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Getting the Best out of your Competencies

Strebler M T, Robinson D, Heron P
Report 334, Institute for Employment Studies, June 1997

Employers are spending vast amounts of money and time introducing competencies. But do they reach the people they are intended for, and what brings added value to their use? This study evaluates the practices of eight leading employers who use competencies for performance review, and includes the views of 184 users. Employers who evaluate their practices will gain insights and practical tips to target interventions where they are likely to make most impact. The findings will serve to remind employers that competencies only exist because of their employees and their motivation and willingness to make them work.

Introducing competencies

Employers believe that competencies give clear messages to employees about the behaviours required by their business. A review of the approaches adopted by the eight case study organisations in this study, together with feedback from users, challenges this belief. Users have conflicting views about competencies. Some are somewhat suspicious about the real business purpose for introducing them. However, they are not perceived to be just another initiative to control costs.

Attitudes to how well competencies fit jobs also vary. On the whole, managers are satisfied that they will help them develop the skills they will require in the future. However, they do not agree that competencies reflect their technical and professional skills. Users of competencies are generally neither particularly satisfied nor dissatisfied about the introduction of competency frameworks. Nevertheless, staff in financial organisations (who tend to have longer experience of their use and a service-oriented culture), and users with managerial roles, tend to be more satisfied. Those with technical and specialists roles are the most dissatisfied with competency frameworks. As shown in Figure 1, training managers in understanding and using competencies ‘to a great extent’ significantly improves satisfaction with the approach.

Using competencies

Many employers are faced with the challenge of deciding the purpose for which competencies are best used. They are also required to provide adequate support to individuals for implementing them successfully. Among the case study organisations, competencies are most frequently used to discuss and rate job performance, and identify training needs; they are less frequently used to define job requirements and determine salary and pay increases.

Fig. 1: Impact of training on satisfaction

Source: IES, 1997

Satisfaction with the use of competencies is determined by the extent to which users believe they will enhance their career prospects. They are more positive about some aspects of the implementation process (eg deciding which competencies are critical for their roles, and agreeing levels of performance with their managers) than with others (eg understanding the link with pay and reward, and consistency in assessment).

Assessing and measuring

Organisations which have spent time and money to ensure that competencies are used successfully, may understandably expect improvement in the assessment of job performance. However, competencies are not immune to the difficulties encountered with the more traditional measurement of job performance. The systems used to assess competency performance vary along several important dimensions, including the extent to which competencies are weighted, whether self-assessment is used, and whether competencies are linked to the level of job performance required.

In this study, users show no strong feelings about whether they believe competencies can be assessed properly. They do, however, agree that the assessment process relies too heavily on managers’ judgement, and that managers and staff can have a different view of what is required in order to demonstrate competency. Interpersonal skills are perceived to be the most difficult area to assess and develop. Employers should be mindful of the reasons given by users for this: it is difficult because of the way they are expressed, overlap with other skills, need to be adapted to work situations, and because behaviours are perceived to be difficult to change. The rating systems used place great demands on the ability and willingness of individuals. Users believe that the process by which competencies are measured is more consistent and fair, but that the outcomes (eg the resulting measures) are not necessarily more objective.

Linking to pay and training

Employers who integrate competencies into their performance review are signalling that competencies will be directly or indirectly linked to some outcomes. All the case study organisations have combined the use of competencies with the assessment of objectives in the performance review. In practice, objectives are perceived to carry more weight than competencies.

Users are, on the whole, confident they can assess and develop their own competencies, but slightly less so for assessing and developing those of others, as shown in Figure 2. Developing interpersonal skills and coaching staff in the use of competencies present the most challenge to employers, as users are the least confident in this area.

Fig. 2: Confidence assessing and developing competencies of others

Source: IES 1997

The outcome of the performance review has a negative impact when it results in recommending current job training and development. Staff who have received such an outcome are significantly less confident about assessing and developing their own competencies. The outcome of the performance review has a positive impact on users when it results in a pay increase. Managers who have received such an outcome are significantly more confident in assessing and developing the competencies of others.

Integrating competencies into the performance review raises expectations that competencies will be rewarded (most users think that they should) and that assessment will be followed up by some actions (most users think that it is not).

• Introducing competencies without a clear business purpose raises staff suspicion.
• The perceived job fit and relevance of competency frameworks influence users’ satisfaction.
• Competencies have made the process of performance review more open.
• Interpersonal skills are perceived to be the most difficult to assess and develop.
• Competencies are perceived to improve the consistency and fairness of the assessment and measurement process, but not the outcome (eg competency measures).
• The outcomes of the performance review (eg link to pay and/or training) impact on users’ confidence with their use of competencies.
• Competencies raise expectations that improved performance will be rewarded.

Adding value

Our research clearly demonstrates at least two fairly simple interventions which will add the most value to integrating competencies into performance review:

1. Using competencies to define job requirements ‘to a great extent’ significantly predicts satisfaction with the approach, increases the belief that competencies can be assessed properly, and confidence with their use. Failure to do so may result in individuals finding that their efforts remain largely ignored or, worse, a waste of time, especially if they are later told that these competencies are not required for their jobs.

2. Training staff ‘to a great extent’ in understanding and using competencies adds the most value. It is the most significant predictor of satisfaction at every stage in the use of competencies for performance review. Employers failing to provide adequate training may find the costs and efforts they have spent in introducing competencies are wasted on users who do not understand them and are unable, or unwilling, to make them work.

The solution is for employers to become their own ‘corporate doctor’. Evaluating practices by seeking feedback from their users will tell them which aspects of their use of competencies need improving and precisely where in their organisations (eg location, units, function etc.), and for which groups of staff, they need to intervene. Our study has provided a tool forsuch evaluation and highlighted points of good practice that employers need to attend to with some urgency.

Getting the Best out of your Competencies, Strebler M T, Robinson D, Heron P. Report 334, Institute for Employment Studies, 1997.
ISBN: 978-1-85184-260-5. £25.00. [PDF price: £10.00]

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