Management Competencies

Abstract

The purpose of this article is to explore the subject of management competencies and provide a framework for contextualizing competency modeling within organizations. First, a background discussion will ensue with an examination of the origins of competency modeling, along with a definition of the term "competencies." From there, we'll highlight the types of competencies typically employed in the construction of competency models. We'll then transition to the various approaches for developing competency dimensions, typical organizational uses for competency models, types of competency models, and management competencies as predictors of performance. The article concludes with an example of an actual competency model and an outline of some perceived drawbacks of competency modeling.

Global interest in the utilization of management competencies as a management tool parallels the recognition of human resources as the most valuable asset within any organization. Directly in line with this recognition, management competencies are gaining widespread usage in organizations. Competencies clarify work expectations, generating a common language that catalyzes and reinforces changes in individual behavior. In short, competency models develop a set of expectations within organizations that serve as benchmarks for superior performance. However, as shall be seen, there are several beneficial aspects associated with competency models.

Origins of competency-based methodology are grounded largely in the research of Harvard behavioral psychologist David McClelland in the 1970s, and management theorist Richard Boyatzis's research in the 1980s. McClelland (1973), in his article "Testing for competence rather than for intelligence," made the case for competency modeling as opposed to intelligence testing, proposing that intelligence test scores are not reliable predictors of job success. Essentially, McClelland's competency methodology focused on the identification of key behaviors in high performers versus lesser performers.

Management competency pioneer, Richard Boyatzis (1982), is noted for his work in competency modeling as a predictor of effective manager performance. Boyatzis defines competencies as "an underlying characteristic of an employee (i.e., motive, trait, skill, aspects of one's self image, social role, or a body of knowledge) which results in effective, and/or superior performance in a job" (Boyatzis, 1982, p.20). Likewise, Seal, Boyatzis and Bailey (2006, p. 193) state:

"In the purest sense, a competency is defined as a capability or ability that leads to a successful outcome. It is a set of related but distinct sets of behaviors organized around an underlying purpose or goal, called the "intent." Competencies, therefore, are the result of appropriate behaviors used effectively in the situation or time to further the underlying goal or purpose that emerges from the intent."

Additionally, LeBleu and Sobkowiak (1995), summarize competency modeling by stating: "In its crudest form, it is a yardstick for measuring how someone is performing, comparing current performance to an ideal, and suggesting actions that can be taken to improve that performance."

Types of Competencies

Competencies span three broad categories (Byham & Moyer, 1996).

1. Organizational Competencies—those unique competitive attributes that form the basis upon which organizations compete—sometimes referred to as core competencies. It is an organizational strength that gives an organization a competitive advantage over competitors. For example, Dell Computer's core competence lies in superior supply chain management—namely their superior efficiency in the procurement of production parts/supplies, manufacturing processes, and their distribution system.

• 2. Personal Competencies—characteristics representing general standards for acceptable performance (level of achievement or output) in a given role. Consider the job of a sales manager. A sales manager is said to have personal competency if they can adequately perform at a level typically expected of a sales manager. Thus, personal competence is the ability to adequately perform in a given job—as opposed to superior performance.
• 3. Job/Role competencies—skills and behaviors necessary to achieve superior performance in a specific job, role, function, task, duty, organizational level, or entire organization. Job/role competencies are the focus of this article. These job/role competencies exist on a number of job levels (Byham & Moyer, 1996):
• A role (leader of a meeting).
• A job or position (a manufacturing team leader).
• A job level (first-line leaders).
• Several job levels (middle management).
• A broad band of jobs (professional/ technical jobs).
• An entire organization.

It is these job/role competencies that provide the footing for our discussion. Job/role competencies measure knowledge, skills, and abilities shown to predict superior performance. As applied to managers in organizations, job/role competencies define effective management performance and are thought of as management competencies. Throughout the remainder of this article, the terms competency and management competencies shall be used interchangeably.

Job/role competencies may be broken down into a number of observable items, i.e. behavior, knowledge, and motivation (Bynam & Moyer,1996).

Behavioral Competency: Behaviors a person exhibits that result in good performance—that which a person says or does that determines performance.

Example: Consider the HR competency dimension of performance management. A manager would be expected to exhibit certain behaviors such as communicating clear performance standards, monitoring employees' performance, providing performance feedback and recommending corrective action when necessary.

