Human Capital practitioners are often accused of not playing the strategic role they should; failing…
It has become fashionable to say, “people are at the heart of our business”. There are few CEO’s and HR Executives that do not utter these words today. No one in their right mind can contest the truth of this statement especially when looking at all the research and case studies that exist on building sustainable organisations and how businesses will compete in the future.
A fundamental question does, however, need to be asked. Do we really understand what this means and implies? Does it mean that we create people centric organisations? And so, build organisations around our people? Does it mean we build organisations of people that keep themselves busy with whatever needs to be done? Trusting their ability to do the right thing at least most of the time? Worth pondering is: How will we pay these resources? How will we decide if they have done well? How will we decide if they need to be developed or what new opportunities they get?
Or does putting people at the heart of our business imply something else? Another view is that when putting people at the heart of our business implies putting work or better even, the result of work and investment in related organisational capability at the heart of our business. In other words, understanding the result of work the business needs to get done leads to what kind of people will do this best and how this will influence what we pay people, how we develop them and in essence the other opportunities they get exposed to. This thinking is driven by SIPP® (Strategic Integrated People Practices), an architecture protocol developed to assist in integrating people practices worldwide.
Regarding people as a ‘cost’ vs. an ‘investment’ is not an either-or decision. It’s about making the right choices that will firstly benefit the business in the long run and secondly benefits the person. Philanthropic run business may not last too long and neither should businesses that only exploit their people. Helping managers, executives and shareholders to make decisions and maximise people potential in the context of the business is the role of the People Professionals. How are you doing?
This article will not explore work and structures, performance management or remuneration models but will focus specifically on recent learning regarding the use of competency and competency models in modern businesses.
This article will cover aspects like:
- Selecting a competency framework and model
- Agreement on a competency assessment framework
- Aligning competency assessment providers and techniques
- Making good use of the results
- Q & A
- Selecting a Competency Framework and Model
Work and capability required are key intertwined themes when building human capital models. Understanding work, accountability and levelling is a major piece of this complexity that we will not cover in this document. Required capability becomes the footprints that eventually turn into competency modelling and even the assignment of role families.
Using the Business Strategy and Business Model as tools to describe required capability, confirming this with executives and then hunting for or developing a bespoke competency framework is a task forgotten by most. Including behavioural, technical, skills, knowledge and other components are classic text book requirements still applicable today.
Breaking these competencies down to proficiency descriptors can prevent the unnecessary expansion of the competency library because the current competency definitions lack the differentiation to illustrate level and maturity differences when these competency and proficiency descriptors are aligned to role profiles.
Before these competencies can really be used and integrated, work itself should be articulated in partnership with the business. Whilst one would assume that the full value chain of the organisation has been articulated in process maps, this is often a “black hole” in most organisations. They do not take the time and effort required to undertake this key strategy enablement exercise. This often results in the actual work that needs to be done in an organisation not being understood in a comprehensive and integrated manner.
It is important to distinguish the work that needs to be done by using a levelling methodology like Drotter or Stratified Systems Theory. The end product being a generic understanding of work by level and role function (resulting in a generic role grid or career model) that articulates work in a consistent manner at the granularity level that works for the business.
This process is a science in itself and will not be described in further detail but remains an essential part of the puzzle before competency and required proficiency can be associated with each of these roles. This is a tedious task. Yet it is essential to set up work and required capability aligned to business needs. This setup becomes the essential footprint of recruitment, performance and development and even advanced deliveries like succession planning and talent grid management.
- Agree on a Competency Assessment Framework
With a competency model in place and integrated into the role grid, we know what is required from who, when and where in order to deliver on the goals of the organisation. Moving away from the work and related competency required, the next step is to consider how people will be assessed against these competencies imbedded in the roles.
Accepting that policy and processes exist on when, how and for what reason/s employees will be assessed, one should agree on an assessment framework as illustrated here. It is costly to assess all staff on all the competence elements related to their specific roles.
