Journal of Management Development
Can compet encies at select ion predict perf ormance and development needs? Anna Sutton, Sara Watson,
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To cite this document:Anna Sutton, Sara Watson, (2013) "Can competencies at selection predict performance and development needs?", Journal of Management Development, Vol. 32 Issue: 9, pp.1023-1035, https://doi.org/10.1108/ JMD-02-2012-0032
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Can competencies at selection
predict performance and
development needs?
Anna Sutton and Sara Watson
Business School, Manchester Metropolitan University, Manchester, UK
Abstract
Purpose– The purpose of this paper is to explore the utility of an organisation-wide competency framework, linking competency ratings at selection to later development needs and job performance. Design/methodology/approach – Candidates’ scores at a management selection event were compared to their performance appraisal scores on the same competencies six to 12 months later (n¼58). Scores on numeracy and profit and loss tests were also collected at the selection event and related to subsequent performance (n¼207) and development needs.
Findings– Competency ratings at performance appraisal were significantly lower than at selection interview. Correlations between ratings at interview and at performance appraisal were generally weak, though one (Understanding the Business) showed significant relationships with five of the seven performance appraisal competencies. In addition, competency ratings were related to employee turnover and managerial development needs.
Research limitations/implications – Although competencies were clearly defined, inter-rater variations may have occurred which obscure the relationships. However, it is of interest that a single competency at selection (Understanding the Business) seems to have the greatest effect on performance, employment outcome and development needs.
Practical implications – A competency framework that is embedded in both selection and performance ratings can provide the organisation with a clearer understanding of what determines managerial success, as well as informing better selection decisions. This study also raises the issue that performance ratings may be influenced more by a manager’s ability to understand the business than by any other competencies.
Originality/value– The use of a longitudinal design provides unique evidence of the relationship between competency ratings at selection and later performance, employment outcome and development needs.
Keywords Development, Selection, Competencies, Manager Paper type Research paper
Introduction
Competency frameworks are often proposed to provide a practical way for an organisation to integrate its HR practices across the employee life cycle, from selection through training and development, to performance appraisal and promotion. Using an integrated framework is purported to enable the organisation to strategically deploy its human capital to meet business objectives. This study explores the utility of a competency framework embedded throughout selection and performance appraisal processes, identifying the organisational advantages accrued as well as highlighting some of the difficulties in practical application.
The growing emphasis on strategic HR management during the 1990s resulted in pressure on HR to reduce costs, improve its services, increase its impact and provide a more satisfying work experience for its own employees (Kochanski and Ruse, 1996). Process and competence emerged as key factors in how the HR function was organised. The idea of measuring “competence” rather than intellectual ability or cognitive
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function originated with McClelland’s (1973) call for a more criterion-based approach to assessing people’s abilities than the intelligence tests which at the time were popularly accepted as the best means of identifying individual potential and ability. While definitions of what a “competency” actually is may differ somewhat, there is good consensus that competencies are characteristics of an individual that underlie effective or superior performance (Boyatzis, 1982). Their usefulness and popularity lie primarily in the way they capture a range of individual characteristics in a performance-focused manner, incorporating not only what a person can do, but what they want to do (Ryanet al., 2009).
Matching employee competencies and job requirements is claimed to improve employee and organisational performance, as well as lead to increased satisfaction (Spenceret al., 1992). Special issues of this journal have been devoted to developing both theoretical understanding and practical applications of competencies in organisations in both the USA (volume 27, issue 1) and the EU (volume 28, issue 9). Boyatzis (2009) noted the value of this series of papers in exploring the link between competencies and performance: a relationship which relatively few published studies have addressed. This study seeks to extend and build on this work by reporting on the relationship between managers’ competency ratings at selection and later, at performance review.
