Journal of Management Development

Can competencies at selection predict performance and development needs?

Anna Sutton, Sara Watson,
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needs?", Journal of Management Development, Vol. 32 Issue: 9, pp.1023-1035, https://doi.org/10.1108/
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Performance and
Can competencies at selection development
predict performance and needs
development needs?
Anna Sutton and Sara Watson 1023
Business School, Manchester Metropolitan University, Manchester, UK
Received 21 February 2012
Revised 12 December 2012
Abstract 8 April 2013
Accepted 9 April 2013
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Purpose – The purpose of this paper is to explore the utility of an organisation-wide competency
framework, linking competency ratings at selection to later development needs and job performance.
Design/methodology/approach – Candidates’ scores at a management selection event were
compared to their performance appraisal scores on the same competencies six to 12 months
later (n ¼ 58). Scores on numeracy and profit and loss tests were also collected at the selection event
and related to subsequent performance (n ¼ 207) and development needs.
Findings – Competency ratings at performance appraisal were significantly lower than at selection
interview. Correlations between ratings at interview and at performance appraisal were generally
weak, though one (Understanding the Business) showed significant relationships with five of the seven
performance appraisal competencies. In addition, competency ratings were related to employee
turnover and managerial development needs.
Research limitations/implications – Although competencies were clearly defined, inter-rater
variations may have occurred which obscure the relationships. However, it is of interest that a single
competency at selection (Understanding the Business) seems to have the greatest effect on
performance, employment outcome and development needs.
Practical implications – A competency framework that is embedded in both selection and
performance ratings can provide the organisation with a clearer understanding of what determines
managerial success, as well as informing better selection decisions. This study also raises the issue
that performance ratings may be influenced more by a manager’s ability to understand the business
than by any other competencies.
Originality/value – The use of a longitudinal design provides unique evidence of the relationship
between competency ratings at selection and later performance, employment outcome and development
needs.
Keywords Development, Selection, Competencies, Manager
Paper type Research paper

Introduction
Competency frameworks are often proposed to provide a practical way for an
organisation to integrate its HR practices across the employee life cycle, from selection
through training and development, to performance appraisal and promotion. Using an
integrated framework is purported to enable the organisation to strategically deploy
its human capital to meet business objectives. This study explores the utility of
a competency framework embedded throughout selection and performance appraisal
processes, identifying the organisational advantages accrued as well as highlighting
some of the difficulties in practical application.
The growing emphasis on strategic HR management during the 1990s resulted in
pressure on HR to reduce costs, improve its services, increase its impact and provide Journal of Management Development
Vol. 32 No. 9, 2013
a more satisfying work experience for its own employees (Kochanski and Ruse, 1996). pp. 1023-1035
Process and competence emerged as key factors in how the HR function was organised. r Emerald Group Publishing Limited
0262-1711
The idea of measuring “competence” rather than intellectual ability or cognitive DOI 10.1108/JMD-02-2012-0032
 JMD function originated with McClelland’s (1973) call for a more criterion-based approach to
32,9 assessing people’s abilities than the intelligence tests which at the time were popularly
accepted as the best means of identifying individual potential and ability. While
definitions of what a “competency” actually is may differ somewhat, there is good
consensus that competencies are characteristics of an individual that underlie effective
or superior performance (Boyatzis, 1982). Their usefulness and popularity lie primarily
1024 in the way they capture a range of individual characteristics in a performance-focused
manner, incorporating not only what a person can do, but what they want to do
(Ryan et al., 2009).
Matching employee competencies and job requirements is claimed to improve
employee and organisational performance, as well as lead to increased satisfaction
(Spencer et al., 1992). Special issues of this journal have been devoted to developing
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both theoretical understanding and practical applications of competencies in organisations

