CSWT Papers
Competency Assessment
Angelique Lee
Abstract
In today’s competitive business world, making sure that having the right knowledge, skills and abilities (KSAs) among people are important for an organization to stay afloat in the industry. Competencies are the KSAs that will lead to successful performance. Competency assessment is the process of assessing those defined competencies. Selection of competencies, methods to assess competencies, applications of competencies in the organization, and validity and reliability of competency assessment are discussed. Competencies form the foundation for many human resource functions (e.g., selection) and are an integral part in maintaining a competitive advantage.
Competency Assessment
In the corporate world, identifying characteristics for successful performance is more important than ever, given the growing competition among industries. Recognizing the different components and behaviors leading to success helps the organization grow and become more competitive in its industry. These behaviors are labeled competencies. Competencies are distinguishing characteristics of successful performance within an established role (Wolfe, 1998, p. 228). The characteristics may include any combination of the following: knowledge, skill, traits, values/beliefs, motives, and physical ability (Wolfe, 1998, p. 228).
By extension, competency assessment is the process of identifying the competencies among a group of employees, typically by department, job category, or hierarchical structure (McNerney & Briggins, 1995). About one-third of organizations use competency assessment today (Armstrong & Baron, 1998). A success profile is usually created to describe the behaviors relevant to success at a company; the success profile is usually called a competency model. A competency model lists the competencies associated with exemplary performers and ties to a corporate culture (McNerney & Briggins, 1995).
McNerney and Briggins (1995) distinguish between competency assessment and task analysis in the following way: task analysis bases training on what people do, whereas competency assessment bases training on who the successful performers are. Task analysis typically focuses on jobs with an emphasis on manual labor and psychomotor skills, whereas competency assessment conducts training for workers who perform decision-making and knowledge work such as managers and professionals (McNerney & Briggins, 1995).
Competencies are used in many different human resources (HR) functions. Primarily, competency assessment and modeling are used heavily in performance management, compensation, developmental purposes (i.e., to improve in areas where one is weak), and training. Applications of competencies used in HR functions will be discussed later in the paper.
McNerney and Briggins (1995) state several reasons for the increasing use of competency assessment in corporations today. First, the speed of change in today’s business environment is sparking interest in assessment because of the dated nature of task analysis; competency assessment is much more flexible and does not date itself as quickly. Second, the nature of work is changing. Hourly workers are beginning to make more decisions these days, relying less on psychomotor skills than before. Employees are becoming more empowered. As stated before, competency assessment is used more as more decisions are made in job responsibilities. Third, widespread corporate downsizing requires training and development professionals to move away from tightly constructed and bureaucratic jobs to more flexible definitions of work. Finally, competency assessment can become the basis for an entire corporate HR department’s activities such as those mentioned before and more. Recruitment, selection, orientation, training, work design, compensation, performance appraisal, career paths, and succession planning all use competency assessment as the centerpiece of the function.
Selection of Competencies
Companies that assess companies use different methods in how to select competencies. However, most companies assess competencies based upon previous research models in academia, such as Industrial/Organizational psychology and management. Also, many companies use surveys to better understand what is happening in their organization. Data from previous research in the company is used. For example, at American Airlines, in an attempt to define the competencies that will fit the desired culture for a rollout of multi-rater feedback for managers, two other project leads and I used a combination of research methods. First, data from employee opinion surveys and organizational culture surveys molded the initial competencies. We developed verbiage around the competencies using research from consulting firms and other companies. Existing job analyses helped in further defining the behaviors associated with successful performance.
Transamerica Life Companies identified competencies using a five-step process. The first step was strategy. They asked the question of how they wanted to achieve their goals. Secondly, they wanted to know their capabilities—what must they do well. The third step is processes—how do they work. Structure is the fourth step asking how do they organize. Lastly, competencies were developed asking what skills, knowledge, and behaviors they needed in order to perform successfully (Wolfe, 1998, p. 237).
