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Getting Past Competency Chaos
A Crucial Step on the Path to Talent Management Value Realization

In pursuing the promise of HR technology an organization must also overcome the inevitable pitfalls standing
in the way of those promises. We welcome you to use what you learn here to assess your organization’s
current level of maturity and align your talent management strategies to surmount one of the most important
immediate hurdles you face—that of competency chaos. Your reward will be technology that works better
and acceleration down the path toward talent management value realization.

Introduction
In 2005, while discussing the emergence of tools to support strategic HR capabilities, research analysts from
the Gartner Group noted:

         The interests of four diverse communities—executives, IT, HR and vendors—are
         coming together to support the emergence of a new suite of human capital management
         applications, which we call talent management application suites (TMAS) 1

While vendors and IT managers have their own motives for pursuing integrated suites, for business and
human resources executives the demand for TMAS is driven by a need to gain maximum value from human
assets. The decisions made by managers about people are increasingly viewed as crucial to building a ready
supply of the right talent for organizations competing in a knowledge economy. This vision of managers
armed with the information needed to make better talent decisions—that will add real value in the drive for
enterprise performance and sustainability—is the primary reason for the significant investments organizations
have been making in these application suites.

Problem
The need to make better talent decisions has, indeed, been the objective of recent talent management
technology implementations. Yet this goal has proven illusive. In a rush to automate talent management
processes and put sophisticated tools in place, organizations have overlooked factors that lead to the
realization of strategic return on these investments. Instead, they have inadvertently exposed themselves to
risks associated with getting poor data faster to make quick and inappropriate decisions.

To understand the current state of affairs with today’s talent management application suites and the persistent
obstacles to using this technology more strategically, it’s helpful to look at previous research presented on the topic.

Figure 1 on the next page shows a typical architecture for a talent management application suite, as identified
by the pioneering research from the Gartner Group’s report in 2005. 2



1
 Gartner’s Dec 2007 research publication – ID Number: G00152102: Unlocking the Strategic Value From Talent Management
Application Investments by James Holincheck.

2
 Gartner’s June 2005 research publication – ID Number: G00126407 Talent Management Application Suites Can Enhance Workforce
Effectiveness by James Holincheck.




                                                      Real Leadership Advantage   ™
Figure 1:




This research, updated in 2007, states:

        Customers talk about implementing talent management applications to support strategic
        human capital management. However, much of what has been implemented focuses on
        automating what was previously done on paper or in Microsoft Word documents or
        Excel spreadsheets.1

Holincheck goes on to list some of the key reasons for this more tactical reality of most implementations.

        The lack of integration between talent management applications can cause many issues
        for companies in gaining strategic value from their investments…From an IT point of
        view, there is shared data that is used across the multiple applications that must be kept
        in sync. A core HRMS solution (personnel, payroll and benefits administration) typically
        provides the system of record for basic employee and organizational hierarchy data…
        However, competency models, job profiles and individual talent profile data are
        typically not stored in the core HRMS... It is stored in each talent management
        application. Thus, if several vendors are used for talent management applications, then
        these vendors need to integrate with another vendor to ensure that this data stays in sync.

        The analysis of talent data should drive decisions on how to best leverage talent to
        achieve specific business outcomes. The lack of consistent and integrated talent profile
        data makes it difficult to analyze and use strategically… However, it is just this type of
        analysis that is the key to unlocking the strategic value of talent management
        investments.




                                                       2
Overcoming Competency Chaos: A Crucial Step on the Path to Value
Realization
The Gartner research points to a number of factors preventing organizations from getting strategic value from
their talent management applications. Chief among these is the difficulty organizations face in effectively
developing, deploying, and integrating competency libraries and job profiles across disparate systems.

The need to improve talent decisions and the effective use of human assets are the primary goals of the talent
management application suite. Every day, decisions are made in the areas of selection, performance and pay,
development, succession, and promotion. All of these require a common taxonomy to describe the skills and
behaviors – or competencies – that drive organizational performance.

When used effectively, competencies are more than a mere library of desired traits. Rather, sets of
competencies are assembled into competency models, or job profiles, that accurately describe successful
performance in critical roles. These job profiles become the basis for making more sophisticated and effective
decisions about talent.

As demonstrated by the Gartner study, the importance of competencies and job profiles to strategic talent
management is well documented. Yet, organizations continue to stumble when implementing competencies
for a wide variety of reasons. Some of the most common challenges are:

    lack of stakeholder and constituent buy-in to competency models which often occurs when the relevant
    stakeholders are not involved in the initial design or when their unique needs are not addressed in the job
    profiles that are created
    lack of a process for updating and keeping competency models current as the organization changes
    lack of appropriate competency governance processes and policies which often results in the demise of
    the view of competencies as a fair and objective tool
    failure to integrate competencies and profiles into critical business and talent management processes
    little consideration for how competency models and competency content need to integrate with various
    talent management technology platforms
    designing competency models without the end use in mind
    using competency models designed for one purpose to try to fit another resulting in the need to adjust
    models after the fact
    lack of a single system for managing competency content and making it accessible to all users so that
    changes to the competencies are made as they happen in all locations
    lack of a plan to execute against the competency models and successfully ensure that they lead to real
    behavior change in the organization

Defining Competency Chaos
At the center of most of these problems is a condition called competency chaos. Competency chaos is the
situation that arises when different parts of an organization create their own sets of competency content to
match their specific HR needs. In other words, competency chaos is the state of confusion that reigns when
different parts of an organization independently define and use the same or similar competencies in different
ways.

Competency chaos can happen for many reasons. In one organization, three different departments defined
their own competencies, with the result being three different definitions for “communication skills.” In
another, the conversion of job descriptions created a far too diverse competency catalog. In a third, a central
                                                        3
competency model was identified, but some departments felt it didn’t quite work for them, so they redefined
the competencies to suit their specific needs.

The consequence is that each part of the organization has its own set of definitions for the content that should
serve as the foundation of the common talent management systems. Imagine different business or functional
groups having various definitions for the accounting codes used to manage expenses and run a business. That
would certainly create accounting chaos. In turn, this would doom any ambitions an organization might have
to make smart financial decisions based on a
comprehensive and accurate accounting of           Imagine different business or
the overall financial position of the enterprise.  functional groups having various
In a similar way, competency chaos
jeopardizes the successful implementation of
                                                   definitions for the accounting codes
talent management systems and weakens              used to manage expenses and run a
their promise to provide an organization with      business.
a solid plan to manage its human capital as an
asset.

Deceptive Complexity
One factor that contributes to the deficiencies of competency management is the appearance that
implementation is simple. Talent management system vendors focus on their applications and assume that
their clients can develop their own set of competencies. They generally provide support only for finished
competency profiles mapped to organizational positions. In addition, just about every talent management
technology vendor and human capital consulting firm professes the ability to do competency modeling, but
many of them lack grounding in the art and science of building proper models and profiles and fail to
understand the necessary talent management perspective.