in both the USA (volume 27, issue 1) and the EU (volume 28, issue 9). Boyatzis (2009) noted
the value of this series of papers in exploring the link between competencies and
performance: a relationship which relatively few published studies have addressed. This
study seeks to extend and build on this work by reporting on the relationship between
managers’ competency ratings at selection and later, at performance review.
While there are many different approaches to defining managerial competencies,
one of the most valuable is to identify those behaviours which distinguish “superior”
from “average” managers. As McClelland (1973) pointed out when first recommending
this approach to the study of individual effectiveness, behavioural analysis requires
both theoretical and practical sophistication. An example of this approach is given by
Cheng et al.’s (2005) study of project managers in the construction industry. A list
of performance excellence measures were drawn up by focus groups of key
stakeholders and used to identify a group of “superior” and a group of “average”
managers. Interviews with the “superior” managers were used to identify the
competencies associated with higher performance. Subsequently, all managers were
interviewed using a critical incident technique and the transcripts analysed and
individuals scored on the competencies. The results indicated that superior managers
could be distinguished from average managers on 12 competencies. This study had the
advantage that the competency framework was linked to performance measures,
however, it could be argued that extracting the competencies from a previously identified
group of higher performers may have falsely inflated the scores of that group in the
subsequent interviews. Interestingly, while Antonacopoulou and FitzGerald (1996)
commented on the difficulty of describing a universal set of manager competencies more
than two decades ago, Cheng et al. noted that there is clear cross-mapping of competencies
between different industry sectors. They suggested instead that a behavioural
competency model for managers may be sufficiently abstract to be applicable across
different types of management jobs, although they do caution that job-task-specific
competencies will still be important to success.
While there is evidence that competencies capture important contributors to
individual managers’ performance, another important question is the extent to which
they contribute to organisational performance. A longitudinal study of top-level
executives showed that different sets of competencies were associated with high
performance at different time points, and that candidates who were selected using
a competency-based system were estimated to increase annual organisational profit
by $3 million each. Henderson (2008), in a survey of over 500 respondents, found that
managers’ communication competency made a significant contribution to their teams’
 productivity and satisfaction, although it was noted that geographical dispersion had Performance and
a negative impact on the team members’ perceptions of their manager’s competency. development
This again underlines the issue that it is important to contextualise management
competencies when using them as a measure of managerial effectiveness. needs
The importance of context in both defining and using competencies is further
explored in a study of competency-based assessment centres for the selection of the UK
judges (Kirton and Healy, 2009). This study noted that while using competencies in 1025
selection had the potential to increase diversity in a very homogenous workforce, that
the competencies themselves were socially constructed and that measurement, while
seeming objective, is dependent on subjective judgements by assessors. This criticism
of the competency approach should be borne in mind throughout the following paper.
While competency criteria were initially designed for specific applications,
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competency frameworks that can be applied across the full range of human resource
processes are now emerging. Young and Dulewicz (2009) identified four competency
clusters which were associated with higher performance in naval officers and
described how this competency-based approach was subsequently used as the basis
for selection, training and development in management and leadership in the British
Royal Navy. The current study investigates the next step in organisational implementation:
evaluating the utility of a competency framework across the employee life cycle.
The competency framework has been recognised for its practical applications in the
assessment of candidate suitability to a particular role, along with assessment of
effectiveness post-appointment (McBeath, 1990). Indeed, Soderquist et al. (2010, p. 326)
refer to competency as lying at “the heart of HRM” allowing horizontal and vertical
integration of HR activities with each other and with organisational strategy.
A competency framework within an organisation may be used to structure selection
processes, training and development programmes and performance appraisal
templates, providing an integrated and coherent approach to the management of an
organisation’s human capital.
The advantages of implementing integrated competency frameworks within and
even across organisations have been demonstrated in several different industries
and countries. A framework developed for diabetes nurses, for example, outlines how it
can provide a career structure, assist in business planning and allocation of resources,
allow benchmarking of practice across different sites and even help to standardise
practice across different countries (Hill, 2011). Beyond the requirements of a particular
role, a competency framework is also an effective way of identifying and encouraging
behaviours and capabilities within the organisation that can enhance competitive
advantage but are not specifically tied to a particular job role, such as with corporate
entrepreneurship (Hayton and Kelley, 2006). Ryan et al. (2009) describe how a
competency framework was used to compare performance within and across different
organisations, highlighting the relative importance of different competencies in
predicting performance in two organisations. The authors used critical incident
interviews to identify and code for behavioural evidence of the competencies, and
compared superior to average performers. While this study was not able to assess
performance using an objective measure, it demonstrates how some competencies
(such as team leadership) are associated with higher performance across different
samples while others are more specific to the context.
Finally, an integrated competency-based approach to management has the benefit
of improving the transparency of HR processes, fostering employee respect and
creating a better work environment (Bonder et al., 2011).
 JMD Once the organisationally required competencies have been identified and defined,
32,9 one of the main areas of application for the competency framework is in the selection
interview to ensure as far as possible that candidates who can contribute to the overall
business objectives are chosen. Nearly all European employers interview prospective
staff (Dany and Torchy, 1994), and a review by Judge et al. (2000) provided support for
the continued use of the employment interview in selection, despite the range of
1026 validity coefficients being reported by past researchers. Several methods for improving
the effectiveness of interviews have been suggested. For example, Taylor and Small
(2002) noted that using a descriptively anchored rating scale in the interview process,
such as is often used in competency assessment, could increase validity estimates to 0.63.
In addition, Schleicher et al.’s (2002) comprehensive examination of the construct
validity of an assessment centre found that frame of reference training was effective
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at improving the reliability, accuracy, convergent and discriminant validity and the
criterion-related validity of assessment centre ratings.
A second application of the competency framework is in the performance appraisal,
a process of identifying, observing, measuring and developing human performance
in organisations (Carroll and Schneir, 1982). While there has been discussion over the
accuracy of performance ratings, with some authors suggesting, for example, that
supervisory affective regard can skew ratings (Lefkowitz, 2000), and others arguing
that affective regard can be seen as a function of ratee performance (Cardy and
Krzystofiak, 1991), there have been clear demonstrations that, similarly to selection
interviews, rating accuracy can be improved using frame of reference training (Sulsky
et al., 2002).
Making use of up to date understandings of competency definition, rating and
accuracy, a competency framework that is embedded throughout the organisation has
the potential to bring large returns in terms of the management of talent. Using the
same competencies for both selection and later performance appraisal, and then
making comparisons of individual’s scores provides an effective means of evaluating
HR functions as well as individual development. Identifying competency ratings
at interview that are associated with later work outcomes such as increased likelihood
of turnover, potential for further development and promotion, and higher levels of
performance would be invaluable in assessing the utility of competency frameworks.
This study seeks to explore the benefits or drawbacks of an organisation-wide
competency framework, by addressing the following questions in a longitudinal study:

