Anne E Marreli, Ph.D., is a perfor- ‘mance improvement manager for Hughes Space and Communications Company in El Segundo, California She manages performance improve iment projects including planning, analysis and competency modeling for employee development and strategic workforce planning. She bas 17 years of experience in learning and develop- ‘ment and performance improvement. Dr, Marrelli has published articles in several journals and books and has received local and national awards for ber publications and work in instruc tional design and performance improvement. She may be reached at Loe. SC, Bldg. S41, MIS A380, PO Box 92919, Los Angeles, CA 90009; telephone: (310) 662-8679; email afmarrelli@mailbac.coms An Introduction to Competency Analysis and Modeling by Anne E Marrelli ompetencies are_measurable human capabilities that are required for effective work per formance demands. Competency analy- sis and modeling identifies and documents those capabilities. The models apply to a wide range of peo- ple management systems such as workforce planning, selection, employee development, performance ‘management, and compensation. ‘Competency modeling and its appli- cation to people management sys tems is a continuously evolving discipline. Thus, competency practi- tioners may have different explana- tions for what competencies are and how they are identified and used. This article presents one perspective and includes brief discussions of alterna- tive approaches Many organizations are adopting competency-based people practices and systems to find solutions to the problems of effectively managing and motivating their workforces in. the new world of work. The benefits of competency-based systems include the following: ‘+ emphasizing human capital as essen- tial to the organization’s prosperity and longevity ‘+ moving away from narrowly defined functions and jobs to integrated processes and teamwork + creating the flexibility to quickly adapt to changing customer needs and business conditions through competency-based deployment of employees 8 performance improvement / may -june 1938 * creating a culture of continuous learning, + substituting lateral growth for career ladders and promotions * providing employees with opportu- nities to develop and apply new knowledge and skills in exchange for their work and commitment Competency-driven people manage- ment systems contribute to employee empowerment because they allow employees a large degree of autonomy in managing their own careers. People know what is expected of them in their current positions and what com- petencies they need to develop to move into new positions. Competency- based systems also promote fairness and equity in selection and compensa- tion because people are selected and rewarded based on clear and estab- lished guidelines. By promoting fair- ness and equity, competency-based systems in turn support workforce diversity by clearly delineating for all employees the road to excellence and advancement in the organization. The History of Competency Models Modern competency modeling began with the research of David McClelland in the late 1960s and early 1970s to identify variables that would accurate- ly predict successful job performance. A large number of research studies had demonstrated that traditional aca- demic aptitude and knowledge tests and academic geades and credentials did not predict job performance or success in life, Research was alsoshowing that these tests and academic predictors were biased against women, minorities, and persons from lower socioeconomic groups. The research of Ghiselli, Mischel, and oth: ers who studied the validity of person- ality tests also demonstrated the low correlation of personality to job performance, McClelland and his associates sought ‘competency variables that were good predictors of job performance and that were less biased by race, sex, and socioeconomic factors. They formu- lated two key principles for research: (1) using criterion samples to compare people who are clearly successful in their jobs or life outcomes with people who are less successful, and (2) identi fying the characteristics and behaviors causally related to this success. McClelland and his colleague, Dailey, developed Behavioral Event Interview (BEI). BEI combined Flanagan's critical incident method of almost. 20 years earlier with McClelland’s Thematic Apperception ‘Test (TAT) probes developed in his studies on motivation. The BEI asked interviewees to describe important on- the-job events that turned out well and ‘events that turned out poorly. A series of probing questions were asked such as: What led up to the situation? Who was involved? What did you want £0 happen? What did you feel about what happened? What did you do? What was the outcome? McClelland administered the BEI to high, average, and poor performers performing the same job tasks. By careful comparison of their responses through structured content analysis, McClelland identified the characteris: tics that differentiated superior per- formers from average and poor performers. This approach of focusing ‘on job performers and defining a job in terms of the characteristics and behaviors of the people who do the job was a radical departure from tra- ditional job analysis that focuses on the duties and tasks of the job (Spencer, ‘McClelland, and Spencer, 1994). Conceptual Frameworks Over the past 30 years, several differ- ent competency-modeling, approaches have evolved from MeClelland’s origi- nal work. The conceptual framework, terminology, and methodologies used by current competency modeling prac- sitioners are often related to the pro- fessional discipline of the practitioner. Three disciplines have been