An analytical study on competency development and its

positive organisational outcomes.

Key Responsibilities and Competencies of HR Professionals:-

The role of the HR professional is constantly evolving, but without core
competencies and skills, HR managers could dramatically hurt your business.
There are several key skills and competencies for HR professionals to be aware of
today. For any business to be successful, it’s essential that HR managers
understand and master any HR core competencies they need to properly perform
their job functions.
In fact, according to Evren Esen, the survey program manager at SHRM, “We can
actually see the profession changing. Some core areas remain the same, but others,
based on how the raters assess and perceive HR, are new.”

Skills and Competencies of HR Professionals

Let’s take a look at some key HR skills and competencies your human resource managers
should possess to be able to effectively perform their job functions and ensure the success
of your business.

Communication Skills
It should be no surprise that an effective HR professional needs to possess excellent
communication skills. Having proper communication skills is one of the biggest key
competencies of HR professionals because their job mainly consists of facilitating
discussion between employees and employers. Without proper communication skills,
HR professionals would not be able to effectively relay information between the two
parties, causing the business to suffer. Having effective communication skills is such
an important human resources competency that, Dave Ulrich, a professor of business
administration at the University of Michigan, states, “You’ve got to be good at all of
them, but, no question, [this competency] is key.”
Critical Thinking
Another major key competency your HR managers should possess is critical thinking
skills. HR professionals spend a lot of their time balancing complex situations and
without being able to think critically, your HR managers would not be able to properly
create an environment where all employees feel comfortable and are motivated to
improve the business. In fact, according to Bloomberg, critical thinking is in the
“sweet spot” of rare skills that companies want most but are less common to find.

Organizational Skills
While there are many key competencies of HR professionals to master today,
possessing superior organizational skills is a must. Since being an HR manager is a
huge juggling act, it’s important to be organized to stay ahead of any HR issues that
may arise. A great way to help your HR professionals become more organized is to
have them perform the same actions, in the same way, each day to help them build
a routine. When all HR materials and practices are organized, your company will run
much more smoothly.

Leadership
One of the biggest HR core competencies your HR professionals need to possess is
leadership. HR managers are responsible for ensuring that the entire workforce is
properly taken care of and resolving many issues the business may face. HR
managers are not only responsible for the entire workforce but their department too
so without the ability to effectively lead, your entire organization will suffer. Part of
being an effective HR leader is to be flexible. For your business to be successful,
your HR professionals have to be open-minded and willing to accept change and
listen to opposing perspectives. When your HR managers are flexible in their
position, your business and employees will be more flexible as well. If you’re an HR
professional yourself, and you’re concerned whether you’re meeting these key HR
skills and competencies, Ulrich suggests, “Review the competencies with your
business leaders and ask them if you’re doing them. Next, pose the same questions
to your HR team. Then, ask yourself whether you really know the business or if
you’re glossing on the surface.” He then suggests setting your priorities and getting
to work on mastering these HR core competencies.
Possessing key competencies of HR professionals is so important because,
according to Human Resources Management Policies and Practices in the United States,
“70 percent of responding organizations said HR has a place on the board of
directors, and 66 percent reported having a written HR management strategy.” For
HR professionals to reach their full potential at any organization, it’s essential that
they learn and master all HR skills and competencies.
Now that we know some of the major human resources competencies your HR
professionals should possess, let’s take a look at how you can ensure that you
always hire the best talent for your business with a proper skills and competencies
model.
A proper competency model is essential for your HR managers to be able to hire
employees that will not only help the business stay successful but decrease turnover
rates as well.
Since competencies are sets of skills, knowledge, abilities, and attributes that enable
people to successfully perform their jobs, a proper competency model is essential to
achieve higher ROI of employees hired and lower turnover. There are many steps in
developing a competency model for your HR managers to ensure that they’re hiring
competent employees to work for your company.
Your competency model development should begin with a desire to support your
associates throughout their entire employee lifecycle including selection,
performance, management, training, and succession planning. HR competencies like
pre-hire selection assessments, performance management criteria, succession
planning programs, and training and development curriculums are essential to
ensure that you’re not only hiring the best employees, to begin with but that those
employees continue to do well in their positions and help your company grow and
stay successful.
SHRM Competency Model
Competency model development begins with aligning relevant business
outcomes and HR skills and competencies with your competency model. To ensure
that your competency model process is business-focused from start to finish, follow
these steps and you’ll be able to rest easy knowing you’re hiring the best employees
to help your company achieve success.

