Competency-Based Talent Management

Stephen C. Schoonover, M.D.

President, Schoonover Associates

Portions of this article are copyrighted to Salary.com, Inc. and are used under license.

©2011 Schoonover Associates. All rights reserved.

i Competency-Based Talent Management

Contents
Contents......................................................................................................................................... i  
List of Figures ................................................................................................................................ i  
Executive Summary ...................................................................................................................... 1  
What Are Competencies and Why Are They Important? .............................................................. 1  
Why the Interest in Competencies? .............................................................................................. 2  
How Competency Models Are Structured ..................................................................................... 3  
An Integrated Approach to Talent Management ........................................................................... 5  
Changing Roles of Manager and Employee ................................................................................. 7  
The Future: What to Expect .......................................................................................................... 7  

List of Figures
Figure 1 Customer Responsiveness ............................................................................................. 1  
Figure 2 Organizational Contributions of Competencies .............................................................. 3  
Figure 3 Schoonover Associates Competency Framework .......................................................... 4  
Figure 4 Competency Implementation System ............................................................................. 6  

©2011 Schoonover Associates. All rights reserved.

1 Competency-Based Talent Management

Executive Summary
Competencies are behaviors that excellent performers exhibit much more consistently than
average performers. They answer the question, What does an excellent performer look like in
a particular work setting? If the setting changes, so do the competencies. Therefore,
competencies are statements about a collection of observable behaviors, called behavioral
indicators, that are linked to a particular context and require no inference or assumptions.
How employees do their jobs now represents the competitive edge in all work settings, and
competencies provide the roadman. When we know what is required for excellent performance
in a job or role, we can select, motivate, develop, and reward employees to perform at that
level. And when employees are at optimal performance, so is the organization.
Most organizations frame their competencies using discrete models, or groups of behaviors
bounded by a defined work setting and organized by themes or topics. The nature of models
depends on whether the organization is defining success for the company, a function, a role or
career level, or a job. We call these core, functional, role, and job competencies, respectively.
Competencies can provide the linkage for developing a truly integrated human resource
system, an emerging area with the potential to produce significant improvement in
organizational effectiveness. Selected organizations are rigorously collecting and analyzing
competency evidence to create a more data-driven approach for implementing talent
management processes. And organizations that use competency-based approaches are more
likely to view performance management as the cornerstone of an overall performance
development process that also includes the following.
• Hiring and selection
• Team assessment
• Development and career planning
• Coaching and mentoring
• Self-directed team learning
• Courseware focused on competency development
For many organizations, competency-based talent management also means a change in the
roles typically played by managers and employees. The manager’s role can become one of
coach and facilitator. And the employee often becomes a more active partner who takes much
more responsibility for his or her development.
We see competency use expanding significantly over the next decade, especially as
organizations become more aware of best practices and see the power of using competencies
as an integrating vehicle for all talent management systems.

©2011 Schoonover Associates. All rights reserved.

 Competency-Based Talent Management

What Are Competencies and Why Are They Important?

While competencies have become a mainstream concept, there is much confusion about how to
define them. Current definitions run the gamut from the key capabilities of an entire organization
to job knowledge or technical performance criteria. Among most professionals in the field,
however, the basic definition of competencies has remained relatively unchanged for the past
25 years. Competencies are those behaviors that excellent performers exhibit much more
consistently than average performers.
In defining what competencies are, it is also important to understand what competencies are
not. Competencies are not a psychological construct. For example, there is no single behavior
that could be termed “customer responsiveness.” The competency called “customer
responsiveness” is a grouping of behaviors that, taken together, describe how an employee
demonstrates customer responsiveness through behavior on the job in a particular work
context. So, competencies answer the question, What does an excellent performer look like in a
particular work setting? If the work setting changes, so do the competencies.
Competencies, therefore, are a collection of observable behavior statements linked to a
particular context that require no inference or assumptions. The statements—typically referred
to as “behavioral indicators”—are grouped according to a central message or theme, which
becomes the title of the competency and is captured in the definition.
Most competencies are presented in the form of a model, or grouping of several other
competencies merged into a profile or profiles. Figure 1 presents an example of a competency
for customer responsiveness.
Figure 1
Customer Responsiveness
Definition:
Demonstrates consistent, focused actions to ensure high levels of customer satisfaction.
• Asks questions to clarify customer requirements.
• Takes a variety of actions to meet customers’ needs as required until needs are met.
• Responds to customers with an appropriate level of urgency.
• Builds confidence in customers that their needs are given the highest priority.