While there are many different approaches to defining managerial competencies, one of the most valuable is to identify those behaviours which distinguish “superior” from “average” managers. As McClelland (1973) pointed out when first recommending this approach to the study of individual effectiveness, behavioural analysis requires both theoretical and practical sophistication. An example of this approach is given by Cheng et al.’s (2005) study of project managers in the construction industry. A list of performance excellence measures were drawn up by focus groups of key stakeholders and used to identify a group of “superior” and a group of “average” managers. Interviews with the “superior” managers were used to identify the competencies associated with higher performance. Subsequently, all managers were interviewed using a critical incident technique and the transcripts analysed and individuals scored on the competencies. The results indicated that superior managers could be distinguished from average managers on 12 competencies. This study had the advantage that the competency framework was linked to performance measures, however, it could be argued that extracting the competencies from a previously identified group of higher performers may have falsely inflated the scores of that group in the subsequent interviews. Interestingly, while Antonacopoulou and FitzGerald (1996) commented on the difficulty of describing a universal set of manager competencies more than two decades ago, Chenget al.noted that there is clear cross-mapping of competencies between different industry sectors. They suggested instead that a behavioural competency model for managers may be sufficiently abstract to be applicable across different types of management jobs, although they do caution that job-task-specific competencies will still be important to success.
While there is evidence that competencies capture important contributors to individual managers’ performance, another important question is the extent to which they contribute to organisational performance. A longitudinal study of top-level executives showed that different sets of competencies were associated with high performance at different time points, and that candidates who were selected using a competency-based system were estimated to increase annual organisational profit by $3 million each. Henderson (2008), in a survey of over 500 respondents, found that managers’ communication competency made a significant contribution to their teams’
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productivity and satisfaction, although it was noted that geographical dispersion had a negative impact on the team members’ perceptions of their manager’s competency. This again underlines the issue that it is important to contextualise management competencies when using them as a measure of managerial effectiveness.
The importance of context in both defining and using competencies is further explored in a study of competency-based assessment centres for the selection of the UK judges (Kirton and Healy, 2009). This study noted that while using competencies in selection had the potential to increase diversity in a very homogenous workforce, that the competencies themselves were socially constructed and that measurement, while seeming objective, is dependent on subjective judgements by assessors. This criticism of the competency approach should be borne in mind throughout the following paper. While competency criteria were initially designed for specific applications, competency frameworks that can be applied across the full range of human resource processes are now emerging. Young and Dulewicz (2009) identified four competency clusters which were associated with higher performance in naval officers and described how this competency-based approach was subsequently used as the basis for selection, training and development in management and leadership in the British Royal Navy. The current study investigates the next step in organisational implementation: evaluating the utility of a competency framework across the employee life cycle.
The competency framework has been recognised for its practical applications in the assessment of candidate suitability to a particular role, along with assessment of effectiveness post-appointment (McBeath, 1990). Indeed, Soderquistet al.(2010, p. 326) refer to competency as lying at “the heart of HRM” allowing horizontal and vertical integration of HR activities with each other and with organisational strategy. A competency framework within an organisation may be used to structure selection processes, training and development programmes and performance appraisal templates, providing an integrated and coherent approach to the management of an organisation’s human capital.
The advantages of implementing integrated competency frameworks within and even across organisations have been demonstrated in several different industries and countries. A framework developed for diabetes nurses, for example, outlines how it can provide a career structure, assist in business planning and allocation of resources, allow benchmarking of practice across different sites and even help to standardise practice across different countries (Hill, 2011). Beyond the requirements of a particular role, a competency framework is also an effective way of identifying and encouraging behaviours and capabilities within the organisation that can enhance competitive advantage but are not specifically tied to a particular job role, such as with corporate entrepreneurship (Hayton and Kelley, 2006). Ryan et al. (2009) describe how a competency framework was used to compare performance within and across different organisations, highlighting the relative importance of different competencies in predicting performance in two organisations. The authors used critical incident interviews to identify and code for behavioural evidence of the competencies, and compared superior to average performers. While this study was not able to assess performance using an objective measure, it demonstrates how some competencies (such as team leadership) are associated with higher performance across different samples while others are more specific to the context.
Finally, an integrated competency-based approach to management has the benefit of improving the transparency of HR processes, fostering employee respect and creating a better work environment (Bonderet al., 2011).