Step 1: Collect Data

It’s not enough to rely solely on interviews with potential employees as the
cornerstone of your competency model development. This strategy is not only short
sighted but doesn’t provide the necessary information needed to identify the critical
competencies of HR professionals for a particular job. By collecting data from
potential employees, leaders, and internal or external customers through multiple
formats, you’ll be able to obtain more information and enhance the relevance of your
HR competency model and the key competencies of HR professionals.

Step 2: Integrate Data

While it’s essential to collect data from multiple perspectives, it’s not enough. Data
must be analysed separately then brought together to create a cohesive story
around the critical knowledge, skills, abilities, and characteristics that will ensure the
success of your competency model.

Step 3: Focus on Goals

When you focus on specific goals, you reinforce the alignment between your
competency model development and the needs of your organization, creating a
sense of urgency and cementing HR core competencies your employees should
possess.

Step 4: Make it Practical

Your competency model is not useful unless everyone in the company can follow
along. Avoid using technical jargon and fancy acronyms when describing the
competencies of HR professionals needed for particular roles within your
organization. By making your competency model interesting instead of a
tedious HRM process you bring it to a level where action can be taken easily.

Step 5: Establish a Strategy

Since your competency model can be used to determine whether you should hire
new talent to join your organization or provide internal staff training to meet essential
competencies of HR professionals, your competency model should be used to
assess the time, effort, and budget available to create a strategy that will provide
your organization with personnel that meet these requirements.
Step 6: Set Minimum Requirements
Your HR competency model needs to address the minimum acceptable levels of
performance for each competency included in your model. Without leaders and
managers across the organization understanding the minimum level at which
individuals can perform and still be successful in their roles, they will not be able to
hire employees that can contribute to the success of your organization.

Step 7: Business Outcomes

By linking your competency model to your desired business outcome, you’ll be

able to validate your HR competency model and show its direct business impact.
This is an essential step in developing your competency model because it helps to
drive your training, hiring, and performance strategies since you have a better
understanding of which competencies to focus on based on their importance to your
bottom line.

Step 8: Include Standards of Performance

It is essential that you make values and standards of performance a central part of
your competency model because these standards represent a key piece of how the
job should be performed.
Your SHRM competency model isn’t complete once you’ve created the perfect
version of it. It is essential that you continue to refine your HR competency model
and the strategy you use to create it. Try revising your competency model at least
every year and a half to reflect the new roles of your organization and to ensure its
comprehensiveness and relevance to your business objectives. Without an updated
competency model on hand, the leaders of your organization will not be able to hire
competent employees and your business will suffer.
These skills and competencies of HR professionals should be evident in the work life
of every human resource professional.

Competency Based Management In Organizational

Context: A Literature Review
 Abstract

In today’s competitive and global environment it has become crucial for every organization to retain
competent employee for survival. The success of an organization depends not only on how the
organization makes the most of human competences, but also how it stimulates commitment to an
organization. Employee commitment, together with a competent workforce, seems to be of decisive
importance for an organization to be able to compete in quality and to go along with changes. This
paper reviews the available literature on competency based management and its uses in the
organizational sector. Very little research has been done in this area in the Indian organizations. This
paper defines the concept of competency based management, the driving force behind the use of
competency based management and its uses in the organization as well as the future prospect of
research in this area specifically in the Indian organization context. Organizations are using
competency based management as a tool for the success of the organization. Studies have shown
that competency approach to human resource management is not new. Competency framework is
used by the organizations today in different HR practices like recruitment and selection, training and
development, performance management, career development, compensation and pay etc. to
improve the performance of the organization as well as of employees. Competency based
management approach focuses on increasing the potential of employee to have the competitive
edge over other organizations in today’s time. Researchers and scholars have reported that
competency based management has a positive effect on the performance of organization and on
employee’s performance also. Keyword: competency based management, organizational
performance.

