who
are clearly successful in jobs with less successful persons to identify those
characteristics with success
Identification of operant thoughts (knowledge) and
behaviors causally related to these successful outcomes. That is,
competency measures should involve open-ended situations in which individual
has to generate behavior.
By using
Flanagan’s critical incident method and behavioral event interview to
distinguish successful and unsuccessful performers, McClelland attempted to
identify characteristics which differed between the two samples, generally
behavior shown by superior performers and not shown by average performers.
The essence of McClelland’s radical departure in
approach to job analysis is that where traditional job analysis looks
at elements of the jobs, competency assessment studies the
people who do the job well, and defines the job in terms of the
character-ristics and behaviors of these people.
Competency Modeling Matures: The Work of Richard Boyatzis. Boyatzis wrote the first empirically-based and
fully-researched book on competency model developments. It was with Boyatzis
that job competency came to widely understood to mean an underlying
characteristic of a person that leads or causes superior or effective
performance. Boyatzis was explicit in describing the importance of
clearly-defined competency as reflected in specific behavior and clearly
defined performance outcomes when he wrote that “the important points is that
specific actions cause, or lead to, the specified results. Certain
characteristics or abilities of the person enable him or her to demonstrate the
appropriate specific actions”(Boyatzis, 1982, p. 12).
As founding developer of competency modeling in the
United States
Section 2
Concepts of Competency
What is Competency?
Competency is the vital behavioral skills, knowledge and personal
attributes that are translations of organizational capabilities and are
deemed essential for success. They distinguish exemplary performers from
adequate performers.
In that regard, competencies offer a highly descriptive means of
discussing job performance. They go beyond traditional job descriptions because
they focus on how employees perform their jobs, not simply on what they do.
While job descriptions detail specific tasks, competencies encompass the
tangible and intangible abilities
employees possess.
For instance, a necessary competency for a marketing professional might
be the ability to perform detailed market analysis while another competency
might be leadership qualities, as evidenced through the ability to build
consensus.
Components
of Competency
There are four major components of competency:
Skill: capabilities acquired through practice. It can be a
financial skill such as budgeting, or a verbal skill such as making a presentation.
Knowledge: understanding acquired through learning. This
refers to a body of information relevant to job performance. It is what people
have to know to be able to perform a job, such as knowledge of policies and
procedures for a recruitment process.
Personal attributes: inherent characteristics which are brought to
the job, representing the essential foundation upon which knowledge and skill
can be developed.
Behavior: The observable demonstration of some competency,
skill, knowledge and personal attributes. It is an essentially definitive
expression of a competency in that it is a set of action that, presumably, can
be observed, taught, learned, and measured.
Based on the above
definition, it can be said competency only include behaviors that demonstrate
excellent performance. Therefore, they do not include knowledge per se, but do
include applied knowledge or the behavioral application of knowledge that
produces success. In addition, competencies do
include skills, but only the manifestation of skills that produce success.
Finally, competencies are not personal work motives, but do include observable
behaviors related to motives. See figure below for an illustration of these key
points.
Figure 1. Competency Components
Competencies: Competency:
Position a new product Uses an understanding of
Introduction so that it is market pricing dynamics
Clearly differentiated in to develop pricing models
Skill: Set up new
product
introduction
project
Competency:
Meets all commitments
in
a timely manner
Personal Motives:
Achievement – wants to do an excellent job
Looking at the above figure,
we could depict competency causal flow model as follows
Personal Attributes/Motives
Knowledge
Skills
Competency
 |
Observable Behaviors
Job PERFORMANCE
Type of
Competency
There are four types of
competency:
Employee Core Competency
Competency that
relate to organization’s values, mission and strategy; these are competencies
that reflect organizational core capabilities and should be possessed by all
employees regardless of their function.
Example:
Customer satisfaction; quality orientation
Managerial Competency
Competencies
that relate to skills needed to perform managerial work and process; it deals
with the interaction process either with individual or group of people.
Typically generic in nature, these competencies are common skills sets required
by most companies; are not necessarily industry specific, and are not confined
to managerial positions. In typical organizations, managerial competencies will
play greater emphasis as the position progresses within the organization.
In general,
managerial competency could be divided into two categories:
Human Competency
An ability to
work with, understand, and motivate other people as individuals or in group. It
relates to the individual’s expertise in interacting with others in a way that
will enhance the successful completion of the task at hand.
Examples:
interpersonal skills; developing people.
Conceptual Competency
An ability to understand the degree of complexity
in a given situation and to reduce that complexity to a level at which specific
courses of action can be derived.