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Once the organisationally required competencies have been identified and defined, one of the main areas of application for the competency framework is in the selection interview to ensure as far as possible that candidates who can contribute to the overall business objectives are chosen. Nearly all European employers interview prospective staff (Dany and Torchy, 1994), and a review by Judgeet al.(2000) provided support for the continued use of the employment interview in selection, despite the range of validity coefficients being reported by past researchers. Several methods for improving the effectiveness of interviews have been suggested. For example, Taylor and Small (2002) noted that using a descriptively anchored rating scale in the interview process, such as is often used in competency assessment, could increase validity estimates to 0.63. In addition, Schleicher et al.’s (2002) comprehensive examination of the construct validity of an assessment centre found that frame of reference training was effective at improving the reliability, accuracy, convergent and discriminant validity and the criterion-related validity of assessment centre ratings.
A second application of the competency framework is in the performance appraisal, a process of identifying, observing, measuring and developing human performance in organisations (Carroll and Schneir, 1982). While there has been discussion over the accuracy of performance ratings, with some authors suggesting, for example, that supervisory affective regard can skew ratings (Lefkowitz, 2000), and others arguing that affective regard can be seen as a function of ratee performance (Cardy and Krzystofiak, 1991), there have been clear demonstrations that, similarly to selection interviews, rating accuracy can be improved using frame of reference training (Sulsky
et al., 2002).
Making use of up to date understandings of competency definition, rating and accuracy, a competency framework that is embedded throughout the organisation has the potential to bring large returns in terms of the management of talent. Using the same competencies for both selection and later performance appraisal, and then making comparisons of individual’s scores provides an effective means of evaluating HR functions as well as individual development. Identifying competency ratings at interview that are associated with later work outcomes such as increased likelihood of turnover, potential for further development and promotion, and higher levels of performance would be invaluable in assessing the utility of competency frameworks. This study seeks to explore the benefits or drawbacks of an organisation-wide competency framework, by addressing the following questions in a longitudinal study:
RQ1. Are competency ratings at the selection stage related to performance ratings once the candidate is in post?
RQ2. Is it possible to identify, at the selection stage, competency ratings that are associated with higher turnover?
RQ3. Can a competency framework provide a tool for identifying training needs for future promotion?
Method
Organisational context
The study was carried out within a single organisation, a leading operator of managed pubs and pub restaurants in the UK with 16 brands in its portfolio, which has recently adopted a single competency framework throughout its different locations. Historically,
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the organisation had been divided into two groups which each had its own competency framework. The Restaurant group used the Covey framework (Covey, 1989) and the Pubs and Bars group used a framework developed by a consultancy firm. This consultancy exercise was completed before the time of the research reported in this paper but essentially involved the development of competencies using a combination of the two common approaches identified by Mansfield (1996): beginning with a one-size-fits-all approach, the consultancy then customised and reviewed the competencies to ensure they captured high performance in the specific organisation and reflected the language of the organisation.
Over time, however, the distinction between the Pubs and Bars and the Restaurant groups had become blurred and after an organisational restructure combined the groups, there was a need for a single competency framework. The two sets of competencies were mapped against each other by the HR department in consultation with senior managers and it became clear that the competencies in each framework were essentially the same, with similar behavioural descriptors, but just worded slightly differently. The decision was made to use the Pubs and Bars competency framework as it had been developed specifically for the organisation. Buy-in was reasonably high as the customisation of the new framework drew heavily on the pre-existing and accepted competencies from each division. This single competency framework was then used for future selection events and performance appraisals.
Data collection
Structured one-to-one selection interviews for management roles were carried out by trained interviewers as part of a longer recruitment day and typically lasted 45-60 minutes. The interview questions followed the experience-based format that Krajewski
et al.(2006) reported as producing a validity coefficient ofr¼0.32,po0.01. Performance
appraisals were carried out by line managers, 6-12 months after recruitment, using the same competency definitions as at selection but without structured interview questions. Ratings from the selection interviews were drawn from the recruitment database, while performance appraisal ratings were requested directly from line managers.