RQ1. Are competency ratings at the selection stage related to performance ratings
once the candidate is in post?

RQ2. Is it possible to identify, at the selection stage, competency ratings that are
associated with higher turnover?

RQ3. Can a competency framework provide a tool for identifying training needs for
future promotion?

Method
Organisational context
The study was carried out within a single organisation, a leading operator of managed
pubs and pub restaurants in the UK with 16 brands in its portfolio, which has recently
adopted a single competency framework throughout its different locations. Historically,
 the organisation had been divided into two groups which each had its own competency Performance and
framework. The Restaurant group used the Covey framework (Covey, 1989) and development
the Pubs and Bars group used a framework developed by a consultancy firm. This
consultancy exercise was completed before the time of the research reported in this needs
paper but essentially involved the development of competencies using a combination of
the two common approaches identified by Mansfield (1996): beginning with a one-size-
fits-all approach, the consultancy then customised and reviewed the competencies to 1027
ensure they captured high performance in the specific organisation and reflected the
language of the organisation.
Over time, however, the distinction between the Pubs and Bars and the Restaurant
groups had become blurred and after an organisational restructure combined the
groups, there was a need for a single competency framework. The two sets of
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competencies were mapped against each other by the HR department in consultation

with senior managers and it became clear that the competencies in each framework
were essentially the same, with similar behavioural descriptors, but just worded
slightly differently. The decision was made to use the Pubs and Bars competency
framework as it had been developed specifically for the organisation. Buy-in was
reasonably high as the customisation of the new framework drew heavily on the
pre-existing and accepted competencies from each division. This single competency
framework was then used for future selection events and performance appraisals.