Because many organizations believe that competencies are simple, they think they can create and implement a
competency-based solution by gathering a group of people to brainstorm a set of competencies in an
afternoon. While that process may elicit a list of desirable traits, in many cases those traits are statements of
altruistic vision and have little connection to the business strategy and, as a result, do nothing to improve
business results. Without a well-defined direction emanating from a clear competency strategy, the benefits of
an aligned workforce are never realized.

What makes implementing competencies so difficult? There are many factors that contribute. Among them:

    Many different uses and views of the same competencies
          Competencies can be applied in many ways within an organization, just as they are used in many
          ways in systems—as a basis for interviewing candidates for an open position, underlying a skills
          inventory, to define development needs—different groups have different, usually overlapping
          needs, and the result is a legacy of different approaches and levels of quality.

    Many different types of competencies
          Competencies work in different ways and do different things. In addition, there are many ways of
          looking at competencies. For example:

            Core competencies describe the culture and behaviors of an organization.



                                                        4
Level-based competencies refer to those competencies shared by people at specific levels of an
            organization (e.g., managerial, leadership).

            Functional competencies refer to competencies, usually behavioral, shared by individuals in a
            particular function.

            Technical competencies refer to the technical skills necessary to get a job done.

            Career path competencies identify the developmental competencies needed for a future position.

            Competencies can also be categorized as threshold vs. differentiating. While these categorizations
            are not similar to those above, they are important considerations. Threshold competencies are like
            “table stakes”; they refer to the competencies that are necessary, but they don’t separate high
            performers from average performers. Differentiating competencies, on the other hand, do just that.
            They are the competencies that are exhibited by “A” players that are not demonstrated by “B” or
            “C” performers. These competencies are discussed in greater detail later in this paper.

    Different levels of granularity
            Certain processes (e.g., selection) use competencies as a whole, while other processes (e.g.,
            development) focus on competencies at the behavior level.

    General enough to be comparable for succession planning but specific enough to be relevant, clear, and
    measurable
           Different uses for competencies place different demands on competency profiles. Competencies
           are best understood and adopted when they speak directly to an individual, but yield the best
           analytics when they can be used to aggregate comparisons across the organization.

    Emotionally charged because they are the basis of performance and pay
           Because of their tie to performance and pay, it is natural for every constituency to try to adjust the
           competencies to fit their strengths. “Gaming” the system may be natural, but it can wreak havoc
           with an attempt to leverage competencies to generate prescriptive or predictive analytics.

    Need for objectivity and fairness
           Because of their tie to performance and pay, it is critical that the competencies are perceived as
           objective and fair. This can only happen is a measure of inter-rater reliability if introduced. If that
           is not the case, “easy graders” will cause further grumblings of inequity and undercut the
           utilization and perceived value of the system.

Competency chaos and the fractured nature of competency integration across an enterprise is not the fault of
the systems, process, and data tools. In fact without the proper competencies the systems, process, and tools
can’t progress and mature. As more organizations seek to evolve their talent strategies and realize value from
their talent management initiatives, the imperative to squarely address the competency foundation and
minimize competency chaos is increasing.

In short, the payoff from talent management strategies is often stalled by the lack of a coherent, competency-
based foundation, for both aligning talent strategy with business strategy and enabling execution of that

                                                        5
strategy through a focus on the performance behaviors most essential to strategy success. To paraphrase
Winston Churchill, “[Competencies] are the worst form of [talent management] except when you compare the
alternatives.

Solution
So how does an organization create a comprehensive competency strategy, avoid competency chaos, and
avert the risk of the rush to automate? The chart below depicts the current landscape of today’s maturing
talent management strategies, avoiding competency chaos, and advancing to a vision of Enterprise Talent
Management Value Realization. While it suggests the use of technology application tools, it is obvious that
more than technology is needed if the strategic vision is to be realized.

                                         From Competency Chaos to Talent Management Value Realization
                                  High
                                            Vision for automation, but immature              Vision for business impact, sound
                                             strategy; simplistic and ineffective       strategy, and solid integrated competency
                                             competency models with effective                 models and profiles; combining
                                            implementation in terms of executive        automation with effective implementation
                                          commitment and execution excellence for         in terms of executive commitment and
   Implementation Effectiveness




                                                     enterprise adoption                    execution excellence for enterprise
                                                                                                         adoption

                                                Well-Oiled HR Machine                   Mature Competency Strategy with
                                                                                         Enterprise Talent Management
                                                                                                Value Realization

                                                      Competency
                                                                                          Strategic Vision Without Impact
                                                    Strategy Start-up

                                            Vision for automation, but immature             Vision for business impact, sound
                                             strategy; simplistic and ineffective        strategy, and solid competency models
                                            competency models with ineffective           and profiles; uses automation but with
                                  Low
                                                       implementation                          ineffective implementation




                                         Low                                                                               High
                                                                        Competency Strength

Because many talent management strategies are relatively immature, and because competency chaos is a
frequent impediment to their success, an approach is needed that accelerates more immediate returns on talent
management initiatives. This approach would:
    reflect a realistic view of current conditions pertaining to technology, competency content, and talent
    management decision processes
    balance the attention on technology tools with attention to key implementation barriers such as the
    foundation of competency content that is needed to define the behaviors essential for strategy success
    quickly define the scope for an early win where competency alignment within one or more talent
    management processes would lead to better talent decisions and more desirable outcomes
    continue the process of gradually resolving competency chaos so talent management applications can
    capture the accurate and consistent data needed for better talent decisions and lay a rock-solid foundation
    for greater integration in the future



                                                                                    6
In short, a Competency Strategy needs to be developed, complete with a road map and timetable that outlines
the conditions required for success.

As part of the strategy, an optimal framework will be established that captures the core leadership capabilities
required at different levels in the enterprise, the key functional capabilities needed to further develop the
functional profiles at different leadership levels, and the core business skills required across the organization.
At the same time, it will ensure that the resulting output is simple and easy to use. This approach will make it
easy to map existing success profiles and
to create new job profiles in different
parts of the business. In a rapidly
changing business environment, roles and
jobs will change, disappear, and be newly
created, so the competency framework
must be flexible and enable an
organization to continue to apply the
framework as its business evolves.

A strong conceptual approach to helping
organizations build an enterprise-wide,
integrated capability framework is
illustrated.

Why an Enterprise Competency Structure Is Critical
The number and types of functional models and job families vary by organization. Inevitably, there is a
struggle to balance between the desire to create broadband functions and the need to get competencies closest
to the position so they are relevant to the job they attempt to describe.

The number of functions may also help to determine the competencies used in specific models. For example,
a recent report, “The Role of Competencies in Driving Financial Performance,” states that “Because financial
services companies tend to be stove-piped into distinct functional business units, [a good] communication
[competency] breaks down these large barriers, and makes individuals more effective and gives them greater
perspective.”

The most critical determinant of the optimal framework for competency models is their link to business
performance. Competencies are the embodiment of the organization’s business strategy through its people.
Research shows that when managers identify the competencies required for high performance, they are right
approximately half of the time. The problem is that they don’t know which half! Ultimately, the ability
(through research) to predict which capabilities are the most critical to performance allows for smaller,
simpler, and more targeted models.