Example :
problem solving and decision making
Technical/Functional Competency
Competencies
that pertains to specific bodies of knowledge and skills required to perform
the defined activities in an industry, function or job. It include the
abilities to use the procedures, techniques and knowledge of a specialized
field.
Example: sales
ability, behavior interview technique
Personal Attribute
Competencies
that relate to inherent personal characteristics (e.g. motives, self image,
self concept, etc.) and potentially affect work attitude and performance.
Example
tolerance for stress; achievement motivation.
Differences Between Job Description and Competency
Model.
Job descriptions
are lists of the general tasks, or functions, and responsibilities of a
position. Typically, they also include to whom the position reports,
specifications such as the qualifications needed by the person in the job,
salary range for the position, etc. Job descriptions are usually developed by
conducting a job analysis, which includes examining the tasks and sequences of
tasks necessary to perform the job.
Competency model, on the other hand, is a set of
competencies that include the key behaviors required for excellence performance
in a particular role.
Based on the above definition, we could conclude
that main differences between job description and competency model lie in the
unit of analysis: job description looks at what, whereas competency model
focuses on how. In other words, traditional job description analysis looks at elements
of the jobs and defines the job into sequences of tasks necessary to
perform the job; while competency studies the people who do the job well,
and defines the job in terms of the characteristics and behaviors of these
people.
Competency Model
Competency model is a set of
competencies that include the key behaviors required for excellent performance
in a particular role. Competency model development is driven by the
organization’s strategy (see figure below).
Figure 2. Competency Model Framework
Vision & Mission
Core capabilities
Stakeholder requirements
Market realities
COMPETENCY MODEL
Design
Decision
As shown in the picture, in term of grand design,
competency model should be guided by firm’s strategy which is shaped by four
factors: vision & mission, stakeholder requirements, market realities and
core capabilities of the firm. In a more technical design, competency model
development should be determined in the process of design decision. In this
stage, we should discuss the design of the model with clients, based on their
specific needs and expected outcomes of the competency model.The following are
some factors that need to be considered in deciding the design of the
competency model.
1. Context
Competencies are actually context bound. They
answer the question ‘What does a superior performer look like in a specific
setting?’ In other words, effective competencies are linked to a particular
organizational target or goal. Therefore, depending on the context, the design
of models may be geared toward:
?
the total
organization (e.g., core competencies or
values)
?
an entire
function (e.g., finance, human
resources)
?
a specific role
(e.g., HR generalist)
?
a specific job
(e.g., compensation analyst)
2. Level of Orientation
This factor deals with the
level of orientation of the model: will the model reflect future or current job
requirements. The degree of future orientation depends on how the organization
plans to apply the model and the pace and nature of changes occurring within
the organization. If an organization decides that their model will be based on
future requirements, they might use future performance needs (i.e., benchmark
data; best practices) to create competencies.
3. Level of Complexity
Two other
critical factors should be considered in developing competencies — the length
of models and the degree of complexity and detail described in behavioral
indicators. Frequently, competency initiatives fail because models are too long
and too detailed or because organizations spend too much time and too many
resources researching and editing behaviors. Consequently, organizations fail
to provide a simple framework to users in a timely manner. Models that work
best follow the 80-20 rule. They provide the 20% of behaviors that drive 80% of
excellent performance.
To guide the
process of design decision and to determine the context, level of orientation
and level of complexity of the model, we
might need to consider the following factors :
4.The model should be linked to strategy
Effective competency models support and contribute
to the company's and the function's strategy and goals. For instance, if a goal of the company is to
transcend functional barriers, the model needs to describe the behaviors that
demonstrate that competency. Likewise,
if a goal is ensuring that all employees communicate and work together effectively,
the model should describe the behaviors that demonstrate that competency.
The model should be company-specific
Unlike many job
descriptions, competency models are not easily transferable among
companies. Competencies needed for a
company are determined by the company's unique characteristics, such as
culture, strategy, size, and industry.
This is true even of the competencies needed for a position common to
many companies, such as the job of a financial analyst. The competencies required of a financial
analyst at an automobile manufacturer are vastly different from those required
of a financial analyst at a health care company, for instance.
The developed model should be flexible
A good competency model functions as a performance
management tool. It provides enough detail to distinguish between employees who
are operating at different levels of proficiency. It also helps a company
articulate why an employee is at the current level and the competencies needed
to advance. In this sense, a competency model is prescriptive, yet it must not
be too binding. It needs to be flexible enough to accommodate differing
approaches to success, simple enough to be easily understood, and readily
adaptable to changing business environments.