prominent in competency modeling in the past three decades: differential psychology, educational and. behavioral psych ology, and management science/ Knowledge and skills that canbe developed are seen as important groups of competencies as well as cog nitive abilities, values, traits, and ‘motives. Practitioners in this approach see the performance environment as an important determinant of workers’ behavior on the job. Although some competencies are seen as innate, most are seen as characteristics that can be developed. The educational psycholo- gy framework is usually espoused by educators, educational and behavioral psychologists, and performance tech- nologists. The approach to competen: cy analysis and modeling described in this article reflects my_ professional grounding in educational psychology. The Management Science framework typically favored by reengineering and total quality experts, compensai ts, human resource administrators, and job-classification consultants. industrial engineering 1997, 19976). (MeLagan, Differential psychology focuses on the differences between superior and other performers. It emphasizes cogni- tive and physical abilities, values, interests, motives, and personality traits rather than knowledge and skills that can be developed. Thus, compe- tencies are seen as primarily innate dif ferences among people that are difficult to develop. The differential psychology approach is closely related to McClelland’ thinking. It is often favored by those whose educational grounding is in areas of psychology as opposed to educational or behavioral psychology. On the other hand, the educational and behavioral psychology framework focuses on all the competencies needed for successful job performance, whether or not they differentiate supe ior from average performance. ‘The management science/industrial engineering approach focuses on job duty and task analysis. The models provide lists of job tasks and activities and descriptions of processes and tools needed for effective perfor- mance. This information is used to create job descriptions and evalua. tions, a process that is closely aligned with traditional job analysis—that is, focus on the job rather than on the performer. Job descriptions. usually include the knowledge, skills, and other characteristics required 10 per form the job but the primary emphasis is on the job itself. The Management Science framework is typically favored by reengineering and total quality experts, compensation specialists, human resource administrators, and job-classification consultants. Some approaches to competency analysis are hybrids of one or more of these conceptual frameworks. The work of Robert Kelley, Janet Caplan, and others to identify the characteris performance improvement / vol 37, #5 ®tics of “star performers” is a good ‘example. This work focuses on the top performers in an organization (differ- ‘ential psychology) but emphasizes the work strategies employed by these superior performers that can be adopt- ed and developed by other workers (educational psychology} (Kelley and. Caplan, 1993). Competency Analysis A competency is a measurable capabi ity required to effectively perform work—that is, produce the results desired by the organization. Com- petency analysis involves identifying the knowledge, skills, abilities, and enabling behaviors that employees must demonstrate for the organization to meet its business goals and objec tives. When employees apply these competencies to their work, the result is effective performance, which in turn leads to the achievement of organiza tional objectives. A competency may involve just one knowledge, skill, abil- ity, or enabling behavior, or it may be a cluster of any combination of these. Knowledge is the information ot understanding needed to perform a task successfully, for example, the knowledge of statistical probability and sampling techniques adequate to draw a random sample. Skill isa learned capacity to successfully perform a task or activity with a spec ified outcome. Skills may actions that directly accomplish the task or that provide the support to oth- ‘ers who work to accomplish the task, for example, the use of a software pre sentation graphics program to prepare an overhead slide presentation. Ability is a demonstrated cognitive or physical capacity to successfully per- form a task with a wide range of pos. sible outcomes—for example, reading a report of a problemsolving project and evaluating the soundness of the solutions proposed. Enabling behavior is an enacted value, work habit, personal characteristic, or manner of conducting oneself that contributes to effective performance— for example, manage work priorities and assignments to meet schedule ‘commitments Widespread disagreement exists about the terms used to define competencies. Often the same term is used by differ- ent practitioners to describe two oF more different kinds of human attrib: utes. For example, “skill” can be used as [have defined it above, or it can be used to mean what I call ability and knowledge. Most of the disagreement seems to focus on the term I call “enabling behavior.” Other labels used for this competency category include the following: commitments, personal characteristics, attributes, traits, values, attitudes, and motives, In theory, it matters what labels you assign to competency categories because these labels underlie the con- ceptual foundation for a competency effort. But there isa great deal of over lap between competency categories. ‘Two reasonable people working with- in the same conceptual framework could easily disagree about the “right” category for a specific competency. In practice, as long as everyone within an ‘organization