Competency Frameworks: Challenges and Response

Question

Appraise the issues that need to be considered in the design and implementation of a competency framework for a financial services organisation.

Key Findings

The philosophy behind Human Resource Management (HRM) is to get the right people to the right place at the right price. The identification of key competencies within an individual is crucial behind the implementation of HRM policies. Competencies are underlying characteristics of a person which result in effective or superior performance in a job (Boyatzis, 1982). By identifying key competencies, HRM managers can be more effective at other HRM activities like selection, training, performance management, rewards and career progression.

The main types of competencies are found in the works of Rodger A. (1952) and Munro Fraser (1954). They include competencies like physical make-up, attainments, intelligence, interest, disposition and motivation. After identifying key competencies required for a job, HRM managers would then device a competency framework. A competency framework is essentially a checklist of competencies that an employee is expected to have in order to perform activities with the level of performance expected in employment.

Among the benefits of using a competency framework is that these frameworks are a systematic method to find the right personnel by identifying key competencies that constitute a minimum requirement for a job. Second, a competency framework enables the employer to identify existing expertise that can become building blocks for further training and development. Third, competency frameworks will state a minimum standard of performance that can then be a clear route for rewards and career progression. Lastly, competency frameworks help to avoid gaps and overlaps by ensuring that they are just the right amount of people with a certain required competency.

However, all systems do contain imperfections and the issues concerning competency frameworks can be divided into their designing stage and their implementation stage. In the designing stage, the level of complexity of the framework would be in question. Some of the dilemmas include whether the framework be a generic one taken from other organizations or an entirely new framework tailored to the requirements of the job. Generic frameworks suffer from being too broad and inaccurate but are easy and cheap (Boak and Coolican, 2001). New and tailored frameworks are expensive and time consuming.

Getting the conditions right when designing a competency framework is also crucial. Conditions include the position of the job within an organisational structure and feedback from line managers. Feedbacks from line managers are extremely important because they are more aware to the needs of employees and competencies needed for them to perform well. Getting input from line managers would however be time-consuming and costly as their participation would require synchronising time schedules and work hours during the selection process.

Besides that, HRM managers should also match the resources the company is willing to spend for the competencies it requires. In designing a competency framework, one must also be aware of the tradeoffs between the level of competencies and the resources available to hire people. Certain individuals may have a good mix of competencies but would require a higher amount of incentives to remain motivated and rooted to the organisation. Over-qualification may also be a problem for lower level workers as the organisation may not be willing to pay them the right amount of compensation they require for their expertise.

Perhaps the most crucial issue is designing a competency framework is that it is a continuous process or a going concern that must be re-evaluated from time to time. Due to the ever changing business and market environments, the competencies needed in an organisation are bound to change. Organisations may also change internally when they diversify into new businesses that require different expertise. One of the major weaknesses of the competency framework is that it is a static state that is unable to catch the dynamic detail of a changing external and internal environment.

Other than issues in designing the competency framework, issues in implementing them are just as important. Certain competencies like the level of leadership, teamwork and motivation are notoriously hard to identify, let alone quantify. Furthermore, these competencies are normally subject to personal bias base on the individuals involved during the selection process. Although the competency framework is able to eliminate certain bias like the level of qualifications needed for a job, the ‘soft skills’ are still subjected to bias and preference.

Strictly adhering to a competency framework may also result in the organisation hiring employees of the same stereotype. This inflexibility is deemed negative as an organisation with the same type of employees would lose the advantages of variety and differential opinions. It is no secret that military task forces are made up of individuals with different expertise and experiences in order to gain a competitive advantage on the battlefield. Certainly the same can be said for business organisations.

Lastly, another major problem of the competency framework lies in its assumption that if person A has competency B and performs well, every individual with competency B would perform well with the same task. This is untrue as different individuals even with the same competencies may have different levels of productivity and motivation. The competency framework would not be able to help identify, for example, which employee is more hardworking in the long-run. This would mean that the individuals involved in the selection process are unable to fully rely on the competency framework during its implementation process.

