Competency Management

Know instantly who's a star - and who needs support.

Balance is the key to team performance in global organizations. That's why managers
around the world are using SuccessFactors Competency Management to rapidly chart the
competencies of each team member - and help aim skill sets toward their highest possible
level of performance. Plug it in - and help everyone across your organization and across
the world do their jobs better with cutting-edge core assessment tools from
SuccessFactors.

SuccessFactors Competency Management helps you successfully shape your staff with:

• Competencies inside. Get started quickly with built-in competency libraries, then
customize or work with partners to get the competencies that are right for you
• At-a-Glance Evaluations. Get instant insights on the core strengths of each
employee
• Competency Alignment. Align individual competency goals to overall company
objectives
• Growth Tracking. Track the progress of each individual's competency
development
• Digital Writing Assistant. Create lightning fast, relevant assessments
consistently across the organization

Make performance reviews really count at your

company.
The performance of your employees naturally affects the performance of your company.
Which means performance reviews stand as one of your most powerful tools for ensuring
your ongoing success. But unfortunately, many organizations today have come to see the
review process as a dreaded exercise that holds little real value for workers or
management.

SuccessFactors Performance Management transforms the employee review process into a

springboard that helps your company drive real business results. With SuccessFactors,
you’ll be able to more easily measure individual employee contributions—accurately,
clearly, and objectively. So you’ll be equipped to decide who you want to keep, reward,
or single out for targeted development.

• Identify your best workers. Gain real-time, actionable insight into employee
performance across your organization.
• Revolutionize your performance review process. Complete reviews more
quickly and easily plus slash much of the time and costs associated with
cumbersome paper-based processes.
 • Bring workforce performance to the next level. Transform your standard
review process into a dynamic feedback loop between managers, subordinates,
and peers.
• Boost compliance. Create an audit trail of discoverable documents to ensure the
legality of reviews plus comply with Sarbanes-Oxley and other regulations.
• Install a true meritocracy. Motivate employees by creating a pay-for-
performance culture at your company.

Forward thinking companies are taking steps to implement innovative solutions that
ensure processes deliver real results and improve performance. The purpose of this guide
is to provide concrete guidelines and practical steps that can be used to improve the
performance management processes at your organization.

1. What is Performance & Talent Management?

Performance & Talent Management is a holistic approach to maximizing your company's

potential by helping your employees realize theirs. It encompasses a set of technological
solutions and processes that help you identify your talent needs, your best applicants, and
your star players; align employees' goals with the organization's goals; and then evaluate
performance, coach people to improve over time, and reward excellence.

With the right Performance & Talent Management program in place, you simply
outperform the competition. Why does that happen?

• Team members' goals align with organizational goals, and productivity

skyrockets.
• Favoritism and politics lose their influence over the compensation process, and
employees' commitment and engagement increase.
• Motivation builds as new responsibilities and challenges spur people to higher
levels of performance.
• Succession planning linked with career planning means you and your employees
create a shared vision of an exciting future.

The Learning and Performance Institute can assist with developing an integrated
competency based talent management system. Competency Management Systems can be
implemented to integrate workforce and succession planning, training and development
and performance management so that your human capital processes are aligned and
ensure strategic priorities are met.

Our competency modeling process identifies the core competencies required for
successful performance. Assessment tools are used to evaluate organizational capability
and capacity as well as assist with employee assessment and competency gap analysis.
Development action plans can be created to list developmental priorities and plan
learning activities to bridge competency gaps.

WHAT IS A COMPETENCY?
Simply put, a competency is a combination of traits, skills, knowledge, and experience
needed to perform a particular task or project. Competencies are the critical foundation
upon which an integrated talent management system can be designed, managed, and
improved. Competency identification can be applied to enhance a number of human
resource processes including recruitment and selection; learning and development; career
and succession planning and performance management.

In theory, a competency is developed over many years of work experience, training, and
practical application until it becomes second nature.

Competencies Describe Employee Job Behavior

Competencies describe employee job behaviours that account for good or bad
performance at the individual, unit, and organizational levels. Put otherwise, business
results are the "what" of employee performance, whereas competencies are the "how."