attaches the same mean ing to the same competency labels, i doesn’t matter greatly what labels you use. The key is consistency and under- standing within the organization. Clearly defining a competency is much more important than “correctly” elas- sifying it. Competency Models A competency model is the organiza tion of identified competencies into a conceptual framework that enables the people in an organization to under stand, talk about, and apply the com. petencies. A model is an_ organizing scheme. Often, a chart, diagram, or other visual image is used to illustrate the model to enhance comprehension. Example of a Competency Model. In an aerospace and defense company I worked with, we identified the compe- 10 performance improvernent / may-june 1998 tencies that the organization's 20,000 engineers needed currently and in the next three years to achieve strategic business objectives. Our focus of analysis was the processes engineers use in accomplishing their work. We wanted to identify the competencies engineers need to effectively execute these processes. We identified the ‘competencies required for each of 17 established work processes such as software design, algorithm develop- ment, test engineering, and data and configuration management. A total of 363 competencies were identified and organized into a three-level model. Level 1: Core competencies are com- petencies required of all engineers in the organization. They are based on the mission, values, and business strategies of the organization, Exam- ples of core competencie: * Integrated Product Development— Knowledge of the objectives and key principles of the Integrated Product Development Initiative and the regular application of these to work. * Oral Communication—Understand the information needs of others and respond orally in a clear and con- cise manner. Advocate ideas and courses of action in an organized, well-thought-out, and persuasive Level 2: Common process competen- cies are competencies not included in Level 1 that are required for all engi- neers who use the specified process. Examples of common process compe- + For the Software Engineering Process ‘Common Software Processes—Know: ledge and application of company common software processes objec tives, process steps, and practices. + Forthe Mechanical Engineering Process Mechanical Design Integration— Apply knowledge of the interrela tionships of parts to arrange sub- ‘components in large assemblies and Level 3: Product and product-supportCI eur Race ee eset ed Common Process Competencies cud Figure 1. A Sample Competency Model. competencies are competencies not included in Levels 1 or 2 that are important for most engineers who work on the specified type of product for product support. Example of a competency for integrated circuit products Sensitivity Analysis—Determine the sensitivity of circuit performance to variations in key design parameters, In this model the competencies were organized by level of specialization— beginning with the competencies needed by all engineers and moving up to the competencies needed only by those in specialized disciplines. The core competencies are directly based on the ‘organization’s business strategies. The second: and third-level competencies are based on the individual roles engineers play in implementing these business strategies by working within a common process on specific types of products We such as the reading, reasoning ability, considered basic competencies and the engineering knowledge and skills that one earns from a bachelor’s, degree in engineering as prerequisites for any engineer. These basic compe tencies were therefore not included in our model, Three defi * Basic Level—capable of performing only the most simple tasks or has a basic understanding of principles or concept. + Fully Functional Level—capable of performing 80% t0 90% of associ ated tasks or is capable of indep dent problem solving in applying the competency. + Expert Level—capable of solving the most difficult applications or problems or understands the most specialized or esoteric knowledge. Differences Among Competency Models. Other models may organize the com: petencies required for effective perfor nee based on the levels in the ;anization at which specific compe- levels of functioning were sd for each competency tencies are expected (executives, man- et, first-line supervisors, professional staff, support staff), job families or functions (human resources, finance, legal, security, marketing, etc.), or clusters of skills and behaviors (inter- personal relationships, business results, technical knowledge, etc). Some mod: els focus solely on certain types of competencies such as leadership com- petencies or interpersonal. relation- ships. Other models include the full range of competencies required for effective performance ‘A competency model may be devel: oped for an entire organization or only for specific business units, functions, work processes, or jobs within the organization. A'common approach is to identify a set of competencies based oon the organizational mission and val- ues that are required for all employees (these are often labeled “core compe: tencies” or “key competencies). ‘Then business units or functions identify additional competencies that are neces sary for them to achieve their more specialized objectives. The term “core competencies” as have used it here refers 10 the key capabilities required of individuals to perform work. The same term is often used in the management literature to designate the capabilities that differen: tiate one organization from others and that are therefore critical to its success. This definition of core competency was introduced by C.K. Prahalad and