Defining
and measuring employees’ competencies is a cornerstone of human capital
management. Keith Rodgers discovers how organisations are finding out if their
teams are fit for purpose
When
asked how long he would need to develop a competency management scheme for his
company’s 34,000 staff, the head of learning at a large US telecommunications
provider was under no illusions. It would probably take two full-time workers
six months just to pull together the initial data they would need, he said –
and that was before the programme had even kicked off.
Competency
management – the term used to describe initiatives that define and measure an
organisation’s skills, competencies and behaviours – has never been the kind of
programme you can launch in a spare afternoon.
Bringing
some degree of scientific analysis to behaviours and other ‘soft’ attributes
isn’t easy, and many organisations that start down the competency route quickly
become bogged down. One large pharmaceutical company, for example, confessed
that it once spent two years simply running a pilot scheme in the UK.
For
HR, it is a hugely frustrating problem, because competency management is a key
component of effective human capital management (HCM).
At
a basic level, it involves companies defining the core skills, competencies and
behaviours that matter to their business. These competencies are then used as a
framework for line managers and staff to build more detailed competency
profiles of their individual team members, which in turn can be used as the
basis for performance reviews and skills-gap analysis.
Once
this kind of competency data begins to be collated, it has multiple uses. In
terms of performance management, it helps companies ensure that line managers
are focusing on the qualities that matter most to the organisation.
It
also generates information that feeds into other HR processes; for example,
helping to identify areas of weakness that may require training. While these
weaknesses are assessed in the context of a specific role, the fact that
competencies are generic in nature sometimes makes it easier for companies to
standardise learning programmes for different departments.
At
a departmental and corporate level, competency management programmes aggregate
large amounts of data about the employee base, helping companies to understand
where their strengths and weaknesses lie, and providing information for
strategic workforce planning.
Depending
on how the data is collated and electronically stored, it is possible for
senior management to both assess the big picture, and drill down into the
details, identifying skills gaps that may be important in both the short and
long-term. When it comes to strategic decisions about improving the capability
of the workforce, this information can be invaluable.
That,
at least, is the principle. But where many companies fall down is the
execution. First, many get sucked into too much detail. Defining the core
skills and competencies that matter to an organisation is tricky when different
departments have different business priorities, so there is a natural tendency
to keep breaking down the core competencies into subsets that better suit
specific requirements. Add to that the fact that every line manager – and HR
professional, for that matter – will have their own personal opinion and
priorities, and it is easy to see why the definition process alone can be
never-ending.
Michael
Richards, chief executive of Snowdrop Systems, has extensive experience in
competency management and agrees that many companies try to identify too many
elements of behaviour.
He
points out that there will often be a lot of correlation between different
competencies – which means that if one scores highly, so will the others. In
those situations, he says, it makes sense to amalgamate the different
competencies into one, and establish "demonstrable behaviours" that
help to identify the different competency levels that workers may reach.
Sometimes,
these kind of definition problems can be headed off by leveraging other HR
projects. Hampshire County Council, for example, only developed its competency
programme after it had built a balanced scorecard with the senior executive
team (for details, see weblink below). But pragmatism is probably the best
advice – it is important to understand where the value of the process really
lies.
"Put
simply, if you have a set of measures covering behaviours and attitudes that
are of fundamental importance to the organisation and you get it 70 per cent or
80 per cent right, the benefits are enormous," says Richards.
"No
one assessed measure or level will form the cornerstone of a decision, so it’s
okay if it is slightly out of step due to different managers, personality
factors between managers and employees, or mood variations on different days.
It is the collective picture across many people, over many assessments, by many
assessors, that produces the ‘correct’ picture."
Hurdles
to jump
If
agreeing on the competencies is the first major hurdle, the second is getting
senior and line managers to participate in the process. Collating the data for
a competency management system can be a daunting task, particularly the first
time round when individual employee ‘profiles’ are drawn up.
Mark
Geary, managing director of HR consultancy AsiaNet Consultants, and a former HR
director at Inchcape and Intercontinental Hotels, says: "I think there is
a tendency for HR to make it too complex, too scientific, and in the process it
loses the line managers. I think you’ve got to express it in their language.
They look for a simple process in a simple language."
Line
managers need to have an incentive to commit to and prioritise the workload,
which means the competency programme needs to be delivering tangible value to
them. Linking basic competencies to training programmes, for example, can make
a difference if managers can see their team members’ abilities improving.
Value
also needs to be apparent to senior management. If the chief executive is
driving the competency programme, it is more likely to happen than if it is
seen as just another bureaucratic paper-pushing exercise emerging from HR.
Ultimately, that kind of buy-in only comes when the programme is seen to
promote strategic business objectives. If an organisation believes better
customer service translates into repeat business, for example, then the board
will be more enthusiastic about promoting a programme that tries to measure
workers’ attitudes to customers, and how well they interact.
Finally,
the competency management system must be integrated with other key HR
processes. Depending on how profiles are drawn up, organisations may want to
pull in data held in other systems (such as information harvested from CVs in
recruitment systems), and feed outputs into other applications, such as
learning. A growing number of companies also use competency data as a factor in
their compensation decisions. Geary argues that competency management,
performance appraisals and succession planning should in fact all be seen as
subsets of one process, since they share so much in common.
This
kind of process integration needs to be supported by the underlying technology
platform. As well as specialist competency management applications, most HR
management systems and many learning management systems contain competency
modules that provide users with the tools to build, store and analyse this kind
of data. It is important these systems are integrated with other relevant HR
applications, rather than being seen as standalone applications.
In
addition, the volume of data generated in these programmes shouldn’t be
underestimated. "Assuming you manage to have a core framework of just 10
competencies, and these are assessed every six months at appraisal, you will
create 160,000 records in four years in a 2,000-strong organisation," says
Richards.
"If
you take the route of 360-degree assessment, this can be multiplied three-fold.
To gain value, you need to simplify the gathering of this data, validate it
effectively and produce meaningful management information," he added.
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