Data collection
Structured one-to-one selection interviews for management roles were carried out by
trained interviewers as part of a longer recruitment day and typically lasted 45-60
minutes. The interview questions followed the experience-based format that Krajewski
et al. (2006) reported as producing a validity coefficient of r ¼ 0.32, po0.01. Performance
appraisals were carried out by line managers, 6-12 months after recruitment, using the
same competency definitions as at selection but without structured interview questions.
Ratings from the selection interviews were drawn from the recruitment database, while
performance appraisal ratings were requested directly from line managers.
Unfortunately, we did not have access to details of the raters at each stage and so
were unable to test inter-rater reliability. It should therefore be noted that differences
between individuals and indeed between ratings at different times may be subject to
inter-rater error. However, both selection raters and line managers had received
briefings and coaching sessions to try and ensure reliability in interpretation and use of
the competency ratings. This study, therefore, should be seen as an assessment of the
realities of competency ratings within most organisations.

Measures
The seven competencies assessed in the selection interview and performance appraisal
were: Understands the Business (UTB), Building the Business (BTB), Focusing on the
Guest (FOG), Leads to Win (LTW), Building Capability (BC), Lives the Values (LTV)
and Making it Happen (MIH). Descriptions of the competencies are given in Table I and
candidates were assessed on a scale from 1 (little or weak evidence of this competency)
to 5 (excellent, strong evidence of this competency), with a zero allocated if a candidate
failed to provide any evidence for that competency.
Candidate scores on Numeracy and Profit and Loss tests, developed with an
external consultancy a number of years ago, were also collected at selection.
The Numeracy test consisted of 19 items with a maximum total score of 20 points, and
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32,9
JMD

Table I.
1028

competencies
Definitions of
Competency Abbreviation Description

Understands the UTB Understands and applies commercial and financial principles, and views issues in terms of sales, costs, profits and
Business markets. Demonstrates an ability to work with and interpret numerical information. Is profit conscious and appreciates
the commercial impact of activities on business profits. Is aware of competitor activity and market trends. Seeks out
information on guests, markets and competitors, and commits to keeping up-to-date with market and industry
developments
Building the BTB Focuses on new business opportunities and activities that will build the business and bring the largest return. Is focused
Business on maximising business return and understands key business drivers. Utilises appropriate selling techniques that are
consistent with the brand/offer. Shows a commitment to brand/offer goals and standards and follows through to ensure
that these are delivered in running and building the business
Focusing on the FOG Is committed to meet and exceed guest expectations by providing a prompt, efficient and courteous service and going the
Guest extra mile. Reinforces the importance of providing personalised service to guests without compromising the brand/offer
and business offerings. Quickly builds rapport with guests and works hard to exceed their needs. Develops and
maintains professional relationships with guests. Encourages a guest service orientation within the business
Building Capability BC Actively seeks to improve the capability of individuals and teams by providing coaching and development opportunities.
Identifies developmental needs, arranges appropriate learning experiences and motivates people to develop themselves.
Values teamwork and ensures the practical needs of teams are met. Builds and aligns teams with the vision of the brand/
offer and the business and organisation, and supports and fosters effective teamwork
Leads to Win LTW Provides the team with a clear sense of direction and takes time to explain to individuals how they can contribute to the
business goals. Takes charge, organises resources and steers others towards successful task accomplishment. Creates
empowering conditions that enable individuals and teams to achieve their goals. Enthuses and motivates others by
providing a clear sense of purpose, inspiring a positive attitude towards work, and arousing a strong desire to succeed
amongst team members. Communicates clearly and persuades others around to their point of view
Lives the Values LTV Maintains high ethical standards and acts in a way that is consistent with the organisational and business values. Shows
integrity and fairness in dealings with others and is reliable and trustworthy. Is committed to the achievement and
maintenance of quality. Encourages organisational and individual responsibility towards the community and the
environment. Actively promotes compliance with legal and safety requirements, and demonstrates commitment to the
organisation
Making it Happen MIH Takes responsibility for actions, projects and people, initiates action and generates activity. Delegates work effectively
and monitors progress against delegated activities. Maintains high professional standards and shows commitment to the
organisation and building the success of the business. Drives projects along, gets results and ensures that key business
objectives are met. Utilises planning skills to identify actions and objectives and clearly articulates them. Schedules
activities to ensure optimum use of time and resources. Shows enthusiasm and maintains energy and commitment in the
face of setbacks and pressure
 included simple mental arithmetic. The Profit and Loss test consisted of 13 questions Performance and
for a maximum total score of 20 points and items covered calculation of profit margins development
and understanding of profit and loss sheets, for example: How has the outlet performed
this year against its Managerial Profit Budget? needs
Sample
Scores from the recruitment day were available for a total of 207 employees (73 per cent 1029
male). Data were also collected on the current employment status of these employees:
whether they were still in employment with the organisation (n ¼ 127) or had left
(n ¼ 80). The main analyses were conducted on the sub-sample of employees for whom
both selection interview performance appraisal ratings were available (n ¼ 58, 81 per
cent male). At the time of the performance appraisal, 45 per cent of these were assistant
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managers, 45 per cent were general managers and the remainder in “holding” or
“designate” manager roles.

