HR Summit and Expo Africa 2015 - Seminar Presentation by Brent Herman, Lead Consultant, Hay Group South Africa

Developing and implementing a
competency framework
Session Code: HRSA09

“Starting the Journey”- Developing a Behavioural Competency
Model in Organisations
Brent Herman
Lead Consultant- Hay Group South Africa

STARTING THE
JOURNEY
Developing a Competency Model
18 SEPTEMBER, 2015

©2015HayGroup.Allrightsreserved
4
1. WHAT ARE
COMPETENCIES?

BEST BOSS / WORST BOSS
Answer the following questions for each boss:
 How did you feel when you worked for that boss?
 How did you perform when you worked for that boss?
 How long did you work for that boss?
 What were the business results?
__________________________________ _______________________________________
__________________________________ _______________________________________
__________________________________ _______________________________________
__________________________________ _______________________________________
5

HOW WE DEFINE A “COMPETENCY”
6
A relatively
enduring
characteristic of a
person
Displayed more
often and more
consistently by
outstanding
performers
In a given role,
job, situation or
culture
To get
outstanding,
strategic results
What it is about you, that makes you great
at your job?

THE ICEBERG MODEL OF COMPETENCIES
7
Social Role
Values
Traits
Motive
Skill
Knowledge
The image one projects to others
(“outer-self”) e.g. manager,
teacher
Recurrent thought
that drive
behaviour
Behavioural
demonstration of
expertise
Information that a
person
has in a particular area
A general disposition to
behave in a certain way
A person’s beliefs and
things that are important
to them
Self Image
A person’s view of themselves or
sense of worth e.g. technical expert
Technical
Expertise:
Easier to
see,
measure and
develop
Behavioural
Competenci
es: More
difficult to
see,
measure
and develop
Characteristics that lead to longer-term
success

SOME COMPETENCIES BECOME MORE IMPORTANT AS JOB
COMPLEXITY INCREASES
8
Natural tendencies and traits
 For example:
 Tenacity
 Initiative
 Interpersonal sensitivity
 Self confidence
Task-related knowledge and skills
 For example:
 Knowledge of electronics, company products
 Market awareness, labor relations, law,
 Skill in active listening, negotiating
RELATIVEIMPORTANCE
JOB COMPLEXITY
High
High
Low

9
2. HOW DO
COMPETENCIES LINK
TO OTHER HR
DELIVERABLES?

COMPETENCIES – NOT IN A SILO
10

COMPETENCY APPLICATIONS
11

EXECUTIVE TURNOVER RATES AND COSTS BY TRADITIONAL
AND COMPETENCY-BASED HIRING SYSTEMS
12
PERCENTAGEOFEXECUTIVES
LEAVINGWITHINTWOYEARS
PERCENTAGEOFEXECUTIVES
LEAVINGWITHINTWOYEARS
N=35 N=32
Total sample
N=17 N=2
Total sample
100%
0%
60%
80%
40%
$4.5
$3.5
$0.5
$1.5
$2.5
Competency based hiring improves
retention of executives
The dollar value of improved
retention of executives
Key: Traditional
Competency based

COMPETENCIES AND LEADERSHIP DEVELOPMENT
13
Job Competency
Requirements
Leadership
Style
Organisational
Climate
Our Framework for Development:
 The Four Circle Model
provides a proven
framework & language for
analysing and addressing
individual & team
performance development
opportunities
• Growth in
Organisation
Revenue
• Increase in
Effectiveness
• Attainment of
Broader Strategic
Objectives
70%
30%
INDIVIDUAL
COMPETENCE
 Motives
 Values
 Behaviours

PERFORMANCE BELL CURVE
14

PERFORMANCE BELL CURVE
15
What will you pay for?
What will the balance be?
Role
Performance Competencies
Role
Performance
Competencies
Role
Performance
Competencies

16
3. COMPETENCY
MODELLING – HOW DO
YOU GO ABOUT IT?