The most widely used behavioral competencies are:

1. Team orientation;
2. Communication skills;
3. People management;
4. Customer focus;
5. Results orientation;
6. Problem-solving; and
7. Planning and organizing (Rankin, 2005).

Knowledge Competency: A person's knowledge of facts, technologies, processes, or procedures related to their job. Diplomas, licenses, certificates, as well as a person's ability to apply their knowledge, are signs of such knowledge competency.

Motivational Competency: An individual's feeling about their job, organization, or geographic location which may impact upon performance. Motivational competencies focus on the motivational aspects of proper job fit, organizational fit, or location fit. Generally motivational competencies cannot be developed.

Example: The position of sales manager requires an entrepreneurial orientation as manifested by a predisposition to seeking out opportunities, and a willingness to take calculated risks. If a sales manager is lacking these qualities, a poor job fit results and that individual would most likely lack the motivation and ability to perform at high levels.

Competency Models in Organizations

Research affirms that competency models are widely deployed, with adoption rates likely to increase in the future. A UK-based benchmarking study (Rankin, 2005) of competencies in organizations found that 60% of respondents had a competency framework in place. Of those firms lacking a competency framework, about half (48%) intended to introduce one in the future. Furthermore, among those organizations with competency frameworks, approximately four out of five employees (78%) were included in their competency model. Also, one-half (50%) of the firms reported having a single, common competency framework across the entire organization.

Changes in the business world have made the use of management competency models more prevalent for the following reasons (Byham & Moyer, 1996):

• Rapidly changing, team-oriented, and "virtual" organizations mean that the traditional definitions of jobs are increasingly rare. Thus, management competencies fill the void by clearly defining what is expected of employees.
• Flattened organizations with fewer layers have fewer advancement opportunities that translate to a more horizontal selection process—creating less room for error due to a smaller number of promotional jobs. This phenomenon increases the need for defining and using competencies to aid in selection accuracy.
• With a more dynamic workplace and the path to advancement less clear, well defined competencies provide better self-guidance in career planning. As individuals become increasingly responsible for their career planning, career guidance assistance is needed. Competencies provide this needed assistance.
• With increased overlap between employee and management roles, clearly defined work roles are imperative. Competencies fill the void by clarifying organizational expectations and individual responses.
• Global workforce requirements require an ability to operate effectively in cross-cultural assignments. Competencies are uniquely suited to providing benchmarks for uniform standards that can be applied worldwide (Byham & Moyer, 1996).

Applications

Approaches to Defining Competencies

There are two basic approaches to defining and developing competencies in organizations—the behavioral approach and the clinical approach (Byham & Moyer, 1996). The behavioral approach concentrates on behaviors, motivations, and knowledge relevant to a particular job—i.e. job-relevant behavior. On the other hand, the clinical approach identifies underlying personal characteristics of the individual as the basis for defining competencies; independent of any job connection. In essence, the clinical approach targets the personal characteristics of superior performers. Unless otherwise stated, our discussion relies on the behavioral approach—the approach most widely used in developing competencies.

Competency Model Types

The following is an overview of competency models involving US-based firms (Rothwell & Lindholm, 1999). Though the models are based on data specific to the US, these models may be found across cultures to varying degrees, regardless of country origin.

1. Borrowed Approach—The easiest and least expensive competency modeling approach, the borrowed approach simply borrows an approach from an existing organization, without taking into consideration the uniqueness of the adopter. An obvious shortcoming lies in the possibility of the borrowed model not being appropriate for the borrowing organization.

• 2. Borrowed and Tailored Approach—A variation of the borrowed approach is the borrowed and tailored approach—which borrows a competency framework from an existing organization, yet tailors the model to the borrower's structure, culture and resources (human, technical, financial, informational, etc.).
• 3. Tailored Approach—As its name suggests, the tailored approach tailors a competency model according to the unique needs of the organization. The process-driven and outputs-driven approaches are classic tailored approaches that have been in use for some time and are more commonly utilized. Several new approaches are the invented approach, the trends-driven approach, and the work responsibilities approach.
• Process-driven Approach—Emphasizes work process (job activities, personal characteristics, behaviors) required for exemplary job performance.
• Outputs-driven Approach—Identifies key outputs of a given job that successful performers produce. Competencies are then developed based on these key outputs.
• Invented Approach—A new competency model is developed without regard to an existing approach. This approach is used when exemplary performers are unavailable or the organization is about to undergo drastic changes.
• Trends-driven Approach—Focuses on what people must know or be able to do in response to managing a changing environment.
• Work responsibilities-driven Approach—"Derives work outputs, competencies, roles, and quality requirements from work responsibilities or activities" (Rothwell & Lindholm, 1999, p.99).

