Competency-Based HR Management The Next Steps

Many readers may be wondering, "Where is this all headed? Everything we've heard sounds true and worthwhile, but what's next—and why?" In this chapter, we offer some predictions about the future of competencybased HR management, its possible innovations and uses, and some of the challenges that lie ahead for those who apply it.

Future Direction

We believe that competency-based HR management will become the standard approach for all or most organizations. Job descriptions, the basis of traditional work-based HR management, are no longer an effective means of making good employment decisions. There are several reasons for this. First, job descriptions tend to focus on activities or responsibilities instead of on measurable outcomes or results. Second, they do not take into account the abstract qualifications that affect customer satisfaction and are integrally related to exemplary performance. And third, in the volatile business world of today, job descriptions simply cannot be written quickly enough to keep up with work changes.

Many decision makers are looking for an alternative approach as they simultaneously attempt to retrofit existing methods and practices. Competency modeling has much to recommend it. Competency models are more flexible and more enduring than job descriptions. They are based on measurable work results and are specific to the organization's culture and success factors. Competency models are also highly effective at describing the less definable characteristics associated with exemplary individual performance. This may enhance the capability of HR practitioners to link organizational core competencies to the competencies of individual exemplary performers. Pinpointing the characteristics of exemplary performers holds out the promise of making quantum leaps in productivity improvement if HR systems are retooled such that the competencies of exemplary performers become the foundation for all HR practices.

At this time, case studies have documented HR departments with one or more competency-based HR functions within their organization. In the future, however, we expect that competency-based HR management will be used to align HR practices with the organization's strategic objectives and employee development efforts and to integrate all components of the HR function across an organization.

Future Innovations

Growing awareness of the value of competency-based HR management will lead to innovations in competency technology. For example, HR practitioners will be able to apply increasingly sophisticated electronic technologies to competency identification, modeling, and assessment. Web-based applications for competency identification and validation as well as for development and career management, already possible, will become the norm.

As more organizations conduct competency identification and modeling work, we can expect that the development and verification of innovative methods for competency identification will advance both the state of the practice and the state of the art. Increased use of competency methods will build the inventory of identified competencies, thus improving the data available for use in menu-based competency modeling activities. Organizations will then be able to define exemplary performance more precisely and with greater validity and reliability.

We anticipate that the use of competency technology will be the subject of considerable research regarding its value for improving performance—both individual and organizational—and the long-term effects of competency applications. There will be increasing focus on return on investment, return on assets, and other valuation measures that demonstrate the superiority of a competency-based approach.

Future Uses

We believe that competency-based HR management practices that enhance, encourage, and support exemplary performance will dominate the HR management scene in the future.

Organizations will most likely introduce competency-based HR management through their recruitment and selection applications. This will be a response to growing awareness of the critical need to match people to work rather than work to people. Talent will be increasingly recognized as a major competitive resource, and competency-based HR management is a more effective approach to identifying the people who are essential to sustained competitive advantage.

Performance management and rewards are the second and third HR management processes that will most likely become competency based. In the case of performance management, organizations will be responding to their need to achieve organizational success with decreased HR complements by utilizing the full potential of existing employees. In other words, managers who are expected to do more with less will turn to exemplary performers for the huge advantages they offer compared to their fully successful peers. As for rewards, exemplary performers must be given incentives and rewards that match their exceptional contributions and measurable productivity.

Because employees recognize the benefits of a wide spectrum of competencies, which makes them highly marketable both within their organizations and extermally, they will expect growth and development opportunities at unprecedented levels. This will require many leaders to understand the importance of a competency-based employee development function as a key HR management strategy. Competency-based employee development defines competency acquisition needs as those that align with life-careers as well as with development. When both of these dimensions are successfully addressed, organizations will be better able to attract and retain exemplary performers.

Future Challenges

Wrongheaded application of competency identification, modeling, and assessment methods is foremost among the challenges in the widespread use of a competency-based approach. HR practitioners must take steps to distinguish the good from the bad methods of identifying competencies and constructing competency models. Too many practitioners are in a rush to develop the models so that they can move on to the next steps. Given these inadequate models, decision makers are never able to discover what sets exemplary performers apart from fully successful ones, and much of the models' value is lost.

A second challenge is the lack of HR staff capable of completing high-quality competency technology applications. In the absence of resident HR specialists who can perform this work, organizations must enlist the support of experienced contractors or consultants.

Third, it will continue to be a challenge to gain the long-term commitment of senior mangers. Senior managers must be willing to learn, become involved, and commit to objectives that might require more time to realize than they prefer. An organization's decision makers sometimes view initiatives as all-or-nothing propositions. As noted earlier, however, it is not necessary to convert all HR functions and practices to a competency-based foundation in one step. A more practical approach is to introduce the use of competency-based practices in those areas that will realize the greatest organizational benefits with the available resources.

Fourth, and finally, organizations that do not initiate and maintain continuous communication with their employees on the use of competency-based practices will find implementation of the new approach a difficult undertaking. All persons affected by the technology must be informed about its benefits, requirements, and other factors relative to the applications to be used.

Summary

In this brief chapter, we have attempted to predict the future direction of competency-based HR management and the innovations that may affect it. We discussed the particular HR functions that we believe will adopt and use competency-based HR management and identified some key challenges that lie ahead in applying a competency-based approach. We believe that the use of competencies and competency-based HR management practices are here to stay. Competency applications will revolutionize the way an organization's leaders and employees work together. To accept the value of competencies is to embrace the value of elements of the human soul. In doing so, we also recognize and nurture the concept that work is, after all, a deeply human enterprise, and without the contributions that come from human performance, nothing of great value can be accomplished.