How To Build A Competency-Based Talent Management System

How To Build A
Competency-Based
Talent Management
System
Agenda
Competencies
Applications
Profiling
Assessing
Talent Management
2004 Gulf Coast Symposium on Human Resource Issues – Session 404: How to Build a Competency-Based Talent Management System
What is a Competency?
• Behavioral or technical skill, attribute
(e.g. intelligence), or attitude (e.g.
optimist)
• Measurable and/or observable
• Related to success at work (competent)
or failure at work (incompetent) – 60%
Building a Model
• Critical Incident Debrief
• 360 Expert Discussion
• Compare Assessment to Performance
• Buy one…
Commercial Interpersonal
Models
• 85% of all models include the same content
• DDI – developed over 30 years of research
• Hay/McBer – studied 286 situations and found
that same 21 competencies differentiated
performance
• Other research-based models
– Lominger’s Leadership Architect™
– Center for Creative Leadership (various 360’s)
– Saville Holdsworth Limited (360)
– Personnel Decisions, Inc.’s Successful Manager/Executive
Handbook
• Other models based on 360 results
– Bernard Bass
– Clark Wilson
Different for Each Level
Individual Supervisor Manager Executive

Contributor
Knows Customer Work Business Industry
Manages Work People Process Systems and

Org
Focus Up Up & some Down & Down

Down some Up
Strategy Hears it Shares it Shapes it Creates it
How to Create Value
• Effectiveness
– Increase revenue
– Increase productivity
– Improve quality
– Improve customer satisfaction
• Efficiency
– Reduce costs
– Reduce cycle or delivery time
How Competencies Impact
Value
• Attract
• Select
Reduce
• Develop top talent costs
• Deploy
• Retain Example from Development:
Train 100% of field sales at or
below 80% of industry average
Improve cost so that Mystery Shopper
ratings are no lower than 70%
customer and average 90% in the areas of
satisfaction product knowledge, helpfulness
and courtesy.
How Competencies Help HR
• Research clearly indicates that HR can add
market value to the organization if…
– HR processes are aligned with and support the
business strategy
– HR processes are excellent, streamlined and
integrated
– HR systems are hard for competitors to imitate
• Research also indicates that HR practices can
lower shareholder value if…
– Quality is poor or effort is based solely on theory
– Results are not measured
– Potential overshadows performance in HR decisions
Begin With the End in Mind
ATTRACT
SEL
IN
TA
E CT
RE
PROFILES
D
Y EV
LO EL
P O
DE P
Attract
THE PROCESS
Define Talent Profile - What do these people look like?

Determine Location (Internal/External) - Where are they?
Target Individuals - Who are they?
Develop Attraction Strategy - How to get them on board?
Establish Timing - When to bring them in?
WHEN TO DO IT
Current shortage
Future need
HOW TO DO IT
Current Shortage
- Identify key positions where talent bench is thin/non-existent
- Identify possible internal “fits”
- Identify reasons for interest/lack of interest in position
- Identify possible external “fits”
- Create employment brand with strong performance and talent management reputation
Future Needs
- Anticipate possible future scenarios
- Build future success profile(s)
- Determine depth of talent bench for possible futures
- “Bench Strength” available within organization : Target individuals and discuss interest in future possibilities
- “Bench Strength” not available within organization : Select Build/Borrow/Buy/Bind strategy to meet needs
Select
THE PROCESS
Identify Needs - When will I have a need to recruit?

Define Talent Profile - What will a successful candidate look like?
Determine Location (Internal/External) - Where can I find them?
Build Talent Pool – How can I get the best of them together?
Create Selection Guidelines - How will I make a choice?
WHEN TO DO IT
Position becomes/will become vacant

New position may be required
HOW TO DO IT
Position Vacancy
- Review/Modify position profile
- Determine internal availability or need to go to market
- Create Recruitment Guide and Candidate Selection documentation
New Position
- Define Success Profile
- Follow above steps
Develop
THE PROCESS
Identify Needs – What do we need to build?

Make Investment Decision - Why should we invest in person X?
Clarify Outcomes – What will be the required outcome of development?
Create a Plan – What developmental action will be most effective?
Manage Learning – What will be done to support the required change(s)?
WHEN TO DO IT
- Poor/Under Performance (Focus on Lagging Capabilities – should have had them to start with)
- Develop Superior Performers (Focus on Leveraging Capabilities – what differentiates high performers)
- Prepare individuals for the future (Focus on Leading Capabilities – what will they need to be effective in the
next position/level)
HOW TO DO IT
Poor/Under Performance
- Identify indicators of poor performance (e.g. Quality of work, Timelines of delivery, etc.)
- Translate indicators into development needs/Match against current position profile
- Target high impact development interventions (Train, Apply, Feedback, Adjust)
- Track change
Developing Superior Performers