Competency Model Uses

Early usage of competency models focused on two areas: performance management and career development. These early models typically applied primarily to senior managerial personnel (Rankin, 2005). However, management competency frameworks are now being applied across the entire range of the human resource management function. For example, the various uses of competency models are:

• Executive development
• Recruitment and selection
• Compensation
• Performance appraisal
• Career development
• Job design
• Organization design
• Training and development
• Training needs analyses
• Succession Planning (LeBleu & Sobkowiak, 1995) (Bynam & Moyer, 1996)

Also, Rankin (2005) goes further in identifying (in order) the primary applications of competency models in organizations:

• Performance reviews/appraisal
• Improving employee effectiveness
• Achieving greater organizational effectiveness
• Training needs analysis
• Career management

Management Competencies & Performance

In the 1970s, the American Management Association (AMA) and McBer Company (a consulting company founded by David McClelland) studied 1800 managers over a 5 year period, with the aim of identifying the competencies of successful managers. The result of their research yielded five management competencies deemed essential in determining a manager's job success (Rothwell & Lindholm, 1999):

1. Specialized knowledge
2. Intellectual maturity
3. Entrepreneurial maturity
4. Interpersonal maturity
5. On-the-job maturity

Research verifies a number of management competencies serving as accurate predictors of outstanding manager performance (Boyatzis, R., Stubbs & Taylor, 2002). These competencies reside within three broad categories:

Cognitive or intellectual ability, as in the ability to make sense out of complex scenarios with any number of conflicting and sometimes obscure variables which may affect decisions;

Intrapersonal abilities, such as personal adaptability, i.e. the ability and willingness to deal with change;

Interpersonal abilities, (sometimes referred to as emotional intelligence), motivating others to perform, network, communicate, etc.

An important additional ingredient is a person's desire to apply their ability in any one of the aforementioned areas. Without the requisite desire to use these abilities, competencies lose their quality for predicting outstanding performance (Boyatzis, R., Stubbs, & Taylor, 2002).

A Competency Model

The National Institutes of Health (NIH), (the primary federal agency for conducting and supporting medical research) developed an organization-wide competency model for its entire workforce. NIH defines competencies as "the combination of knowledge, skills and abilities that contribute to individual and organizational performance." Suggested uses for the model are decisions pertaining to recruitment and selection, promotion readiness, selection and approval of training, and leadership readiness

(http://hr.od.nih.gov/workingatnih/competencies/faqs.htm).

The NIH Competency Model comprises of three components: Core competencies, administrative leadership and management, and occupation-specific areas. Core competencies form the foundation of the NIH model and represent the knowledge, skills and abilities required of all NIH employees—regardless of function. Occupation-specific competencies represent the set of knowledge, skills and abilities expected within a particular functional area (e.g., Accounting, Contracting, Human Resources, Information Technology, etc.). Also, NIH managers and supervisors must display an additional set of competencies in Leadership and Management. Within each competency dimension, individuals are rated on a proficiency scale of 'not applicable' to a high score of 5 which indicates Expert proficiency. (The rating NIH Proficiency Scale is as follows: N/A—Not applicable, 0—Not Demonstrated, 1—Fundamental Awareness, 2—Novice, 3—Intermediate, 4—Advanced, 5—Expert.)

I. Core competencies are split into Business Competencies and Communications/Interpersonal Competencies:

Business Competencies

• Enterprise Knowledge
• Analysis, Decision Making & Problem Solving
• Customer Service
• Driving Results
• Personal Effectiveness

Communications/Interpersonal Competencies

• Written Communication
• Oral Communication
• Interpersonal Effectiveness

II. Leadership & Management Competencies

• Visionary Leadership
• Developing & Managing Talent
• Strategic Decision Making

III. Occupation-Specific Competencies

Occupation-specific competencies vary according to occupation, i.e., an Accountant will have a different set of occupational competencies from that of an Information Technology specialist. The following list illustrates the occupation-specific competencies for NIH Information Technology Management staff (http://hr.od.nih.gov/workingatnih/competencies/occupation-specific/2210/default.htm)

NIH Information Technology Management Competency Model

1. Information Technology (IT) Adeptness Possesses the ability to learn new technologies and the aptitude to understand IT concepts.