Results
Table II shows the descriptive statistics and correlations for all variables.
Competencies at each assessment time were all significantly inter-correlated.
The mean competency rating during appraisal was 3.19 (SD ¼ 0.58), lower than in
the interview (mean ¼ 3.57, SD ¼ 0.51). Comparison using paired t-tests indicated that
this difference was highly significant (t57 ¼ 4.41, po0.001) and had a large effect size
(partial Z2 ¼ 0.25).
To investigate RQ1 (Are competency ratings at the selection stage related to
performance ratings once the candidate is in post?), bivariate correlations were
calculated for corresponding interview and performance appraisal competencies.
The results showed that these were generally weak, with only UTB demonstrating
a significant correlation (r ¼ 0.33, po0.05). Interestingly, scores on this competency
at selection were significantly correlated with ratings at performance appraisal of FOG
(r ¼ 0.30, po0.05), LTW (r ¼ 0.31, po0.05), BC (r ¼ 0.34, po0.01) and MIH (r ¼ 0.37,
po0.01). In addition, interview FOG was significantly related to appraisal BC
(r ¼ 0.31, po0.05), and interview MIH was significantly related to appraisal FOG
(r ¼ 0.30, po0.05).
Table III shows the means and standard deviations for ratings at selection
interview, split by current employment status (leavers and those still at the organisation).
To address RQ2 (Is it possible to identify, at the selection stage, competency ratings
that are associated with higher turnover?), one-way ANOVA was conducted to compare
leavers’ scores with the scores of those still in employment. Results demonstrated that
leavers were rated significantly lower than active employees at the selection stage on
three competencies: UTB (F(1,205) ¼ 3.92, po0.05), BC (F(1,205) ¼ 5.12, po0.05)
and MIH (F(1,205) ¼ 4.71, po0.05). In contrast, Numeracy (F(1,205) ¼ 1.93, p40.05) and
Profit & Loss ( F (1,201) ¼ 2.13, p40.05) scores were not significantly different between
the leaver and active employee groups.
Finally, stepwise discriminant analysis was conducted on the selection interview
competency ratings to explore RQ3 and determine whether job role (assistant manager,
general manager or holding manager) could be distinguished by selection criteria.
A single function emerged with an eigenvalue of 0.37, explaining 98 per cent of the
variance ( Wilks’ l ¼ 0.725, w2(6) ¼ 60.7, po0.001), and containing three variables:
Profit and Loss, UTB and BC. The standardised discriminant function coefficients
demonstrate the unique contribution of each independent variable to the function and
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32,9
JMD

1030

Table II.

for all variables

correlation co-efficients
Means, SD and Pearson
Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