Unfortunately, we did not have access to details of the raters at each stage and so were unable to test inter-rater reliability. It should therefore be noted that differences between individuals and indeed between ratings at different times may be subject to inter-rater error. However, both selection raters and line managers had received briefings and coaching sessions to try and ensure reliability in interpretation and use of the competency ratings. This study, therefore, should be seen as an assessment of the realities of competency ratings within most organisations.
Measures
The seven competencies assessed in the selection interview and performance appraisal were: Understands the Business (UTB), Building the Business (BTB), Focusing on the Guest (FOG), Leads to Win (LTW), Building Capability (BC), Lives the Values (LTV) and Making it Happen (MIH). Descriptions of the competencies are given in Table I and candidates were assessed on a scale from 1 (little or weak evidence of this competency) to 5 (excellent, strong evidence of this competency), with a zero allocated if a candidate failed to provide any evidence for that competency.
Candidate scores on Numeracy and Profit and Loss tests, developed with an external consultancy a number of years ago, were also collected at selection. The Numeracy test consisted of 19 items with a maximum total score of 20 points, and
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Competency Abbreviation Description
Understands the Business
UTB Understands and applies commercial and financial principles, and views issues in terms of sales, costs, profits and markets. Demonstrates an ability to work with and interpret numerical information. Is profit conscious and appreciates the commercial impact of activities on business profits. Is aware of competitor activity and market trends. Seeks out information on guests, markets and competitors, and commits to keeping up-to-date with market and industry developments
Building the Business
BTB Focuses on new business opportunities and activities that will build the business and bring the largest return. Is focused on maximising business return and understands key business drivers. Utilises appropriate selling techniques that are consistent with the brand/offer. Shows a commitment to brand/offer goals and standards and follows through to ensure that these are delivered in running and building the business
Focusing on the Guest
FOG Is committed to meet and exceed guest expectations by providing a prompt, efficient and courteous service and going the extra mile. Reinforces the importance of providing personalised service to guests without compromising the brand/offer and business offerings. Quickly builds rapport with guests and works hard to exceed their needs. Develops and maintains professional relationships with guests. Encourages a guest service orientation within the business
Building Capability BC Actively seeks to improve the capability of individuals and teams by providing coaching and development opportunities. Identifies developmental needs, arranges appropriate learning experiences and motivates people to develop themselves. Values teamwork and ensures the practical needs of teams are met. Builds and aligns teams with the vision of the brand/ offer and the business and organisation, and supports and fosters effective teamwork
Leads to Win LTW Provides the team with a clear sense of direction and takes time to explain to individuals how they can contribute to the business goals. Takes charge, organises resources and steers others towards successful task accomplishment. Creates empowering conditions that enable individuals and teams to achieve their goals. Enthuses and motivates others by providing a clear sense of purpose, inspiring a positive attitude towards work, and arousing a strong desire to succeed amongst team members. Communicates clearly and persuades others around to their point of view
Lives the Values LTV Maintains high ethical standards and acts in a way that is consistent with the organisational and business values. Shows integrity and fairness in dealings with others and is reliable and trustworthy. Is committed to the achievement and maintenance of quality. Encourages organisational and individual responsibility towards the community and the environment. Actively promotes compliance with legal and safety requirements, and demonstrates commitment to the organisation
Making it Happen MIH Takes responsibility for actions, projects and people, initiates action and generates activity. Delegates work effectively and monitors progress against delegated activities. Maintains high professional standards and shows commitment to the organisation and building the success of the business. Drives projects along, gets results and ensures that key business objectives are met. Utilises planning skills to identify actions and objectives and clearly articulates them. Schedules activities to ensure optimum use of time and resources. Shows enthusiasm and maintains energy and commitment in the face of setbacks and pressure
Ta
b
le
I.
Definitions
of
comp
etencies
included simple mental arithmetic. The Profit and Loss test consisted of 13 questions for a maximum total score of 20 points and items covered calculation of profit margins and understanding of profit and loss sheets, for example: How has the outlet performed this year against its Managerial Profit Budget?