Weighting the different elements of the competency model based on level of the work i.e. leadership roles, management roles, specialist and operational staff may allow the assessors to pick relevant assessment tests and processes that will optimise cost and improve effectiveness of the process.
In order to obtain an integrated, holistic view of employees, the attributes most important to the performance of a role are identified and measured. Once an overall score is obtained, it is compared to the requirement of a specific role (according to the role grid). The extent to which the individual matches the requirement is given as a percentage-fit. The minimum percentage-fit required to be declared a ‘good fit’ should be identified at this point. This is an important decision as it will inform many important human decisions in the future including the management of maturity pipelines, bench strength etc.
The overall attributes to be measured include:
Behaviour is used as an overarching description for the behavioural preference profile and the cognitive capability of the employee. These are assessed with a psychometric self-report questionnaire and a cognitive capability/ability test.
Knowledge and skills (K/S) are measured though a functional (technical) skills test and or an in-basket exercise applicable to the abilities required from employees on a specific level of work. These tests compare the employee’s skill level to pre-identified and specific skills required from a position.
The behavioural and skills components identified are dependent on the LoW applicable, for example, cognitive capability weighs 9% of the total score required from a LoW 1 employee, whereas it weighs 32% for the CEO (LoW5). The same holds true for behaviour, the more senior an employee becomes, the more important the required behaviour to act accordingly.
Not only does one need to have a standardised view of work and competence – this process extends to standardised legally compliant processes and includes work on aligning assessment batteries to the model and applying these in a consistent manner across the business no matter the size.
- Align Competency Assessment Providers and Techniques
All the good alignment work done until this point is easily rendered useless by selecting the wrong providers and techniques. The big mistake most practitioners make here is to select products they are used to or have been trained on, versus selecting products that make sense given the above design and set-up processes.
It is appalling that good set-up work so often gets ruined by inconsistent or inappropriate assessment methods and techniques – in essence rendering the results unusable when comparing occupants in the same generic role working in different divisions in a business that has been assessed using different tools as reference point or tools not properly standardised for the population.
A myriad of techniques and service providers are available. Type ‘competency assessment techniques’ into Google and it yields 16,700,000 returns. Clearly a monumental task! This process can however be summarised as follows: Now that the foundation is set with the competency framework and assessment framework in place, the next step is to research and benchmark tools, techniques and service providers that will produce appropriate, valuable and accurate information according to requirement. The process described thus far allows for the use of standardised tests and/or techniques across the organisation. The ideal is to use one service provider who can cover the spectrum of psychometric and skills tests at all levels. This ensures consistency, continuity and the confidence that the same attributes will be measured according to each level and position’s unique requirement.
The focus of technique selection should be the same, to identify behavioural and skill demonstration tests applicable to the organisation, the level of work involved and the organisation’s environment. Those responsible for assessment should have a clear understanding of the day-to-day operational actions as well as the organisational strategy in order to choose the best suited assessment battery possible. An Assessment Code of Conduct is used to integrate and manage all related information according to a well-defined assessment policy, process maps and standard operating procedures.
The use of role families and subject matter experts plays an important role in this regard. Subject matter experts (SME) recognised for specialist knowledge and skills assist the assessment team with a deeper and appropriate understanding of the role/position. The role family owner plays an integration role ensuring that the information obtained from the SME is applicable to the Business Strategy and Model.
The ease of application and administration should also be considered. The idea is to limit the time away from work for assessment purposes to minimise business impact, both in time away from work and associated cost. Automated, online testing allows employees to be assessed simultaneously in a controlled environment. If the framework and model is well thought through, with competencies identified and the weighting applied as in the example above; integrated, automated reports can be produced in a short period of time, minimising hours of manual integration work. As usual – overall cost and related benefit is King.
- Making good use of the results
The time and effort devoted to creating a solid foundation with associated techniques and service providers really starts paying off with quality information generated after the assessment phase. The most obvious benefit is the ability to identify the percentage job fit of each tested candidate/employee, highlighting exact areas of match and subsequent development opportunities.