Competencies are Observable

Because they are defined in terms of behaviours, competencies are necessarily observable
and therefore measurable.

Competencies Translate Vision into Behaviour

Competencies translate the strategic direction and values of the organization into
expected employee behaviour.

Competencies can be Behavioural or Technical

Competencies can be technical in nature (e.g., ability to use Java programming in a

particular context) or behavioural (e.g., shows initiative in such a way as to promote the
particular goals of the business unit).

Competencies are an Extension of KSAs

Competencies stem from the knowledge, skills, abilities, attitudes and personality traits of
employees.

Competence vs. Competency

"Competence" and "competency" are not interchangeable terms. Competence has to do

with the level of expertise that an individual or team has attained. A competency, as we
have just explained, refers to the set of skills, knowledge, and experience that must be
applied in a particular way. We call "delegation" a competency because it describes a
body of knowledge about managing and prioritizing job tasks. To be competent in
delegating, an individual has to do it well, and to do it well, he or she has to use abilities
in leadership, coaching, listening and communication, empathy, management, and so on.
Types of Competencies

There are three types of competencies:

1. Core competencies, which have to do with what the entire organization needs to
do in order to succeed. Core competencies can include Customer Commitment,
Creativity and Innovation, and Quality Focus.
2. Role Specific competencies, which are shared by large groups of people.
Accountants, for example, all have in common competencies such as Analytical
Ability and Attention to Detail.
3. Job-specific competencies are unique to a particular job or project task.
Diagnostic information gathering is an example of a job-specific competency.

Organizations determine the most important competencies that define what they are
trying to achieve and where they want to be long-term. They can then determine what
expertise they will need and to what degree workers must possess or achieve that
expertise.

WHY USE COMPETENCIES?

When done correctly, implementing competencies within your organization gives you the
means to:

• Translate the organization's vision and goals into expected employee behaviour;
• Implement more effective and legally defensible recruitment, selection and
assessment methods;
• Reduce hiring costs, absenteeism and turnover rates;
• Identify areas for employee development that are directly linked to desired
outcomes and organizational objectives;
• Target training dollars in areas that will realize the most return on investment;
• Develop career plans that help employees build on existing competencies and
prepare them for future opportunities and promotion;
• Set more effective and valid criteria for developing and evaluating performance;
• Identify gap between present skills sets and future requirements of employees;
• Gain a clearer picture of the competencies that exist within and across the
organization for project assignments and succession planning; and
• If downsizing is required, ensure retention of the essential competencies for the
success of the organization

WHAT IS A COMPETENCY MODEL?

There are variations in the content and form of a competency model, but most include a
description of:
 • The position's most important responsibilities and core tasks, with performance
criteria for each responsibility;
• The competencies required for carrying out each responsibility (normally 8-16
competencies with definitions). Each competency may have a set of behavioral
descriptors, or a set of proficiency levels (e.g., basic, intermediate, advanced) with
definitions.

This model or set of competencies is specific to a job or group of jobs. Optional sections
in competency models can include a matrix showing the links between competencies and
responsibilities, knowledge requirements for technical jobs, or recommendations for
ensuring that jobholders possess the required competencies through selection, training,
and development.

With valid, fair and unbiased competency profiles, management can recruit, select, train,
develop and reward employees in a manner that is consistent with the strategic vision an
objectives of the organization. Therefore, any investment an organization makes in
competency profile development has benefits far beyond the usefulness of the results for
employee development purposes.

WHY DEVELOP COMPETENCY MODELS?

You may wonder why you need to develop competency models when you already have
job descriptions. In contrast to a job description, which typically lists the tasks or
functions and responsibilities for a particular role, a set of competencies (or competency
"model") lists the knowledge, skills and abilities needed to conduct those tasks or
functions.

Too often job descriptions are not worded in a manner that enables an employee's
performance to be effectively measured. Competencies on the other hand are described in
terms such that they can be observed, measured and rated against criteria that are
standardized and required to do the job effectively.