Sample
Scores from the recruitment day were available for a total of 207 employees (73 per cent male). Data were also collected on the current employment status of these employees: whether they were still in employment with the organisation (n¼127) or had left (n¼80). The main analyses were conducted on the sub-sample of employees for whom both selection interview performance appraisal ratings were available (n¼58, 81 per cent male). At the time of the performance appraisal, 45 per cent of these were assistant managers, 45 per cent were general managers and the remainder in “holding” or “designate” manager roles.
Results
Table II shows the descriptive statistics and correlations for all variables. Competencies at each assessment time were all significantly inter-correlated. The mean competency rating during appraisal was 3.19 (SD¼0.58), lower than in the interview (mean¼3.57, SD¼0.51). Comparison using pairedt-tests indicated that this difference was highly significant (t57¼4.41,po0.001) and had a large effect size
(partialZ2¼0.25).
To investigate RQ1 (Are competency ratings at the selection stage related to performance ratings once the candidate is in post?), bivariate correlations were calculated for corresponding interview and performance appraisal competencies. The results showed that these were generally weak, with only UTB demonstrating a significant correlation (r¼0.33, po0.05). Interestingly, scores on this competency
at selection were significantly correlated with ratings at performance appraisal of FOG (r¼0.30,po0.05), LTW (r¼0.31,po0.05), BC (r¼0.34,po0.01) and MIH (r¼0.37, po0.01). In addition, interview FOG was significantly related to appraisal BC
(r¼0.31, po0.05), and interview MIH was significantly related to appraisal FOG
(r¼0.30,po0.05).
Table III shows the means and standard deviations for ratings at selection interview, split by current employment status (leavers and those still at the organisation). To addressRQ2 (Is it possible to identify, at the selection stage, competency ratings that are associated with higher turnover?), one-way ANOVA was conducted to compare leavers’ scores with the scores of those still in employment. Results demonstrated that leavers were rated significantly lower than active employees at the selection stage on three competencies: UTB (F(1,205)¼3.92, po0.05), BC (F(1,205)¼5.12, po0.05)
and MIH (F(1,205)¼4.71,po0.05). In contrast, Numeracy (F(1,205)¼1.93,p40.05) and
Profit & Loss ( F (1,201)¼2.13,p40.05) scores were not significantly different between
the leaver and active employee groups.
Finally, stepwise discriminant analysis was conducted on the selection interview competency ratings to exploreRQ3and determine whether job role (assistant manager, general manager or holding manager) could be distinguished by selection criteria. A single function emerged with an eigenvalue of 0.37, explaining 98 per cent of the variance ( Wilks’ l¼0.725, w2(6)¼60.7, po0.001), and containing three variables:
Profit and Loss, UTB and BC. The standardised discriminant function coefficients demonstrate the unique contribution of each independent variable to the function and
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Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1. Numeracy 4.07 0.915 2. Profit and Loss 2.91 0.786 0.360**
3. Int UTB 3.45 0.841 0.028 0.249 4. Int BTB 3.52 0.778 0.023 0.248 0.444**
5. Int FOG 3.66 0.664 0.069 0.251 0.533**0.522** 6. Int LTW 3.72 0.7900.095 0.020 0.348**0.408** 0.518** 7. Int BC 3.55 0.680 0.022 0.160 0.327* 0.380** 0.585** 0.550**
8. Int LTV 3.50 0.682 0.084 0.184 0.275* 0.430** 0.504** 0.554**0.378**
9. Int MIH 3.62 0.7210.199 0.159 0.285* 0.325* 0.418** 0.521**0.398** 0.464**
10. PA UTB 3.13 0.798 0.048 0.329*0.330* 0.074 0.235 0.026 0.060 0.024 0.056 11. PA BTB 3.04 0.9380.004 0.031 0.175 0.065 0.038 0.135 0.127 0.075 0.193 0.391** 12. PA FOG 3.25 0.768 0.175 0.184 0.299* 0.220 0.258 0.217 0.235 0.176 0.301*0.519**0.387**
13. PA LTW 3.06 0.636 0.219 0.294*0.309* 0.024
0.012 0.001 0.043 0.172 0.064 0.616**0.525**0.364**
14. PA BC 3.18 0.730 0.309* 0.260 0.337**0.188 0.312* 0.164 0.184 0.150 0.183 0.592**0.655**0.481**0.695**
15. PA LTV 3.29 0.744 0.228 0.212 0.235 0.067 0.084 0.114 0.091 0.052 0.047 0.556**0.535**0.522**0.611**0.660** 16. PA MIH 3.23 0.774 0.248 0.269*0.370**0.085 0.244 0.025 0.133 0.122 0.160 0.567**0.370**0.505**0.529**0.653**0.662**
Notes: I, Interview; PA, Performance Appraisal; UTB, Understands the Business; BTB, Building the Business; FOG, Focusing on the Guest; LTW, Leads to Win; BC, Building Capability; LTV, Lives the Values; MIH, Making it Happen. *po0.05, **po0.01
T
ab
le
II.
