Do you want to learn about competency frameworks for employee performance management? Well, read on. We’re going to cover everything you need to know here.
As a manager, I have seen firsthand the positive impact that competency frameworks can have on organisational performance and employee development. In this article, we will;
- Explore what a competency framework is
- Delve into the benefits of using them
- Provide an example of a competency
- Discuss how the data from competency frameworks are used.
Understanding Competency Frameworks
Competency frameworks serve as a centralised tool that defines the knowledge, skills, and abilities required for successful job performance within an organisation. They provide a structured approach for assessing, developing, and managing employee competencies. A well-designed competency framework offers clarity and consistency in evaluating performance across different roles and departments. Part of the reason for improved consistency is that many roles share competencies. So, you define them once and use them in many places.
Let’s consider a real-world example to better understand competency frameworks. In my previous role, we developed a competency framework for our sales team. It included competencies such as effective communication, negotiation skills, and customer relationship management. This framework helped outline the specific skills and behaviours expected from each sales representative, resulting in improved team performance. This group of sales roles shared many of the same competencies, but the expected performance level differed between roles depending on the role’s seniority. As a bonus, we could re-use some of the competency definitions in other roles too. Many non-sales roles share the “effective communication” competency, for example.
Benefits of Using Competency Frameworks
Using competency frameworks in employee performance management offers several advantages:
Providing clarity and focus on performance expectations
Competency frameworks establish clear performance expectations for employees, ensuring everyone understands the skills and behaviours required to excel in their roles. This clarity helps align individual objectives with organisational goals. Employees are more likely to succeed when they know what is expected of them. This fosters a culture of accountability and achievement within the organisation.
Facilitating fair and consistent performance appraisals
Competency frameworks provide a structured framework for assessing employee performance. By using predefined competencies, performance evaluations become more objective and consistent across the organisation. This helps eliminate biases and subjective judgments, resulting in fairer and more accurate assessments.
I recall a situation where a sales representative who struggled with customer relationship management realised their shortcomings after reviewing their performance against competencies. This allowed us to create an effective personal development plan to help them improve in specific areas. Leading to significant growth in customer satisfaction and sales performance.
Enhancing employee development and career progression opportunities
Competency frameworks enable organisations to identify skill gaps and focus on areas of improvement for employees. By identifying these gaps, we can create targeted training and development plans that align individual growth with organisational needs. Employees feel supported in their professional development and are more motivated to acquire the skills required for career progression.
An example of this is when we utilised the competency framework to identify high-potential employees within our accounting department. We reviewed individuals against competencies such as critical thinking, problem-solving, and attention to detail. With the data we collected, we were able to identify suitable candidates for leadership development programs. Several employees who participated in these programs successfully advanced their careers within the organisation.
Help easily identify skills gaps and create development plans
During the performance review, you have clearly defined competencies to hand. It’s now incredibly easy to discuss performance based on this organisation-wide definition. Reviewing actual performance against the pre-defined target performance makes it super simple to identify gaps. And well-defined gaps make it really easy to create a well-defined development target to help close the gap. This doesn’t have to be for underperformance either. With the complete framework in front of you, you can clearly see how you would perform in the next step of your career. Making it super simple to create development targets to help you get there.
Creating a Competency Framework
Two things need to be done to create your framework:
- Define competencies
- Define roles that use the competencies
Defining A Competency
Let’s explore a specific competency to better understand how it fits into a framework. One common competency in many frameworks is Effective Communication.
First, let’s define effective communication at a high level:
“Effective communication involves the ability to express thoughts, ideas, and information clearly and appropriately to others. Key characteristics of effective communication include active listening, clarity of expression, adaptability to different audiences, and the ability to provide constructive feedback.”
Now, how do we use that in a framework? Well, there are 2 schools of thought, which we talk about in our Rating employee competencies post. To briefly outline the two:
1) Simple Approach
Define the competency as we did above and then define a simple rating scheme to capture performance against it. The ratings could be as simple as Not Met, Met and Exceeded.
2) Advanced (far better)
Describe what performance looks like on multiple levels, starting from the least demanding. Aim for around 6 levels. Then employees simply choose the level that best describes their performance.
Defining A Role
Now that you have some competencies defined, it’s time to define some roles that use them. A role is a group of competencies that employee performance is rated against.
For example, let’s say we have the role of “Project Manager”. This role could have the following competencies associated with it: Planning and Organisation, Communication, Leadership and Technical Skills.
Dealing with role levels
Let’s say we have levels within roles. Using the Project Manager example above, these could be; Junior Project Manager, Project Manager and Senior Project Manager. The way you deal with these depends on which approach you used to define your competency. If you used the simple approach, you will probably need to define versions of each competency to match the role level. For example, Basic Communication, Effective Communication and Advanced Communication. You can then apply each of these to the different role levels. But, if you used the advanced method when you defined the competencies, then you are in for an easier ride! This is because you can use the same competency definition in all three roles. For example, the target performance level for the junior level could be “Foundation”, for the middle level “Effective” and for the Senior level “Advanced”. We prefer this method – take a look at the best way to rate competencies for more detail.
Using Your Competency Framework
Once you have defined your competencies, how do you use them? Well, with all the hard work of defining the framework and creating roles out of the way, this is the easy bit. Employees or their managers simply look at the competency and choose a performance level that best matches actual performance.
The framework already knows what the target performance level is for the role. So you now know whether the employee is performing at the right level for their role.
Using Competency Framework Rating Data
You can use competency framework data in several ways to enhance organisational performance:
Gathering and analysing competency data
Organisations can analyse competency data to identify trends and patterns, allowing them to make data-driven decisions regarding talent management and development strategies.
Identifying skill gaps and training needs
By assessing competency data, organisations can identify areas where employees may lack the necessary skills. This information can be used to tailor training and personal development plans, ensuring employees acquire the competencies required to excel in their roles.
Competency frameworks can be used to identify potential leaders within the organisation. By comparing individual competencies with those required for leadership roles, organisations can develop tailored leadership development programs.
Employee Engagement and Satisfaction:
When employees understand the competencies expected of them, they are more likely to be engaged and satisfied with their work. Clear expectations can lead to increased motivation and commitment. Not only this, but employees can see and action career progression strategies.
Utilising the data for recruitment and selection purposes
During recruitment, competency frameworks can guide the selection process by identifying the key competencies required for a specific role. This enables organisations to hire candidates who possess the necessary skills and behaviours.
Linking competencies to performance evaluation and rewards
You can integrate competency frameworks into the performance evaluation processes, allowing you to assess employee performance against predefined competencies. This enables fair and objective performance appraisals and provides a basis for performance-related rewards and recognition.
Competency frameworks help align individual performance with organisational strategy. By defining competencies that support the company’s mission and goals, organisations can ensure that employees are working towards shared objectives.
Competency frameworks play a significant role in employee performance management.
- They provide clarity and focus on performance expectations
- Facilitate objective assessment and evaluation
- Enhance employee development and career progression opportunities
- Provide valuable data for talent management decisions.
Organisations that prioritise the development and effective use of competency frameworks are likely to experience improved overall performance and employee satisfaction.
Emphasising the value of aligning competencies with organisational goals is crucial. By aligning competencies with organisational objectives, organisations can ensure that their workforce is optimised to achieve success.
As an HR Manager, I have witnessed first-hand the positive impact competency frameworks can have on organisations. Therefore, I encourage all organisations to prioritise the development and implementation of competency frameworks to maximise the potential of their workforce.