How To Build A Competency-Based Talent Management System

How To Build A Competency-Based Talent Management System
Presented by Darin Phillips at the 2004 Gulf Coast Symposium on Human Resource Issues
Agenda
Competencies Applications Profiling Assessing
Talent Management
2004 Gulf Coast Symposium on Human Resource Issues Session 404: How to Build a Competency-Based Talent Management System
What is a Competency?
Behavioral or technical skill, attribute (e.g. intelligence), or attitude (e.g. optimist) Measurable and/or observable Related to success at work (competent) or failure at work (incompetent) 60%
Building a Model
Critical Incident Debrief 360 Expert Discussion Compare Assessment to Performance Buy one
Commercial Interpersonal Models

85% of all models include the same content DDI developed over 30 years of research Hay/McBer studied 286 situations and found that same 21 competencies differentiated performance Other research-based models
Lomingers Leadership Architect Center for Creative Leadership (various 360s) Saville Holdsworth Limited (360) Personnel Decisions, Inc.s Successful Manager/Executive Handbook
Other models based on 360 results

Bernard Bass Clark Wilson
Different for Each Level

Individual Contributor Knows Customer Supervisor Manager Executive
Work
Business
Industry
Manages
Work
People
Process
Systems and Org Down
Focus
Up
Up & some Down Shares it
Down & some Up Shapes it
Strategy
Hears it
Creates it
How to Create Value

Effectiveness
Increase revenue Increase productivity Improve quality Improve customer satisfaction
Efficiency
Reduce costs Reduce cycle or delivery time
How Competencies Impact Value

Attract Select Develop Deploy Retain top talent
Reduce costs
Example from Development:

Train 100% of field sales at or below 80% of industry average cost so that Mystery Shopper ratings are no lower than 70% and average 90% in the areas of product knowledge, helpfulness and courtesy.
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Improve customer satisfaction
How Competencies Help HR

Research clearly indicates that HR can add market value to the organization if
HR processes are aligned with and support the business strategy HR processes are excellent, streamlined and integrated HR systems are hard for competitors to imitate
Research also indicates that HR practices can lower shareholder value if

Quality is poor or effort is based solely on theory Results are not measured Potential overshadows performance in HR decisions
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Begin With the End in Mind

ATTRACT
PROFILES
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Attract
THE PROCESS Define Talent Profile - What do these people look like? Determine Location (Internal/External) - Where are they? Target Individuals - Who are they? Develop Attraction Strategy - How to get them on board? Establish Timing - When to bring them in? WHEN TO DO IT Current shortage Future need HOW TO DO IT Current Shortage - Identify key positions where talent bench is thin/non-existent - Identify possible internal fits - Identify reasons for interest/lack of interest in position - Identify possible external fits - Create employment brand with strong performance and talent management reputation Future Needs - Anticipate possible future scenarios - Build future success profile(s) - Determine depth of talent bench for possible futures - Bench Strength available within organization : Target individuals and discuss interest in future possibilities - Bench Strength not available within organization : Select Build/Borrow/Buy/Bind strategy to meet needs
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Select
THE PROCESS Identify Needs - When will I have a need to recruit? Define Talent Profile - What will a successful candidate look like? Determine Location (Internal/External) - Where can I find them? Build Talent Pool How can I get the best of them together? Create Selection Guidelines - How will I make a choice? WHEN TO DO IT Position becomes/will become vacant New position may be required HOW TO DO IT Position Vacancy - Review/Modify position profile - Determine internal availability or need to go to market - Create Recruitment Guide and Candidate Selection documentation
New Position - Define Success Profile - Follow above steps
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Develop
THE PROCESS Identify Needs What do we need to build? Make Investment Decision - Why should we invest in person X? Clarify Outcomes What will be the required outcome of development? Create a Plan What developmental action will be most effective? Manage Learning What will be done to support the required change(s)? WHEN TO DO IT - Poor/Under Performance (Focus on Lagging Capabilities should have had them to start with) - Develop Superior Performers (Focus on Leveraging Capabilities what differentiates high performers) - Prepare individuals for the future (Focus on Leading Capabilities what will they need to be effective in the next position/level) HOW TO DO IT Poor/Under Performance - Identify indicators of poor performance (e.g. Quality of work, Timelines of delivery, etc.) - Translate indicators into development needs/Match against current position profile - Target high impact development interventions (Train, Apply, Feedback, Adjust) - Track change Developing Superior Performers - Identify high performers (have been able to consistently deliver results that exceed expectations) - Build high performer profile/Review profile against research profile for level - Target individuals who are already solid performers and match them against the high performing profile - Develop performance enhancement plans (specifically focused on key competencies) Preparing for the future - Build potential skills - Build for the next level to have more talent from which to select
Deploy
THE PROCESS Identify Needs Do we have the right people in the right place with the right skills doing the right work? Define Timeframe Current performance improvements or future scenario planning? Select Intervention - Performance Management or Talent Management? Define Impact Right people with right skills in right position at the right time? Create a Plan Define the desired outcome and supporting steps? WHEN TO DO IT - Performance not aligned with business direction - Not responding to business changes/needs HOW TO DO IT Performance Management - Cascade SMART objectives down based on company strategic plan - Provide multi-rater ongoing feedback on performance against objectives - Build pay-for-performance pool from business results and distribute accordingly
Responsiveness - Build database of mission critical technical skills, experiences, competencies - Build position and personal profiles using the database - Base build/buy/borrow/bind/bounce decisions on results of what-if scenario reports
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Retain
THE PROCESS Identify Key Talent Who do we need to Bind? Determine Source of Value - What makes them key talent (Scarcity or Mobility)? Manage Future Value How do we maintain their value ? Develop Retention Plan How will/can we keep them? Manage Risk How can we minimize the risk of losing them (Monitor motivation and build back-up)? WHEN TO DO IT - Individuals have a unique/scarce portfolio of capabilities that is highly valued by the business - Individuals have a portfolio of capabilities that makes them extremely mobile across the business HOW TO DO IT Unique/Scarce Portfolio - Use a human capital balance sheet to identify the bench strength of key positions - Identify individuals on that talent bench who stand alone, i.e. they have a good fit to the requirement and there is a large gap between them and the next best fit - Identify possible talent retention strategies and create Talent Back-Up Plan High Mobility Portfolio - Use the mobility index to identify individuals with high mobility (either vertically or laterally) - Target development opportunities for horizontally mobile people to improve vertical mobility For Both : Identify and monitor key retention factors and discuss quarterly at executive level
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Profile Choices
Content
Performance vs. Potential Ability vs. Willingness
Point in Time
Lagging vs. Leveraging vs. Leading
Organizational Slice
Core vs. Level vs. Family vs. Position
Model
Research vs. Expert
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PROFILE: Content
Performance
What an employee can do Knowledge & Education Skills Experience Degree of Proficiency What s/he is willing to do Attitude Beliefs Values & Principles Personality
Potential
What s/he will be able to do Learning capacity Aptitude Intelligence Ambiguity management What s/he wants to do Career goals Interests & Motives
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PROFILE: Content
Performance
Only focus on what can be measured and developed Attract Select Develop Deploy Retain You will probably not change what is almost innate Develop (if possible) Deploy Retain
Potential
Capture and leverage this rare employee Attract Select Develop (if possible) Deploy Retain Capture and use Attract Select Deploy Retain
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PROFILE: Point in Time