Me
ans,
SD
and
Pearson
co
rrelation
co-ef
ficients
fo
r
all
varia
bles
were as follows: Profit and Loss¼0.52, UTB¼0.45 and BC¼0.5. The discriminant function was able to classify cases correctly 55 per cent of the time. assistant managers could be distinguished from general managers very well, scoring lower on the combination of competencies captured by this function, while general manager designates were intermediate between the two (Table IV).
Discussion
This study aimed to explore the potential benefits or drawbacks of a single competency framework being utilised across the organisation. First, we identified the extent to which competency ratings at selection were related to performance in post. In this study, a single competency at interview (Understanding the Business) was positively related to five of the seven competencies at appraisal. It seems that an individual who is skilled in understanding the business is likely to outperform his or her colleagues on all the other competencies as well. In a similar vein, Haurani et al.(2007) found that communication and professionalism were related to higher scores on other competencies. A burgeoning area of research in selection interviews is their use in assessing Person-Organisation Fit, and in their review Judge et al.(2000) highlight how the interviewer’s judgement of P-O fit may be based candidates’ personal characteristics, such as congruence between their career goals and the organisation’s business goals. Clearly, an applicant with a greater understanding of the business would be able to demonstrate this congruence more effectively and therefore may well be perceived as having greater fit. Taken together, these results indicate that there may be a critical competency (or two) that determine an individual’s success in an organisation. Although it waits further investigation, it may be that an individual’s understanding of the requirements of the organisation, whether this is industry-specific knowledge or an understanding of how high-performing individuals in that organisation tend to behave, is an important component of demonstrating his or her competence across the range of criteria an organisation uses to assess performance.
Function 1
Assistant manager 0.561
General manager 0.682
General manager designate 0.444
Table III. Functions at group centroids
Still employed (n¼127) Left organisation (n¼80)
Mean SD Mean SD
Numeracy score 4.01 0.930 3.83 0.911
Profit and loss 2.93 0.879 2.74 0.938
Interview – UTB 3.53 0.898 3.28 0.886
Interview – BTB 3.56 0.720 3.41 0.724
Interview – FOG 3.76 0.672 3.63 0.603
Interview – LTW 3.69 0.753 3.61 0.720
Interview – BC 3.61 0.680 3.38 0.769
Interview – LTV 3.60 0.759 3.54 0.655
Interview – MIH 3.63 0.722 3.41 0.669
Table IV. Selection data by employment outcome
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The study also found that the combined means for interview and appraisal competency ratings were significantly correlated and had a large effect size, a result comparable with those found by previous researchers ( DeGroot and Kluemper, 2007; Hermelinet al., 2007), though there remains a question mark over whether the selection interview is as strong a predictor of future performance as hoped (e.g. Cook, 2009). Overall, appraisal ratings were lower than selection interview ratings. This could be due to either exaggeration during the selection process (many candidates now are comfortable with competency-based interviews and understand how to sell themselves well), the influence of other work-related factors on day-to-day performance or how the competencies are understood by selection interviewers and line managers.
