WHITEPAPER

Competence, Performance, and Competency Models
Dr. Karen L. McGraw
Cognitive Technologies Group, LLC

Web: www.cognitive-technologies.com Ph: 770-551-8205 Email: info@cognitive-technologies.com

COMPETENCE, PERFORMANCE, AND COMPETENCY MODELS

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COMPETENCE, PERFORMANCE, AND COMPETENCY MODELS

Introduction
Discussions about human competence have been occurring in academic and HR circles since the ‘70s. However, because intellectual assets are now recognized as one of the foundations for competitiveness, competence and competency management have become strategic issues. The ability to implement strategy and achieve “bottom line” results requires that organizations take stock of available competencies and manage them in a way that increases the effectiveness of performance throughout the value chain.

Competence and Performance
Competence …a function of the ratio of valuable accomplishments to costly behavior.

While most people believe they know competence when they see it, they typically have trouble defining it. In fact, it may be easier to think of competence in terms of what it is not. It is not a specific set of behaviors, although these may be evidence of competence. One way to define competence is as a “function of the ratio of valuable accomplishments to costly behavior” (Gilbert, 1978). That is, a performer is competent to the extent he or she can produce accomplishments that are of value to the organization without incurring more costs than the accomplishment is worth. For example, a new performer may be able to produce a desired accomplishment—but at what cost? How long does it take to do so? How many times was it reworked before it was of acceptable quantity? If answers to questions reveal that the accomplishment was produced at great cost, the organization may not have achieved any real value. When someone is competent, they increase the value of accomplishments while reducing the cost and energy put into the effort. The true nature of competence is derived from the value of our accomplishments; as Gilbert noted, competence is a comparative judgment about the worth of performance. Finding competence that predicts exceptional performance in an organization or its valueproducing network requires examining the top performers in specific job roles. They are able to consistently produce outcomes or accomplishments that are valued by, and bring value to, the organization. Not only do they consistently produce these accomplishments, but also are able to do so in a manner that increases the value of the accomplishment to the organization. Exemplary performance must consider the quality of the work (accuracy, etc.), the quantity or productivity of the work (the rate, timeliness, volume), and the associated cost (labor, material, management). Top, or exemplary performers produce accomplishments that meet or surpass a standard for quality, quantity, and cost.

Competencies and Other Factors Influencing Performance
Competencies Skills, knowledge, and traits, attitudes, or abilities that enable effective performance of a job within a specific organizational context.

Top performers are able to produce high-value accomplishments primarily because they have the required competencies and they know how to do things more productively than others. Competencies are abilities and traits that predict and enable effective or exemplary performance of a job within a specific organizational context. To be deemed ‘competent’ in an area a performer must have requisite skills, the appropriate body of knowledge, and traits or personal characteristics that contribute to success. Some texts define competencies as “skills, knowledge, and abilities or talents” or “skills, knowledge, and attitudes”. Others use the terms “traits and personal characteristics” to encompass talents and abilities, which we prefer. We can observe evidence of the existence of personal traits and characteristics, and research has shown their impact on performance (Spencer and Spencer, 1993).

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COMPETENCE, PERFORMANCE, AND COMPETENCY MODELS

For example, one competency for the job of a project manager might be “customer relationship management.” This could be defined as the ability to articulate project vision and definition, define scope and success criteria, identify assumptions, and communicate to ensure client satisfaction. Specific knowledge and skills would be required to enable an individual to demonstrate this competency, such as: knowledge of the client’s business need, and skills like listening and conflict resolution. Specific personal characteristics and traits that would contribute to success include ‘interpersonal understanding’ and ‘client focus’. Competencies alone cannot ensure effective job performance, however. As Figure 1 illustrates, organizational support can make the occurrence of effective or exemplary performance more or less likely. Organizational support includes the following, each of which is known to influence performance: Motivation & incentives—what performers are motivated to do, based on their compensation structure and incentives Environment & culture—the physical environment in which work occurs, and the mindset and shared belief system of the organization (i.e., “the way we work”) Job design—the way particular jobs are designed to spread responsibility and accomplishments across the workforce Management practices—how management acquires, develops, reinforces, and retains competencies.

