Competency Modeling

At Competency International we are dedicated to helping clients develop validated competency models upon which HR applications can be based. The following approach to validating competencies enables talent management executives to take the lead in introducing a more strategic approach that will have demonstrable added value for their organization.

  1. Identify Key or Pivotal Jobs: These are the ones most critical to executing your strategy successfully. They may not always be managerial roles. One way to identify critical jobs is through key task analysis. The strategy, objectives as well as supporting activities are broken down into essential tasks that must be performed to a very high standard to ensure success. These tasks are then mapped on to the various jobs to see which jobs contain the largest percentage of key tasks to determine relative criticality.

  2. Determine the Standard Deviation of Performance: Once the critical jobs have been identified it is important to measure the degree of performance variability to establish the opportunity both for performance improvement and the capacity required to execute strategy successfully. Hard objective performance measures such as financial, quality, productivity and customer retention data should be used in preference to performance ratings that can be subject to a variety of problems that make them less suitable as performance criteria measures, unless no other relevant data is available. The more complex the job, generally the wider the variability. This information allows talent management executives to size the problem/opportunity and to help build a business case.

  3. Identify Human Factors Underlying Performance Variability: The human element alone cannot explain all the variance in performance. However, we have found that a substantial proportion of the variance (approximately 40% on average) in the job samples we have studied is accounted for by the competency behaviors of the jobholder. This is why we recommend that a formal job competency analysis be conducted following the original procedure as detailed by Spencer & Spencer (1993).

  4. Develop a Business Case: Information from Steps 2 and 3 can be used to prepare a business case. The suggested procedure is outlined in Spencer (2001) where an expected rate of return is set or agreed and the probability of achieving this calculated to support talent management initiatives/investments. The business case should show the potential, i.e. the extra value-added by those managers that are one standard deviation above the mean and how much of this amount can be attributed to the competencies being measured. For example, if such jobholders generate 80% more than those at the mean and if their competencies account for 40% of this variation, then the potential exists to obtain 32% more added value.
    The question then becomes how much of this 32% added value due to competencies can reasonably be expected to be achieved either through developing the competencies of existing jobholders or replacing average performers with others capable of achieving performance one standard deviation above the mean.

  5. Conduct Jobholder Assessments: Ideally, every key jobholder should be assessed against competencies plus other factors that statistically relate to measured job performance. But we have found it is better to focus initially on a more tightly defined group. Until an organization’s senior managers see tangible evidence of the benefits of this approach, they can remain skeptical.

  6. Develop, Implement and Monitor Talent Management Strategy: There are several options available to make optimal use of the data generated in previous steps.
  • Where a goal is to ensure an adequate supply of superior job holders in the key positions, then selection and promotion tools and methods can be developed from the information gathered in Step 3. The critical-incident interview is used for both internal and external candidates. Asking candidates to recall events when they felt they were particularly effective and which provided a benefit for the Organisation gives a better picture of a person’s competencies than using pre-set, situational-based interview questions.

  • To improve accuracy, training can be provided on conducting interviews and evaluating candidates’ responses which incorporates behavioral examples from Step 3.

  • Subsequent tests or surveys, such as organizational climate surveys for internal candidates, can be used to supplement the interview data and provide incremental validity.

  • Job-specific case study material can be developed from critical-incident interview data in Step 3 to improve existing key jobholder performance for example, by assigning people to projects identified as providing specific competency-development opportunities.

  • For either recruitment or development strategies, a specific performance tracking system should be put in place. This will provide talent management executives with evidence that their initiatives are working as planned using measures already in place and accepted as valid by senior management.

Competency Modeling Articles by Competency International Consultants

Improving Competencies - A Six Step Plan. By Geoff Ryan

How Competencies Create Economic Value. By Dr. Lyle Spencer

The Economic Value of Emotional Intelligence Competencies and EIC-Based Programs. By Dr. Lyle Spencer






About Us

Competency International is a research and consulting group dedicated to the application of scientifically validated techniques to the management of human capital in organizations. Committed to advancing the science of motive and competency assessment, application and development, our consultants adhere to the highest standards of ethics and practice.

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