1. Numeracy 4.07 0.915

2. Profit and Loss 2.91 0.786 0.360**
3. Int UTB 3.45 0.841 0.028 0.249
4. Int BTB 3.52 0.778 0.023 0.248 0.444**
5. Int FOG 3.66 0.664 0.069 0.251 0.533** 0.522**
6. Int LTW 3.72 0.790 0.095 0.020 0.348** 0.408** 0.518**
7. Int BC 3.55 0.680 0.022 0.160 0.327* 0.380** 0.585** 0.550**
8. Int LTV 3.50 0.682 0.084 0.184 0.275* 0.430** 0.504** 0.554** 0.378**
9. Int MIH 3.62 0.721 0.199 0.159 0.285* 0.325* 0.418** 0.521** 0.398** 0.464**
10. PA UTB 3.13 0.798 0.048 0.329* 0.330* 0.074 0.235 0.026 0.060 0.024 0.056
11. PA BTB 3.04 0.938 0.004 0.031 0.175 0.065 0.038 0.135 0.127 0.075 0.193 0.391**
12. PA FOG 3.25 0.768 0.175 0.184 0.299* 0.220 0.258 0.217 0.235 0.176 0.301* 0.519** 0.387**
13. PA LTW 3.06 0.636 0.219 0.294* 0.309* 0.024 0.012 0.001 0.043 0.172 0.064 0.616** 0.525** 0.364**
14. PA BC 3.18 0.730 0.309* 0.260 0.337** 0.188 0.312* 0.164 0.184 0.150 0.183 0.592** 0.655** 0.481** 0.695**
15. PA LTV 3.29 0.744 0.228 0.212 0.235 0.067 0.084 0.114 0.091 0.052 0.047 0.556** 0.535** 0.522** 0.611** 0.660**
16. PA MIH 3.23 0.774 0.248 0.269* 0.370** 0.085 0.244 0.025 0.133 0.122 0.160 0.567** 0.370** 0.505** 0.529** 0.653** 0.662**
Notes: I, Interview; PA, Performance Appraisal; UTB, Understands the Business; BTB, Building the Business; FOG, Focusing on the Guest; LTW, Leads
to Win; BC, Building Capability; LTV, Lives the Values; MIH, Making it Happen. *po0.05, **po0.01
 were as follows: Profit and Loss ¼ 0.52, UTB ¼ 0.45 and BC ¼ 0.5. The discriminant Performance and
function was able to classify cases correctly 55 per cent of the time. assistant managers development
could be distinguished from general managers very well, scoring lower on the
combination of competencies captured by this function, while general manager needs
designates were intermediate between the two (Table IV).

Discussion 1031
This study aimed to explore the potential benefits or drawbacks of a single competency
framework being utilised across the organisation. First, we identified the extent to
which competency ratings at selection were related to performance in post. In this
study, a single competency at interview (Understanding the Business) was positively
related to five of the seven competencies at appraisal. It seems that an individual who
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is skilled in understanding the business is likely to outperform his or her colleagues

on all the other competencies as well. In a similar vein, Haurani et al. (2007) found
that communication and professionalism were related to higher scores on other
competencies. A burgeoning area of research in selection interviews is their use in
assessing Person-Organisation Fit, and in their review Judge et al. (2000) highlight
how the interviewer’s judgement of P-O fit may be based candidates’ personal
characteristics, such as congruence between their career goals and the organisation’s
business goals. Clearly, an applicant with a greater understanding of the business
would be able to demonstrate this congruence more effectively and therefore may well
be perceived as having greater fit. Taken together, these results indicate that there may
be a critical competency (or two) that determine an individual’s success in an
organisation. Although it waits further investigation, it may be that an individual’s
understanding of the requirements of the organisation, whether this is industry-
specific knowledge or an understanding of how high-performing individuals in that
organisation tend to behave, is an important component of demonstrating his or her
competence across the range of criteria an organisation uses to assess performance.

Function 1

Assistant manager 0.561 Table III.

General manager 0.682 Functions at
General manager designate 0.444 group centroids

Still employed (n ¼ 127) Left organisation (n ¼ 80)