Organizational Support Influences

Skills

Knowledge

Traits

Effective Job Performance
Motivation & Incentives Environment & Culture Job Design Management Practices

Figure 1. It takes more than competencies to ensure effective job performance

Consequently, the existence of competencies alone does not ensure performance at the desired level. Not only must requisite competencies be available, but also the organization must do all it can to increase the likelihood that competent performers produce the desired outcomes of value.

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COMPETENCE, PERFORMANCE, AND COMPETENCY MODELS

Competency Models
A competency model is a mechanism or framework to organize the skills, knowledge, and traits that result in effective or exemplary performance of a specific job. Good competency models can be extremely useful to an organization or enterprise as it attempts to accomplish the following: Explicitly link performance to business results Develop a shared mindset about what is important in a job, what will be monitored, and what should be measured Develop behavioral interviewing questions and a model against which to judge candidates to ensure the organization acquires the needed competencies Identify priorities for development to fill the “gap” between the competencies an individual has and those needed to perform a job at the desired level of proficiency Facilitate more effective performance feedback, review, and appraisal Help individuals plan career growth Provide links from a needed competency to learning resources or interventions.

Approaches to Competency Modeling
Competency Modeling • Generic models • Custom, organization-specific models • Customization of generic models

The two primary approaches to the development of a competency model can be envisioned as a continuum. At one end of the continuum is a highly generic competency model, and at the other end is a highly customized model. Generic competency models have been developed and validated across a number of organizations. They can be purchased, typically as a database of competencies. The purpose of these models is to present core competencies of a job across organizations. While this can be a useful place to start, these models often do not provide the level of detail required for exemplary performance within a particular business context. Generic competency models typically cover approximately 50-60% of what one must do to produce an accomplishment that would be considered exemplary within a specific organization (Boulter, Dalziel, Hill, 1998). They are most appropriate for upper management positions, where well-understood leadership characteristics and traits are so crucial to performance (Lucia & Lepsinger, 1999), or for positions that are relatively the same from organization to organization. At the other end of the continuum is the organization-specific competency model. This approach requires that a full competency assessment and analysis be conducted for each position. One variation of this approach prescribes working with top performers only; another prescribes working with both top and mediocre performers to identify differentiating competencies. This approach most often requires analyzing the full spectrum of a job. A competency model is developed to reflect performance within the specific organization, and is validated by performers and their management. This validation typically includes focus groups and trial ratings of existing employees using blind sorting to determine if the model discriminates between exemplary and mediocre performers. This approach costs more and takes more time to complete, but can have a higher payoff in terms of enabling the organization to hire the right people and increasing the percentage of exemplary performers.

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COMPETENCE, PERFORMANCE, AND COMPETENCY MODELS

In the middle the spectrum is a combination approach. The organization purchases existing competency models and refines them so they better represent their desired outcomes and competencies. For example, the organization might perform a competency assessment on top performers for critical jobs and analyze the information elicited to refine some of the generic models.

Typical Problems with Competency Assessment and Modeling
People often encounter a similar set of problems when working through a competency assessment and modeling activity. One of the most common problems is that they rarely understand up front the true size of the endeavor and the amount of labor required to do it well. Because they tend to underestimate it, they often fail to produce the results promised within the timeframe required, and may lose their focus, funding, or both. Another typical problem is that management may consider the project too “academic” or impractical if any of the following conditions exist: The resulting list of competencies for a job is too long to be practical or manageable. For example, one model we reviewed had 54 competencies for one job, some of which were obviously trivial and not likely to produce an accomplishment of great value. The methodology is too arduous, takes too long, or is too costly. Some businesses will not tolerate a methodology that can’t show results quickly, or one that takes months to analyze mounds of statistics. The project dies a slow death. Analysis paralysis sets in. Because the team does not approach the task looking for accomplishments that matter, they don’t know where to focus. They try to cover the whole job and each miniscule task instead of focusing on the competencies that produce the accomplishments of value. Or in an effort to be diplomatic, they attempt to talk to people performing the job from all over, without regard to who is doing it well. They end up with too much data that is too hard to manage, compile, or analyze. The project stalls. The competency model is developed using a flawed methodology. For example, the process produces models that would “clone” current employees in a position without regard to the changing business strategies and new capabilities needed. Or the team purchased and fielded generic competencies without regard to their ability to address specific needs of the business. Perhaps the process did tap workers within the specific organization during the competency assessment process, but failed to focus on top performers. The resulting competency model might succeed in developing average performers, but will not increase the percentage of exemplary or top performers.