Business Analytics to Link Talent Decisions to Business Outcomes
The final step in Talent Management Value Realization is when an organization is able to take full advantage
of their competency modeling efforts by conducting advanced analytical research. At that point, they can link
competencies with organizational outcomes that matter, such as profitability, increased revenues, customer
satisfaction, and employee engagement. When organizations can develop a process to determine which
dimensions of performance (competencies, behaviors) predict each critical strategic objective or outcome,
they can achieve the real business impact of the initiative.
                                                        7
A business impact analysis can help organizations determine:
   which competencies best differentiate “A” players from “C” players
   which behaviors have the greatest overall impact on outcomes such as productivity, customer service, and
   employee engagement
   where efforts should be focused to gain the greatest performance improvement
   where key business strategies or initiatives may be at risk due to talent constraints

This analysis can use statistical methodologies to examine the ratings from a group of individuals to
determine the competencies and behaviors that have the most significant impact on key outcomes. For
example, if an organization wants to identify those competencies most closely associated with individual
productivity, the analysis would examine the relationship between competency ratings from feedback surveys
and individual productivity data obtained from the organization. The resulting analysis would generate
relative-importance weights for the competencies included in the survey as they relate to productivity. The
figures that follow show actual data from a PDI professional services client. This helped them determine the
competencies that were most critical for differentiating “A” vs. “C” performers.

Predicting Utilization




                                                     8
Building a Competency Strategy
To avoid competency chaos and achieve Talent Management Value Realization, six conditions must be met:
 1. clear vision
 2. aligned strategy
 3. solid foundation
 4. executive commitment
 5. execution excellence
 6. ongoing management and governance

    Clear Vision – a view into a future where integrated human capital management processes reliably yield
    the information and talent decisions needed to ensure a supply of superior leaders who will drive
    improved performance. This includes an understanding of how each of the talent management processes
    will be addressed and the associated competency requirements.

    This also includes a clear vision of the projected culture of the organization and the message that the
    competencies should send when they are presented to the organization. In addition, it includes a clear link
    to business outcomes, both for stakeholder buy-in and to evaluate impact.

    Aligned Strategy – a solid understanding of the outcomes desired from the organization’s business
    strategies and their alignment with a maturing talent management strategy and Information Technology
    systems integration strategy. Based on the organization’s vision, the behaviors and experiences most
    crucial to addressing its business needs are clearly linked (by competencies) to integrated human capital
    management processes.

    Solid Foundation – a strong competency management foundation supported by reliable data sources.
    This becomes the basis for integration of talent management applications and enables strategic,
    enterprise-wide impact.

This requires a consistent and duplication-free competency library, a set of consistent competency profiles,
and an underlying rationale that will support business analytics. The content must be simple enough to adopt
and use on an everyday basis and strong enough to support its objectives. Most often this will include a clear
framework that parallels the organizational structure, including the number of hierarchical levels and

                                                       9
functional delineations. This will serve as the foundation for all competency component development, use,
and lifespan management. To paraphrase Albert Einstein, “Make [the competencies] as simple as possible, but
not simpler.”

    Executive Commitment – clear direction from executive management will help ensure that managers
    and employees get involved early and often so that they understand the value in doing things differently.

    Execution Excellence – the best talent management applications implemented with the best processes will
    not achieve desired business outcomes if managers and employees don’t know where to start, or if they find
    the process too hard to use. In addition to skillful project management, successful execution requires a
    simple implementation process that addresses technology and infrastructure issues, competency foundation
    requirements, and organization/people concerns. It must make the new leadership “brand” memorable,
    measure the engagement, and reinforce the message whenever and wherever necessary.

    Ongoing Management and Governance – the more effective the competency implementation, the more
    susceptible it will be for each group that wants to tailor the models and profiles to fit its specific needs.
    This is a fast track to competency chaos. It is imperative that policies and business rules are put in place
    to protect the integrity of the competency system and the resulting data. Clear and strong governance of
    competency content is essential to the continued usefulness of your talent management system.

In addition, a system of record for managing, updating, accessing, time-stamping, and sharing all competency
data must be integrated into the governance plan. Without such a system, different versions will inevitably
appear and a proper audit of the application of profiles will be virtually impossible.

Finally, the organization will need a plan for managing and updating competency content to keep it alive.
Competency content needs to evolve as the business strategy evolves. Inadequate supervision of the changes
needed or the lessons learned from the use of the competency models will, at best, render them irrelevant and,
at worst, guide behavior that will be inconsistent with the company’s direction.

By charting a path that meets these conditions, an organization will be able to more quickly move from the
efficiency gains of technology automation into the arena of alignment of performance behaviors with strategy
execution needs which is required for Talent Management Value Realization.

Specific Approach
Overcoming competency chaos for Talent Management Value Realization may seem difficult. To make it
easier, we recommend a three-step process that considers the current maturity of the organization’s talent
management strategies.

    1. Figure out where we are now.
         How mature are our current talent management strategies?
         What’s our existing business need and vision for Talent Management Value Realization?
         What Talent Management Applications and IT Systems do we have in place and how well aligned
         are they?
         What are our competency assets and how can they be put together to create a cohesive foundation?
         Where do we have gaps?
         What level of executive commitment is there to overcome barriers and realize success?



                                                       10
2. Determine where we need to go.
         What is required to support development and learning systems?
         What about selection readiness assessment?
         What is needed to stand up to the scrutiny of pay for performance or succession planning and
         promotion decisions?
         What kind of competency framework will we need to minimize overlap, redundancy, and chaos?

    3. Build a strategy road map.
         What is the foundational architecture?
         What do we need first?
         What’s needed for a quick win?
         What more will be needed?
         What is our timeframe?

The following table suggests five levels of maturity in competency implementation (paralleling the
model/structure outlined by Carnegie Mellon in their CMM-P 3 ) that can be used to diagnose and assess the
current level of your organization. It also suggests the conditions that should be present to move from one
level of maturity to the next. Using this table, organizations can create a specific agenda to sequentially
progress toward greater maturity.