Another way to select competencies is using job analysis. HRZone defines job analysis as the research and analysis of all aspects of work and all its aspects; job analysis is the systematic analysis of an existing or proposed position or group of positions within an organization (cited in Harris, 1998). Defining the skills needed to perform a job help in identifying the competencies, which include skills.
Methods Used in Assessing Competencies
Competency tests are often used in assessing competencies. Pharmacists use testing as a way to assess whether or not they still possess the professional skills necessary for relicensure (Ukens, 1996). The National Association of Boards of Pharmacy authorized a study for the development of a Pharmacist Competency Assessment (PCA) mechanism. Mostly, the program would be to help pinpoint some practice deficiencies and maybe send them to continuing education programs in order to help them develop and improve; no punishment is meant for the pharmacists. In other words, PCA is a developmental tool for pharmacists. An expert panel of practitioners, pharmacy board members, and academics will set the areas of competence. The panel would first have to define continuing competence and how that differs from beginning competence. That is, what knowledge, skills, and abilities (KSAs) are necessary for those who have been working for awhile as opposed to those who have just entered the field. The panel of experts would also have to determine how continuing competence can be assessed in a practical way (Ukens, 1996).
Assessment centers are another method used in assessing competencies. Assessment centers use situational tests to observe specific behaviors of the participants (Thornton, 1992, p.2). Individuals are evaluated based upon the behaviors exhibited throughout the situational tests. Competencies are the foundation of the assessment center process. The behaviors being assessed are determined from the competencies. Assessment centers are valuable in that there appears to be a high correlation between assessment center scores on high-performance competencies and actual performance in jobs (Sparrow, 1996).
Yet another method in assessing competencies is multi-rater feedback, more commonly known as 360° feedback. Multi-rater feedback is commonly used for developmental purposes in an organization. Multi-rater feedback is a process where feedback is elicited from a person’s manager, his or herself, the person’s peers, and his or her direct reports. Approximately 20 surveys are distributed, and 18 are split between direct reports and peers. Behaviors for successful performance are determined from the list of competencies identified for the job. Usually, a five-point scale is used in order to show to what extent someone is exhibiting a behavior well. Those who receive negative feedback in one or more areas can find help from internal consultants and resource guides in order to grow in the organization. Competencies are once again the foundation for this developmental tool. For example, at American Airlines, multi-rater feedback is being used to lead a culture change in the organization by helping the managers develop those behaviors that will lead to successful performance at American (e.g., Effective Communications).
Gallon, Stillman, and Coates (1995) describe another method to assess competencies. However, their approach is aimed at assessing competencies for the organization. Competencies for the organization are often referred to as core competencies. Core competencies have special qualities. They exemplify excellence and provide competitive advantage, as perceived by the customers. Core competencies are those things that a company does uniquely well and has the effect of being able to bring the company better-than-average degree of success over the long-term.
Gallon et al. (1995) suggest that core competencies can be divided into the following three categories: market-interface capabilities, infrastructure capabilities, and technological capabilities. Market-interface capabilities are used in the marketplace and include such things as selling, advertising, consulting, invoicing, or customer satisfaction monitoring. Infrastructure capabilities concern the internal operations of the company and are invisible externally; for example, management information systems or internal training. Technological capabilities are technical capabilities that provide direct support to the product or service portfolio and are divided into three subcategories: applied science capabilities that mainly hail from research; design and development capabilities such as industrial engineering, and manufacturing capabilities such as inspection and final test.
One approach suggests six modules to assessing core competencies (Gallon et al., 1995). The first module is the planning stage where everyone involved has a common language and knowledge base from which to work. In the second module, inventories of capabilities are developed in order to determine the categories needed to be assessed. Then, using questions developed by experts then assesses core competencies in the third module; for example, does it translate into customer-perceived value? In the fourth module, candidate competencies are selected from those that were assessed as being better than the other competencies. The fifth module tests those candidate competencies, and in the sixth module are evaluated to see which ones are finally selected.