COMMON DATA SOURCES FOR COMPETENCY MODELS
17
Observation: Watching outstanding and average performers, seeing what they do, using this to
input to a model. Most suitable for front line jobs which are relatively simple (e.g., bank branch
manager, retail sales person, call centre manager).
Behavioural event interviewing: Interviewing outstanding and average performers
to understand how they do what they do. Closest thing to observation, more practical for senior
executives with jobs which are too complex to simply observe.
Subject matter expert / stakeholder interviewing: Interviews to
understand what SMEs and senior leaders believe are the critical behaviours for the role. Often misses
critical competencies, but helps to articulate organisational expectations and aspirations.
Customer interviews: Interviews with internal or external customers of a function / role,
to understand customers’ needs and impact of competencies on customer satisfaction.
Existing competency models in the organisation: Often useful
context, and can help avoid re-inventing the wheel and creating more change than is necessary.
Competency model benchmarks: Gathering and analysing competency models
from other relevant organisations to ensure nothing is ‘missing’ from above data gathering.
Role / strategy benchmarks: Gathering and analysing competencies demonstrated
by executives in similar roles or delivering same strategic initiatives, to ensure nothing is ‘missing’ from
above data gathering.

COMPETENCY MODEL DATA COLLECTION METHODS
18
Relationship between methods and validity of results
Benchmarking
Generic model
Heavy duty research-based
model (35+ BEI’s)
Full-scale BEI-based model (20+
BEI’s)
Hybrid model (5-15 BEI’s)
Expert panel and benchmarking
and strategic interviewing
Expert panel
INVESTMENT$$$
CRITICALITY / PRECISION AND VALIDITY OF RESULTS
Key: [ ]
Target
Tipping point / algorithm
ROI

OUR RESEARCH METHODS COMBINE
BIG PICTURE AND DETAILS; NUMBERS AND TEXT
19
Big Picture / Strategy / Concepts
Details / Behavior / Analysis
Quantitative/Numbers
Qualitative/Text

RIGOR OF ANALYSIS
20
Not coded because an
assertion
Not coded because can’t
tell who “we” is - and it’s
an assertion
Coded because 1st person,
past tense, and specific
words said
Straight Talk
1. Uses “tact” or says things in an indirect way.
2. Gives individuals honest assessments.
3. Publicly gives one’s team an honest viewpoint.
4. Makes differences of opinion stunningly clear
in a noncontentious manner.
Coded for “Straight Talk”
Level 3
Exec:
Exec:
Int:
Exec:
I structured X into a profitable business unit and these
guys all grew. We gave them responsibility to create
their own destiny...
I called the meeting. I said, “Today, the purpose of this
meeting for the next two days is I want you to sober up.
The party is over. I’m going to take you through the real
data of how much money you have and haven’t made.”
That’s what you said?
Yeah, a quote. “The party is over. You’ve
been telling yourselves you’re great...
Today you are going to see the real
numbers, the numbers as we
see them.”

COMPETENCY MODEL BUILDING PROCESS
21
Define and agree
purpose
Steps
 Purpose (HR
tool, capability
building, culture
change, etc)
 Ownership and
governance (HR,
Line, Functional
head)
 End users (Top
250, Finance
function, High
potentials, etc)
Define/agree
methodology
aligned to
purpose
Steps
Data sources:
 Executive
Interviews
 Behavioural
Event Interviews
 Expert Panels
 Previous Models
& Values
Statements
 External
Benchmarking
Implement
methodology
and build
model
Steps
 Gather data
 Build the model
by clustering the
competencies
into themes, and
with defined
levels
 Assign target
levels to different
roles / categories
Validate and
rollout
Steps
 Approval of
models by the
Executive Team
 Communication
to all Employees
 Possible training
on management
(specially if it will
be included in
the PM system)
Implement
competencie
s
Steps
 Implement in the
HR systems that
will support the
acquisition and
development of
competencies:
- Performance,
- Recruitment,
- Development,
- etc.

ALIGNING THE PURPOSE OF THE MODEL TO THE OWNERSHIP
OF THE MODEL
22
Driven by HR
with Line support
Driven by Line
with HR support
Transformational
Change
(e.g. Building Strategic
Capability, Step
Change in
Performance)
Fails to deliver
HR cannot gain the traction required to drive
real change without the Line taking the lead
Succeeds in driving change…
…when (and only when) the Line and HR work
together to embed the behaviours through
communications, development programmes,
succession planning, selection, performance
management, etc
HR Architecture
(eg, Competencies to
be slotted into role
descriptions,
development
programmes, etc)
Succeeds in providing best practice HR
support to the business…
…when (and only when) HR then embeds the
competencies into HR processes
Poor use of resources
Because line leadership is not necessary if the
purpose is simply to provide HR architecture
PURPOSE