In most organizations, competencies typically exclude “baseline” behaviors—those that are

common to average and excellent performers. The overriding reason for excluding baseline
behaviors is to maintain a focus on excellence. Most organizations that use competency-based
human resource systems are trying to drive excellent, not average, performance. Thus
identifying “baseline” behaviors runs the risk of encouraging average performance or, at a
minimum, wasting development time on behaviors that most members of the work force are
already exhibiting.
Competencies are important because they enable us to provide employees with a roadmap of
the kinds of behaviors that will result in excellent performance. How employees do their jobs
now represents the competitive edge for organizations in all work settings. Excellent customer
service and total quality performance can happen only when attention is paid to how employees

©2011 Schoonover Associates. All rights reserved.

2 Competency-Based Talent Management

carry out their tasks. When we know the competencies required for excellent performance in a
job or role, we can select, motivate, develop, and reward employees to perform at that level.
And when we have employees performing at an optimum level, we maximize the overall
performance of the organization.

Why the Interest in Competencies?

Contrary to the perceptions of many human resource professionals, competencies are not a
new concept. Competency-based human resource practices have been in use for decades, but
principally as assessment and development tools. Only recently have competencies emerged
as a broad-based human resource tool for many organizations.
It’s not hard to understand why. Our experience and discussions with other organizations
indicate competencies are viewed by many as the answer to a problem—how to manage and
motivate employees effectively in a new work environment characterized by the following.
• Greater focus on integration and improvement of work processes.
• Increased demands on people to acquire and demonstrate new behaviors and skills.
• A reduction in the number of traditional jobs and the elimination of career paths and ladders.
• An increased focus on teamwork and team performance.
• A focus on the organization’s people as the source of competitive advantage and superior
performance.
Organizations that stay the course in implementing competency-based systems most commonly
report they have done the following.
• Raised the performance bar. Because competencies are based on the behaviors that
distinguish excellent performers, the goals set for individuals are higher than before. This
increases everyone’s performance level.
• Helped align individual behavior with business strategies. Organizations that are relentless
in linking their competency models to the organization’s strategic values report that
individuals’ actual behaviors are better aligned with these values. Just as important,
individuals see this linkage.
• Supported a new, more collaborative employer–employee contract. In most organizations,
gone are the days when employees are promised job security and fair pay in exchange for
loyalty and a fair day’s work. Many organizations are looking to replace this old contract with
a new one—one in which the organization provides individuals with the opportunity to
develop and use new skills and knowledge in exchange for their loyalty and labor. For these
organizations, competency-based human resource systems provide a vehicle for assessing
needs and developing the necessary competencies.
• Changed the measure of success. For organizations looking to de-emphasize “ladder-
climbing” and title acquisition, competencies have introduced a new way to measure
success. While broadbanding tends to de-emphasize titles and levels, it fails to offer a
replacement for them. Competencies can provide a substitute measure or indicator of an
individual’s growth and performance success.
• Provided a spark for creating and sustaining a culture of learning. Many organizations
believe that competencies enable them to develop and sustain a culture where people want
to learn and develop. Competencies can help clearly identify a roadmap for success,

©2011 Schoonover Associates. All rights reserved.