The model should be future-oriented
Competency models with a forward-looking
perspective stimulate organizational change. Rather than defining competencies
in the context of "tasks," or how a job has traditionally been
carried out, useful competencies articulate how the job is evolving and will
best be performed in the future. Not only does this approach increase a model's
shelf life, it ensures that employees have enough time to understand what the
required competencies are and to develop them.
Link
between Firm Core Competence and Employee Core Competencies
Core competence of the firm is the term originally
invented by Prahalad and Hammel, 1990) and provide an impetus to create
competency modeling beyond the realm of individual performance and into the
realm of organizational performance. Core competence of the firm is basically
an indication of a strategic strength, the essence of what makes one firm
competitive in its environment. A core competency represents the fruits of the
collective learning of an organization, especially how it coordinates diverse
production skills.
To qualify as core competencies, they should be
meeting the following criteria:
Customer Value: It must make a disproportionate
contribution to customer perceived value. Core competencies are the skills that
enable a firm to deliver a fundamental customer benefit.
Competitor Differentiation: A core competence must
also be competitively unique and not easily copied by competitors.
Extendability: Core competencies should also be
gateways to tomorrow’s market. In practical matters, in defining core
competencies, the leaders should configure how the competence might be applied
in new product arenas.
The examples of core competence are as follows. Mc
Donald’s core competencies, for instance, consist of two key elements :
production and delivery speed.; while Microsoft’s core competence is making
user friendly software.
To make it useful for the competitiveness of a
firm, core competencies then should be translated into employee or group of
individual competencies. Thus, for example, of MC Donald has determined that
their core competencies are production and delivery speed, then all Mc Donald
employees should generate competencies that provide the firm with the right mix
of talent to reflect those core competencies.
In that process, core competencies should be used
as a guide to determine types of employee core competencies. On the other hand,
the development of employee core competencies should simultaneously be directed
to enhance and broaden the quality of core competencies. Here, group of
individual or employee competencies should collectively turn into
organizational core competence.
Benefits of Using Competency Model
There are some useful benefits of using competency
model for the company, managers, and employees as well.
For the company, these benefits are:
reinforce corporate strategy, culture, and vision.
establish expectations for performance excellence,
resulting in a systematic approach to professional development, improved job
satisfaction, and better employee retention.
increase the effectiveness of training and
professional development programs by linking them to the success criteria
(i.e., behavioral standards of excellence).
provide a common framework and language for
discussing how to implement and communicate key strategies.
provide a common understanding of the scope and
requirements of a specific role.
provide common, organization-wide standards for
career levels that enable employees to move across business boundaries.
For Managers, the benefits are:
identify performance criteria to improve the
accuracy and ease of the hiring and selection process.
provide more objective performance standards.
clarify standards of excellence for easier
communication of performance expectations to direct reports.
provide a clear foundation for dialogue to occur
between the manager and employee about performance, development, and
career-related issues.
For Employees, the benefits are:
identify the success criteria (i.e., behavioral
standards of performance excellence) required to be successful in their role.
support a more specific and objective assessment of
their strengths and specify targeted areas for professional development.
provide development tools and methods for enhancing
their skills.
provide the basis for a more objective dialogue
with their manager or team about performance, development, and career related
issues.
Section 3
Developing Competency Catalogue
The following section will explore detailed
activity for each step in developing competency catalogue and competency
profile. Specifically, there are four stages that should be done to develop
competency catalogue and profile as shown in diagram:
Stage 1
Conducting Competency Workshop
Description of activity:
This activity is held to introduce the concept of
competency. This workshop is also intended at deciding the scope of competency
project that will be undertaken.
Key activity:
Conduct Competency workshop
In addition to providing an understanding of
competency concepts and application, this workshop will also clarify the scope
of the competency project: Is the focus on the organizational level, function
or specific roles? What are the needs, outcomes and expected impact of the
competency project? These issues should be addressed and clarified with key
stakeholders in this workshop (detail description about competency workshop
is in the Appendix 1).
Input/Tools:
Competency workshop materials
The section that discusses about Theory and Concept
of Competency (see section 2 & 3) could be used as materials for competency
workshop.
Output:
An understanding of competency concepts and
application
Scope and objectives of competency project
Stage 2
Identifying Competency
Components
There are two main phases in this second stage. The
first is to identify employee core
competencies and the second one is to identify job relevant competencies. The following section will describe
these two phases in detail.
Stage 2a
Identifying Employee Core Competencies
Description of activity:
This activity is conducted to identify employee
core competencies or competencies that should be possessed by all employees
regardless of their functions.
Key activities:
Review business vision and strategy
This review is done to clarify business strategies
and visions. The results of this review then will be used as a basis to
determine core competencies.
Identify Employee Core Competencies
As mentioned above, these types of competency will
be defined for the whole organization, regardless of function. As such, the
core competencies should strongly reflect and link to corporate vision and
strategies.