For example, in moving toward Talent Management Value Realization, an organization must start with a
strategy that has the end result in mind. If the goal is a system to identify, differentiate, and develop talent for
better decisions of all types – selection, promotion, development, and succession – then an integrated talent
management system will be needed with organization-wide analytics based on an aligned set of standards for
all processes from recruitment to retirement. This means better tools to:
     build, customize, and manage a single, consistent competency and model library
     structure those competency models to provide both vertical and horizontal comparability
     leverage information about competencies by getting different applications to talk to each other
     enable managers to make sound decisions about jobs and people on a daily basis




3
 Talent People Capability Maturity Model (P-CMM) Version 2.0, 2008 Carnegie Mellon University by Bill Curtis, Bill Hefley, and
Sally Miller.
                                                              11
Competency Implementation Maturity/Utility Model (abridged)

  MATURITY LEVEL
                                     1                            2                               3                            4                          5
     CRITERIA

1. BUSINESS NEED:         EXPERIMENT visibility;     MANAGEMENT                      PERFORMANCE                    INTEGRATED                 ENTERPRISE
pilot, play to core       do latest thing; fad       Communication                   Improve productivity,          PERFORMANCE                Shareholder Value
                                                     (competency list as values      reduce costs, cut cycle        Profit, ROI
                                                     statement), Control e.g.,       times, correct specific
                                                     perf mgmt rating on             problem (e.g., high new hire
                                                     employees in a job or unit      failure rate, turnover)

2. ORG SPAN,               One-off pilot study:       Single job in several org       Multiple org units,            Multiple business:         Enterprise-wide:
IMPACT: pilot to           single job, workgroup,     units (e.g., sales); several    processes, operations          functions, processes       multiple businesses
enterprise-wide            department                 jobs in one job family,         linked to produce              linked in profit center
                                                      function                        economic outcome               balanced scorecard

3. HR APPLICATION:         Single HR function:        Two or more HR                  Several HR functions that      Several HR and other       All HR functions across
One to all                 >job/team/org analysis/    functions: A and B, but         interact in causal flow        business functions         multiple businesses,
                           design or >staffing or     not linked synergistically      value chain to increase        (product                   geographies
                           >development or >perf      to improve performance          performance (e.g., better      development/R&D,
                           management, or                                             staffing + training + perf     supply, production,
                           >compensation                                              mgmt)                          finance, marketing/
                                                                                                                     sales) that interact to
                                                                                                                     improve business
                                                                                                                     performance

4. COMPETENCY              Many data collection       Standardized data               Standardized BEI, 360          Standardized BEI, 360      Standardized BEI, 360
METHODOLOGY:               methods: panel, survey;    collection: survey, perf        survey, test competency        survey, test               survey, test competency
inconsistent methods       no standards               management form                 assessment methods             competency                 assessment methods
to standardized,                                                                                                     assessment methods         worldwide
reliable, validated                                                                                                  linked

5. CONTENT: random         No standard                Standard core                   Standard core competency       Standard core              Standard core
ramblings to               competency dictionaries    competency dictionary           dictionary used across         competency dictionary      competency dictionary
standardized, reliable,    or definitions             used across org units;          processes; local               used across business       used enterprise-wide
validated content                                     local supplements               supplements; $EVA of           functions; local           with local supplements;
                                                                                      competence at                  supplements; $EVA          $EVA of competence at
                                                                                      unsuccessful, average, and     of competence at           unsuccessful, average,
                                                                                      superior (+1SD) points on      unsuccessful, average,     and superior (+1SD)
                                                                                      performance bell curve         and superior (+1SD)        points on performance
                                                                                                                     points on performance      bell curve
                                                                                                                     bell curve
MATURITY LEVEL
                              1              2                                3                          4                        5
     CRITERIA

6. IT SYSTEMS,         None       Integrated HR database           Integrated HR database or    Integrated HR and      Integrated HR and
software support:                 or linked unit databases;        linked unit databases        linked ERP databases   linked ERP databases
none to integrated                simple                           Statistics software (e.g.,   SEM and time series    SEM and time series
HRIS to ERP; s-o-a
                                  survey>database>                 SPSS) to test reliability    statistics to test     statistics to test balanced
predictive analytics
                                  reporting                        and validity of HR           balanced scorecard     scorecard value
                                                                   competency independent       value chain/causal     chain/causal flow
                                                                   variables to predict         flow models:           models: “upstream”
                                                                   dependent variables $EVA     “upstream”             competency (HR
                                                                   outcomes                     competency (HR         learning and innovation),
                                                                                                learning and           ops and customer IVs
                                                                                                innovation), ops and   prediction of global
                                                                                                customer IVs           business financial
                                                                                                prediction of DV       outcomes
                                                                                                business financial
                                                                                                outcomes




                                                              13
Adapted from the Competency Maturity Model by Lyle M. Spencer and Paul D. Storfer
So, for example, if you have determined that your organization is currently at Level 2 and you wish to move the organization to Level 3, there are certain
things that you must have and certain things you must do to make that happen. Some of these will affect the culture and people in the organization and the
corresponding competency initiatives, and some will require investments in technology and systems infrastructure.


                                             MATURITY LEVEL 3                                  TO THE EXTENT THESE ARE NOT IN PLACE, TO REACH MATURITY LEVEL
                                                                                                                   3, YOU WOULD NEED TO:

  PEOPLE/ ORG        Formalized HR management structure, within which HR seeks to               Define the organizational structure
  CULTURE            provide some level of strategic information to senior executives           Define the rules and roles of job functions (non-specific) for
                     Performance Management programs in place including a formal                executives, managerial, line, and individual contributors
                     Performance Appraisal program of some kind.                                Implement a well-defined Performance Management Program
                     Formal recruiting efforts and supporting organization.
                     Some business processes formalized take into account Web-based
                     delivery of HR services and programs

  COMPETENCY         Competencies integrated into organizational Performance                    Define and implement a pilot Performance Management Program
  INITIATIVES        Management programs                                                        Seek employee acceptance and feedback during Performance.
                     Core competencies for levels of positions from executive through           Management Program development
                     individual contributor are in place, typically within one just business    Integrate Performance Management within workflow and consider best
                     unit; not yet consistent within all business units across geographies;     practice research
                     identified competencies for a few job families, but not yet down to        Explore metrics and scorecard utilization related to workforce
                     the functional position level                                              capabilities
                     Some metrics related to performance of workforce are generated,            Build competency definitions for all jobs in a single business unit, and
                     mostly turnover and retention                                              then use this to pilot additional business units


  SYSTEMS/           Fairly comprehensive HRIS capability, either a best-of-breed Talent        Implement “go-live” plans for an HRIS that includes functionality for
  INFRA-             Management Application package or an Enterprise Resource                   Performance Management and Career Development
  STRUCTURE          Planning system or an effective home-grown system.                         Build appropriate interfaces to non-HR systems such as finance and
                     HRIS maintaining job and position levels and descriptions, as well         customer relations/billing
                     as reporting relationships; organization structure and organization        Ensure your systems have the capability to support basic or
                     charting a plus                                                            rudimentary metrics and scorecards related to capturing workforce
                     Ability to gain access to other non-HR systems such as financials          capabilities, movement, and future trends
                     via automated interfaces (bi-directional) and customer relations to
                     generate some rudimentary metrics
                     Methodology for data input via Lotus Notes or similar and ready for
                     use to capture and update employee performance plans
With the previous table and this example, you can create your own tailored plan with specific initiatives that assist in increasing the maturity of the
organization and advancing toward Talent Management Value Realization.

                                                                                   14
Conclusion
Realizing value from today’s talent management strategies requires dealing with a rapidly changing
environment. Organizations must balance the opportunity cost risk of moving too slow with the “rush to
automate” risk of moving too fast. Increasing technology is playing a role as a tool for meeting human capital
business needs and enabling talent management success. However, as the technology stabilizes,
implementation issues often emerge as the biggest barriers to value realization. In the case of talent
management strategy, for many organizations the most painful Achilles’ heel may be the competency chaos
that often surrounds the competency content that is needed as the anchor for talent analytics and better talent
decisions.