3 Competency-Based Talent Management

provide tools for self-development, and reward employees when they acquire and
demonstrate the mastery of relevant competencies.
While these typical outcomes provide substantive benefits to organizations, competency-based
approaches to talent management offer an even more diverse range of advantages for
organizations (see Figure 2).
Figure 2
Organizational Contributions of Competencies

Positive
Characteristic
Impact

External representation of motives that drive individuals to work Motivation

Representation of context-driven success factors (e.g., “boundary
Alignment
conditions”)
Focus on person and work performance requirements vs. job
Performance
accountabilities (i.e., an “engine for change”)
Focus on factors that produce superior results Excellence
Appropriate balance between “what” (goals and job accountabilities)
Balance
and “how” for performance factors
Definitions of the critical few behavioral factors for success Focus
Clear, observable criteria for assessment and development Objectivity
Common behavioral factors required for implementing talent
Integration
management applications/processes
The means by which individuals can develop and improve behavioral
Distribution
targets through support materials linked to competencies
Fair, Supportive
Simple, commonly shared language for coaching conversations
Feedback
A more encompassing set of performance criteria Holistic
Metrics for evaluating effectiveness Measurability

How Competency Models Are Structured

Most organizations frame their competencies using discrete models. Models are groups of
behaviors bounded by a defined work setting (such as job, role, and/or function) and organized
according to themes or topics (competencies) to make understanding and assessment easier.
The nature of models varies depending on whether the organization is defining success for the
following.
• The overall company (that is, the business strategy and/or desired corporate culture).
• A specific function (for example, human resources, finance, sales).

©2011 Schoonover Associates. All rights reserved.

4 Competency-Based Talent Management

• A given role or career level (for example, strategist, integrator, team leader, or individual
contributor).
• A specific job.
Schoonover Associates calls these core, functional, role, and job competencies, respectively.
Figure 3 depicts Schoonover Associates’ competency framework indicating how competencies
vary by both career band or role and functional specialty.
Figure 3
Schoonover Associates Competency Framework

Core Organizational Competencies

Required for excellence across all levels and functions

Leadership Competencies
Success factors that differentiate performance across levels
(e.g., first-level, mid-level, executive)

Functional Competencies
Success factors that distinguish performance in separate functions
Human Resources
Sales / Business

Manufacturing
Research and

Supply Chain
Development

Development

Technology
Information
Marketing

Finance

A number of factors influence which model or part of a model an organization chooses to use in
various applications. Factors include how the competencies will be applied and the resources
the organization has for developing and applying them.
In general, the more specific the model, the more powerfully it can be used to focus and develop
people. However, highly specific models are also more costly to develop and maintain. Often,
organizations create a core and leadership model to communicate the organization’s mission,
vision, and values, and to ensure total organizational alignment. To provide for more powerful
performance development, organizations often create functional or role-based models in highly
leverageable areas. Few organizations develop models for all jobs or levels and functions.
Whatever the nature of the model or models developed by an organization, most organizations
place a premium on brevity. They typically emphasize the five to ten most important
competencies for each model.

©2011 Schoonover Associates. All rights reserved.

5 Competency-Based Talent Management

An Integrated Approach to Talent Management

Competency models are not ends in themselves. They are simply a means to an end—a set of
standards to drive human resource processes. The goal for most organizations is a more
effective, productive work force. Increasingly, organizations are concluding that, to develop a
more effective and productive work force, it is necessary to align and integrate its human
resource systems. Too often, an organization’s human resource systems have been developed
without regard to either the ultimate business strategy or to other human resource systems. The
result has been a poorly focused—or even confused—workforce.
Though competencies were originally developed to focus training and development efforts,
organizations have begun to use competencies in virtually every human resource domain. More
and more organizations are looking to build competencies into each and every practice—a key
attraction to competencies. Competencies can provide the linkage for developing a truly
integrated human resource system. By viewing the entire range of human resource practices as
a set of closely related activities, companies can do the following.
• Align human performance systems design with other process improvements or
reengineering interventions.
• Identify conflicts, synergies, and redundancies among various performance development
processes.
• Clarify, communicate, and continuously improve the performance development system.
Figure 4 illustrates how competencies link to larger organizational issues and a range of talent
management applications. Through hiring and selection, organizations can use behavioral-event
interviewing techniques and scoring checklists to identify individuals who have the
competencies needed to be successful in the organization. In general, the greatest effort is
devoted to identifying individuals with competencies in areas considered to be difficult to
develop or in areas where immediate success is required.
When integrated into the learning, development, and career planning processes, competencies
have been used in a variety of ways. Competency-based curriculum design has been a
mainstream practice for many years. In addition, many organizations have used career planning
across bands or roles. More recently, competencies have been used to develop initiatives
ranging from multisource feedback and assessment to coaching tools and comprehensive
learning frameworks. Through the performance management process, organizations can clearly
communicate the behaviors important to individual success. They can also help individuals see
how well they demonstrate the competencies and develop plans for individual improvement.
Competency-based human resource planning is an emerging area with potential for producing
significant improvement in organizational effectiveness. Currently, firms are using competencies
primarily in the following situations.
• Succession planning (e.g., to “rank” candidates according to competencies for a targeted
position; to create bench strength; or to focus development of high-potential talent).
• Management resource reviews (e.g., evaluating total team talent for strengths,
vulnerabilities, and development needs).
• Staffing decisions.