Gary Hamel (1990). For example, inovation would be considered a core competency of Hitachi, one of the top 10 patent filers in the United States every year (Higgins, 1995) A diverse range of organizing schemes can be aptly used in competeney mod cling. Competency organized on the basis of functions, processes, disciplines, organizational levels, career paths, and more. No one scheme is superior 0 another. The objective of creating a competency model is to make the identified competencies easier ro use in models may be performance improvement / vol 37, #544Content of a Competency Model The content of a fuly developed competency model includes categories of competencies (such as the core, process, and product labels used in my example), the competencies that make up each category, a definition of each competency, and several behavioral examples for each compe- tency: Some competency models also include a set of descriptors for each competency intended to clarify and amplify the definition. ‘A Sample Competency Model For Managers Category: Develop People Competency: Developing Individual Performance and Potential Definition: Encourage and enable direct reports to maximize their efforts and capabilities in pursuit of organizational goals, Descriptors: * Support direct reports’ best efforts by clearly stating goats, rection, ‘and purpose of assignments. * Provide people with the authority, information, and resources to get the job done. Assess the competencies and performance of each direct report. Provide performance feedback and coaching, Work with direct reports to plan their development. Hold people accountable for their commitments Reward and recognize performance. Behavioral Examples. © Assign work to direct reports by giving a clear explanation of customer requirements, tasks, tools, timeframe, resources, and parameters of accountability and authority. Explain how the respon- sibilities of other team members coordinate with the employee's assignment © Provide frequent informal performance feedback to each direct report. ‘+ Meet with each direct report at least quarterly to provide formal per- formance feedback. ‘Listen actively to questions, problems, issues, or concerns and respond promptly ‘Treat direct reports as individuals. Understand the needs, values, ‘motivations, and preferences of each. ‘+ Recognize and reward individual performance with rewards tailored to the recipient. the intended applications such as employee development or compensa tion. Each organization needs to cre- ate a model that that objective for that organization. achieves The Competency Analysis and Modeling Process A successful competency analysis and ‘modeling process typically includes 12 performance improvernent / may-june 1998 the following steps, 1. Establish the objectives for the com- petency-modeling project. * Define the unit of analysis. The unit of analysis can be as small as a single job or as large as an entire organization, * Select the people management sys- tems to which the model will be applied. ‘These systems, such as sclection, compensation, or work- force planning, will be discussed in the next section, 2. Obtain the support of executives and senior managers. ‘+ Executives need to actively champi- con the project and provide resources. They need to understand that for a competency-modeling project to be successful, thinking in terms of competencies needs to become a way of life in the organization 3. Plan the competency-analysis framework and methodology. Select the features of work to be analyzed in identifying the compe- tencies required for effective perfor- mance. (Some methodologies focus analysis on work products or processes, others on job responsi- bilities and accountabilities, others ‘on job duties and tasks, and others on differences in work habits between superior and other per- formers. For example, in the aero- space company study we focused on engineering processes and products.) # Select the timeframe of analysis. (Do you want to focus on compe- tencies needed now or those that will be needed in a future time span, or both?) # Select the tools to be used to collect and analyze data. These include interviews, focus groups, surveys, “observations, and more. 4, Develop communication and educa- tion plans for everyone in the organi- zation who will be affected by the ‘competency project. As in any organi- zational initiative or change, intensive and frequent communication is a key5. Begin implementing the communi- cation and education plan before the analysis work begins. It is important to let everyone in the organization know what to expect before they are asked to participate in the project. 6, Identify the competencies using the selected methods, 7. Use the collected data to create the competency models) 8. Apply the model ro the selected people management systems such as selection, employee development, suc- cession planning, and so on 9. Integrate the competency-based people systems so that they are aligned. and mutually supportive. 