[Successful Competency Management]

In these turbulent economic times, many companies are rethinking their

competency management models. As baby boomers retire and workforce
demographics pose an unfavorable situation, organizations are facing an
increasing need to hire, train and retain their most valuable employees. At a
time when employee turnover is highest even at the C-level, companies need to
pay attention to their competency management models. This white paper will
outline some best practices followed by the world-class companies in
competency management.

What is Competency Management?

Competency management is the framework that aims to objectively identify,

recognize and develop the desired skills and competencies of employees across
the organization. It is an umbrella concept the influences the execution of an
organization’s strategy and operations. The competency management model of
the organization guides the management of a company’s talent base and
controls various activities such as performance appraisal, performance
measurement, goal achievement, HR training and development, hiring,
recruiting, workforce planning and management, etc.

Why Competency Management?

Many people erroneously believe that competency management is something
that should be taken care by human resources department. But the truth is it is
much more encompassing and comprises of various tools, methodologies,
metrics, processes and systems that direct the performance of the entire
organization. It is overarching, right from the C-level executives to the entire
organizational hierarchy and processes.

Competency management is the cornerstone of an organization’s talent

development and management strategy. It identifies the core competencies
required in the employees for the successful execution of company’s strategy
and operations. Without a framework to understand what to look for in your
employees and what to train them for, organizations are bound to waste
precious resources, time and energy in hiring wrong persons, installing wrong
training programs and mismanaging the workforce performance. An effective
competency management strategy is essential to understand, nurture and
develop your organization’s most valuable asset – your workforce.
Compeetency Ma
anagemen
nt – Best Practicess
Id
dentify Yo our Core Competenc
C cies. What are the hiighest valuues and corre
coompetenciees held in great
g imporrtance by your
y organiization? Whhat skill sets
arre most souught after by
b your com mpany for various
v keyy positions?? Understannd
th
hat core com mpetencies apply to em mployees at
a all levels across the organizatioon
annd tend to o define the
t organizational cu ulture. Somme examples of corre
coompetenciees include integrity,
i tiime management, andd communiccation skillls,
ettc. Identify and make a list of 12 to 15 such core compeetencies.

Specialize Your Com

S mpetencies. After identifying tthe core competencie
c es
reequired by the organizzation, deveelop more detailed
d commpetency liists based on
o
v
various funcctions carrieed out in orrganization.. Since thesse competenncies depennd
on specific job
j profiless, the comppetencies preferred byy marketingg departmennt
w
will vary considerabl
c y from thhose of HR H or prodduct devellopment. As A
coonsolidating core com mpetencies for all funnctions can be time-co onsuming, it
m
might be useeful first too identify thhe most im
mportant jobb functions and develoop
th
he required core compeetencies forr them.

Create Com
C mpetency Profiles. Using
U the identified
i ccore compeetencies annd
fuunctional competenciees, create ccompetencyy profiles thhat are speccific to eacch
department or job. Seee that the competenccies identiffied in eacch profile is
liimited to a comfortaable numbeer so as to o make it easy for performancce
ap ppraisals. Overt
O me, create pprofiles for all jobs in your organnization. This
the tim
shhould help you a lot inn performannce management.

Define Prooficiency Levels.

D L Prooficiency leevels give an indicaation of thhe
em
mployee’s mastery ovver the defiined compeetency in a profile. Haaving a cleaar
understandinng of expected proficciency levels of varioous competencies helpps
y measuree an employyee’s actuall mastery off the desiredd skills.
you

Sales Manager

• Communication (Core) - 9
• Conflictt Resolutio
on (Core) - 8
• Decisionn Making (Core) - 8
• Employeee Relatioons (Functtional) - 9
• Sales Mentoring ((Functionaal) - 10
• Territory
y Managem ment (Funntional) - 7
 You may choose to assign scores or points to differentiate between various
proficiency levels such as ‘0 points’ for ‘Not Satisfactory’ and ‘10 points’ for
‘Excellent’. Above is a sample profile of a sales manager’s proficiency levels
in various competencies.

Communicate Competency Requirements Across the Organization. Share

the desired core and functional competencies and their expected proficiency
levels with all the employees. See that it does not become just another data.
Every employee must be informed that his or her proficiency levels in various
competencies will be a key component in hiring, performance measurement
and compensation decisions.

Link Competencies with Performance Appraisals and Rewards. An

effective competency management system should link competencies with
performance appraisal, performance measurement and compensation. Senior
management can compare the performance of one employee with another on
various competencies and design bonuses, compensation increases and other
rewards on the basis of proficiency levels.

Assess Competency Reports to Identify Development Needs. Designing

comprehensive competency reports will help the management identify and
analyze gaps between expected proficiency levels and actual levels. This
information can be used to develop employee training needs, change hiring
practices and predict future talent requirements.

Enhance the Desired Competency Levels. Tailor your employee training

programs to the desired competencies in each employee’s profile. The
competency reports can also be used to identify performance gaps in an
employee and address them at an individual level. Competency performance
data is very useful in identifying low performers and high performers and guide
their career progression plans.

Conclusion
Competency management practices impact all phases of an employee lifecycle,
right from hiring to career development. A detailed and extensive competency
management system is very useful to identify, develop and leverage talent in an
organization. It addresses the most important aspects of the most valuable asset
a company has – its workforce. By identifying the best talent, hiring the right
persons and developing the required competencies, you can make your
workforce stronger and more productive.