Strategic approaches to competency assessment have also been investigated. The premise behind competency assessment is that if an organization’s managers are equipped with the right competencies to carry out their jobs effectively, corporate success should, all things being equal, not only be improved, but accelerated (Tovey, 1993-a). The link between management development and corporate strategy are growing these days for several reasons: the emergence of new organizational structures and designs to cope with the pressures and competition of the 1990s. Human resource departments are now being seen as being able to enable a deeper understanding of business objectives and the actions that need to be taken in order to achieve them. Therefore, competency assessment is the bridge between strategy and management development (Tovey, 1993-a).
Before beginning competency assessment, some questions, taken verbatim from Tovey (1993-a), are worth asking:
These questions are all part of the first stage in assessing competencies in strategic competency assessment called the Strategic Review (Tovey, 1993-b). The next stage is labeled the Strategic Areas of Competence. In this stage, critical success factors are clarified and confirmed so that strategic competence can be identified.
Determining competency requirements is the third step in the process and there are three sources from which they are derived: requirements of the business as reflected in strategic areas of competence; the job itself, both in terms of business, professional; technical and personal and managerial competencies; and from the organization in terms of culture. These competency requirements are then classified under a number of cluster headings in order to be tested and prioritized against the strategic areas of competence. Assessment of the competency requirements is then conducted where the gap between the requirements and skills people possess is investigated. Assessment of requirements helps with developing training and development needs.
The competencies are then tested in the fourth phase called application. Every manager engages in at least four activities in the development cycle as described earlier in the paper. Finally, in stage five, the job and business performance stage, the job impacts business performance and it is imperative that the job and the organization’s strategy is aligned (Tovey-b, 1993).
Robinson and Barberis-Ryan (1995) share yet another method in assessing competencies in the nursing field. The first thing was a brainstorming session, where a list was created of all the nursing competencies currently being assessed in the organization. Criteria were then determined to create a framework for the assessment process. The nurse managers were then enlisted into the application process. Then, presentation of competency standards comprised the next step in the process. Leadership assessment tools and managerial leadership and its relationship to the developmental status of the unit members were the focus of the third session. The final segment focused on departmental education for development.
Kush (1994) outlines another competency assessment method for nurses. Prior to hire, the employee fills out a formal application, then is interviewed by the nurse recruiter and the unit’s nurse manager or assistant nurse manager. At the beginning of orientation, the Staff Development Department provides a competency-based orientation checklist to be filled out by the prospective employee. Based upon the skills identified in the checklist, the list is given to the preceptor to plan for the unit orientation. Throughout orientation, the orientation checklist is used to document attainment of the required skill competencies. At the conclusion of orientation, the preceptor evaluated the employee’s competency in relation to the assigned responsibilities of his/her role, and communicated this to the nurse manager. The orientation checklist remains unit-based throughout the rest of the probationary period. After six months of employment, a probationary performance evaluation is conducted. The orientation list is used once again to evaluate competency. Annual performance reviews are then conducted to provide for ongoing competency assessment.
Applications of Competencies in the Organization
To apply competency assessment in the organization, having a foundation for what competency assessment is and the premise behind assessing individuals on competencies is useful. Competency assessment rests on three pillars: (a) the correct competencies have been identified; (b) the chosen form of assessment truly reveals the competencies; and (c) the assessors and appraisers have the skill, ability, and training to make those judgments about the revealed competencies (Sparrow, 1998).
As stated earlier, there are many human resource functions that rely on competency assessment as the basis for their initiatives. Performance management, development, succession planning, and selection are all HR activities using competencies as the foundation (Tovey, 1993-a). The theory is that if companies can identify the knowledge, skills, and behaviors, of their most successful employees, they can train other employees to acquire and apply these same attributes to yield better results (Dewey, 1997).