2. Information Technology Expertise Able to use the technologies needed to perform in one's IT-specific area and understands the technologies of importance to NIH Institutes.

3. Information Technology Awareness Keeps up to date with trends and changes in the technology market relevant to one's area of professional expertise.

4. Information Technology Legislative Requirements Understands and applies comprehensive knowledge of government IT laws, regulations, policies and procedures.

5. Federal and Departmental Acquisition Policies and Procedures Knowledge Understands the Federal Government industry and how it functions as a buyer of services and products.

6. Project Management Creates and maintains an environment that guides a project to its successful completion.

7. Technical Information Communication Communicates technical information in a manner consistent with the level of the target audience.

Note that within each defined competency, a list of key behaviors serve as benchmarks for rating purposes. For example, for IT Adeptness, note the key behaviors:

Information Technology Adeptness In-Depth Possesses the ability to learn new technologies and the aptitude to understand IT concepts.

Key Behaviors:

• Grasps the "how and why" of information technology and its opportunities and limitations.

• Shares information learned at conferences, seminars, and training on new tools and technologies.

• Enhances knowledge and capabilities by engaging in discussions with other IT professionals.

Issues

A number of criticisms have been leveled at the concept of competency modeling over the years (Rankin, 2005). Some of the major criticisms of competency frameworks are:

Competency-based models can be overly elaborate and bureaucratic, affecting their utility to varying degrees. Also, they can be expensive—costing 2 to 3 million dollars for larger organizations, and are likewise very time consuming to implement. Furthermore, in a rapidly changing environment, a given competency model may quickly become outdated, thus consuming additional time and expense in ensuring it remains relevant and up-to-date.

Also, when placing too much emphasis on employees' inputs (competencies) instead of their actual production (outputs), there is a danger of favoring employees who are good performers in theory, but not in actual practice. In a similar vein, because some behavioral competencies are essentially personality traits a person is unable to change, it may be more prudent to judge someone on what they actually achieve.

Competency modeling runs the risk of producing clones that mimic one another, at the risk of minimizing work teams with diverse skill sets who offset and balance the strengths and weaknesses of other team members. Also, because competencies are based on models of good performers' past performance, this potentially overlooks a dynamic environment whereby new ways of addressing work issues may be needed. Also, if an organization is not very proficient in differentiating between successful and unsuccessful performers, competency modeling adds little value to the organization.

Conclusion

Used correctly, competency models can be powerful, unifying agents for change—changing and directing individual behavior toward organizational goals. Through the clarification of organizational expectations, competency models can be instrumental drivers of superior performance. Aside from enhancing the performance management process, competency models can be effective tools for recruiting and selecting the right person for the right job. Yet, competencies are also useful tools for designing jobs, career development, compensation planning, determining training and development needs, and making organizational design decisions. Though there are some drawbacks to the use of competency models, the positive contributions tend to outweigh any negative aspects. In light of the wide-ranging benefits of competency models and their ability to elicit superior performance, competency modeling has continued to gain traction.

Terms & Concepts

Behavioral Approach: A way of defining competencies that concentrate on behaviors, motivations and knowledge relevant to a job -- i.e. job-relevant behavior.

Behavioral Competencies: Behaviors a person exhibits that result in good performance.

Borrowed Approach: A competency modeling approach that borrows from an existing organization, without taking into consideration the uniqueness of the adopting organization.

Borrowed & Tailored Approach: A competency modeling approach which borrows a competency framework from an existing organization while tailoring the model to the new organization.

Clinical Approach: A means of defining competencies by identifying underlying personal characteristics of the individual, independent of any job connection.

Competencies: Abilities shown to predict and measure superior performance.

Job/Role Competencies: Skills and behaviors that someone must demonstrate to achieve superior performance in a specific job, role, function, task, duty, organizational level, or entire organization.

Knowledge Competency: An individual's professional knowledge regarding a profession, job, or organization.

Management Competencies: Those job/role competencies which define exemplary management performance.

Motivational Competencies: An individual's feeling about their job, organization, or geographic location which may impact upon performance.

Organizational Competencies: Those unique competitive forces which form the basis upon which organizations compete -- sometimes referred to as core competencies.

Personal Competencies: An individual display of characteristics representing general standards for acceptable performance (level of achievement or output) in a given role.