A Competency Model can be used for many Human Resource and Talent Management
purposes, such as:

• An analysis which aids the process of creating job descriptions;

• A guide for hiring employees during behaviour-based job interviews;
• A self-assessment tool for employees and managers;
• A performance management guide for supervisors/managers;
• A learning and development evaluation tool;
• A model to provide insight into succession planning activities; and
• Many other applications.

COMPETENCY MODELS PROCESS

STEP 1: ANALYSIS

In early meetings with our consultants, you'll select one class of jobs, or "job family,"
critical to the success of your company. We then assess the jobs in that family to
determine the exact competencies that enable your best employees to do their work so
well. This assessment consists of the following steps:

Groundwork and Planning

We begin by identifying the immediate uses you'll have for your competency models.
Next we review and customize a generic set of building-block competencies. These basic
competencies form the foundation on which we ll build your unique job competency
models.

Data Collection
JOB HOLDER INTERVIEWS:
Once we identify the job families to be modeled, we organize individual interviews. In
these interviews consultants review job descriptions to ensure they accurately reflect the
job holder's main responsibilities and tasks. If the job descriptions are inaccurate they are
updated with information from the interviews and with information from job fact sheet
surveys distributed to job holders.

Four to six interviews are held with current job holders. These interviews review main
responsibilities and tasks of the position and identify knowledge, skills, and abilities
(KSA's) required to fulfill the roles and responsibilities of the position or job family.
Performance measures are also discussed as well as aspects of the job which are the most
challenging or difficult. If further analysis is desired, consultants will also analyze the
frequency, importance and level of difficulty of the core tasks that are performed by job
holders.

FOCUS GROUPS:
In addition to job holder interviews, consultants also conduct focus groups. These focus
groups add depth to the data collected in the interviews. Each group consists of three to
five employees in each target job and one to three managers who supervise employees in
that job. These are the topics those focus groups address:

Identify ways in which the target job is changing because of changes in:

• Your company
• The industry
• The marketplace
• Technology

Define the primary responsibilities of employees in this job. For each responsibility,
identify:
 • Tasks necessary for its fulfillment
• Performance outcome measures
• Knowledge, skills, abilities (KSA s) required for effectiveness

Identify situations that employees in this job face today - and will face in the future.

Review the building-block competencies (customized earlier) and rate their importance
for this job.

From the list of building blocks, select a set of competencies for this job.

Review, revise, and add to the set of specific behaviors for each selected competency.

STEP 2: MODELING

The final product of the job analysis is a Job Competency Model for selected jobs. While
the analysis itself is a valuable tool for understanding and improving group processes
within your company, the job Competency Model is your company's key to self-
regeneration, targeted learning and development and effective performance management.

To construct these models, the consultants bring together all data gathered from focus
groups, surveys, and interviews. A draft job model is prepared and circulated, based on
data from the focus groups and interviews. Using feedback from your employees,
consultants then produce a final model containing the following specification:

• Purpose and content of the job, including tasks, responsibilities, and performance
measures;
• A rating scheme that identifies the frequency and importance of particular tasks
(where required);
• Formats which can be used to compare that job with other jobs;
• Competency requirements for the job in terms of the knowledge, skills and
characteristics required for adequate and for superior performance;
• Career paths that produce superior candidates for the job; and
• Process by which the key competencies for that job are developed.

STEP 3: APPLICATION

CAREER PATHING AND RETENTION:

Job Competency Models provide detailed maps for existing employees to follow as they
plan their careers and self-development. The model for any given job describes the exact
competencies necessary to advance to that job, giving aspirants both secure information
and incentive to acquire those competencies. That's the kind of open opportunity that
keeps talented and ambitious people working for you.

RECRUITMENT AND SELECTION:

Today you may have all your players in place, but every new day brings the possibility of
change. Retirement, outside recruitment, and growth needs are some of the situations that
can leave you with holes to fill-and concern about the quality of the people you'll choose
to fill them.

By applying the Job Competency Model to the promotion and hiring process, your human
resource department can greatly simplify their work. Models identify optimal career paths
to look for, simplifying the search for candidates. Models also describe in detail the exact
competencies employees will need to perform well in their jobs. Information from the Job
Competency Model can be used to create behavioral-based interview guides that provide
questions that target particular competencies essential to the position, and bring a
standardize tool to the hiring process. Supplement this with hiring assessments based on
job profile benchmarks and you have greatly increased your chances of hiring the
candidate with the best fit for the position.