Introduction
In the present business environment of cut throat competition and globalization, competency based
practices have gained much of an attention from the contemporary organizations. Globalization,
individualization, digitalization and increasing competition are changing the face of the industry as
we know it. They aim at achieving an optimum performance in the long term by developing the skills
and competencies of the employees on a continuous basis. Literature and best practices indicate
that, to some extent, if employers treat their employees as valued contributors, they tend to remain
in the organization. To this end, organizations train, offer competitive compensation plans and
increase benefits to secure their employee loyalty.

Background
For over 30 years, business and industry has utilized competency models to select employees. But
the trend to use competency-based approaches in education and training, assessment, and
development of workers has experienced a more recent emergence. The competency movement
has been in use in business through the ground breaking work of and many others in the field.
Competency is a combination of tacit and explicit knowledge behavior and skills that gives someone
the potential for effectiveness in task performance. Using of competency models in HRM Integrate
HR activities. In fact Competencies are the common link among the majority of human resource sub
system . By linking human resources processes to desired competencies, organizations can shape the
capabilities of its workforce and achieve better results and it may be possible for an organization to
build ongoing snapshots of the overall knowledge capital and skills portfolio of its workforce.
Further, organizations may be able to utilize this information to perform individual and
organizational analysis, reduce education costs, improve hiring practices, improve retention,
improve human resources performance and developmental planning processes, and deploy its
human capital more effectively.

Competency:-
Competency has its origins in the Latin word 'competentia' which means “is authorized to judge” as
well as “has the right to speak” (Caupin et al., 2006). The competency approach to human resources
management is not new. The early Romans practiced a form of competency profiling in attempts to
detail the attributes of a “good Roman soldier” (Draganidis and Mentzas, 2006). McClelland (1976)
described “competency” as the characteristics underlying superior performance. He is credited with
introducing the idea of “competency” into the human resource literature; in his efforts to assist the
United States Information Agency improve its selection procedures (Draganidis and Mentzas, 2006).
Boyatzis (1982) defined competency as underlying characteristics of an individual, which are,
casually (change in one variable cause change in another) related to effective performance. The KSA
framework of competency is very popular in defining the competency concept. A competency is a
set of skills, related knowledge and attributes that allow an individual to successfully perform a task
or an activity within a specific function or job.

Showing the concept of KSA framework of competency :-

Types of Competency :-
Managerial Competency (Soft Competency): - This type of competency relates to the ability to
manage job and develop interaction with other persons.
For example: problem solving, communication, leadership etc.

Functional Competency (Hard Competency) :-

This type of capacity relates to the functional capacity of the work. It mainly deals with the technical
aspect of the job. For example: market research, financial
analysis.

Competency based Management (CBM)

CBM supports the integration of human resource planning with business planning by allowing
organizations to assess the current human resource capacity based on their competencies against
the capacity needed to achieve the vision, mission and business goals of the organization. Targeted
human resource strategies, plans and programs to address gaps (e.g., hiring and staffing; learning;
career development; succession management; etc.) are then designed, developed and implemented
to close the gaps. Other processes which are essential for competency based management system
are defined as follow (Draganidis and Mentzas, 2006): Competency identification. The process of
discovering what competencies are necessary for exemplary or fully-successful performance.
Competency model. A narrative description of the competencies for a targeted job category,
occupational group, division, department or other unit of analysis. Competency assessment. The
process of comparing an individual’s competencies to those of a competency model. Competency-
based management. Application of a set of competencies for managing human resources so that
performance contributes efficiently and effectively to organizational results. Competency standard.
Identifies the essential skills and knowledge workers must have, and defines the performance levels
they must achieve, to demonstrate competency in a specific work segment or function. Competency
profile. Document that describes the set of competencies particular to a position/ job/ occupational
group/functional community.