More and more companies are beginning to use competency-based interviewing in order to select the right employee for the job. Many companies are experiencing limited promotion activities and planned attrition along with high costs of the selection process, so it is imperative to select the right people the first time. Custard (1998) describes a strategy from the Bonneville Power Administration. Competency-based interviewing is based upon identifying competencies and using the interview process to obtain in-depth information about applicants, and how they perform, and translate learning to new situations. Competency-based interviewing emphasizes communication of the applicant’s lifelong learning and skill building. The interview process is somewhat standard except that the questions asked are a little different. The applicant is given a worksheet for each competency that will be used and they are then able to prepare answers to the competencies. The worksheet includes such questions like how did you approach the situation, why did you do it that way, what did you learn. The actual competencies revealed in the interviewing process are combined with other factors, that when summarized, will determine the selection for the position. Other factors for consideration are technical and/or functional skill qualifications (in certain cases managerial), performance, responses to KSAs, information provided by references, and training and development (where appropriate).
At Toyota, competencies are linked to performance (Smith, 1998). A clear link to business strategy was desired. Skills necessary in cultivating the behaviors necessary to support business objectives were targeted and were encouraged to grow. There was increased flexibility. A new three-part appraisal process was used to determine whether or not competencies were met. The three parts of the performance appraisal were: the results section, core competencies (critical success factors), optional core competencies (based on job responsibilities), and two ratings determined from the first two listed. Development plans were also put into place so that pay increases were available to those who were willing to learn new skills. The core competencies of the organization are customer satisfaction, teamwork, problem solving, efficiency, quality and quantity of work. Merit increases stayed the same. What changed were progress could be made within bands of compensation ranges, less emphasis was placed on promotion, and timing/years of experience requirements were eliminated.
Westinghouse Savannah River Company, a key facility in a U.S. nuclear weapons complex, used a competency model to support organizational change efforts (Scarbrough & Trill, 1998). Making a cultural shift was the focus of the company. They started to define their competency model where business imperatives were formed with management support and the model was validated by other task teams. Westinghouse’s organizational imperatives were safety, disciplined operations, cost effectiveness, continuous improvement, and teamwork. From those imperatives came six core competencies: teamwork, leadership, communication, business results, self-management, and employee development. These six core competencies were the basis for the competency-based infrastructure of selection, development, assessment, and reward. In selection, selection was based on demonstrating competencies through panel interviews. Positions were open to all employees and all employees were trained in competency-based resume writing and interviewing. In development, management was trained to LEAD—Leadership Expectation And Development. LEAD incorporated four prongs: leadership of others; business leadership, self-leadership, and continuous learning. Senior management was exposed to the competencies and skill-building tools were implemented around competencies through interactive exercises. Additional business days were developed to assist managers in competency-based development. An instrument was built to assess the six core competencies in the third aspect of the competency-based infrastructure. A cycle was developed in order to generate continuous feedback between employee and supervision. Employees and their manager select six attributes to focus on during the year and multi-source feedback is incorporated. Finally, in the reward system, selection for promotion is based on performance around competencies. Interviews were based upon the six competencies. All senior management positions were filled through this process.
Competencies are also making their way into the training and development arena. At Partners Healthcare System, Inc., where they are overseeing the consolidation of Brigham and Women’s hospital and Massachusetts General Hospital, a leadership competency modeling process was developed where KSAs and critical incidents led the way to developing a Healthcare Learning System (HLS) for the hospitals. The learning centers created leadership educational materials in order to help managers develop and grow into successful behaviors. Learning standards of excellence organization-wide were developed. Development training was also offered.
Validity and Reliability for Competency-Based Systems
Although competency-based human resource systems give a company a competitive advantage, the legal issues of validity and reliability of these systems remain. Title VII of the Civil Rights Act of 1964 may be violated by these systems. Competencies must validly, or accurately, and reliably, or consistently, distinguish excellent performers from average performers (Klein, 1996).
To work, competency-based systems must be developed and administered with methodological rigor. If an organization does not apply this rigor, two problems may occur (Klein, 1996):
Because competency-based models are used as assessment procedures, these systems must be validated in accordance with the definition of tests. The definition of tests is any means of observing or documenting consistent behaviors or attributes (Klein, 1996).
