We often hear from the Operations team saying, “we don’t get the right people for the job”, complaining about the HR team. HR team in turn says, “the operations’ team did not know what skills were required to perform the job”. These kinds of accusations are eternal in the corporate world.

Other HR issues, we frequently come across are the following:

• Poor Performance Management
• No career planning
• In-effective training programs
• Opaque compensation policies
• No succession planning

The above issues may cause chaos in the organization with respect to the operations, performance management and Learning & Development. Having that said, now let’s discuss about the solution for this perennial challenge in getting the right people for the right job at the right time. Now a days, businesses are operating in a more complex business environment, so they have to have an exhaustive framework of competency for all the roles so that the job expectations will be very clear for everyone in the organization. Competency model will be able to provide a solution to these challenges in the organization. It makes the requirements of a job role and the expectations transparent.

Why do we need a competency model?

It can be explained in two major sections viz.

• Necessity of competency model
• How to establish a competency framework in an organization.

In this blog, we cover the necessity of the competency model.

The recent survey conducted by Times jobs show that majority of HR managers (53%) say they prefer more skilled work force to the highly qualified ones A few companies are having the competency dictionary in the world though every company has skill data base. Researchers have found that those organizations investing in people practices reap better benefits than those who don’t.

The probability of survival increased to 0.79 from 0.70*
The sales per employee increases to USD 27000/-*
The shareholders’ value increases by 20%*
PCMM SM Model document/ CMMI Institute.

Now we will be interested to know what is competency, right? Competency is de ned as an underlying characteristic of an individual that is responsible for superlative performance in any area Competency has three components viz. Knowledge, skills and process abilities. Before discussing about competency framework in detail, let’s discuss what consequences an organization will have without competency framework.

• Bad Recruitment
• Poor Performance management
• Ineffective and ineficient operations / service delivery
• Poor customer satisfaction

1. Bad Recruitment:

When competency framework is missing, the leadership team may not know the minimum level of competencies that are required for the new recruits and that results in bad recruitment. Many a times, people misunderstand the skill matrix/data base as competency framework. We have come across many occasions, when requested to show the
competency dictionary, they used to show the skill database/matrix. Actually speaking, the skill is the subset of competency as shown in the above triad. Therefore, by using only the skill matrix, the talent acquisition team will not be able to assess the competencies of the new recruit. This will impact the cost of training and other competency development activities adversely as the organization needs to allocate more budget for training the new recruits.

2. Poor Performance Management:

The challenge starts from the performance goal setting itself. Without a detailed competency framework, goal setting is like aimless wandering. Could not imagine about the performance appraisal when the goal setting itself is not right. Most often, we have come across managers during the assessment that the managers who could not convince themselves and their team members about the performance ratings. This is due to the absence of the competency framework.

3. Inefficient and Ineffective Operations:

When I say operations, I mean core business operation. For example, in IT organizations, the operations are software design, development, testing and delivery etc. Assume that the team lead does not know the required competencies, then he/she will not be adding value to the project and in turn, to the organization. Both efficiency and effectiveness are the victims of the lack of competency. When the work force is not aware of the required competencies, how can one expect the operations are executed e anciently and effectively? When the organization is not able to produce the high-quality products / services consistently, then the customer rating will go down that in turn will impact the business. Therefore, the competency framework is very important and very vital to the organizations in a long run.
Many a times, we keep insisting to hire right people for right job. Unfortunately, most people do not know how to identify the right people. If you know what is right then, you can hire right people. In fact, few people know the right meaning of competency. If the required competencies are documented, then the competency frame work shows the required competency.

4. Attrition:

When the quality of service delivery is inconsistent, then the customer satisfaction index goes down, that till in turn, impact the business adversely. This will result in employee attrition. Usually, the CXO’s keep crying about reducing the attrition, but very few really work on that by introducing the elements such as competency framework, new methods for business development. Now having discussed about the implications of the absence of competency framework, let’s discuss about what is competency framework.
The competency framework is nothing but the collection of knowledge, skill and process abilities of various work force competencies with their respective proficiency levels in a matrix format. This document will have both the list of competencies and proficiency levels. The proficiency levels can be classified in to 3 to 5 levels as per organization desire & complexity.

If any organization has decided to adopt People Capability Maturity Model (PCMM SM ) – Maturity Level 3, then the competency model is a mandatory requirement. Please note the PCMM maturity level 1 – 5 is different from competency proficiency levels. We have conducted a survey among the leadership team of some organizations about the necessity of the competency models. I have given you the results below The survey was aimed at knowing the preferences of the leadership team about the necessity of competency framework. Out of the members we have surveyed, around 90% of the team has opined that competency model is very much required for all of the HR tasks such as Recruitment, Selection, Performance Management, Career development and compensation. 100% participants say that the competent work force is mandatory for performing the job effectively. Therefore, competency model is imperative for any organization to achieve business objectives as the right people only will be able to do right jobs at the right time. Now the question arises about how to develop a competency framework. We will discuss about this in the next blog.

Survey methodology:
Selected participants from the leadership team in organizations were surveyed. The domain spreads across IT, ITES, Health care, Telecom and Legal services.

The questions that were asked are given below:

• I think competent work force is important
• We have competency dictionary in our organization
• I agree that competency dictionary is essential
• Performance Management (PM)
• Recruitment (STF)
• Training(T&D)
• Career Dev (CRD)
• Compensation (CMP)
• We need to establish competency dictionary

Author:

Pazhanikumar R
Director,
IZAAKI Consulting
The author of this article has vast experience in building the competency dictionary and was instrumental in implementing the PCMM in Top Tier MNC organizations.
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