A maturity pipeline can be used to identify and map less experienced employees who entering the work arena for the first time, will have greater developmental needs with lower scores on the accepted job match fit. More mature workers with a higher fit can be identified to disseminate knowledge and skills (K/S) to others.
Managing this mix is important to keep an eye on productivity, cost, risk and a healthy morale to mention just a few. It is the compilation of cumulative assessment information that really adds business value. It enables reporting processes to be put into practice informing decisions on maturity pipelines, talent management and succession.
This approach enables the organisation to populate the maturity pipeline with information on:
- Percentage job match fit across the organisation.
- Snapshot view of distribution of resources across the pipeline.
- Identification of areas where development needs are urgent and appropriate budgeting to meet these needs.
- Identification of coaches and mentors and subsequent follow-up actions.
- Identify where ‘gaps’ exist in the pipeline to inform future recruitment actions and associated costs. A strategic approach to talent management can be facilitated through the development of a talent grid.
- Building a talent pipelineas illustrated above, enables the organisation to identify future managers and leaders, coaches and mentors and those individuals who no longer meet the needs of the business. It enables subsequent actions, such as focused attention on:
- Individuals who perform exceptionally and who have the potential to fulfil more complex roles (1). Which in turn impacts leadership and levelling development with associated reward and recognition.
- Individuals with high potential and poor performance. Line managers and HR need to investigate the possible causes and solutions available (4).
- Developing developmental interventions according to potential, i.e. those with high performance and low potential might have reached their peak or future development needs according to the learning ability of the individual (6).
- Identifying coaches and mentors (1, 2, 3 and 6).
- Q & A?
- Do you need to assess all your people?
The answer to this question is unique to the organisation. Ideally and if the necessary resources are available, the answer is overwhelming yes. The most important prerequisite is a bespoke competency framework and the use thereof to generate meaningful information.
Apart from the examples already mentioned, this approach yields the following benefits:
- Optimal fit between employees and coaches/mentors according to learning ability and personality style.
- A targeted learning approach fulfilling the requirements of the Skills Levy’s Act and ensuring return on training investment.
- Identification of ideal vs. current culture and needed adjustments.
It demonstrates the organisations commitment to the welfare and future development of employees through the investment of time, money, effort and quality feedback.
- How do you really get ROI from competency modelling and assessment?
By following the processes outlined in this article, it is truly possible to determine return on investment. Being able to measure the impact of having the right people, in the right jobs, doing the right work at the right time living the desired values is imperative and HR’s responsibility. It enables HR to measure impact and strategic impact in Rands and Cents, finally taking up its rightful place at the boardroom table.
- How much is it going to cost?
Depending on the practices and policies already in place, the immediate investment will be costly and needs to be incorporated into the organisation’s budget. The long-term return on investment can be measured against the points already mentioned.
- What role can technology play?
Technology can act as the key enabler through the use of the Data Centric Model (DCM®) as a framework to explain the inter-relationships between the elements of a business system. Establishing an understanding of, building accountability for and developing the levels of the DCM® should become an essential part of implementing technology. Not only should we monitor the effectiveness of the processes but also the practice itself and integration into people and business practices through knowledge level reporting.
In conclusion, it can be said that assessments are the golden thread linking the 5 Strategic People Levers in organisations. Lever 1 (work and structure/capacity) and lever 2 (outputs/business performance) enables an understanding of the result of work the business need to get done. Lever 4 (competencies and skills/capability) leads onto what kind of knowledge, skills and competencies are required to do this best. Lever 3 (reward and recognition) follows from the identified match between 1, 2, and 4 to influence what people get paid.
All of which leads interchangeably to engaged employees (part of lever 5), aware of their capabilities, rewarded for their efforts and creating collective purpose and meaning within the context of work. Now, people are the heart of your business and driving strategic, competitive advantage.
Can you really say that people are at the heart of your business…?
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