Why Competencies Matter: Measure and Develop

Choosing the Right Model

SuccessThe best approach to competency modeling involves a rigorous comparative analysis of top and average performers in order to identify the few behaviors that account for the significant differences in performance between the two groups and can predict success. The critical point of differentiation is to be able to consistently identify and differentiate the small but important elements that cumulatively define the variations and types of competencies required to do a job well.

Some organizations rely on personality assessments which can change fairly quickly and dramatically because these assessments can be influenced by situational circumstances or life events, whereas predictive level, comparative analysis doesn’t change.

Other organizations make the decision to develop their own competencies more quickly and less expensively. Examples of competency modeling that are fairly typical and not as rigorous include:

  • using focus groups or “expert panels” of employees to utilize an open-ended process to discuss and identify what competencies these “experts” believe are important for getting good results,
  • simply asking focus groups to rank-order the relative importance of a pre-determined set of generic competencies and pick those they feel are most critical in their organization

While these methodologies are quick, convenient, and low cost, their success in identifying competencies that will help their employees to attain specific results in their job is highly variable. Given the reliance on the “focus group” approach, the value ultimately depends on the insight and wisdom of the “experts” involved in the process. It can also lead to choosing competencies that are common between top performers and average performers, which then impacts the validity of the choices made. While the resulting model may have the “buy-in” of the participants because of their involvement, it may not be the “right” model.

Now, for Reason #2 to use competencies as part of your talent management strategy:

Competencies are measurable and can be developed: Ask yourself, “What is superior performance worth?” This is easier to answer for some jobs than others, but there is always an answer for each job.

Let’s look at a sales job to illustrate the point. In a recent study of 1,800 companies, completed by Chief Sales Officer (CSO) Insights it was found that by choosing the right competency model, organizations can increase revenues on average by $4-6 million. In addition, those organizations who utilize granular, role-related behaviors that predict success were 20% more likely to hit their sales quotas, increase deal sizes YOY by 5.5%, and close 10% more leads.

Business executives understand this kind of thinking, where they often do not understand other approaches that are seen as having little impact on the bottom line.

When properly defined, competencies can be measured. By measuring competencies, organizations are enabled to evaluate the extent to which their employees are demonstrating the behaviors believed to be critical for success as well as to calculate the return on resources invested to retain, attain or develop these competencies, and make adjustments for a more targeted approach to development.

Using 360 feedback instruments as part of employee development efforts, the effectiveness of employees developing or employing key job competencies can be routinely measured and enable individuals to compare their perception to that of their boss, peers, direct reports and others. For example, if I get feedback on how “well I work with others” and I think I am a “team player” whereas others see me as “hard to work with” that is important to know. Using that information to improve that competency is an important step in employee development and improving job performance.

In addition to job competencies, the ability to know if individuals are demonstrating the competencies deemed to be critical for producing the organization’s desired results and/or are making progress in developing them is a critical aspect of being able to strengthen an organization’s brand and culture. If the measurement of competency development progress is also coupled with the measurement of the impact of these competencies on business results, this increases the organization’s capability to progress in its development of its brand and culture, and ultimately enables the organization to tie its talent management strategy to its business strategy. For example, if “problem solving” is important for your organization to enable it to “‘think outside the box’ to find solutions”, then this competency would be important to measure and develop throughout the organization. This way all employees are using and developing a competency that directly impacts the strategic direction the organization has chosen.

Next up, competency-based learning. For more on this topic, click here.

Jackie Messersmith is President and CEO of Talent Management LLC. Talent Management is the developer and distributor of Talent Snapshot®, an integrated, competency-based, “in the cloud” talent management solution. Jackie can be reached at 513-528-9700 or jackie@talentmanagementllc.com.

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