Driving Forces for Using Competency Based Management:-

Researchers have given the most frequently used reason for the introduction of using competencies
for managing human resource are to improve to organizational performance, increase the ability to
be competitive, support cultural change, enhance training and development effectiveness, improve
processes associated with recruitment and selection, reduce turnover, clarify managerial roles and
specialist roles, increase emphasis on business objectives, aid in career and succession planning,
analyize skills and able to identify the current and projected deficiencies in skills, improve workforce
flexibility, support the integration of overall HR strategies and provide a basis for compensation and
reward programs( Pickett,1998). Lucia and Lepsinger (1999) mentioned these additional business
needs that can be addressed through the use of competency models: providing clarification for both
job and work expectations, assisting in creating effective hiring practices, enhancing productivity,
creating effective processes for 360-degree feedback, providing a tool that can assist in meeting
today’s needs as well as assist with changing needs, and aligning behaviours with strategies of the
organization and its values. Draganidis and Mentzas (2009) describes few main reasons why
competency-based approach has been undertaken by companies or business organizations:

(1) it provides identification of skills, knowledge, behaviours and capabilities needed to meet certain
criterions which are aligned with the organizational strategies and priorities
(2) it focuses in eliminating competency gaps among individuals and groups in a project, job role or
enterprise strategy been selected.

The application of Competency in HRM functions:-

Competencies can be used in different parts of employee management applications, having an
important role in each one of them. Competencies are important in the following employee
management applications.

Selection:- Competency based selection was first used by David McClelland for hiring
purpose (Ozcelik & Ferman, 2006) Competencies are used in order to compare the capabilities of the
candidate with the requirements of the offered position; once the best candidate is identified,
competency gaps form the basis for an initial new-hire learning plan (Draganidis & Mentzas, 2006).
The purpose is to establish the "behaviours " needed in a particular job and the extent to which
these are possessed by different candidates (Rowe, 1995). Matching employee competencies and
job requirements is claimed to improve employee and organizational performance, as well as lead to
increased satisfaction (Spencer et al., 1993).

Training and Development- Competency gap analysis can identify

the needed competencies; these competencies can be linked with the equivalent learning objects.
Greengard offered a discussion on the competency based practice done by organizations, for
example, ford financial uses a skill and competency based learning program that affords employee
an opportunity to view information such as the skills and competencies needed for positions.

Performance Management - Today, performance is not only seen

as "what" (objectives) an employee achieves but also viewed as "how" (competencies
demonstrated) the job is carried out. Many organizations use competency-based models as a part of
their employee development center. The objective here is to assess individuals' strengths and
weaknesses so that future development is identified. According to Worker performance is evaluated
against job competency requirements as well as objectives.

Compensation Management- - Competency based

compensation can help the organizations to determine compensation on the basis of actual
performance levels through the process measuring the actual competencies exhibited by the
individuals while performing their jobs. Competency based system can also help in designing a fair
and equitable system through an objective evaluation of competencies which contributes for an
individual’s performance. American compensation Association have identified competency based
management as the least common application of competency model mong all HRM practices.

Career Planning- According to McLagan, the competency approach is an

effective tool to be used as a criterion for career development. Competency-based career planning
systems link competencies with the development activities, which help employees learn what they
need for further development . They can review the needed competencies of all the positions and
through comparison with the competencies they possess and identify potential positions and
develop their career plans.