Aside from employee core competencies, there are
other types of competencies that should typically be possessed by all employees
regardless of their functions, i.e.: personal attributes and industry
knowledge. The identification of these two types of competencies could also be
done in this phase.
Inputs/Tools:
Business Strategy and Vision documents
Core Competence Workshop (detail description about this
workshop can be seen in the Appendix 2).
Output:
List of core competencies of the employee
The following core competencies lists – which are
taken from our previous competency project – could be used as a reference.
Company A – Corporate Values
Teamwork
Professionalism
Customer Intimacy
Company B – Core Competency
Integrity
Productivity & Efficiency
Professionalism
Sustainability
Company C – Core Values
Continues Quality Improvement
Customer Satisfaction
Innovation
Integrity
Leadership
Learning & Knowledge Sharing
Teamwork with Partnership Spirit
Company D – Core Competencies
Business Process Knowledge
Change Management
Self Development
Customer Satisfaction Orientation
Quality Orientation
Team Development
Company E – Core Competencies
Focusing Customers
Understanding of Business Environment
Improving Department Performance Continuously
Developing Self
Developing People
Fostering Effective Communication
Committing to Quality
Stage 2b
Identifying Job Relevant Competencies
Description of activity
This stage is conducted to identify types of
competencies which relevant with each of existing function/job/role within the
organization.
Key activities
Determine and understand the nature of the
job/role/position to be analyzed
Select the job to be analyzed; and identify other
jobs that have similar elements of tasks (i.e. job family) and thus may have a
similar set of competencies. We might use a job/position or a group of similar
jobs (job family) as a basis for discussion.
Conduct desk study to review existing
organizational structure and job description documents. This study is done to
get a better feel of the jobs to be analyzed and thus be able to pre-determine
some logical competencies that should be included. It will also be helpful to
already list down some competencies and try to validate them during the
interview
Conduct focus group discussion (detail
description about FGD process can bee seen in the appendix 3).
Input/Tools:
Organizational structure and job description
documents
Focus group discussion
Output:
List of job relevant competencies
Stage 3
Developing Competency Catalogue
Description of activity:
Once we have identified list of competencies, we
then should develop competency catalogue. This catalogue documents key
behaviors indicators of each identified competency.
Key Activities
Conduct behavioral event interview to identify
behavior indicators of competency to be analyzed.
Define the competency with a description which
includes the previously identified behavior indicators
Scale each identified behavior indicators into a
clear progression from lower to higher levels of performance. This scale
displays a logical accumulation of competencies as a person move to higher
level.
There are four dimensions to be considered when
creating progression levels of competencies:
Intensity of the intention
involved or completeness of action taken to carry out an intention.
Complexity in taking more
things, people, data, concepts or causes into account.
Time horizon in seeing
further into the future, and planning or taking action based on anticipation of
future situations
Breadth of impact on the number
and position people affected; or the size of the problem addressed
Another alternative to create competency catalogue
is by 1) exploring list of behavior examples in each competency then 2)
grouping the behavior list into key behavior indicators and finally 3) scaling
the identified behavior list and key behavior indicators into progression
matrix level. Thus, in this method we firstly explore behavior list and then
grouping that list into behavior indicators.
Validate and confirm the matrix of competency
catalogue with key stakeholders to obtain agreement.
Input/Tools:
List of employee core competencies and job relevant
competencies
Behavioral Event Interview
To create behavior indicators and progression
levels of competency, we use behavioral event
interview techniques to explore distinctive behaviors that distinguish a
superior performer from an average performer (see Appendix 4 for detail explanation
about behavioral event interview technique).
Taxonomy of Behavior
To create progression levels of competency, we
might use behavior taxonomy as a guide. The taxonomy can be seen in Appendix 5.
To adapt to future requirements, behavior indicators
used in the matrix of performance level might not necessarily be based on
behavior interview – which explicitly focus on past performance. In this case,
we might use future performance needs as a basis for designing behavior
indicators.
Output:
Competency catalogue
The examples of generic competencies catalogue that
are taken from our previous competency project can be seen in Section 4.
Stage 4
Developing Competency Profile
Description of activity
This activity is intended to develop competency
profile by using identified competency catalogue completed in the previous
stage.
Key Activities:
Define number of positions to be reviewed
Identify roles and responsibilities of each
position
Establish competency matrix: match the roles and
responsibilities with the competencies
Analyze the weight of the roles and
responsibilities as a basis to decide the level of requirements/proficiencies
for each competencies
Inputs/Tools:
Job description, job grading and competency
catalogue
Focus group discussion
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