By using a Talent Strategy maturity model, organizations can begin to assess where they are in setting the
proper competency foundation for their talent management systems, deal with competency chaos, and
determine what needs to be done to achieve the next level of maturity.

By recognizing the need to go beyond immediate attention on technology to resolving implementation
barriers, organizations can more quickly capture the data they need to make better talent decisions now and
lay a rock-solid foundation for greater talent management application integration in the future.

Realizing value from talent management strategies requires a coherent, competency-based foundation. This
foundation will enable organizations to:
    have a springboard to go from vision to action
    serve as the basis for aligning talent strategy with business strategy
    enable execution of an aligned strategy through a focus on highly valued behaviors
    enable the type of workforce analytic needed to help leaders know how to best address specific business
    issues and drive specific business outcomes
    offer line managers a concrete way to add value by improving talent decisions and driving enterprise
    performance and sustainability




                                                                                                              Personnel Decisions is a registered trademark of Personnel Decisions International Corporation in the United States and other countries.
                                                                                                              Copyright © 2008, Personnel Decisions International Corporation. All Rights Reserved.




          For more information on how we can help your company gain a leadership advantage, call
               your local PDI office or 1.800.633.4410, or visit www.personneldecisions.com.
                                                                                                              PDI_1008

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Overcoming Competency Chaos: A Crucial Step