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COMPETENCE, PERFORMANCE, AND COMPETENCY MODELS

Cognitive Technologies’ Solution to Competency Modeling
Cognitive Technologies believes that it may be pragmatic for a company to purchase generic competency models and databases, or to develop organization-specific models. However, we strongly suggest that groups choosing generic models for key technical and professional positions consider refining these models to reflect the accomplishments and performance that their company and its clients value. We applaud attempts to develop organization- or enterprise-specific models, but caution those who undertake to carefully consider the methodology they use and the problems that can occur. We have developed a methodology to help clients interested in developing their own specific competency models, or in refining generic models they may have purchased. Our Performance-Centered Competency Assessment (PCCA) methodology is based on the principles and guidelines that follow: 1. Start with the company’s mission and strategy, and an understanding of the business context in which it competes. 2. Spend valuable resources wisely. Start with key job positions—those that are strategic in nature and critical in terms of being able to accomplish strategy and business goals. 3. Identify and document the primary accomplishments and outcomes of value; link accomplishments to business strategy and goals. 4. Document the primary events and activities that are performed to produce the desired outcomes of value; do not attempt to capture every possible task involved in a job. 5. Analyze primary events and activities and work with top performers to understand the required skills, knowledge, and personal characteristics or traits that predict or enable effective performance. The output of the PCCA methodology is a preliminary model that can be validated both internally (with staff and managers) and externally (through benchmarking). The result is a valid, job-specific competency model that addresses accomplishments of value that are important to the organization. Benefits of the PCCA include avoidance of some of the typical problems associated with competency modeling. For example, the “analysis paralysis” phenomenon can be avoided, and the model can be constructed in a timely fashion. Additionally, the PCCA methodology results in the definition of outcomes for which metrics can be defined to measure job performance. Furthermore, the PCCA focuses on top performers to identify the accomplishments and outcomes that are valued by the organization. Consequently, it eliminates the need to interview and analyze mediocre performers to determine discriminating competencies. The PCCA supports the development of competency models that are appropriate to the client’s value-producing network. These models have high fidelity (e.g., they represent how specific jobs are performed within a specific organization or enterprise) and reflect good coverage of the competencies required within this context. As a result, the PCCA methodology can be a very cost effective approach to the development of organizationspecific models.

PCCA Benefits • Avoids analysis paralysis • Produces definitions for outcomes and metrics that can be used to measure job performance • Focuses on top performers • Produces models that are appropriate to client’s value-producing network

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COMPETENCE, PERFORMANCE, AND COMPETENCY MODELS

Apply What We Know
Cognitive Technologies is available to assist clients in using the PCCA methodology to develop or refine their competency models. Our preferred engagement model is to begin by working with senior management on strategy, vision, and challenges that impact business success. Using this information we will work with the client team to select job positions that are critical to the realization of strategy. Next, we provide team training on the background and use of the PCCA methodology. After the initial training, we coach and support the team as its members use it to assess and analyze one of the selected job positions. This enables us to model and monitor the use of specific techniques for: Eliciting critical information and performing the analysis that results in a preliminary model, or refinements to an existing model Compiling the information into a usable format Validating the information using individual and group techniques.

After the competency model has been completed and validated for the selected job position, Cognitive Technologies can provide follow-on review and coaching, if necessary, as the client team builds models for other key positions within their organization or valueproducing network.

References: Boulter, N., Dalziel, M. & Hill, J. (Eds.) (1998). Achieving the Perfect Fit, Gulf Publishing Co. Gilbert, T. (1978). Human Competence, McGraw-Hill. Lucia, A. & Lepsinger, R. (1999). The Art & Science of Competency Models, Josey-Bass Pfeiffer. Spencer, L. & Spencer, S. (1993). Competence at Work: Models for Superior Performance, John Wiley & Sons.

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