Competency Based HR Applications

Competency based Performance Management

Competency based Training and Development
Competency based Compensation Management
Competency based Performance
Management
Competency Based Performance Management

Strategic Business Plan Mission/Vision/Values

Department/Unit/ Individual Objectives Core Competencies

What Phase 1:Performance Planning How

Performance • Objectives Competencies
Objectives • Competencies
• IDP

Manager’s Responsibilities
• Create conditions that motivate
• Update Objectives Phase 2:
Phase 3: Evaluation
• Provide Feedback Monitoring &
• Objectives
• Provide development opportunities Coaching
• Competencies
• Reinforce effective behavior ▪ Objectives
• IDP
▪ Competencies
Employee’s Responsibilities ▪ IDP
• Achieve objectives
• Solicit feedback and coaching
• Communicate openly
• Collect and share data
• Prepare for reviews
Competency Based Performance Management

3 components of a well-designed PMS ; they are the focus in each of three phases of the PM Cycle.
Objectives: identifying and evaluating employee’s major work objectives – measurement of results
Competencies: evaluating employee on the competencies which have been determined as associated
with superior job performance – measurement of behavioral characteristics that impact results.
Development: Creating Individual Development Plans (IDPs) to enhance employee strengths and to
close performance gaps as determined by the competency evaluation.
If the employee fails to meet certain work objectives, the competency evaluation will typically reveal
the reasons why. Evaluating employees on the critical competencies for a position does much more than
that, however. An employee can meet their performance targets, yet be rude to customers, disrupt the
team and fail to keep commitments. Providing employees with performance feedback on competencies
gives them the information they need to be successful.
Phase 1: Performance Planning – Supervisors and their direct reports
• Identify major work objectives
• Review competencies
• Establish Individual Development Plans (IDPs)
• Identify action steps for achieving both the performance objectives and personal development.
 Competency Based Performance Management

• Phase 2: Monitoring and Coaching - Supervisors work closely with direct reports
to monitor progress toward meeting the major work objectives and follow through
with planned professional development activities. This is a continuous process.
Employees need regular reinforcement to help maintain focus on their goals, and get
regular encouragement to participate in professional development activities. There
is a range of options for providing feedback – some organizations require formal
monitoring and coaching sessions on a quarterly basis. In others, supervisors
incorporate monitoring and coaching into their everyday interactions with their
direct reports.
• Phase 3: Evaluation - Supervisors evaluate performance results for objectives,
Individual Development Plans and competencies. In many organizations, supervisors
perform a unilateral assessment of all three. However, the process is much more
effective when employees participate fully by completing self assessments of their
objectives and competencies. Even when employees’ self-assessments are inaccurate,
there can be tangible benefits from a process that requires employees to think
through their degree of proficiency in the competencies most important for success.
 Guidelines for developing PM Components:

▪ Objectives
▪ Use SMART acronym to design appropriate objectives; identify about 4 to 8
objectives during each performance evaluation cycle.
▪ The objectives to concentrate on outcomes; a major outcome of the continuous
focus on performance objectives is that virtually all employees clearly understand
what is expected of them and how their individual accomplishments contribute to
the organization’s success in achieving its strategic goals.
▪ Performance objectives generally get driven from the top; employees would feel
a greater sense of ownership and commitment when they have a say in setting
objectives that impact their jobs.
▪ Another approach for some organizations has been to have a workgroup identify
a series of skillfully crafted objectives from which the employee and supervisor
select – and customize as necessary – the ones that are most appropriate for that
specific employee.
 Benefits

• Competency assessment results provide training needs assessment

data that can be used to plan and deliver employees’ training in a
targeted manner.
▪ Outputs or results expectations and metrics for employees are
clarified at the outset of the performance period in a competency
based approach. In addition, the approach is an incentive and retention
tool especially for exemplary or high performers as they value the
recognition and rewards that such a system could bring to their work
situation.
▪ In short, a competency based performance management approach
establishes a work environment in which the roles, relationships and
responsibilities of both managers and employees are well defined and
clearly stated. This straightforward and mutually understood system
builds trust as it ensures accountability and improves performance.
 Challenges