Competency based Management/Competency Based HR

management and its Outcomes :- The use of competency based HR
management produce significant benefits to organizations and their employees. Sparrow (1995) has
observed that the competency literature includes a huge range of claimed benefits specific to HR
processes in organizations. In summary, these are: Improved recruitment and selection practices
through a focus on required competencies; improved individual, organizational and career
development programs; improved performance management processes due to improved
assessment; and lastly improved communication on strategic and HR issues through a common
language. Cooper, Lawrence, Kierstead, Lynch, and Luce (1998) noted some of the positive outcomes
produced by valid and reliable competency based HR management models. These include linking
individual competencies directly to the organization’s strategies and goals; developing profiles for
positions or roles and matching individuals to the task sets and responsibilities; affording the
opportunity to continuously monitor and refine competency profiles; facilitating the selection and
evaluation of employees as well as the training and development; assisting with the hiring of
individuals with unique competencies that are costly and not easily developed; assisting
organizations in the ranking of competencies for both compensation and performance management.
Cook and Bernthal (1998) did a survey in HR Benchmark Group, Development Dimension
International and the results suggested that improved organizational performance and
improvements to the bottom line can occur when competencies support even a few HR systems.
According to Kumari and Sita (2010) observed that the Indian companies have realized the
importance of human assets and have started using competency approach towards the human
resource management to improve the quality human resources, generating trust & learning, result
oriented, empowering employees, analyzing training & development needs, rating the employees,
increased satisfaction, increased productivity and strengthening employee engagements has started
among the employees and employers.

Conclusion :- It is visible from the literature review that competency based management is a
fast emerging as a new approach for making employees more proficient in their work so that
organizations can achieve the competitive edge over their competitors and thrive in today’s time.
Competency based management have turned out to be an effective tool for HR to improve the
organizational performance. Integration of competency model with the HR function has enhanced
the performance of individual as well as organization.

Future Directions :- Competency approach has been in practice from past 30 years for
managing the human capital of any organization, it shows that it’s not something new. However, this
concept has not been explored much in the Indian Context. As the business environment is changing
frequently due to various developments in the technical, social and economic environment the role
of organizations using competency framework for human resource management should be studied
for retaining the employees and to increase the commitment of the employee towards the
organization as having a competent pool of employees have turned out to be a crucial part of any
organizations. Effect of implementing competency based management in the different organizations
need to be further explored as it will help in improving and gaining insight of the concept which in
turn will help the organization in enhancing their performance as well as that of employee.
What are organizational outcomes?
Proximate organizational outcomes included human capital (e.g., employees'
knowledge, skills, and abilities) and motivation, and distal organizational outcomes
included voluntary turnover, operational outcomes (e.g., productivity, product
quality), and financial outcomes (example sales growth, return on assets).

Why Human Resources Matters for

Organizational Outcomes? Human resource
management matters for organizational outcomes. In this study, human resource
management is divided into three dimensions: skill-enhancing human resource
(HR) practices, motivation-enhancing HR practices, and opportunity-enhancing
HR practices.

Skill-enhancing HR practices include recruitment, selection, and training;

motivation-enhancing HR practices include performance management,
competitive compensation, incentives and rewards, extensive benefits, career
development, and job security; and opportunity-enhancing HR practices include
flexible job design, employee involvement, and information sharing. As regards
organizational outcomes, there were two types: proximate and distal. Proximate
organizational outcomes included human capital (e.g. employees knowledge,
skills, and abilities) and motivation, and distal organizational outcomes included
voluntary turnover, operational outcomes (e.g., productivity, product quality),
and financial outcomes (e.g., sales growth, return on assets).

In breaking down the finding that human resource management influences

organizational outcomes, the investigators determined that skill-enhancing HR
practices, motivation-enhancing HR practices, and opportunity-enhancing HR
practices impact the proximate organizational outcomes of human capital and
motivation that in turn influence the distal outcomes of voluntary turnover,
operational outcomes, and financial outcomes. So, if you want to drive important
outcomes of your business, you now know a good place to start.