10. Evaluate the effectiveness of the competency analysis process and the models created. * How could you process? ‘+ Whar lessons were learned? ‘+ How well are the applications of the model working in your people ‘management systems? improve the 11, Plan for updating your model on a regular schedule, Competency modeling is a continuous process, not a one-time project. To be useful, the list of competencies needs to be revised as business strategies and conditions change Applications of Competency Modeling Competency-driven people manage- ment systems are focused on identify- ing the competencies needed for effective performance and on develop- ing those competencies in the work- force. Competeney models are applied in cach component of these manage. ment systems including: «Strategie workforce planning * Selection Succession planning Employee development areer development + Compensation * Performance management Competency models are put to best use when all the above components are integrated. Thinking in terms of com- petencies becomes a way of life in the ‘organization from planning the work- force through selecting employees and guiding and rewarding their perfor- mance. Its difficult, of course, to sud denly revamp the entire people ‘management system. Many organiza tions choose to evolve to competency driven systems one component at a time. Many begin with the employee development process. When the orga- nization is comfortable with compe- tency-based employee development, they then begin modifying other com- ponents, one or two at a time, and con- rect them to employee development. Strategic Workforce Planning. In com. petency-based_ strategic workforce planning, che business strategy of an organization and the resulting objec- tives are clearly defined. Next, the essential functions required to achieve the objectives are outlined. Each essential function is a set of activities or processes designed 10 achieve one or more objectives. The next step is to describe the work roles needed to execute the functions. ‘The competencies needed to carry out those work roles are next identified. Both functional and process compe- tencies are identified for each work role. Functional competencies are related ro the subject matter content of the role. They define the “what” of the work role such as accounting, human resources administration, or organizational development. They are the knowledge needed to do the work. Process competencies define the “how” of the work role; they are the skills, abilities, and behaviors needed to accomplish the work. Based ‘on projected workload and process eycle time, the number of persons needed for each work role is deter- mined. The number of work roles does not necessarily equal the num- ber of employees needed; an individ- ual employee is often assigned more than one work role, Selection. In a competency-based selection process, the required compe tencies identified for the posi being filled are used as the sc Interviews, written tests, assessment centers, ratings of training, and experience, and any other selec tion instruments are based on these competencies. The candidates for the position are evaluated on each required competency. Behaviorally anchored scales or other rating seales are typically used to assign scores to candidates that indicate the level of competency they demonstrated during the selection process. Succession Planning. The objective of succession planning is to ensure that several employees are prepared to assume each critical leadership. posi- tion in the event that it becomes vacant. In competency-based succes: sion planning, the competencies needed for each leadership position within the organization are identified. These com- petency profiles are then used to iden- tify and rank employees with high potential for succeeding in each posi- tion. When the competency profiles are prepared, the competencies are divided into two groups: competencies that are very difficult to develop, such as personal traits, and competencies that can be developed through on-the- job experience or learning activities. Employees within the organization who already possess the difficult-co: develop competencies are identified. Individual development plans are designed for each of these employees to assist them in developing the addi tional competencies they will need to fill he designated leadership positions. Employce Development. In competency based employee development systems, the competencies required for effective performance are used as the founda- tion of the curriculum architecture Competency analysis becomes. the learning needs assessment. The objec: tives of all learning activities (courses, workshops, computer-based training, performance improvement / vol 97, #5. 18videotapes, etc.) are based on the development of specific competencies within the overall architecture, A per- sonal development plan is created for cach employee listing the specific com: petencies the employee needs to devel op for improved — performance. Assessment instruments such as 360- degree feedback, manager ratings, assessment centers, in-basker exercises, and self-assessment inventories may be used to provide information for the creation of the development plan. Employees then implement the learn: ing activities that will help them devel- ‘op the required competencies. Career Development. In competency- based career-development systems, career paths are established for each functional area or discipline. For example, a support staff career path may consist of clerk, administrative assistant, secretary, executive secretary, and office manager. The required com: petencies are identified for each step in the career path. Employees then work with their managers to plan their development based on their career goals and the competencies they need to develop to achieve those goals. Compensation. Competency-based ‘compensation systems reward employees for the development and application Of the competencies the organization has identified as important for success such as technical knowledge, specific job skills, or leadership ability. In these compensation systems, employ ces’ competencies can affect the base pay grade or band to which they are assigned, as well as pay increases and bonus incentive pay. Some competency-based compensa- tion systems reward an individual's competency level by setting a standard level of competency for a job