To meet validity standards, the Standards for Educational Psychological Testing defines validity as "the appropriateness, meaningfulness, and usefulness of the specific inferences made from test scores." To meet reliability standards, practitioners should follow several logical principles. The American Psychological Association (APA) outline some principles to follow. First, practitioners should use an acceptable number of participants to collect behavioral data. In this case, six to 10 high performers and six to 10 average performers constitute a good base for defining differences between groups. Once the data are in hand, the next steps are to identify the behaviors that distinguish high from average performers and then cluster those behaviors into theme groups—creating competency models. Three types of validity must be met.
Content validity can be established by making sure that the instrument or model reflects the competency as it is defined; that is, it must seem accurate in face value. A content analysis should also be done on the materials in order to determine content validity.
Criterion validity for competency models means that this model must show that possession and development of the required competencies will lead to performance success in that job. The company should keep track of false positives and false negatives (Klein, 1996). False positives are people assessed as being suitable but are not. False negatives are people assessed as not being suitable but truly are suitable. If records are kept that the ratios are low, then the company can protect itself legally. The latter two are much more feasible for the company.
Construct validity is the most difficult of the three types and should not be the goal when developing a competency-based HR system. Although measures of behavior can operationalize constructs such as customer responsiveness, the behavior is not synonymous with the construct. Construct validity is beyond the scope of applied HR management (Klein, 1996).
In terms of reliability, the most practical way of determining reliability is to use multiple measures. Multiple measures should produce the same outcome. If not, then the system may be flawed. Test-retest and giving a split-half test are not recommended because they don’t allow for many different tests and measures to confirm that the competencies are consistently measuring the same behaviors (Klein, 1996).
Conclusion
Competency assessment is a popular option for companies who want to maintain a competitive advantage. There are many uses for competencies such as selection, assessment, training and development, succession planning, and supporting organizational change efforts. In all of these areas, competencies are forming the foundation of these efforts. The company will gain an advantage if it decides to invest in using and assessing competencies.
References
Armstrong, M., & Baron, A. (1998, July 23). Out of the tick box. People Management, 4(15), 38-41.
Custard, S. (1998, November 4). Competency-based interviewing: Selecting the right employee for the right job. Conference Proceedings of Linkage Incorporated, USA, 5, 519-536.
Dewey, B. (1997, March/April). Six companies share their insights: The challenges in applying competencies. Compensation & Benefits Review, 29(2), 64-75.
Gallon, M. R., Stillman, H.M., & Coates, D. (1995, May/June). Putting core competency thinking into practice. Research-Technology Management, 38(3), 20-28.
Harris, C. (1998). Major approaches to job analysis. Denton, TX: University of North Texas.
Klein, A. L. (1996, July/August). Validity and reliability for competency-based systems: Reducing litigation risks. Compensation & Benefits Review, 28(4), 31-37.
Kush, L. J. (1994). Competency assessment: One step at a time. Nursing Management, 25(8), 78-79.
McNerney, D. J., & Briggins, A. (1995). Competency assessment gains favor among trainers. Hr Focus, 72(6), 19.
Robinson, S. M., & Barberis-Ryan, C. (1995). Competency assessment. Nursing Management, 26(2), 40-44.
Scarbrough, J., & Trill, M. (1998, November 3). Using competencies to enhance organizational change efforts. Conference Proceedings of Linkage Incorporated, USA, 5, 95-114.
Smith, J. (1998, November 4). Linking competencies to compensation at Toyota. Conference Proceedings of Linkage Incorporated, USA, 5, 281-320.
Sparrow, P. (1996, December 5). Too good to be true? People Management, 2(24), 22-24.
Thornton, G. C., III. (1992). Assessment centers in human resource management. New York: Addison-Wesley.
Tovey, L. (1993-a). Competency assessment: A strategic approach-Part 1. Executive Development, 6(5), 26-27.
Tovey, L. (1993-b). A strategy approach to competency assessment. Journal of European Industrial Training, 17(10), ii-iii.
Ukens, C. (1996, June 10). Boards to test how to assess pharmacists’ competence. Drug Topics, 140(11), 45.
Wolfe, M. (1998, November 4). Transitioning to a competency for pay system. Conference Proceedings of Linkage Incorporated, USA, 5, 203-279.
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