Competency Based Performance Management

Dr Praveen Srivastava IBS Hyderabad

Performance Management
A Performance Management System (PMS) is a process wherein Managers along with subordinates
Plan Performance Coach/Manage Appraise Performance

It provides information for other personnel functions Compensation Succession Planning Discipline Development Career Pathing

Prerequisite Steps

1. Organisational Strategy Definition 2. Organisational Objectives Definition 3. manager/ Work Unit objectives Definition Performance Planning Definition of job Responsibilities and work Expectations Performance Management Goal Setting Observe and Document Performance Coaching feedback Revise Work Expectation as necessary Provide Development Experiences Reinforce Effective Behavior and Progress towards goals

Start of Period

During Period

End Period

Performance Appraisal Performance Results Vs Job Expectation

Coaching Judging Compensation Development Performance vs, Merit Pay Guidelines Salary: Bonus Succession Planning Competencies vs Future Job Competencies Requirements Career Track, Promotions Discipline Behavior vs. Rules Warnings, Dismissal Formal and Informal Development Activities: Training, Mentoring, Career Pathing Discussions Competencies vs. Present and Future Job Competency Requirements Career Pathing

Job-Person Match Discussions, Developmental Assignments

Improvement of Organization Performance

A Generic Performance Management System (PMS)

Competency Based PMS

In recent year , the emphasis in PMS has been on Performance- The What of Behavior- The Specific quantitative
monetary, productivity , or quality results achieved in the past.

Focus- Rewards ( Performance Based Bonuses, merit awards)

At present many organizations are becoming interested in management and appraisal of Competence- The How of performance, seeking more qualitative assessment, oriented to Future and focused on Development. The Competency Approach views performance in terms of process competencies employees use to achieve their job results.

The Mixed Model

In Mixed model Performance and Competencies are considered (50%-90%) (10%-50%)
Performance ( Pay for Results) What of Performance Quantitative: Tied to unit goals Short Time Frame: one year, past Performance Reward Oriented Competencies ( Pay for Skills) How of Performance More Qualitative Longer time frame: Future Performance in present and future jobs Development oriented (Behavior Change)

Performance-based and Competency- based appraisal approach

The Need for competency based PMS

Job performance standards and appraisal criteria are seen as unequal and unfair. Performance appraisal is seen by managers and employees as bureaucratic paper work exercise that they dont want to take seriously because it has little impact on employees performance or development Employees see nothing in the PMS for them- PM do not address their questions about skill development or career advancement. PMS has little impact on actual management; it does not lead managers to do their jobs better or to develop or provide feedback to their employees. The PMS does not reflect or reinforce the organizations strategy because it fails to focus employee behavior on strategic priority such as quality or service. Performance ratings are inflated

Mixed model
Appropriate for Uncertain Environment- The less control employees have over results , the more performance should be based on competencies. Qualitative/ Process Service Jobs- The more subjective the job output , the more important is to appraise competency behaviors. Self- Managing Teams- The more important is team performance as oppose to the individual performance, the more important is to appraise team work and cooperation behavior of individual workers. Jobs Intended for development of future performance- the more a job or organizational objectives for employees stress, development of skills, the more appraisal should be based on demonstration of improved competence. Changing organizational strategy, focus, or Market- The greater a firms emphasis on future performance, the more its PM should stress development and appraisal of competencies

Developing Competency Based PMS

Identify Competencies required for superior performance in present or future jobs. To add value, A PMS should motivate employees to do better than their current actual performance.
Results Priority Task/ Behaviors -----------------------------------Competencies --------------------------------------

Desired (Superior: top 10%)

1.5 x

Actual (Acceptable)

-------------------------------------

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This matrix compares the actual results, task priorities, behavior and competency levels of employees being appraised with those of best performers desired in the job

Developing Competency Based PMS

Develop a mixed model performance management system for assessing both performance results and competency behaviors that predicts performance in the job. Train Managers and employees in performance management ( coaching for performance improvement); performance coaching involves
Agreement between managers and employees on his /her actual level of competence; can be most easily assessed with 360 degree rating by colleagues all around. The employee identifying the desired level of competency he/she wants to develop to meet his/her own performance or career advancement goals. Agreement on a contract between employees and manager on The employees competency development goals and the action steps he or she will take to attain them. The help and support the manager will give the employee.