- Identify high performers (have been able to consistently deliver results that exceed expectations)
- Build high performer profile/Review profile against research profile for level
- Target individuals who are already solid performers and match them against the high performing profile
- Develop performance enhancement plans (specifically focused on key competencies)
Preparing for the future

- Build ‘potential’ skills
- Build for the next level to have more talent from which to select
Deploy
THE PROCESS
Identify Needs – Do we have the right people in the right place with the right skills doing the right work?
Define Timeframe – Current performance improvements or future scenario planning?
Select Intervention - Performance Management or Talent Management?
Define Impact – Right people with right skills in right position at the right time?
Create a Plan – Define the desired outcome and supporting steps?
WHEN TO DO IT
- Performance not aligned with business direction

- Not responding to business changes/needs
HOW TO DO IT
Performance Management
- Cascade SMART objectives down based on company strategic plan
- Provide multi-rater ongoing feedback on performance against objectives
- Build pay-for-performance pool from business results and distribute accordingly
Responsiveness
- Build database of mission critical technical skills, experiences, competencies
- Build position and personal profiles using the database
- Base build/buy/borrow/bind/bounce decisions on results of what-if scenario reports
Retain
THE PROCESS
Identify Key Talent – Who do we need to “Bind”?

Determine Source of Value - What makes them key talent (Scarcity or Mobility)?
Manage Future Value – How do we maintain their value ?
Develop Retention Plan – How will/can we keep them?
Manage Risk – How can we minimize the risk of losing them (Monitor motivation and build back-up)?
WHEN TO DO IT
- Individual’s have a unique/scarce portfolio of capabilities that is highly valued by the business
- Individual’s have a portfolio of capabilities that makes them extremely mobile across the business
HOW TO DO IT
Unique/Scarce Portfolio
- Use a human capital balance sheet to identify the bench strength of key positions
- Identify individuals on that talent bench who “stand alone”, i.e. they have a good fit to the requirement and there
is a large gap between them and the next best fit
- Identify possible talent retention strategies and create “Talent Back-Up Plan”
High Mobility Portfolio

- Use the mobility index to identify individuals with high mobility (either vertically or laterally)
- Target development opportunities for horizontally mobile people to improve vertical mobility
For Both : Identify and monitor key retention factors and discuss quarterly at executive level
Profile Choices
• Content
– Performance vs. Potential
– Ability vs. Willingness
• Point in Time
– Lagging vs. Leveraging vs. Leading
• Organizational Slice
– Core vs. Level vs. Family vs. Position
• Model
– Research vs. Expert
PROFILE: Content
Performance Potential
What an employee can do What s/he will be able to do
•Knowledge & Education •Learning capacity
Ability
•Skills •Aptitude
•Experience •Intelligence
•Degree of Proficiency •Ambiguity management
Willingness
What s/he is willing to do What s/he wants to do

•Attitude •Career goals
•Beliefs •Interests & Motives
•Values & Principles
•Personality
PROFILE: Content
Performance Potential
Only focus on what can be Capture and leverage this
measured and developed rare employee
Ability
•Attract •Attract
•Select •Select
•Develop •Develop (if possible)
•Deploy •Deploy
•Retain •Retain
Willingness
You will probably not change Capture and use

what is almost innate •Attract
•Develop (if possible) •Select
•Deploy •Deploy
•Retain •Retain
PROFILE: Point in Time
Lagging Leveraging Leading