  • 1. Getting Past Competency Chaos A Crucial Step on the Path to Talent Management Value Realization In pursuing the promise of HR technology an organization must also overcome the inevitable pitfalls standing in the way of those promises. We welcome you to use what you learn here to assess your organization’s current level of maturity and align your talent management strategies to surmount one of the most important immediate hurdles you face—that of competency chaos. Your reward will be technology that works better and acceleration down the path toward talent management value realization. Introduction In 2005, while discussing the emergence of tools to support strategic HR capabilities, research analysts from the Gartner Group noted: The interests of four diverse communities—executives, IT, HR and vendors—are coming together to support the emergence of a new suite of human capital management applications, which we call talent management application suites (TMAS) 1 While vendors and IT managers have their own motives for pursuing integrated suites, for business and human resources executives the demand for TMAS is driven by a need to gain maximum value from human assets. The decisions made by managers about people are increasingly viewed as crucial to building a ready supply of the right talent for organizations competing in a knowledge economy. This vision of managers armed with the information needed to make better talent decisions—that will add real value in the drive for enterprise performance and sustainability—is the primary reason for the significant investments organizations have been making in these application suites. Problem The need to make better talent decisions has, indeed, been the objective of recent talent management technology implementations. Yet this goal has proven illusive. In a rush to automate talent management processes and put sophisticated tools in place, organizations have overlooked factors that lead to the realization of strategic return on these investments. Instead, they have inadvertently exposed themselves to risks associated with getting poor data faster to make quick and inappropriate decisions. To understand the current state of affairs with today’s talent management application suites and the persistent obstacles to using this technology more strategically, it’s helpful to look at previous research presented on the topic. Figure 1 on the next page shows a typical architecture for a talent management application suite, as identified by the pioneering research from the Gartner Group’s report in 2005. 2 1 Gartner’s Dec 2007 research publication – ID Number: G00152102: Unlocking the Strategic Value From Talent Management Application Investments by James Holincheck. 2 Gartner’s June 2005 research publication – ID Number: G00126407 Talent Management Application Suites Can Enhance Workforce Effectiveness by James Holincheck. Real Leadership Advantage ™
  • 2. Figure 1: This research, updated in 2007, states: Customers talk about implementing talent management applications to support strategic human capital management. However, much of what has been implemented focuses on automating what was previously done on paper or in Microsoft Word documents or Excel spreadsheets.1 Holincheck goes on to list some of the key reasons for this more tactical reality of most implementations. The lack of integration between talent management applications can cause many issues for companies in gaining strategic value from their investments…From an IT point of view, there is shared data that is used across the multiple applications that must be kept in sync. A core HRMS solution (personnel, payroll and benefits administration) typically provides the system of record for basic employee and organizational hierarchy data… However, competency models, job profiles and individual talent profile data are typically not stored in the core HRMS... It is stored in each talent management application. Thus, if several vendors are used for talent management applications, then these vendors need to integrate with another vendor to ensure that this data stays in sync. The analysis of talent data should drive decisions on how to best leverage talent to achieve specific business outcomes. The lack of consistent and integrated talent profile data makes it difficult to analyze and use strategically… However, it is just this type of analysis that is the key to unlocking the strategic value of talent management investments. 2
  • 3. Overcoming Competency Chaos: A Crucial Step on the Path to Value Realization The Gartner research points to a number of factors preventing organizations from getting strategic value from their talent management applications. Chief among these is the difficulty organizations face in effectively developing, deploying, and integrating competency libraries and job profiles across disparate systems. The need to improve talent decisions and the effective use of human assets are the primary goals of the talent management application suite. Every day, decisions are made in the areas of selection, performance and pay, development, succession, and promotion. All of these require a common taxonomy to describe the skills and behaviors – or competencies – that drive organizational performance. When used effectively, competencies are more than a mere library of desired traits. Rather, sets of competencies are assembled into competency models, or job profiles, that accurately describe successful performance in critical roles. These job profiles become the basis for making more sophisticated and effective decisions about talent. As demonstrated by the Gartner study, the importance of competencies and job profiles to strategic talent management is well documented. Yet, organizations continue to stumble when implementing competencies for a wide variety of reasons. Some of the most common challenges are: lack of stakeholder and constituent buy-in to competency models which often occurs when the relevant stakeholders are not involved in the initial design or when their unique needs are not addressed in the job profiles that are created lack of a process for updating and keeping competency models current as the organization changes lack of appropriate competency governance processes and policies which often results in the demise of the view of competencies as a fair and objective tool failure to integrate competencies and profiles into critical business and talent management processes little consideration for how competency models and competency content need to integrate with various talent management technology platforms designing competency models without the end use in mind using competency models designed for one purpose to try to fit another resulting in the need to adjust models after the fact lack of a single system for managing competency content and making it accessible to all users so that changes to the competencies are made as they happen in all locations lack of a plan to execute against the competency models and successfully ensure that they lead to real behavior change in the organization Defining Competency Chaos At the center of most of these problems is a condition called competency chaos. Competency chaos is the situation that arises when different parts of an organization create their own sets of competency content to match their specific HR needs. In other words, competency chaos is the state of confusion that reigns when different parts of an organization independently define and use the same or similar competencies in different ways. Competency chaos can happen for many reasons. In one organization, three different departments defined their own competencies, with the result being three different definitions for “communication skills.” In another, the conversion of job descriptions created a far too diverse competency catalog. In a third, a central 3
  • 4. competency model was identified, but some departments felt it didn’t quite work for them, so they redefined the competencies to suit their specific needs. The consequence is that each part of the organization has its own set of definitions for the content that should serve as the foundation of the common talent management systems. Imagine different business or functional groups having various definitions for the accounting codes used to manage expenses and run a business. That would certainly create accounting chaos. In turn, this would doom any ambitions an organization might have to make smart financial decisions based on a comprehensive and accurate accounting of Imagine different business or the overall financial position of the enterprise. functional groups having various In a similar way, competency chaos jeopardizes the successful implementation of definitions for the accounting codes talent management systems and weakens used to manage expenses and run a their promise to provide an organization with business. a solid plan to manage its human capital as an asset. Deceptive Complexity One factor that contributes to the deficiencies of competency management is the appearance that implementation is simple. Talent management system vendors focus on their applications and assume that their clients can develop their own set of competencies. They generally provide support only for finished competency profiles mapped to organizational positions. In addition, just about every talent management technology vendor and human capital consulting firm professes the ability to do competency modeling, but many of them lack grounding in the art and science of building proper models and profiles and fail to understand the necessary talent management perspective. Because many organizations believe that competencies are simple, they think they can create and implement a competency-based solution by gathering a group of people to brainstorm a set of competencies in an afternoon. While that process may elicit a list of desirable traits, in many cases those traits are statements of altruistic vision and have little connection to the business strategy and, as a result, do nothing to improve business results. Without a well-defined direction emanating from a clear competency strategy, the benefits of an aligned workforce are never realized. What makes implementing competencies so difficult? There are many factors that contribute. Among them: Many different uses and views of the same competencies Competencies can be applied in many ways within an organization, just as they are used in many ways in systems—as a basis for interviewing candidates for an open position, underlying a skills inventory, to define development needs—different groups have different, usually overlapping needs, and the result is a legacy of different approaches and levels of quality. Many different types of competencies Competencies work in different ways and do different things. In addition, there are many ways of looking at competencies. For example: Core competencies describe the culture and behaviors of an organization. 4
  • 5. Level-based competencies refer to those competencies shared by people at specific levels of an organization (e.g., managerial, leadership). Functional competencies refer to competencies, usually behavioral, shared by individuals in a particular function. Technical competencies refer to the technical skills necessary to get a job done. Career path competencies identify the developmental competencies needed for a future position. Competencies can also be categorized as threshold vs. differentiating. While these categorizations are not similar to those above, they are important considerations. Threshold competencies are like “table stakes”; they refer to the competencies that are necessary, but they don’t separate high performers from average performers. Differentiating competencies, on the other hand, do just that. They are the competencies that are exhibited by “A” players that are not demonstrated by “B” or “C” performers. These competencies are discussed in greater detail later in this paper. Different levels of granularity Certain processes (e.g., selection) use competencies as a whole, while other processes (e.g., development) focus on competencies at the behavior level. General enough to be comparable for succession planning but specific enough to be relevant, clear, and measurable Different uses for competencies place different demands on competency profiles. Competencies are best understood and adopted when they speak directly to an individual, but yield the best analytics when they can be used to aggregate comparisons across the organization. Emotionally charged because they are the basis of performance and pay Because of their tie to performance and pay, it is natural for every constituency to try to adjust the competencies to fit their strengths. “Gaming” the system may be natural, but it can wreak havoc with an attempt to leverage competencies to generate prescriptive or predictive analytics. Need for objectivity and fairness Because of their tie to performance and pay, it is critical that the competencies are perceived as objective and fair. This can only happen is a measure of inter-rater reliability if introduced. If that is not the case, “easy graders” will cause further grumblings of inequity and undercut the utilization and perceived value of the system. Competency chaos and the fractured nature of competency integration across an enterprise is not the fault of the systems, process, and data tools. In fact without the proper competencies the systems, process, and tools can’t progress and mature. As more organizations seek to evolve their talent strategies and realize value from their talent management initiatives, the imperative to squarely address the competency foundation and minimize competency chaos is increasing. In short, the payoff from talent management strategies is often stalled by the lack of a coherent, competency- based foundation, for both aligning talent strategy with business strategy and enabling execution of that 5