Mean SD Mean SD

Numeracy score 4.01 0.930 3.83 0.911

Profit and loss 2.93 0.879 2.74 0.938
Interview – UTB 3.53 0.898 3.28 0.886
Interview – BTB 3.56 0.720 3.41 0.724
Interview – FOG 3.76 0.672 3.63 0.603
Interview – LTW 3.69 0.753 3.61 0.720
Interview – BC 3.61 0.680 3.38 0.769 Table IV.
Interview – LTV 3.60 0.759 3.54 0.655 Selection data by
Interview – MIH 3.63 0.722 3.41 0.669 employment outcome
 JMD The study also found that the combined means for interview and appraisal
32,9 competency ratings were significantly correlated and had a large effect size, a result
comparable with those found by previous researchers ( DeGroot and Kluemper, 2007;
Hermelin et al., 2007), though there remains a question mark over whether the selection
interview is as strong a predictor of future performance as hoped (e.g. Cook, 2009).
Overall, appraisal ratings were lower than selection interview ratings. This could be
1032 due to either exaggeration during the selection process (many candidates now are
comfortable with competency-based interviews and understand how to sell themselves
well), the influence of other work-related factors on day-to-day performance or how the
competencies are understood by selection interviewers and line managers.
Of further note is the high inter-correlation between competencies measured at the
same time, possibly representing the well-known halo effect (see e.g. Haurani et al.,
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2007). Although the training provided to raters at both selection and appraisal would
hopefully mitigate against these problems somewhat, it is worth considering how
useful it is to continue to measure seven different competencies in this organisation.
It may be that a single, overall rating is of more use. A similar finding was reported
by Haurani et al. (2007) in their study of competency ratings of medical residents,
which found high inter-correlations between the competencies they studies. They
suggest that raters may not be able to differentiate between the competencies when
rating performance, but rather give an overall rating of performance.
Second, it was found that ratings at selection interview were related to employment
outcome, with leavers scoring significantly lower on three competencies
(Understanding the Business, Building Capability and Making it Happen) than
those who stayed in employment with the organisation. This highlights the utility of
a competency framework in evaluating and improving HR processes: using well-defined
and developed competency ratings allow the organisation to improve selection
decisions. In future, the organisation may wish to focus more on ratings of these three
competencies when selecting candidates in order to save on replacement costs for
leavers. Alternatively, by conducting exit interviews with leavers, the organisation
might be able to clarify whether training in these three competencies for new job-
holders would be of benefit in retaining employees or whether employees were leaving
for reasons not captured in the competency ratings.
The savings made in improved selection decisions are not the only benefits of
a single competency framework. The construction of a competency framework itself
is a time consuming process, and there is an obvious saving in resources if a single
framework can be used for three major aspects of the HR process, namely selection,
appraisal and identification of training needs. In addition, the use of a single
framework will allow the employees to become more familiar with the organisations’
expectations and to demonstrate their competence more effectively. A single framework
can also more easily be revised and updated in line with changing organisational needs
and strategy, giving the organisation greater flexibility.
Finally, the results demonstrated that the competency framework in this study was
also useful in identifying training and development needs. General managers had
higher scores at selection than assistant managers on: Profit and Loss understanding,
Understanding the Business and Building Capability. This identifies which competencies
future training and development should focus on if the organisation wishes to
develop its current assistant managers to fill general manager roles. Development
focused specifically on helping assistant managers to understand the business and
its requirements is likely to help the organisation to develop its talent from within.
 Given that our previous results indicated that understanding the business is important Performance and
to high performance in this organisation, developing talent within the organisation development
rather than trying to bring it in from outside is likely to be the best approach. It would
be interesting to see if similar research in other organisations showed the same results. needs
Although the findings of this study are very promising, identifying clear benefits to
the organisation in terms of maximising and building on its talent, the results should
be understood in context. The organisation studied for this research had historically 1033
had a clear split in culture and operations between two divisions and had recently
attempted to bring them together, partly through the use of a combined competency
framework. The raters had all received training in how to interpret and use the
competency framework, but there is still the possibility that there was some
unfamiliarity with the competencies. In addition, as mentioned above, the large number
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of interviewers and appraisers mean that there could be issues with inter-rater
reliability. While it is important to bear this limitation in mind, we believe the results
still provide a valuable assessment of the realities of using an organisation-wide
competency framework where there may well be differences between raters at different
time points in the employee cycle. Further research is needed to identify the impact
of these inter-rater differences on ratings at different points in an individual’s
employment. We also acknowledge that these performance appraisal ratings are not
direct measures of managerial performance. However, they are the ratings that the
organisation itself uses to measure performance and as such represent an important
dimension of managerial success.
In summary, this study demonstrates that an organisation with a single competency
framework underlying both selection and performance appraisal can use the information
it gathers to manage its talent more effectively. The framework has been shown to
provide an efficient and practical method for identifying training and development needs
and improving selection decisions.

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About the authors

Dr Anna Sutton is a Senior Lecturer in Organisational Behaviour at the Manchester Metropolitan
University Business School. With her background in occupational psychology, her main research
interests are in the role of personality and self-awareness in the workplace. Dr Anna Sutton is the
corresponding author and can be contacted at: a.sutton@mmu.ac.uk
Sara Watson is currently the Organisation Development Manager for Jaguar Landrover and
moved to the automative industry after spending four and a half years with Mitchells & Butlers
Plc as a Recruitment Manager, Learning & Development Manager and HR Business Partner.

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