There are many organisations using competency models as the basis for their performance management systems. Competency models articulate the knowledge, skills, abilities and other characteristics that are deemed to be most instrumental for achieving positive organisational outcomes. Job analysis techniques, such as job observations, interviews, focus groups and surveys, are used to identify key competencies and associated critical work behaviours.
According to Sylvie Woolf, director of Client Service, an advantage of competency models is that they typically include a full array of factors associated with success, such as technical, leadership and interpersonal. Competency models are especially useful because they not only communicate what is important to an organisation but also provide a common foundation for developing integrated human resource systems, such as staffing, training, promotion, succession planning and performance management.
For performance management purposes, competencies should be defined in terms of important job behaviours and expectations that are associated with them. Defining competencies behaviourally provides a solid basis to differentiate between employees who are performing more and less effectively than others. The competencies should also be defined to reflect different levels of responsibility, complexity and difficulty that characterize employees’ jobs at different levels in an organisation.
Employees at different job levels are certainly paid differently, based on their experience, responsibility and contributions. For performance evaluation purposes, it is important to articulate clearly how expectations change at different job levels (for example, entry-level employee, experienced employee and manager) as well as what reflects more or less effective job performance at each level.
Alternatively, some competency models contain a set of core competencies that apply to all organisational members and additional specialized competencies that are customized to reflect the specific technical or managerial responsibilities that apply to particular jobs. Here are some of real-event examples:
From all above examples, decisions need to be made about how many sets of competencies and performance standards should be developed and how customized they should be. There is no one best approach, as there are advantages and disadvantages to different options. Use of a common set of performance standards across jobs means that the standards will be written at a more general level and that managers will need to translate them into more specific expectations and goals that are relevant to a given employee’s job, particularly in competency areas that relate to technical aspects of the job.
However, practical advantages to using common standards across jobs or job groups are that the development time and developmental resources are significantly less than developing separate standards for each job and there is more consistency in the expectations communicated to organisational members. To the extent that an organisation wishes to drive particular behaviours, a consistent message regarding expectations can facilitate this.
In short, many factors will impact the effectiveness of an organisation’s performance management system, but three are most important. First, the system needs to be aligned with and support the organisation’s direction and critical success factors. Second, well-developed, efficiently administered tools and processes are needed to make the system user friendly and well received by organisational members. Third, and most important, is that both managers and employees must use the system in a manner that brings visible, value-added benefits in the areas of performance planning, performance development, feedback and achieving results.