Tailored Approach: A competency modeling approach tailored to the meet the unique needs of an organization.

Bibliography

Boyatzis, R.E. (1982). The competent manager: a model for effective performance. London: Wiley.

Boyatzis, R., Stubbs, E., & Taylor, S. (2002). Learning cognitive and emotional intelligence competencies through graduate management education. Academy of Management Learning & Education, 1(2), 150–162. Retrieved May 21, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=8509345&site=ehost-live

Byham, W., & Moyer, P. (1996). Using competencies to build a successful organization. Development Dimensions International. Pittsburg, PA. http://www.ddiworld.com/pdf/ddi%5Fusingcompetenciestobuild%5Fmg.pdf

Hsiu-Chuan, L., Yen-Duen, L., & Chein, T. (2012). A study on the relationship between human resource management strategies and core competencies. International Journal of Organizational Innovation, 4(3), 153–173. Retrieved November 15, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=89082709&site=ehost-live

Kronenburg, M. A. (2014). Evaluating Important Healthcare Management Competency Areas and Preparation for Healthcare Reforms. International Journal of Business & Public Administration, 11(1), 31–40. Retrieved December 1, 2014, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=97887446

Latukha, M. O., & Panibratov, A. Y. Top management teams' competencies for international operations: Do they influence a firm's result? Journal Of General Management, 40(4), 45–68. Retrieved December 4, 2015 from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=108369252&site=bsi-live

LeBleu, R. & Sobkowiak, R. (1995). New workforce competency models. Information Systems Management, 12(3), 7. Retrieved May 28, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9506273274&site=ehost-live

McClelland, D.C. (1973). Testing for competence rather than for intelligence. American Psychologist, 28(1), 1–14.

Mendenhall, M. E., Arnardottir, A., Oddou, G. R., & Burke, L. A. (2013). Developing cross-cultural competencies in management education via cognitive-behavior therapy. Academy of Management Learning & Education, 12(3), 436–451. Retrieved November 15, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=90436672&site=ehost-live

Montier, R., Alai, D. & Kramer, D. (2006). Competency models develop top performance. T+D, 60(7), 47–50. Retrieved May 23, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=21463711&site=ehost-live

Mukhopadhyay, K., Sil, J., & Banerjea, N. R. (2011). A competency based management system for sustainable development by innovative organizations: a proposal of method and tool. Vision, 15(2), 153–162. Retrieved November 15, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=89431363&site=ehost-live

Parry, S. (1998). Just what is a competency? Training, 35(6), 58.

Rankin, N. (2006). The competency researcher's toolkit. Competency & Emotional Intelligence, 14(1), 26–29. Retrieved May 23, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=22713633&site=ehost-live

Rankin, N. (2005). The DNA of performance: the twelfth competency benchmarking survey. Competency & Emotional Intelligence, 13(1), 2–24. Retrieved May 09, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=18619211&site=ehost-live

Rejas-Muslera, R., Urquiza, A., & Cepeda, I. (2012). Competency-Based Model Through It: An Action Research Project. Systemic Practice & Action Research, 25(2), 117–35. Retrieved December 1, 2014, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=73277004

Rothwell, W., & Lindholm, J. (1999). Competency identification, modeling and assessment in the USA. International Journal of Training & Development, 3(2), 90. Retrieved May 28, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4519388&site=ehost-live

Seal, C., Boyatzis, R., & Bailey, J. (2006). Fostering emotional and social intelligence in organizations. Organization Management Journal, 3(3), 190–209. Retrieved May 21, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=24012807&site=ehost-live

Suggested Reading

Boyatzis, R. E. (1994). Rendering unto competence the things that are competent. American Psychologist, 49(1), 64–66. Retrieved May 31, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9406080383

Dubois, D. D. (1993). Competency-based performance improvement: a strategy for organizational change. Amherst: HRD Press Inc.

Griffiths, B., & Washington, E. (2015). Competencies at work: Providing a common language for talent management. New York City, NY: Business Expert Press.

McLagan, P. (1980). Competency models. Training & Development Journal, 34(12), 22. Retrieved May 31, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9072115&site=ehost-live

Spencer, L. M., & Spencer, S. M. (1993). Competence at work: Models for superior performance. New York: John Wiley & Sons.

Strobel, K. (2014). Competency Proficiency Predicts Better Job Performance. HR Magazine, 59(10), 67. Retrieved December 1, 2014, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=98392711