  • 6. strategy through a focus on the performance behaviors most essential to strategy success. To paraphrase Winston Churchill, “[Competencies] are the worst form of [talent management] except when you compare the alternatives. Solution So how does an organization create a comprehensive competency strategy, avoid competency chaos, and avert the risk of the rush to automate? The chart below depicts the current landscape of today’s maturing talent management strategies, avoiding competency chaos, and advancing to a vision of Enterprise Talent Management Value Realization. While it suggests the use of technology application tools, it is obvious that more than technology is needed if the strategic vision is to be realized. From Competency Chaos to Talent Management Value Realization High Vision for automation, but immature Vision for business impact, sound strategy; simplistic and ineffective strategy, and solid integrated competency competency models with effective models and profiles; combining implementation in terms of executive automation with effective implementation commitment and execution excellence for in terms of executive commitment and Implementation Effectiveness enterprise adoption execution excellence for enterprise adoption Well-Oiled HR Machine Mature Competency Strategy with Enterprise Talent Management Value Realization Competency Strategic Vision Without Impact Strategy Start-up Vision for automation, but immature Vision for business impact, sound strategy; simplistic and ineffective strategy, and solid competency models competency models with ineffective and profiles; uses automation but with Low implementation ineffective implementation Low High Competency Strength Because many talent management strategies are relatively immature, and because competency chaos is a frequent impediment to their success, an approach is needed that accelerates more immediate returns on talent management initiatives. This approach would: reflect a realistic view of current conditions pertaining to technology, competency content, and talent management decision processes balance the attention on technology tools with attention to key implementation barriers such as the foundation of competency content that is needed to define the behaviors essential for strategy success quickly define the scope for an early win where competency alignment within one or more talent management processes would lead to better talent decisions and more desirable outcomes continue the process of gradually resolving competency chaos so talent management applications can capture the accurate and consistent data needed for better talent decisions and lay a rock-solid foundation for greater integration in the future 6
  • 7. In short, a Competency Strategy needs to be developed, complete with a road map and timetable that outlines the conditions required for success. As part of the strategy, an optimal framework will be established that captures the core leadership capabilities required at different levels in the enterprise, the key functional capabilities needed to further develop the functional profiles at different leadership levels, and the core business skills required across the organization. At the same time, it will ensure that the resulting output is simple and easy to use. This approach will make it easy to map existing success profiles and to create new job profiles in different parts of the business. In a rapidly changing business environment, roles and jobs will change, disappear, and be newly created, so the competency framework must be flexible and enable an organization to continue to apply the framework as its business evolves. A strong conceptual approach to helping organizations build an enterprise-wide, integrated capability framework is illustrated. Why an Enterprise Competency Structure Is Critical The number and types of functional models and job families vary by organization. Inevitably, there is a struggle to balance between the desire to create broadband functions and the need to get competencies closest to the position so they are relevant to the job they attempt to describe. The number of functions may also help to determine the competencies used in specific models. For example, a recent report, “The Role of Competencies in Driving Financial Performance,” states that “Because financial services companies tend to be stove-piped into distinct functional business units, [a good] communication [competency] breaks down these large barriers, and makes individuals more effective and gives them greater perspective.” The most critical determinant of the optimal framework for competency models is their link to business performance. Competencies are the embodiment of the organization’s business strategy through its people. Research shows that when managers identify the competencies required for high performance, they are right approximately half of the time. The problem is that they don’t know which half! Ultimately, the ability (through research) to predict which capabilities are the most critical to performance allows for smaller, simpler, and more targeted models. Business Analytics to Link Talent Decisions to Business Outcomes The final step in Talent Management Value Realization is when an organization is able to take full advantage of their competency modeling efforts by conducting advanced analytical research. At that point, they can link competencies with organizational outcomes that matter, such as profitability, increased revenues, customer satisfaction, and employee engagement. When organizations can develop a process to determine which dimensions of performance (competencies, behaviors) predict each critical strategic objective or outcome, they can achieve the real business impact of the initiative. 7
  • 8. A business impact analysis can help organizations determine: which competencies best differentiate “A” players from “C” players which behaviors have the greatest overall impact on outcomes such as productivity, customer service, and employee engagement where efforts should be focused to gain the greatest performance improvement where key business strategies or initiatives may be at risk due to talent constraints This analysis can use statistical methodologies to examine the ratings from a group of individuals to determine the competencies and behaviors that have the most significant impact on key outcomes. For example, if an organization wants to identify those competencies most closely associated with individual productivity, the analysis would examine the relationship between competency ratings from feedback surveys and individual productivity data obtained from the organization. The resulting analysis would generate relative-importance weights for the competencies included in the survey as they relate to productivity. The figures that follow show actual data from a PDI professional services client. This helped them determine the competencies that were most critical for differentiating “A” vs. “C” performers. Predicting Utilization 8
  • 9. Building a Competency Strategy To avoid competency chaos and achieve Talent Management Value Realization, six conditions must be met: 1. clear vision 2. aligned strategy 3. solid foundation 4. executive commitment 5. execution excellence 6. ongoing management and governance Clear Vision – a view into a future where integrated human capital management processes reliably yield the information and talent decisions needed to ensure a supply of superior leaders who will drive improved performance. This includes an understanding of how each of the talent management processes will be addressed and the associated competency requirements. This also includes a clear vision of the projected culture of the organization and the message that the competencies should send when they are presented to the organization. In addition, it includes a clear link to business outcomes, both for stakeholder buy-in and to evaluate impact. Aligned Strategy – a solid understanding of the outcomes desired from the organization’s business strategies and their alignment with a maturing talent management strategy and Information Technology systems integration strategy. Based on the organization’s vision, the behaviors and experiences most crucial to addressing its business needs are clearly linked (by competencies) to integrated human capital management processes. Solid Foundation – a strong competency management foundation supported by reliable data sources. This becomes the basis for integration of talent management applications and enables strategic, enterprise-wide impact. This requires a consistent and duplication-free competency library, a set of consistent competency profiles, and an underlying rationale that will support business analytics. The content must be simple enough to adopt and use on an everyday basis and strong enough to support its objectives. Most often this will include a clear framework that parallels the organizational structure, including the number of hierarchical levels and 9
  • 10. functional delineations. This will serve as the foundation for all competency component development, use, and lifespan management. To paraphrase Albert Einstein, “Make [the competencies] as simple as possible, but not simpler.” Executive Commitment – clear direction from executive management will help ensure that managers and employees get involved early and often so that they understand the value in doing things differently. Execution Excellence – the best talent management applications implemented with the best processes will not achieve desired business outcomes if managers and employees don’t know where to start, or if they find the process too hard to use. In addition to skillful project management, successful execution requires a simple implementation process that addresses technology and infrastructure issues, competency foundation requirements, and organization/people concerns. It must make the new leadership “brand” memorable, measure the engagement, and reinforce the message whenever and wherever necessary. Ongoing Management and Governance – the more effective the competency implementation, the more susceptible it will be for each group that wants to tailor the models and profiles to fit its specific needs. This is a fast track to competency chaos. It is imperative that policies and business rules are put in place to protect the integrity of the competency system and the resulting data. Clear and strong governance of competency content is essential to the continued usefulness of your talent management system. In addition, a system of record for managing, updating, accessing, time-stamping, and sharing all competency data must be integrated into the governance plan. Without such a system, different versions will inevitably appear and a proper audit of the application of profiles will be virtually impossible. Finally, the organization will need a plan for managing and updating competency content to keep it alive. Competency content needs to evolve as the business strategy evolves. Inadequate supervision of the changes needed or the lessons learned from the use of the competency models will, at best, render them irrelevant and, at worst, guide behavior that will be inconsistent with the company’s direction. By charting a path that meets these conditions, an organization will be able to more quickly move from the efficiency gains of technology automation into the arena of alignment of performance behaviors with strategy execution needs which is required for Talent Management Value Realization. Specific Approach Overcoming competency chaos for Talent Management Value Realization may seem difficult. To make it easier, we recommend a three-step process that considers the current maturity of the organization’s talent management strategies. 1. Figure out where we are now. How mature are our current talent management strategies? What’s our existing business need and vision for Talent Management Value Realization? What Talent Management Applications and IT Systems do we have in place and how well aligned are they? What are our competency assets and how can they be put together to create a cohesive foundation? Where do we have gaps? What level of executive commitment is there to overcome barriers and realize success? 10