The Coaching approach

Uses the principles of self-directed change theory, which holds that the adults change only when they
Feel it is their own best interest to do so. Feel dissatisfied with their existing situation or level of performance( actual) Are clear about a desired situation or level of performance Are clear about the action steps they can take to move from the actual to the desired situation or level of performance.

Competency Based PMS shifts the emphasis of appraisal from organisational results achieved to employee behavior and competencies demonstrated. Diagnosis and problem solving to deal with poor performance takes this form: if results are not at desired level, give high priority to these job tasks, demonstrate these behaviors more often and develop these competencies Managers explicitly commit themselves to provide employees with formal training, coaching and other competency development activities during the performance period. The most important factor in implementing the competency based PMS is training managers to provide this coaching and development assistance.

Case
Company: An European Airlines Position: Flight Attendant Objective: to develop competency based PMS that captures best service practices Competencies identified
Personal Impact Customer Care Resilience Efficiency Customer Management Team Work Adaptability Flight Service Managers and independent appraisers unknown to the flight attendants regularly travel as passenger to observe attendants and record critical incident interactions with customers

Competency
Customer Care: A concern for providing prompt, courteous and attentive
service to all customers, plus the ability to understand and interpret their concern and feelings. Confidence in own abilities to provide that service
1. Does not recognize customer needs, does not regularly demonstrate courtesy and cheerfulness to them, makes little effort to be responsive. May demonstrate an awkwardness or lack of confidence

Typical Behavior
Uses voice intonations that indicates Own negative feeling, esp .of anger, frustrations etc. Allows personal feelings to overlap into Job. Gives negative answers to customers with no attempt to assist(e.g. we have no hanging space. Provoke detrimental customer letters

Critical Incidents( example

1. ---------------------------------------------------------------------------------------------------------------------------------------2. -------------------------------------------------------------------------------------------------------------------------------------------------------

2.

Is consistently courteous and cheerful to the customer, interprets obvious manifestations of their needs, and has confidence to assist and provide services to them

Typical Behavior
Likes to see happy customer Jokes with the customers who do not mind ( and is able to tell the difference) Builds rapport with customers Reassures nervous customers

Critical Incidents( example)

1. ----------------------------------------------------------------------------------------------------------------------------------------

Knows regular customers preferences

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3.

Is consistently polite and cheerful and makes a special effort to address customers needs, can interpret nonverbal communication and diagnose customers needs when not explicitly stated. Shows confidence in own abilities in new non routine situations but not overbearing and showy.

Typical Behavior

Critical Incidents( example)

1. ----------------------------------------------------------------------------------------------------------------------------------------

Explains everything in detail to frightened customers, sitting with them to reassure them.
Returns regularly to check on certain customers Looks at customers. Faces for sign of anxiety, confusion etc. during boarding

2. -------------------------------------------------------------------------------------------------------------------------------------------------------

4.

Is consistently courteous and cheerful to the customer even when under pressure, interprets no verbal behavior from subtle cues and has a track record of successfully reading people. has complete confidence in own ability with a can-do attitude to challenging situations. Conveys enthusiasm about job and the airline.

Typical Behavior
Calms down irate customers, concluding by making them feel good about the flight Anticipates potential problems and takes precautionary actions( e.g. goes out of the way to arrange unaccompanied minors to sit in flight deck); takes ring pulls from cans for old and arthritic customers; shows elderly customers where toilet facilities are and they operate without being asked Receives complementary customers letters

Critical Incidents( example)

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2. -------------------------------------------------------------------------------------------------------------------------------------------------------

Behavior- Anchored Rating Scales( BARS) Just noticeable differences with examples