COMPETENCY-BASED HUMAN RESOURCE

MANAGEMENT

L eaders of organizations today are always looking for a competitive edge.

In that quest, many organizational leaders have discovered a new, powerful
way to reinvent human resource management: competency-based human resource
management. But why is a new operating methodology needed for HR? What are
competencies? Why is competency-based human resource management worth
implementing? We address these questions next.
Why Is a New Methodology Needed for HR?
Job analysis is the foundation of all HR management. Job analysis is thus an
operating system for HR, much like Linux is an operating system for a computer.
The result of a job analysis is, of course, a job description, which literally describes
the job that people do, and a job specifi cation, which usually describes the minimum
qualifi cations required of someone to be selected for a job.
The problem is that job descriptions are increasingly out of touch with
today’s working world. Job descriptions usually delineate what people do in a job.
They tend to list work activities. But work activities change quickly in light of
competitive conditions and technological change. Job descriptions usually do not
clarify the measurable work outputs—that is, the fi nal results—of the work and how
it is measured. Instead, they focus on volatile work activities.
The Encyclopedia of Human Resource Management: HR Forms and Job Aids
Edited by William J. Rothwell
Copyright © 2012 John Wiley & Sons, Inc.
46 The Encyclopedia of Human Resource Management: Volume Two
Additionally, job descriptions do not clarify what kind of person should do
the work but instead speak in terms of the work activities that people do. When
managers try to pick out people to do the work based on a job description, they
have to translate what it says they should do (listed on the job description) and
what kind of person is being chosen (not listed anywhere). As a result, managers
often make mistakes in hiring.
What Are Competencies?
The term competency is sometimes a term in search of a meaning. The reality is
that the best way to defi ne a competency is as a characteristic of a successful performer.
Competencies relate to the people who do the work, not, like job descriptions,
to the work itself. Competencies lead to successful work results. Anything
contributing to successful work results is thus a competency. A competency model is a
narrative description of everything done by a person who is successful in getting
results by doing work.
Competency models may be of two kinds. One describes the characteristics
of a person who meets the minimum requirements. An example might be a person
promoted from within. Selection may depend on picking someone who can
adequately do what is required.
The second kind of competency model is tied to productivity improvement
and competitive advantage. Research has shown that not all workers produce
equal results. Some people are simply more productive than others. The most
productive person in a job category is called the exemplar. Every job category or
department has them. The exemplar may be as much as twenty times more productive
than an average, but fully trained, performer in the same job category.
That means that each exemplar may equal twenty workers!
If you ask, “How can that be? How can one person be as much as twenty
times more productive than others?” then you are really looking for competency
modeling to provide an answer. A competency model describes the most productive
performer—the exemplar—and what makes that person so productive.
The stakes are high. If organizations could identify the differences between
their merely successful and exemplary performers, then they might be able to
achieve quantum leaps in productivity improvement. They might be able to save
money by preserving productivity with fewer people.
Why Is Competency-Based Human Resource
Management Worth Implementing?
If job analysis (and the resulting job descriptions) is the operating system for
traditional HR management, then competency modeling (and the resulting
Talent Management and Development 47
competency models) is the operating system for competency-based human resource
management. Competency-based HRM leverages the productivity of the organization
by identifying the key differences between best-in-class (exemplary) and fully
successful (average) performers and then narrowing the gaps.
Organizations can choose all or some of the following areas on which to
focus their efforts:
• Career planning
• Compensation and benefi ts
• Orientation
• Performance management
• Recruitment
• Selection
• Training
• Workforce planning
The determining factor is prioritizing. The old adage that you cannot eat an
elephant all at once, but you can eat an elephant one bite at a time applies here.
It is not easy to transition from a traditional to competency-based approach. It
must be done one bite at a time, perhaps one HR function at a time.
Conclusion
As the global economy spurs increasingly fierce competition, organizational
leaders are thinking hard about what they can do to give their organizations
a competitive advantage. Because people may be the most important resource,
it makes sense to think how the management of people might be improved.
Competency-based HR reinvents traditional HR (based on job analysis and job
descriptions) to focus on leveraging the known productivity differences between
average and best-in-class (most productive) performers.
In addition to attracting, retaining, and developing top performers, organizations
must now look to the ethical decisions of their top leaders and performers.
The following section will discuss values modeling.