Of further note is the high inter-correlation between competencies measured at the same time, possibly representing the well-known halo effect (see e.g. Haurani et al., 2007). Although the training provided to raters at both selection and appraisal would hopefully mitigate against these problems somewhat, it is worth considering how useful it is to continue to measure seven different competencies in this organisation. It may be that a single, overall rating is of more use. A similar finding was reported by Haurani et al. (2007) in their study of competency ratings of medical residents, which found high inter-correlations between the competencies they studies. They suggest that raters may not be able to differentiate between the competencies when rating performance, but rather give an overall rating of performance.
Second, it was found that ratings at selection interview were related to employment outcome, with leavers scoring significantly lower on three competencies (Understanding the Business, Building Capability and Making it Happen) than those who stayed in employment with the organisation. This highlights the utility of a competency framework in evaluating and improving HR processes: using well-defined and developed competency ratings allow the organisation to improve selection decisions. In future, the organisation may wish to focus more on ratings of these three competencies when selecting candidates in order to save on replacement costs for leavers. Alternatively, by conducting exit interviews with leavers, the organisation might be able to clarify whether training in these three competencies for new job-holders would be of benefit in retaining employees or whether employees were leaving for reasons not captured in the competency ratings.
The savings made in improved selection decisions are not the only benefits of a single competency framework. The construction of a competency framework itself is a time consuming process, and there is an obvious saving in resources if a single framework can be used for three major aspects of the HR process, namely selection, appraisal and identification of training needs. In addition, the use of a single framework will allow the employees to become more familiar with the organisations’ expectations and to demonstrate their competence more effectively. A single framework can also more easily be revised and updated in line with changing organisational needs and strategy, giving the organisation greater flexibility.
Finally, the results demonstrated that the competency framework in this study was also useful in identifying training and development needs. General managers had higher scores at selection than assistant managers on: Profit and Loss understanding, Understanding the Business and Building Capability. This identifies which competencies future training and development should focus on if the organisation wishes to develop its current assistant managers to fill general manager roles. Development focused specifically on helping assistant managers to understand the business and its requirements is likely to help the organisation to develop its talent from within.
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Given that our previous results indicated that understanding the business is important to high performance in this organisation, developing talent within the organisation rather than trying to bring it in from outside is likely to be the best approach. It would be interesting to see if similar research in other organisations showed the same results. Although the findings of this study are very promising, identifying clear benefits to the organisation in terms of maximising and building on its talent, the results should be understood in context. The organisation studied for this research had historically had a clear split in culture and operations between two divisions and had recently attempted to bring them together, partly through the use of a combined competency framework. The raters had all received training in how to interpret and use the competency framework, but there is still the possibility that there was some unfamiliarity with the competencies. In addition, as mentioned above, the large number of interviewers and appraisers mean that there could be issues with inter-rater reliability. While it is important to bear this limitation in mind, we believe the results still provide a valuable assessment of the realities of using an organisation-wide competency framework where there may well be differences between raters at different time points in the employee cycle. Further research is needed to identify the impact of these inter-rater differences on ratings at different points in an individual’s employment. We also acknowledge that these performance appraisal ratings are not direct measures of managerial performance. However, they are the ratings that the organisation itself uses to measure performance and as such represent an important dimension of managerial success.
In summary, this study demonstrates that an organisation with a single competency framework underlying both selection and performance appraisal can use the information it gathers to manage its talent more effectively. The framework has been shown to provide an efficient and practical method for identifying training and development needs and improving selection decisions.
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About the authors
Dr Anna Sutton is a Senior Lecturer in Organisational Behaviour at the Manchester Metropolitan University Business School. With her background in occupational psychology, her main research interests are in the role of personality and self-awareness in the workplace. Dr Anna Sutton is the corresponding author and can be contacted at: [email protected]
Sara Watson is currently the Organisation Development Manager for Jaguar Landrover and moved to the automative industry after spending four and a half years with Mitchells & Butlers Plc as a Recruitment Manager, Learning & Development Manager and HR Business Partner.
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