The competency framework is a practical and easy to use tool for a HRM manager. However, as all other frameworks, they are not a perfect one-size fit all solution in terms of obtaining the right people for the right job. People who use the competency framework must be aware of their shortcomings and work around these defects in order to succeed. It is important to remember that competency frameworks would never be able to catch certain details like intuition, insights or strokes of geniuses which are important for all organisations.

Group Reflection

Group assignments are naturally not without conflicts and differentials in opinions. The presence of different people with different cultures, backgrounds and philosophies working together to produce a report that is unified and coherent, calls for the alignment of goals and expectations. This was the main reason why my group decided early on to work closely with the expectations of this module as noted on the grid concerning the assessment criteria. In a sense, the grid became our group’s vision and mission statement.

My group started the ball rolling by having meetings every week to discuss the key points of our assignment. After a quick brainstorming session, we came up with some of the key points we all agreed were important in designing and implementing a competency framework. Although I took the role of coordinator during these meetings, the truth was that every individual had a lot of good questions and ideas.

Although all team members were punctual, diligent and motivated to complete the HRM presentation, I felt that communication was the real barrier behind producing a coherent report. This was likely due to the fact that the three of my group members came from a mandarin-speaking school. Barriers to communication was evident when I realized a mistake concerning some of the designing and implementing issues just a few days before the actual presentation. These mistakes happened even though the process of discussion and brainstorming went smoothly.

Fortunately, we left enough time for preparation and proceeded to rectify the flaws and rehearse our presentation. The presentation was then divided into four distinctive parts to ease the workload on individual members. Although all four of my group’s members were present when we finalised the power point slides, each group member was accountable for one section to which he/she would deliver as a presentation in class. I felt that this made each member more committed because they know that any failure to deliver a good job would result in scrutiny from other group members.

A picture is said to speak a thousand words and that was the reason we decided on including humorous pictures were included to ensure that the topic of discussion was not too dry. As for the power point slides, my group tried to put in as little words as possible on the screen to keep the presentation as brief as possible. Visual aids were prepared much earlier in advance with large fonts and bright colours. The handouts for issues concerning the competency framework were special in the sense that it was in the form of a brief mind map that outline the major points of our presentation.

My group’s decision to include all four members during the presentation was also somewhat unique. The main concern was that we would exceed the allocated time limit or cross into the time needed for questions and answers. Besides that, other challenges include the organising of the body of the presentation whereby my group had to decide which points should be presented first in order to form a coherent and smooth flowing presentation. Rehearsals were carried out to ensure that all group members are able to give a good presentation.

Bibliography

Beardwell and Claydon, Human Resource Management – A Contemporary Approach, 2007, 5th Edition, Prentice Hall, England

Boak and Coolican, Competencies for retail leadership: accurate, acceptable, affordable, 2001, Leadership and Organisational Development Journal, MCB University Press 22/5/2001, 212-220

Boyatzis, Competencies in the 21st Century, 2007, Journal of Management Development, Vol. 27, No.1. pp. 5-12

Boyatzis, The Competent Manager: A Model for Effective Performance, 1982, Wiley, New York

Martin and Pope, Competency-based interviewing – has it gone too far? 2008, Industrial and Commercial Training, Vol. 40, No.2, pp. 81-86

Munro Fraser, A Handbook of Employment Interviewing, 1954, Macdonal & Evans, London

Pierce, Executive Competencies, 1994, Executive Development, MCB University Press, Vol. 7, No.4, pp. 18-20

Rodger, The Seven Point Plan, 1952, National Institute of Industrial Psychology, London

Ruth, Frameworks of Managerial Competence: limits, problems and suggestions, 2006, Journal of European Industrial Training, MCB University Press Vol. 30, No.3, pp. 206-226

Stuart and Lindsay, Beyond the frame of management competencies: towards a contextually embedded framework of managerial competence organisations, 1997, Journal of European Industrial Training, MCB University Press 21/1/1997, 26-33

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