  • 11. 2. Determine where we need to go. What is required to support development and learning systems? What about selection readiness assessment? What is needed to stand up to the scrutiny of pay for performance or succession planning and promotion decisions? What kind of competency framework will we need to minimize overlap, redundancy, and chaos? 3. Build a strategy road map. What is the foundational architecture? What do we need first? What’s needed for a quick win? What more will be needed? What is our timeframe? The following table suggests five levels of maturity in competency implementation (paralleling the model/structure outlined by Carnegie Mellon in their CMM-P 3 ) that can be used to diagnose and assess the current level of your organization. It also suggests the conditions that should be present to move from one level of maturity to the next. Using this table, organizations can create a specific agenda to sequentially progress toward greater maturity. For example, in moving toward Talent Management Value Realization, an organization must start with a strategy that has the end result in mind. If the goal is a system to identify, differentiate, and develop talent for better decisions of all types – selection, promotion, development, and succession – then an integrated talent management system will be needed with organization-wide analytics based on an aligned set of standards for all processes from recruitment to retirement. This means better tools to: build, customize, and manage a single, consistent competency and model library structure those competency models to provide both vertical and horizontal comparability leverage information about competencies by getting different applications to talk to each other enable managers to make sound decisions about jobs and people on a daily basis 3 Talent People Capability Maturity Model (P-CMM) Version 2.0, 2008 Carnegie Mellon University by Bill Curtis, Bill Hefley, and Sally Miller. 11
  • 12. Competency Implementation Maturity/Utility Model (abridged) MATURITY LEVEL 1 2 3 4 5 CRITERIA 1. BUSINESS NEED: EXPERIMENT visibility; MANAGEMENT PERFORMANCE INTEGRATED ENTERPRISE pilot, play to core do latest thing; fad Communication Improve productivity, PERFORMANCE Shareholder Value (competency list as values reduce costs, cut cycle Profit, ROI statement), Control e.g., times, correct specific perf mgmt rating on problem (e.g., high new hire employees in a job or unit failure rate, turnover) 2. ORG SPAN, One-off pilot study: Single job in several org Multiple org units, Multiple business: Enterprise-wide: IMPACT: pilot to single job, workgroup, units (e.g., sales); several processes, operations functions, processes multiple businesses enterprise-wide department jobs in one job family, linked to produce linked in profit center function economic outcome balanced scorecard 3. HR APPLICATION: Single HR function: Two or more HR Several HR functions that Several HR and other All HR functions across One to all >job/team/org analysis/ functions: A and B, but interact in causal flow business functions multiple businesses, design or >staffing or not linked synergistically value chain to increase (product geographies >development or >perf to improve performance performance (e.g., better development/R&D, management, or staffing + training + perf supply, production, >compensation mgmt) finance, marketing/ sales) that interact to improve business performance 4. COMPETENCY Many data collection Standardized data Standardized BEI, 360 Standardized BEI, 360 Standardized BEI, 360 METHODOLOGY: methods: panel, survey; collection: survey, perf survey, test competency survey, test survey, test competency inconsistent methods no standards management form assessment methods competency assessment methods to standardized, assessment methods worldwide reliable, validated linked 5. CONTENT: random No standard Standard core Standard core competency Standard core Standard core ramblings to competency dictionaries competency dictionary dictionary used across competency dictionary competency dictionary standardized, reliable, or definitions used across org units; processes; local used across business used enterprise-wide validated content local supplements supplements; $EVA of functions; local with local supplements; competence at supplements; $EVA $EVA of competence at unsuccessful, average, and of competence at unsuccessful, average, superior (+1SD) points on unsuccessful, average, and superior (+1SD) performance bell curve and superior (+1SD) points on performance points on performance bell curve bell curve
  • 13. MATURITY LEVEL 1 2 3 4 5 CRITERIA 6. IT SYSTEMS, None Integrated HR database Integrated HR database or Integrated HR and Integrated HR and software support: or linked unit databases; linked unit databases linked ERP databases linked ERP databases none to integrated simple Statistics software (e.g., SEM and time series SEM and time series HRIS to ERP; s-o-a survey>database> SPSS) to test reliability statistics to test statistics to test balanced predictive analytics reporting and validity of HR balanced scorecard scorecard value competency independent value chain/causal chain/causal flow variables to predict flow models: models: “upstream” dependent variables $EVA “upstream” competency (HR outcomes competency (HR learning and innovation), learning and ops and customer IVs innovation), ops and prediction of global customer IVs business financial prediction of DV outcomes business financial outcomes 13
  • 14. Adapted from the Competency Maturity Model by Lyle M. Spencer and Paul D. Storfer So, for example, if you have determined that your organization is currently at Level 2 and you wish to move the organization to Level 3, there are certain things that you must have and certain things you must do to make that happen. Some of these will affect the culture and people in the organization and the corresponding competency initiatives, and some will require investments in technology and systems infrastructure. MATURITY LEVEL 3 TO THE EXTENT THESE ARE NOT IN PLACE, TO REACH MATURITY LEVEL 3, YOU WOULD NEED TO: PEOPLE/ ORG Formalized HR management structure, within which HR seeks to Define the organizational structure CULTURE provide some level of strategic information to senior executives Define the rules and roles of job functions (non-specific) for Performance Management programs in place including a formal executives, managerial, line, and individual contributors Performance Appraisal program of some kind. Implement a well-defined Performance Management Program Formal recruiting efforts and supporting organization. Some business processes formalized take into account Web-based delivery of HR services and programs COMPETENCY Competencies integrated into organizational Performance Define and implement a pilot Performance Management Program INITIATIVES Management programs Seek employee acceptance and feedback during Performance. Core competencies for levels of positions from executive through Management Program development individual contributor are in place, typically within one just business Integrate Performance Management within workflow and consider best unit; not yet consistent within all business units across geographies; practice research identified competencies for a few job families, but not yet down to Explore metrics and scorecard utilization related to workforce the functional position level capabilities Some metrics related to performance of workforce are generated, Build competency definitions for all jobs in a single business unit, and mostly turnover and retention then use this to pilot additional business units SYSTEMS/ Fairly comprehensive HRIS capability, either a best-of-breed Talent Implement “go-live” plans for an HRIS that includes functionality for INFRA- Management Application package or an Enterprise Resource Performance Management and Career Development STRUCTURE Planning system or an effective home-grown system. Build appropriate interfaces to non-HR systems such as finance and HRIS maintaining job and position levels and descriptions, as well customer relations/billing as reporting relationships; organization structure and organization Ensure your systems have the capability to support basic or charting a plus rudimentary metrics and scorecards related to capturing workforce Ability to gain access to other non-HR systems such as financials capabilities, movement, and future trends via automated interfaces (bi-directional) and customer relations to generate some rudimentary metrics Methodology for data input via Lotus Notes or similar and ready for use to capture and update employee performance plans With the previous table and this example, you can create your own tailored plan with specific initiatives that assist in increasing the maturity of the organization and advancing toward Talent Management Value Realization. 14
  • 15. Conclusion Realizing value from today’s talent management strategies requires dealing with a rapidly changing environment. Organizations must balance the opportunity cost risk of moving too slow with the “rush to automate” risk of moving too fast. Increasing technology is playing a role as a tool for meeting human capital business needs and enabling talent management success. However, as the technology stabilizes, implementation issues often emerge as the biggest barriers to value realization. In the case of talent management strategy, for many organizations the most painful Achilles’ heel may be the competency chaos that often surrounds the competency content that is needed as the anchor for talent analytics and better talent decisions. By using a Talent Strategy maturity model, organizations can begin to assess where they are in setting the proper competency foundation for their talent management systems, deal with competency chaos, and determine what needs to be done to achieve the next level of maturity. By recognizing the need to go beyond immediate attention on technology to resolving implementation barriers, organizations can more quickly capture the data they need to make better talent decisions now and lay a rock-solid foundation for greater talent management application integration in the future. Realizing value from talent management strategies requires a coherent, competency-based foundation. This foundation will enable organizations to: have a springboard to go from vision to action serve as the basis for aligning talent strategy with business strategy enable execution of an aligned strategy through a focus on highly valued behaviors enable the type of workforce analytic needed to help leaders know how to best address specific business issues and drive specific business outcomes offer line managers a concrete way to add value by improving talent decisions and driving enterprise performance and sustainability Personnel Decisions is a registered trademark of Personnel Decisions International Corporation in the United States and other countries. Copyright © 2008, Personnel Decisions International Corporation. All Rights Reserved. For more information on how we can help your company gain a leadership advantage, call your local PDI office or 1.800.633.4410, or visit www.personneldecisions.com. PDI_1008