KEY CRITERIA THAT ANY EFFECTIVE METHODOLOGY SHOULD
MEET
23
Why it matters How to ensure success
 To ensure you’re focusing people in the
right places, its critical to ensure you identify
the competencies that will drive the strategy..
 Use internal best practice and role models
within DBSA to shape the competencies – this
ensures they reflect the reality of how work
gets done in DBSA.
 To ensure people can develop the new
competencies, you need to ensure they
understand what the competencies mean for
them in their roles, and how they connect to
their daily lives.
 Focus on the fewest competencies that
make the biggest difference – don’t try to
describe every single skill required to execute
the role.
 Use examples and provide employees with
guidance on how to develop the
competencies, so they become real.
 To ensure people embrace the new
competencies and drive the change towards
stronger decision support, it is critical that
they are seen as credible.
 Use a blend of internal best practice and role
models, and external benchmarks, to shape
the competencies, to avoid common pushback
such as ‘We’re unique and different, so these
competencies don’t apply to us.’
Regardless of
purpose,
competencies
must be:
Accurate
Understandable
Credible

OPTIONS:
24
 Some organisations have a history of building competency profiles on a role
by role basis.
 Many other organisations build models which can be applied to a range of
roles.
 This section will present different ways that organisations structure their
competencies and competency models.
 There is no ‘right way’; rather the key challenge is to find what will work best
for the organisation, given its structure, operating model, strategy, and its
history with competencies and how they’ve used them in the past.

COMMON WAYS OF LEVELLING COMPETENCIES
25
‘Degree’ levels: This is where you have one set
of behavioural indicators, and the assessor is
asked to determine the degree to which the
individual satisfies the criteria.

COMMON WAYS OF LEVELLING COMPETENCIES
26
‘Developmental’ levels: This is where you have a
cluster of behaviours, some more sophisticated than
others, which are levelled with the least sophisticated
/ easiest at the bottom, and most sophisticated /
most difficult at the top.

27
4. COMPETENCY
FRAMEWORK OPTIONS

EXAMPLE OF HOW TO STRUCTURE COMPETENCY MODELS:
CATERPILLAR
28
Individual Contributors
First Line / Middle
/ Senior Managers
Senior
Leaders
•Built this model first, and invested most in it.
•Heavy emphasis on behavioural competencies.
•Applies to all top 250, regardless of role.
•Has flexibility built in through an empirically
derived ‘algorithm’
•Built this model second.
•Started with Senior Leader model and adapted to
make it appropriate for managers; where possible
competencies are the same, to create clear ‘line of
site’ when transitioning from manager to leader.
•This model was created independently of the
senior leader and manager models.
• This model was retrofitted to work more like
the senior leader models.
• Its primary application is via performance
management.

IBM
29
First Line / Middle
/ Senior Managers
Senior
Leaders
IBM also has different models and
different levels, and these models apply
to people across different functions.
In addition, for mission critical roles
and for mission critical functions, they
have developed more specific
competencies models.
• For the mission critical Sales function, we helped
them build a specific sales competency model which
stretched further down the organisation and included
specific sales competencies which weren’t relevant for
other functions and so hadn’t been included in the
leadership model.
• We also built a similar model for senior research
scientists.
• For the mission critical ‘Managing Director’ role,
which looked after $1 billion dollar accounts with
IBMs largest global clients, we built a specific model
for that role, to help IBM select the right internal
candidates for that role.

VODAFONE
30
Leaders
Vodafone has one integrated, very high
level model, which applies to the entire
organisation. Some behavioural
indicators under each competency
apply only to senior leaders, so there is
some differentiation.
In addition, for every function they
have a competency model, and a core
set of 3 competencies which are
relevant to every function.

EXAMPLE
31
Cluster or “Theme” Managerial Roles Specialist Roles Operational Roles
Managing Others
Developing Others (4) Flexibility (4) Flexibility (3)
Empowerment (4) Teamwork & Cooperation (4) Teamwork & Cooperation (3)
Team Leadership (5) Customer Service (4) Customer Service (3)
Managing Self
Initiative (4) Initiative (3) Initiative (2)
Achievement Orientation (5) Achievement Orientation (4) Achievement Orientation (3)
Strategic Thinking (4) Conceptual Thinking (4) Analytical Thinking (3)
Concern for Order & Quality (3)
Managing the
Organisation
Organisational Commitment (4) Organisational Commitment (3) Organisational Commitment (2)
Impact and Influence (4) Impact and Influence (3)

32
Q&A

33
THANK YOU

Developing and implementing a
competency framework
Session Code: HRSA09

HR Summit and Expo Africa 2015 - Seminar Presentation by Brent Herman, Lead Consultant, Hay Group South Africa

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