©2011 Schoonover Associates. All rights reserved.

6 Competency-Based Talent Management

Figure 4
Competency Implementation System

However, selected organizations are increasingly collecting and analyzing competency

evidence more rigorously to create a more data-driven approach for implementing talent
management processes. Finally, through the compensation systems, organizations can reward
individuals for demonstrating and developing the competencies the organization says are
important to success. In other words, the organization can reinforce what it says with some
tangible action.
Perhaps the most important distinction between competency-based performance management
systems and conventional systems is one of underlying philosophy. Many organizations with
conventional performance management approaches focus performance management narrowly
on operational goals and/or the steps that lead up to and include performance appraisal. By
contrast, organizations that use competency-based approaches to performance management
are more likely to view performance management as the foundation for a systematic approach
to leveraging human resources and as the cornerstone of an overall performance development
process that also includes the following.
• Hiring and selection
• Team assessment
• Development and career planning
• Coaching and mentoring
• Self-directed team learning

©2011 Schoonover Associates. All rights reserved.

7 Competency-Based Talent Management

• Courseware focused on competency development

Changing Roles of Manager and Employee

For many organizations, competency-based talent management also means a change in the
roles typically played by managers and employees. In a conventional performance development
process, the manager is typically viewed as a supervisor or counselor. In a competency-based
approach, the manager’s role can be changed to one of coach and facilitator. Managers commit
themselves to providing employees with formal training, coaching, and competency
development activities.
The employee’s role changes, too. In conventional systems, the employee plays a somewhat
passive role. In many competency-based approaches, however, the employee is expected to
become a more active partner who takes much more responsibility for his or her development.
Competencies provide a clear road map of accountabilities and opportunities for personal
change. No longer does the employee need to wait for the manager to define expectations and
create development plans. Expectations are specified by the competencies; strengths and
weaknesses can be determined through team feedback; and individual action plans can be
created without relying on the manager. Managers can act—and be seen by employees—as
resources, offering ongoing feedback and helping to ensure continued progress toward
achieving company goals.
For many organizations, this role change is critical to future success, since increasing spans of
control often make it impossible to manage employees the old way.

The Future: What to Expect

Although the structure and content of competencies has received significant attention in recent
years, organizations have focused less on translation into talent management applications and
implementation strategies. Recent studies by various groups focusing on this topic highlight that
competency applications vary widely. Most organizations start with developmental and hiring
interventions and progress toward more formal applications such as performance management,
succession planning, and compensation.
Our own studies of competency initiatives indicate that successful programs use more
integrated approaches to competency implementation; provide tools and job aids to managers
and team members; and apply structured change management principles during rollout. Clearly
an individual practitioner can take the initiative to adapt existing competencies as his or her own
standards for assessment and development. However, implementing competencies in multiple
applications across an enterprise constitutes a large-scale change and requires significant
resources and time. In other words, clarifying the critical success factors or competencies
required for the success of individuals is a necessary, but not sufficient aspect of organizational
transformation.
Individuals and organizations too often focus on defining the specific behaviors that support
excellence, neglecting barriers to change such as cultural, structural, process, and learning
systems issues. In practice, six key factors characterize settings that support successful long-
term implementation of competencies.