Improve year-over- Become a high- Prepare for the
year: performer: coming year:
1. Develop annual 1. Assess all employees 1. Develop annual
SMART goals (what 2. Determine high- SMART goals (what
to do) performer to do)
2. Define how the goals differentiators 2. Define how to
should have been 3. Compare original accomplish those
accomplished assessments to goals (success
(performance high-performer profile)
improvement profile and base 3. Assess employee
profile) development on gap against the profile
3. Assess performance analysis and develop skills
and look for and competencies
opportunities to required to succeed
improve next time at goals
PROFILE: Organizational Slice
• Core
what a company does that that results in
sustainable competitive advantage (valuable, rare,
difficult to imitate)
• Level
whether you are managing self, others, process,
or the organization
• Family
what is unique to similar families of jobs
• Position
what is unique to each individual job
PROFILE: Models
• Research-Based Model
– Pro: benchmarks established against proven high
performers
– Con: the job may not accurately reflect one with the
same title in your organization, industry, or culture
– Use When:
• No experts are available
• It is a completely new position with poor defined responsibilities
and objectives
• Validating an expert model
– How to:
• Use or create software that runs gap-analysis reports from a
database of research on your competency model
• Manually calculate technical or leadership skills from available
research
PROFILE: Models
• Expert Model
– Pro: built specific to the job requirements and
environment
– Con: takes key stakeholders off the job during
building and audit/validation steps
– Use When:
• Position has a clear history (or clearly understood change)
and performance objectives
• High performers have been clearly identified and a 360 pool
of raters are available to build and audit/validate
– How to:
• High-Performer Profile
• Success Profile
EXPERT: High-Performer
Profile
1. Assess all incumbents using 360 pools.
2. Gather performance data and build
standard distribution.
3. Isolate profile characteristics that are
unique to the high-performers and
threshold-performers. What is in this
Top cell that is not
in
Middle
Performance
these cells?
Bottom
EXPERT: Success Profile
1. Gather existing data on past, present, and future of the position
1. Who has succeeded and why
2. Accurate job description that includes education, experience, technical knowledge and
skills
3. Annual performance objectives
2. Bring expert panel together (360 pool)
1. Boss and boss’ boss
2. Past and present incumbents
3. Direct reports
4. Customer of work (outputs)
5. Vendor of work (inputs)
6. Collaborators
7. HR
3. Expert panel defines current and future objectives, accomplishments,
standards, and challenges for performer (not skills or competencies
required)
4. Experts use those lists to define ‘mission critical’ technical KSA’s,
experiences, and proficiency then interpersonal competencies
5. Audit/Validate using Research-Based Models
Audit/Validate the Profile
• Some electronic tools can produce instant
profiles based on the research
– Homemade MS Access database
– Buy benchmark software
• Manual comparisons can be done using
research
– Your vendor’s 360 validation reports
– Some certification manuals’ statistics
• Translations can be generated
– Comparative analyses
Audit/Validate the Profile
• Weight the final research-based profile
competencies to end up with a full
distribution
• Compare and contrast to the Expert
Model profile
• Bring the expert pool back together and
have them explain/justify the differences
between the research-based profile and
the one they generated
• Adjust the Expert Model profile as
necessary
Assessment Choices
• Ownership
– Employee vs. company
• Format
– Sort vs. electronic vs. pen/paper
• Number
– Entire set vs. profile only
• Perspective
– Self vs. boss vs. 360
• Distribution
– Absolute vs. forced rank
ASSESSMENT: Ownership
• Employee
– Confidential developmental information
– Typically done on a 5-point scale with
comments added
• Company
– Used by employee for development and by
the company for workforce planning
– Typically done using a flat sort without
comments added
ASSESSMENT: Format
• Sort
– Competencies on cards
• Electronic
– Online or on disk
• Pen and Paper
– Competencies on checklist
ASSESSMENT: Number
• Entire set
– Takes more time
– Can be used for any purpose
• Profile only
– Shorter assessment time
– Limited to one-position analysis
ASSESSMENT: Perspective
• Self
– Least accurate, especially on interpersonal
skills
– Most people over-rate themselves with the
exception of high-potentials, they always see
room for improvement
• Boss
– Looks at what was done and not how it was
done
• 360° Pool (aka Multi-Rater)
– Balanced and perceived as fair
– Direct reports rate higher than other groups
ASSESSMENT: Distribution
• Absolute Sort
– Assign any rating to any competency
– Susceptible to rater bias, tendency to put
majority of cards in an extreme pile
• Forced Sort
– Equal number of competencies in each rating
– If using ‘Not Applicable’ rating, subtract
number in that pile from total and divide the
remainder by total number of available
ratings
Gap Analysis
Importance
High Medium Low
Skill
High
Clear Keep on Beware

strength using overuse!
Medium Low
Important Keep on
Ignore
need using
Urgent
Need Ignore
need
Putting It All Together
• Identify the best of the best
• Identify potential differentiators
• Assess everyone against the database of
potential differentiators
• Isolate the true differentiators
• Compare and contrast everyone to the high-
performer profile
• Develop plans to source, attract, select,
develop/succeed, deploy, and retain
• Reward high performers financially and best
matching employees with moves
Applications
ATTRACT
SEL
IN
TA
E CT
RE
PROFILES
D
Y EV
LO EL
P O
DE P

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How To Build A

Individual Supervisor Manager Executive

Knows Customer Work Business Industry

Manages Work People Process Systems and

Focus Up Up & some Down & Down

Strategy Hears it Shares it Shapes it Creates it

Define Talent Profile - What do these people look like?

Identify Needs - When will I have a need to recruit?

Position becomes/will become vacant

Identify Needs – What do we need to build?

Developing Superior Performers

Preparing for the future

- Performance not aligned with business direction

Identify Key Talent – Who do we need to “Bind”?

High Mobility Portfolio

What s/he is willing to do What s/he wants to do

You will probably not change Capture and use

Lagging Leveraging Leading

Clear Keep on Beware

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