role or position and then comparing the indi- vidual’s actual competency level to the standard. Individuals whose compe- tency level is lower than the standard receive less than the standard base pay while individuals whose competency level is higher receive more pay. Other systems assign people to zones within a pay band based on assessed compe- tency levels. Some compensation systems base salary inereases on the achievement of specific competency development goal or a demonstrated change in level of competency. Other organizations uuse base pay to reward competency achievement and additional incentive pay to reward the achievement of pre- defined objectives. Performance Management, Organiza- tions that employ competency-based performance management see perfor- mance management as a broadly defined development process that includes selection and hiring as well as performance evaluation, feedback, and individual development. Traditional performance management focuses on quantitative, short-term results, that i, did the employee accomplish the objec- tives established for a specified rating, period? Competency-based perfor- mance management focuses on how work is accomplished as well as on what is achieved. Employce develop- ment of required competencies is seen as an essential element of performance management. Emphasis is placed on providing ongoing feedback and ‘coaching to employees to assist them in developing and strengthening the com- petencies they need to do their jobs well. While traditional performance man- agement is based on the evaluation of the employee solely by the employee's direct supervisor, competency-based performance management uses mult ple inputs including the employee, external and customers, coworkers, direct reports, team mem: bers, and the direct supervisor. (Mercer, 1995). Methods Used to Identify Competencies Diverse methods are used to identify required competencies. Most organi- zations choose to use a combination of these to balance the strengths and weaknesses of cach method. Key con- 14 performance improvement / may-une 1998 siderations in selecting data collection methods include: efficieney (the time and human resources required), buy- in (the broad-based acceptance of the information collected as being accu- rate}, and validity (the competencies identified are truly the competencies required for effective performance) (Mercer, 1995). The intended applica- tions of the model influence the meth: ods selected. More stringent validity is necessary for performance manage- ment and selection than is necessary for development and organizational change. The table on page 5 contains a brief description of commonly used methods, along with important fea tures of each method, Success Factors in Competency Analysis and Modeling Competency-modeling_ practitioners have reported the following factors as consistently contributing to the sue- cess of competency-modeling efforts. * To obtain the buy-in of business leaders, explain the business prob- Jems that competency-based people systems will solve and describe the expected cost savings and produc- tivity improvements. * As in any organizational change, early and frequent communication to all affected employees is essen- tial. Employees need a clear defini tion of the project's scope and purposes as well as its expected benefits. They need frequent progress reports and opportuni to provide input on the project from their perspectives. ‘+ Have senior executives introduce the program to employees at kick- ‘off meetings and personally answer employees’ questions. Keep execu- tive support visible throughout the process. Employees will not see the program as a priority unless they see the top executives associated swith it. + Begin participation in competency efforts with top executives t0 gar- ner support and to encourage participation at lower levels. * Continuously emphasize the con-METHODS OF IDENTIFYING COMPETENCIES FOCUS GROUPS (also called Expert Panels) “Trough guided discussion, guns of indviduals who are knowedge ‘able about the target joo roles identity competencies they beleve ae required for success. The group may include incumbents ofthe target Job roles, managers, and customers. Features ‘© Enables broad organizational input and thus promotes buy-in + Otters moderate valcty 1+ Can focus on competencis needed nthe future “+ Relativoly inexpensive for the large amount of data colacted BEHAVIORAL EVENT INTERVIEWS. {@s0 called Ctial incident interviews) Excatent porormers ae interviewed to identity the behaviors that were citical to their sucoess in challenging stations. The nterdowor asks the performers what they did, thought, said, fet, and caused to hap- len. The competencies citcal to thelr suocess are nfered from the information supped. Otten, average or below-average performers wil ‘alo be interewed for comparison Features ‘+A patie of inteniews provides an in-depth vow of the challongos faced on the job end the competencies required to mest them: fers ahigh degree of valisty ‘+The data colected is subjctve: th information may not be olable but a large sample minimizes this problem ‘+ Extemely time and labor intensive 4 Requires a high degree of anaiyticlabilty and experience in com: petency analysis work to infor the competencies ‘+The data may nat be broadly accepted due to the small number of peop included in the interviews ‘Emphasizes curent and past job success factors that may cfr from behaviors needed for the future INTERVIEWS WITH STAKEHOLDERS Persons fata ith the target ob ojo role ae indiualyirterdewed {obtain ther Input on the competencies needed for success. This ‘group can clude jb cumbents, managers, direct reper, and exter al and intemal