©2011 Schoonover Associates. All rights reserved.

8 Competency-Based Talent Management

• Relevance. Approaches that work answer specific, well articulated, highly felt needs of
users, employing tools and approaches that have practical, day-to-day impact. In other
words, lasting implementations are customer-driven.
• Alignment. Competencies are designed with the intent to support the organization’s vision,
strategy, and key capabilities. In the most successful settings, they are actively applied to
help individuals understand how their own behavior supports vision and strategies.
• Integration. Competency initiatives that produce the most significant change are applied
systemically across a range of human capital management processes. Impact correlates
with the number of applications encompassed in a common framework.
• Distribution. Competency standards alone have little impact. They must be actively
communicated and highly accessible (often on Web portals or within IT applications).
• Practicality. Competency models and systems frequently fail because they are too complex
or require an unsustainable level of sponsorship or program support. Implementations that
work best focus on the development of simple models embedded in tools that can be
applied day to day by users with relatively little ongoing support.
• Acculturation. Installing competencies should result in a significant, lasting organizational
change. Too often organizations define and introduce new standards without a plan for
sustainability. Competency programs that work become part of the culture and the mindset
of leaders through repeated application and refinement over a significant period (years, not
months). Competencies become a philosophy for raising the bar, producing accountability
and empowerment, and ensuring continuous feedback and development.

As with all large-scale change initiatives, successful implementation of competencies depends

primarily on designing and sustaining a consistent process. Failure to make a major impact is
frequent. In contrast, initiatives that work consistently include a series of stages and typical
activities. In practice, even effective implementations are never a linear process marked by
steady progress. Rather, most competency programs encounter typical stumbling blocks during
rollout. Often, initial optimism is followed by sagging commitment in the face of competing
priorities. If early adopters are identified and enlisted to apply competencies and if early
successes are communicated widely, programs commonly make significant, early impact. Wider
effects generally require the support of an organized change team and operational sponsors
who bridge inevitable setbacks in application.
Finally, predicting the future is a risky business, but in this case our crystal ball seems very
clear. We believe that more and more organizations will be implementing competency-based
applications, and that organizations with existing models will be looking for more effective ways
to deploy them for greater overall impact. The reasons are self-evident.
• As organizations get the last ounce of productivity improvement out of business process re-
engineering, they will need to turn to the asset they have ignored over the past decade, the
human asset, if they are to gain greater productivity enhancements.
• Competency-based human resources systems have the capacity actually to drive
organizational change rather than simply to enable it to take place.
• Competency development provides a useful alternative to the job progression that many
organizations are seeking as they delayer, broadband, and otherwise de-emphasize the job.

©2011 Schoonover Associates. All rights reserved.

9 Competency-Based Talent Management

• Competency-based tools offer a more effective method for targeting and leveraging a broad
range of self-directed activities that actually produce personal change.
It is necessary, however, to navigate some potential obstacles to widespread use.
• First is the need to streamline the model-building process. In the past, organizations spent
thousands of dollars and countless hours of staff time creating competency models without
any tools or processes for applying them. This was a waste of time and money. For
competency-based systems to become more widely used, organizations must be able to
develop models faster, and at a fraction of the cost. This is why Schoonover Associates
often prefers to use its process of rapid model prototyping. It enables organizations to spend
the majority of time and effort where it belongs: on tools, processes, and implementation.
• Second, organizations need effective practices for implementing competency-based
systems. Too often, models are not translated into practical applications that can be
sustained. Simple, user-friendly tools must provide help for managers and individuals with
their day-to-day human resource problems and opportunities.
• Third, organizations need to focus most attention not on model content, nor how to
document or handle the employee record or data, but on what will optimize human behavior
change—fully motivated, self-directed employees and managers who can conduct
thoroughly expressed, collaborative, continuous coaching conversations.
These obstacles are being overcome as more and more organizations develop and implement
competency-based human resources systems. We see competency use expanding significantly
over the next decade, especially as organizations become more aware of best practices and
see the power of using competencies as an integrating vehicle for all talent management
systems.

©2011 Schoonover Associates. All rights reserved.