• The organization’s senior managers must provide strong, long-term support for the project and act as
role models for the process.
▪ Required resources need to be available over the long-term.
▪ Managers will face increased workloads as a competency based approach requires them to provide
employees with additional and more effective feedback as well as accept responsibilities for addressing
performance obstacles.
▪ There must be a strong alignment between the organization’s strategic direction and the benefits &
costs of adopting the system.
▪ The long term success of the system depends on the creation, completion and maintenance of HR
records of various types; the organization should have the capability to preserve the information in a
secure yet convenient HRIS that assures long term availability.
▪ The organization should be willing to commit project resources to communicating the competency based
approach to all the employees, even if the system is planned only for a small segment of the organization.
Employees are likely to be curious about a system that will affect their performance and work lives.
▪ Managers should be trained on their roles and responsibilities as well as how to use the system to carry
them out.
▪ The organization should be prepared to design, develop and deliver the necessary training for its own
competency base performance management system.
Competency Based Training and
Development
 Competency Based Training and Development

▪ First step is building a serious business case; Why, what and how the training is
intended to support employee and organization growth has to be evaluated and a
credible description evolved.
▪ Developing a good competency building plan would involve understanding customers
and markets of the company business, organizational growth plans, technology,
marketing and investments and also competencies associated with such dimensions of
the business.
▪ The Plan should detail how competencies would be built through training and
development, investments required, infrastructural requirements & facilities,
curriculum aspects, faculty & courses etc.
▪ The type of class room training, on the job training, simulations, special projects,
or long-term coaching etc. based on the competency and methodology that would be
appropriate could be outlined in the T & D plan.
 Competency Based Training and Development

▪ Such a Plan will help organizations to pursue training and developmental programs in
a logical and sustainable fashion and accrue valuable benefits to the organization and
employees;
▪ All role holders to be consulted and be involved under the guidance of experts
and majority view would reflect in the plan for a successful roll out.
▪ Once the Plan has been detailed and cleared, the next phase is training needs
assessment study; this can be conducted at three levels – organization, department/
function and individual employee level; it can also be for the intermediate term ( 1
year), mid-term (3 years) and long-term (5 years).
▪ Look at the organization’s competency framework and identify the training
needs against the pronounced competencies brought out in the framework.
▪ The basic difference between the traditional training needs assessment and
competency-based training needs assessment is to identify and plot the needs in the
light of required competencies and their proficiency level rather that at a generic
aptitude and base skill level.
 Advantages For Employers:

▪ Ensures that corporate training and professional development activities are cost effective,
goal oriented and productive.
▪ Establishes a framework for constructive performance assessments by managements at
scheduled intervals.
▪ Improves communication between employees and management.
▪ Improves quality of its products and services.
▪ Increases internal employee mobility and cross training, providing the organization with a
greater ability to scale and flex as needed.
▪ Outlines employee development and promotional paths within the organization’s
succession plan.
▪ Records the employee’s acquisition of skills, knowledge, safety and other procedures
relating to each task through competency-based interviews.
▪ Reduces cost overruns caused by poor performance or miscommunication of job
expectations.
▪ Standardizes performance across organization.
▪ Targets specific training needs.
 Advantages For Employees:
▪ Enables employees to be more proactive beyond their individual roles by learning
additional skills that are valued by the organization.
▪ Ensures that individual professional development and training milestones are recorded
and acknowledged by the organization.
▪ Gives employees insight into the overall strategy of their team, department and
organization leading to greater encouragement and motivation.
▪ Increases the potential for job satisfaction.
▪ Offers a reference resource for day-to-day job requirements.
▪ Provides a mechanism for recognition of employees’ abilities.
▪ Provides clear direction for learning new jobs skills.
▪ Sets clear expectations for employees, enabling them to make better decisions and
work more effectively.
 Benefits