customers. Sometimes benchmarking inteniows &e ‘So conducted win represartatves of cbr successtul organzatons. Features 4+ Proves for nput rom a wide range of stakoholdors and promotes buys ‘Vala can be difcut to determing the knowledge ofthe intone woes may vary widely + Care must be taken in applying the data collected tom other orga: rizatons; the information may not bo generalzable to a deren work envcrenent ‘Time and labor rtensive SURVEYS ‘A written oF electronic questionnare is distributed to persons familar wit the target job ole including incumbents, manager, doc reports, and customers. Typicaly the suney Its possible competencies required for the job and the respondents are asked to indicate the importance of each for suco2ssin the target job ole. Respondents are also asked to add competencies that are not ist, Features ‘+ aly and reliably vary with the selection of the sample of respondents and the quatty of questionnare construction ‘+ Alot of information can be collctod inexpensively ‘+ Information can be obtained rom a large number of geographically ‘éspersed people ‘+ Facitates buy-in through wide inclusion (COMPETENCY MENUS AND DATABASES Generic databases of competencies found to be important in many ferent organizations can be purchased from consulting fems and pub lshers. Some of these are formatted in menus so thatthe user selects the competencies appropriate forte trgot ob rom a Ist of possi tis. Some of these databases focus on only ane category of compe: tencies, such 3s leadership competences, while others cover a wide range of job oles. Features “+ Valty can be very low due to large afrences in work environ: ‘ment, cuture, and spect ob respensblties among organizations Inexpensive, quick, and easy to use ‘+ Can be useful as 8 fist stop fo iroduce an organization to com: potency modeling (OBSERVATIONS (also called Work Analysis) High performers are observed onthe job. The tasks they perfomm and the actions they take to perform those tasks are recorded. (Observations often include asking the performers to explain the ree sons for ther actions. Comparison samples of average and poor per formers ere also often inchided. The competencies needed for ssccasstul performance ae inferred om the observations. Features, ‘Val is strong representative samples are solcted ‘© Requires a high degree of analvicalabity and experence in ‘competency analysis wrk to far the competencies ‘+ Bxremely time and labor intense “+ Buyrin.can be low du tothe small rumbers of persone included inthe observations Table 1: Methods of Identifying Competencies. performance improvement / vol 37, #5. 18The Secretary’s Commission on Achieving Necessary Skills ‘The federal government has recognized the importance of competency analysis in building a high-performance workplace. In 1991 the US. Department of Labor published the Secretary's Commission on Achieving Necessary Skils (SCANS) report on the foundation compe tencies needed to succeed in the workplace (SCANS, 1991), ‘The SCANS report identities five broad categories of competencies including Resources, Interpersonal, Information, System, and Technology. For each competency in each of the five categories, the SCANS report provides examples of the competency as applied in var- ious jobs on a continuum from lower to higher levels of the competency. For example, for the competency of istening, behavioral descriptions of listening are given for farmer and excavating-equipment operator (lower level) and dietary manager and law-enforcement officer (higher level. The SCANS repor is a valuable resource for any organization under- taking competency analysis. nection between the achievement of business objectives and the identi- fied competencies. © Work with line managers to design the entire competency-modeling process so that they become co- ‘owners of the process. * Create detailed implementation plans, including the assignment of clearly defined roles and accoun abilities for management, line units, and human resources. + Encourage all employees to partici pate in the process of identifying competencies. Participation in the process brings buy-in. * Provide abundant support to, employees throughout all stages of the competency effort. Assessment and feedback tools, competency- identification worksheets, guides 10 creating development plans, coacl ing, meetings, and workshops can make a real difference in the pro- ject’ succes + Find out what line managers and employees are thinking and feeling about the process as you design and implement it. Make adjustments as needed for employee acceptance and use. + Balance scientific rigor with practi cality. Complete the competency analysis and modeling process 16 efficiently so that energy and resources remain to apply the model to the intended people sys- tems, Remem-ber the value of com petency models is in their application to people management systems. Practical Applications of Competency Analysis and Modeling Organizations are increasingly using competency analysis and modeling as they see contributions that competency- based systems can mean to organiza- tional performance. The following is a sample of the many organizations that have successfully developed compe- tency-based people management sys- tems and practices With the deregulation of the electrical utilities industry, Duke Power in North Carolina and Boston Edison faced the same challenge of transform- ing themselves from traditional utility businesses with a guaranteed customer base to competitive businesses provid- ing a range of energy services. Both organizations chose competency based systems to help them meet this challenge. Duke Power is utilizing competency-based strategic workforce performance improvement / may-june 1998 planning, succession planning, sclec- tion, and performance management to create a capable and competitive workforce (Smith and Hewitt, 1996). Boston Edison established competen- ey-based executive assessment and succession planning to develop leaders capable of guiding the organization into an uncertain future (Muhm and Wiley, 1995), Disney Consumer Products created a rigorously developed and validated management-competeney model. The model is applied to selection, perfor- mance management, employee devel- opment, and compensation (Cava, 1995), Ontario Hydro. has. implemented a competency-based, two-level perfor- mance management and compensa tion system for executives. Movement within a base-pay salary range is based on the assessment of competen- cies through multi-rater (360 degree) feedback. The defined levels of each competency are linked directly to out put and results. Each executive defines performance objectives for the year and an incentive bonus is based on achievement of those objectives (Moorthy, 1995). Digital Equipment Corporation iden- tified the competencies needed to turn an organization founded on product excellence and elegance into an orga- nization that can also quickly and effi ciently react to market realities Management then decided which competencies they would hire from the outside and which they would develop internally. Digital now uses competency-based selection and dev ‘opment systems (Ennis and Lawson, 1995; In my own organization, Hughes Spave and Communications Company, ‘we are just beginning to develop com- petency-based people management systems, We are beginning with strate- gic workforce planning, career devel ‘opment, and succession planning. Next we plan to gradually transformall our human resources systems into competency-based systems. Return on Investment ‘An increasing number of research studies are confirming that when organizations invest in competency- based people management systems and practices, they can expect sub- stantial performance improvements and resulting financial benefits. Organizations that have implemented ‘competency-based selection systems have experienced substantial increases in productivity and large decreases in turnover. Competency-based training, programs have also demonstrated sub- stantial gains in _ productivity. (Spencer, 1995). A majority of the leaders of organizations that have instituted competency-based systems believe that competency-based prac- tices have helped them to communi- cate and promote work behaviors that support the achievement of business objectives (ACA, 1996). References American Compensation Association Competencies Research Team. “The Role of Competencies in an Integrated HR Strategy,” ACA Journal: Perspectives in Compensation ‘and Benefits, Summer 1996, 6-21 Cava, J. “Developing Competencies and Organizational Applications.” Paper presented at The Second International Conference on Using Comperency-Based Tools and Applications to Drive Organizational Performance, Boston, October 30-November 1, 1995. Ennis, $. and J. Lawson. “Using Competencies in Selection.” Paper presented at The Second International Conference on Using Competency: Based Tools and Applications to Drive Organizational Performance, Boston, October 30-November 1, 1995. Higgins, J. M. “Innovation: The Core Competence,” Planning Review, November-December, 1995 (32-35). Kelley, R. E. and J. Caplan. “How Bell Labs Creates Star Performers,” Harvard Business Review, July August (1993), 128-139. ‘McLagan, P. A. “Competencies: the Next Generation,” Training and Development, May, (1997) 40-47. MeLagan, P. A. “People Systems: The Next Generation of Competencies.” Paper presented at The Fourth International Conference on Using, Competency-Based Tools and Applications to Drive Organizational Performance, Boston, September 29-October 1, 1997. Mercer Companies. Competencies, Performance, and Pay. New Yor William Mercer Companies, 1995. Moorthy, R.K. “How to Implement a Comperency-Based Compensation System.” Paper presented at The Second International Conference on Using Competency-Based Tools and Applications to Drive Organizational Performance, Boston, October 30-Novernber 1, 1995. Muhm, C. and R. Wiley. “Boston Edison Competency-Based Executive Succession Planning.” Paper present- ced at The Second International Conference on Using Competency: Based Tools and Applications to Drive Organizational Performance, Boston, October 30-November 1, 1995, Prahalad, C.K. and G, Hamel. “The Core Competence of the Corporation,” Harvard Business Review, May-June (1990) 79-92. Secretary’s Commission on Achieving Necessary Skills (SCANS), U.S. Department of Labor. Report for America 2000. Washington, D.C. U. S. Government Printing Office, 1991, Smith, Jn, B,J. and A. Hewitt. rategic Workforce Plannin, Matching People with Changing Business Requirements.” Presentation to Hughes Space and Communications Company, El Segundo, CA, July 22, 1996. Spencer L. M. “The Economic Value ‘of Competencies: Measuring the ROT of Your Training and Development Programs.” Paper presented at The Second International Conference on Using Competency-Based Tools and Applications to Drive Organizational Performance, Boston, October 30-November 1, 1995. Spencer, Jr L.M., D.C. McClelland, and S.M. Spencer. Competency ‘Assessment Methods: History and State of the Art. Boston: Hay/MeBer Research Press, 1994. Zwell, M. and L. Harkness. “How to Develop Effective Employee Competency Development Action Plans.” Paper presented at The Third International Conference on Using Comperency-Based Tools and Applications to Drive Organizational Performance, Chicago, September 10-September 13, 1996. A performance improvernent / vol 37, #5 17