Defining Outcomes: What are they and why

are they important?
In Boundary Management outcomes are the purpose or the reason for the
existence of the organization, unit, or work group. Outcomes have a unique
definition, and are somewhat synonymous with the way that the word
“mission” is used. There are three components to outcomes:
(1) what good is sought,
(2) for which people,
(3) and at what cost.

For those of you that are familiar with Policy Governance, outcomes that define
the purpose of the organization are equal the Ends that John Carver
uses. However, outcomes have a broader application than Ends. Outcomes
can be applied to subdivisions of the organization. This is not true with the use
of the term Ends.

For organizations, outcomes need to be thought of as subsets, attached to each

other, which then forms a greater system or process. The ultimate outcomes are
defined at the highest levels of the organization; with everyone being held
accountable that has some impact or influence on those results. The difference
here is that we have generally grown up with an organizational model that
designs jobs so that we have complete control over our results. This is different
from being held accountable for results for which we have only some
control. In the real world we almost never have total control over anything
important and yet we almost never have absolutely no control either. We
generally have some control. This creates a difference in the way people
respond. We no longer carry out a predefined set of tasks. Instead, we must
learn to find the control that we have and the influencing factors on that control
so that we can manipulate it when we need to. This is why the means
in Boundary Management are managed by limitations rather than
prescriptive processes. This gives the room to be creative and explore new
approaches and processes. It is only through experimentation that the
connections can be discovered.

Limiting means is not enough. This doesn’t provide the focus that the
organization needs. Only outcomes can do that. Outcomes become the
performance area that the organization has decided to maximize. To try to
maximize any of the means that lead to outcomes, will lead to a reduction in
outcome results. For example, increasing sales is not good if you are unable to
deliver. The reverse is true as well; increasing production is not good if we are
unable to sell it. Yet, these two traditional units of an organization act as if the
relationship between them has no impact on overall performance. Each will try
to maximize their results, and will be rewarded for doing so, even when those
actions decrease the total performance.

Workgroup Outcome:-

One of the struggles that people have with this model when they first
encounter it, is that it is not a model of punishment or even reward; it is a
model of creating action. It will reward action in the right direction and it will
punish inaction. It forces action when limitations have been exceeded and it
focuses all other action on maximizing outcomes. Boundary
Management improves performance because it creates action, and particular
appropriate action. It defines the roles and responsibilities through the use of
limitations and outcomes, and therefore clarifies who is accountable. There
will be times when everyone is accountable, such as when a company is losing
money. There will be times when only a small group or an individual might be
accountable. Remember, that the definition that we are using here for
accountability is “who is responsible to take corrective action when something
goes wrong or when results are not achieved.” This is not a model to help
assign blame or fault. In fact, it recognizes that often everyone is more or less
at fault when something goes wrong.

Internal Customers :- Internal workgroups may have two types of outcomes

for which they will be accountable. The primary accountability will be for any
organizational outcome on which they have some control. These will take
priority over the second type of outcome, which is outcomes for other internal
workgroups that count on the first groups’ performance, products, or services.

A common approach would be to develop an internal customer chain that links

up to the organizational outcome. This however does not eliminate the problem
of workgroups maximizing their performance at the expense of the overall
outcome. A better way is to define the linkages as limitations. This assures
that the internal customers will receive a minimum level of performance or
support. This makes sense to in terms of the End/Means separation. Internal
activities are clearly means and not ends; therefore we should be predisposed to
use limitations to guide these internal actions. The exception to this was used in
the previous example, the staff workgroup. Staff functions support line
activities. The line activity is the customer and should have a greater control
over what is needed from staff, but this too can often be handled through a
limitation approach. This approach of organizational outcomes and limitations
for internal customers does two things; it keeps the balance between units by
tying all of them to the organizational outcomes and it keeps the internal
linkages well attached by holding workgroups accountable to internal
customers.

HUMAN RESOURCES :-