▪ As the name implies, competency-based training is a type of training that is focused on specific
competencies or skills. Unlike other more traditional training methods, competency-based training is
broken down into much smaller units that are focused on one single key skill. The learner must
demonstrate his or her mastery of that single skill or competency before continuing to the next
segment of training. The skills are put together into modules and typically at the end the learner
receives some form of qualification or certification. This type of training may also be called outcome-
based learning/training or skills-based learning/training. The benefits for this type of training are as
follows:
▪ Time Management: Since the modules are broken down into small units, it can be less daunting to
begin. Learners are able to simply complete a unit on an as-needed basis, without having to commit to a
longer program all at once. This can make it easier to fit into already busy work schedules—allowing
your employees to gain skills without taking them away from other tasks for too long.
▪ User Directed: These types of modules are often self-paced, which means they can be completed at
the user’s discretion. This can allow more flexibility in getting an entire team trained on a particular
skill without having to get the whole team together at once. It can also mean that individuals can skip
ahead when they already know one component, while those who need extra time can take it.
 Benefits

▪ Reduced Cost: With the way these types of modules are typically used, it can be  less
expensive to implement than a larger training program, while still garnering many benefits for
employees and employers alike. Less money is wasted on components of a program that are not
as useful.
▪ Allows Personalization: This type of training can be set up to allow users to “test out” of
specific modules, which can mean an entire program can be modified to suit individual needs.
One individual may be able to skip modules in which he or she is already knowledgeable, thus
saving everyone’s time and effort. It can also mean a larger program can be completed more
quickly.
▪ Flexible Use: It can be used on its own or in conjunction with other learning methodologies,
depending on the overall training goals. Alternatively, it can be used in remedial training
situations since individual units can be taken alone and assessed.
▪ Better Retention: Learners can be more focused since they are able to take the training units
at times that best suit them.
 Benefits

▪ Workplace Integration: This can be tied to career progression or to receiving pay

raises in some cases. This is because this type of training is very objective in nature
since it requires the learner to show competency in order to progress.
• Limitations: 1. There are chances that these learning styles may not fit the
preferred approach & style of some students; 2. There are chances of an increase in
procrastination among unmotivated students; 3. These courses can also, in some cases,
end up more costly because of an absence of a fixed time frame; 4. These course
credits are usually not transferable; 5. Also, it requires students to be self-
disciplined, self-motivated, and able to plan & work independently which might not be
possible for all students.
Competency Based Compensation
Management
 Competency Based Compensation Management

▪ A system under which an employee is paid for the skills and knowledge he possesses
and not according to the job or position he/she is currently performing. The
employees are paid not by virtue of their position but competency.
▪ In competency based pay, the employee feels he/she is getting paid for the
worth he/she has.
▪ CB Pay is based on the premise that when employees use their knowledge, skills
and abilities on the job, they will achieve the type and level of accomplishment
required for the organization to meet its strategic goals.
▪ Competency based pay depends on employees’ developing and applying
competencies to meet certain performance standards, rather than to achieving
performance goals as in the case of performance pay.
▪ It is used in professional positions, such as a University Professor or Scientist,
where compensation increases are the result of acquiring additional knowledge and
publishing articles and books rather than seniority or past performance. In other
areas, such as software development , developers may receive pay raises when they
complete the training and pass the certification test for a new programming language.
 Competency Based Compensation Management

▪ Competency based pay is often used in conjunction with

performance pay like bonus or incentive programs for
meeting sales goals.
▪ Competency based pay plans include organization,
department, job and personal competencies. Organization and
department competencies are tied to strategic goals and may
include problem solving, planning, service delivery and
communication. Competencies related to the job are based on
knowledge and skills required for the job along with
behaviors required to effectively use the knowledge and
skills. Personal competencies include attitudes, personality
and motivation.
 Benefits and Cons

• Benefits:
▪ It helps motivate the employees to perform better and contribute to
the company.
▪ Since the employees get rewarded for something they feel they
deserve, they become loyal to the company.
▪ Competency based pay helps push employees beyond their comfort
zone as they feel they can earn more based on their competencies.
▪ Subordinates can also earn more as compared to seniors on their
competency levels.

• Cons:
▪ Sometimes competition within the organization can lead to a disjoint
in a team which affects overall output.
▪ In some cases, competency based pay can lead to favoritism towards
a particular employee