COMPETENCY-BASED HRM

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COMPETENCY-BASED HRM DEFINED

Competency-based HRM uses the concept of competency and the

results of competency analysis to inform and improve the processes
of recruitment and selection, performance management, learning and
development, and employee reward.

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COMPETENCY AND PERFORMANCE

Competencies represent the language of performance. They can

articulate both the expected outcomes from an individuals efforts and
the manner in which these activities are carried out.
Because everyone in the organization can learn to speak this
language, competencies provide a common, universally understood
means of describing expected performance in many different
contexts.

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COMPETENCY DEFINITIONS
Behavioural competencies (soft skills) how people are expected to behave in
order to perform their work well. Competency is a person-based concept which
refers to the dimensions of behaviour lying behind competent performance.
(Woodruffe, 1991).
Technical or functional competencies (hard skills) what people are expected to
know and be able to do in order to perform their work well. They can also be
described as work-based or occupational competencies that refer to
expectations of workplace performance and the standards and outputs that
people carrying out specified roles are expected to attain. The term
competences is sometimes used as an alternative to technical competencies.
Woodruffe (1990) defines competence as: A work-related concept which refers
to areas of work at which the person is competent. It is what people have to
know and be able to do in order to work well.
Competency framework this contains definitions of all the competencies used
in the whole or part of an organization (a function or occupation). It provides the
basis for the use of competencies in such areas as recruitment, employee
development and reward.
Sources: C Woodruffe (1990) Assessment Centres, IPM. London; C Woodruffe (1991) Competent by any
other name, Personnel Management, September, pp 3033
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THE TOP 22 COMPETENCIES INCLUDED IN THE COMPETENCY FRAMEWORKDS

OF 40 EMPLOYERS
Team orientation

78%
65%
65%
58%
58%
55%

Communication
Customer focus
People management
Results orientation
Problem solving
Business awareness
Decision making
Technical skills
Developing others
Initiative
Creativity
Influence & persuasion
Quality focus
Relationships
Change orientation
Information management
Interpersonal skills
Strategic orientation
Self-development
Commitment
Self-confidence and assertiveness
Competencies

38%
35%
35%
33%
33%
30%
30%
30%
30%
28%
25%
25%
25%
23%
20%
20%
0%

25%
50%
75%
Percentage of competencies included

Source: N Rankin (2002) Raising performance through people: the ninth competency survey, Competency & Emotional Intelligence, January

100%

REASONS FOR USING COMPETENCIES

The main reasons given by companies for the use of competencies are:
The application of competencies to appraisal, training and other
personnel processes will help to increase the performance of
employees.
Competencies provide a means of articulating corporate values
and objectives so that their requirements can be embodied in HR
practices and be readily understood by individuals and teams
within the organization
Competencies are used as a means of achieving cultural change and
raising skill levels.

Source: L Miller, N Rankin and F Neathey, Competency Frameworks in UK Organizations, CIPD, 2001

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DEVELOPING A COMPETENCY FRAMEWORK

1.

Programme launch decide on the reasons for developing a framework and make out the business case.

2.

Involvement and communication involve managers and staff in developing the framework. Set up a task
force and inform everyone of what is happening and why.

3.

Chose competencies get the task force to draw up a list of the core competencies and values of the
organization: what the organization should be good at doing and the values it believes should influence
behaviour. This provides a foundation for an analysis of the competencies required by people in the
organization. The aim is to identify and define the behaviours that contribute to the achievement of
organizational success and there should be a powerful link between these people competencies and the
organizations core competencies.

4.

Define competencies definitions should be clear and unambiguous and should serve their intended
purpose. The four questions that can be used to test the validity of a competency definition are: (i) Can you
describe the competency in terms that others understand and agree with?, (ii) Can you observe it being
demonstrated or failing to be demonstrated?, (iii) Can you measure it? and (iv) Can you influence it in
some way, eg by training, coaching or some other method of development? *

5.

Define how the framework will be used eg for recruitment, training, performance management.

6.

Test the framework test the framework in each of its applications.

7.

Finalize the framework amend as necessary following the test and produce notes for guidance on its use.

8.

Communicate inform staff of the outcome of the project and how it will affect them.

9.

Train train line managers and other appropriate staff in the uses of the framework.

10.

Implement and monitor launch the framework and check to ensure that it is working effectively.

* Source: R J Mirabile (1998), Leadership competency development, competitive advantage for the future, Management Development Forum, 1 (2)
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APPLICATIONS OF COMPETENCY
Organization
design and
development

Job and
role design

Contributionrelated pay

Recruitment
and
selection

Competency
framework
Assessment/
development
centres

Career-family
structures

Personal
development

Learning
needs
analysis

Performance
management

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THE FIVE MOST POPULAR USES OF COMPETENCY

Performance management

81%

Personal development

75%

Selection

74%

Recruitment

61%

Training needs analysis

61%

Competency

0%

50%

100%

Percentage of surveyed firms using competency

Source: N Rankin, Raising performance through people: the ninth competency survey, Competency & Emotional
Intelligence, January 2002

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