PERFORMANCE MANAGEMENT:
Performance assessments underlie decisions about employee rewards and promotions.
Unfortunately many employees feel they have little control over the results of their work.
You can counter this perception by linking employees; rewards to their competent
performance in defined areas. By doing this you empower workers and encourage
cooperative, team-building behavior.

Job Competency Modeling provides an excellent base for performance management. As

with development and recruitment, employee assessment is based on accurate, detailed
information about job performance. To appraise this performance effectively, your
managers need:

• Accurate job-performance standards;

• Clear descriptions of job behaviors required to perform specific job tasks; and
• Indicators of both average and superior job competencies.

When you use competency models to provide these data, assessments yield useful,
practical recommendations. Skill-based compensation systems also explicitly tie rewards
to the development of key competencies. This gives employees greater control over their
professional development and offers incentive for excellence to workers and managers.

LEARNING AND DEVELOPMENT:

Competency modeling provides a truly ideal framework for your learning and
development program. Studies show that competency-based learning and development
offers a return on investment (ROI) nearly ten times higher than the ROI of traditional
training methods. The Learning and Performance Institute has developed a process
entitled the Competency Acquisition Process (CAP) for managing learning and
development efforts through increasing levels of competencies. The CAP consists of four
steps, outlined below.

Identification of Required Competencies: Competency Models supply this information, or

a simpler, less detailed system can be used for non-critical jobs.

Assessment: Employees assess their current competencies and compare them to examples
of superior performance and job profile benchmarks. Performance assessments by
managers are also tools used to target development areas. Employees and managers then
decide which knowledge, skills, abilities and behaviors to focus on and create an
individual development plan.

Development Opportunities: Employees meet with a development coach to discuss

options for learning and development. Options include but are not limited to: courses and
workshops, independent reading and self-study, coaching and mentoring, applied learning
through projects and stretch assignments, and utilization of job aids such as process maps
or procedure manuals.

Feedback: Supervisors, coaches, mentors or development consultants observe

participants applying their new knowledge, skills and abilities and offer constructive
feedback and reinforcement. Recognition and rewards systems can be used to recognize
and support each individual s demonstration of newly acquired knowledge, skills and
abilities.

When your employees enter this cyclical process of planning their own development and
acquiring necessary learning and development, everyone benefits. They take
responsibility for their own career paths, their own job security, and you gain an ever
more skilled and competent workforce. Improved performance, bonuses, increased
productivity, and career advancement spell success for everyone.

STEP 4: HANDING YOU THE TOOLS

The Learning and Performance Institute wants your company to benefit to the fullest
from your competency-based system. That s why our work isn't finished until our
consultants show you how to replicate the process of identifying competencies, modeling
them, and applying them thoroughly. With these valuable tools, you can spread the
competency focus throughout your organization.

Consultants will show you all the steps necessary to assess completely any job or job
family, and to produce thorough Job Competency Models. Consultants will also show
you alternative methods to achieve serviceable results in less time or at less cost. For
example: You can build workable-thorough less precise-Job Competency Models quickly
and at low cost through single interviews with superior employees in targeted jobs and a
panel discussion with these employees and their managers. Small-scale models
constructed this way provide many of the benefits of the full-scale models but require a
smaller time and resource investment.

In addition to showing you how to produce standard models of existing jobs, consultants
teach you the principles of competency-based management. Using these principles, you
can devise strategies for dealing with such difficult personnel situations as these.
Re-engineering: Build competency models for jobs that don't yet exist. This lets you hire
the people you need right from the start.

Down-sizing: Use competency models to reassign tasks to the employees best suited to
do them well.

Mergers: Construct new models rapidly to help your newly combined workforces work
efficiently together.

The focus of our work is providing you with the tools you need to face the future
confidently. The Learning and Performance Institute wants your human resources system
to work effectively for you, constantly renewing and improving your organization.