Lagging
Improve year-overyear:
1. Develop annual SMART goals (what to do) Define how the goals should have been accomplished (performance improvement profile) Assess performance and look for opportunities to improve next time 1. 2.
Leveraging
Become a highperformer:
Assess all employees Determine highperformer differentiators Compare original assessments to high-performer profile and base development on gap analysis 1.
Leading
Prepare for the coming year:
Develop annual SMART goals (what to do) Define how to accomplish those goals (success profile) Assess employee against the profile and develop skills and competencies required to succeed at goals
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2.
2.
3.
3.
3.
PROFILE: Organizational Slice

Core
what a company does that that results in sustainable competitive advantage (valuable, rare, difficult to imitate)
Level
whether you are managing self, others, process, or the organization
Family
what is unique to similar families of jobs
Position
what is unique to each individual job
23
PROFILE: Models
Research-Based Model
Pro: benchmarks established against proven high performers Con: the job may not accurately reflect one with the same title in your organization, industry, or culture Use When:
No experts are available It is a completely new position with poor defined responsibilities and objectives Validating an expert model
How to:
Use or create software that runs gap-analysis reports from a database of research on your competency model Manually calculate technical or leadership skills from available research
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PROFILE: Models
Expert Model
Pro: built specific to the job requirements and environment Con: takes key stakeholders off the job during building and audit/validation steps Use When:
Position has a clear history (or clearly understood change) and performance objectives High performers have been clearly identified and a 360 pool of raters are available to build and audit/validate
How to:
High-Performer Profile Success Profile
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EXPERT: High-Performer Profile

1. Assess all incumbents using 360 pools. 2. Gather performance data and build standard distribution. 3. Isolate profile characteristics that are unique to the high-performers and threshold-performers. What is in
Top Middle this cell that is not in these cells?
Performance
Bottom
Low Medium
Competencies
High
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EXPERT: Success Profile

1. Gather existing data on past, present, and future of the position
1. 2. 3. Who has succeeded and why Accurate job description that includes education, experience, technical knowledge and skills Annual performance objectives Boss and boss boss Past and present incumbents Direct reports Customer of work (outputs) Vendor of work (inputs) Collaborators HR
2.
Bring expert panel together (360 pool)

1. 2. 3. 4. 5. 6. 7.
3. 4. 5.
Expert panel defines current and future objectives, accomplishments, standards, and challenges for performer (not skills or competencies required) Experts use those lists to define mission critical technical KSAs, experiences, and proficiency then interpersonal competencies Audit/Validate using Research-Based Models
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Audit/Validate the Profile

Some electronic tools can produce instant profiles based on the research
Homemade MS Access database Buy benchmark software
Manual comparisons can be done using research

Your vendors 360 validation reports Some certification manuals statistics
Translations can be generated

Comparative analyses
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Audit/Validate the Profile

Weight the final research-based profile competencies to end up with a full distribution Compare and contrast to the Expert Model profile Bring the expert pool back together and have them explain/justify the differences between the research-based profile and the one they generated Adjust the Expert Model profile as necessary
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Assessment Choices
Ownership
Employee vs. company
Format
Sort vs. electronic vs. pen/paper
Number
Entire set vs. profile only
Perspective
Self vs. boss vs. 360
Distribution
Absolute vs. forced rank
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ASSESSMENT: Ownership
Employee
Confidential developmental information Typically done on a 5-point scale with comments added
Company
Used by employee for development and by the company for workforce planning Typically done using a flat sort without comments added
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ASSESSMENT: Format
Sort
Competencies on cards
Electronic
Online or on disk
Pen and Paper

Competencies on checklist
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ASSESSMENT: Number
Entire set
Takes more time Can be used for any purpose
Profile only
Shorter assessment time Limited to one-position analysis
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ASSESSMENT: Perspective
Self
Least accurate, especially on interpersonal skills Most people over-rate themselves with the exception of high-potentials, they always see room for improvement
Boss
Looks at what was done and not how it was done
360 Pool (aka Multi-Rater)

Balanced and perceived as fair Direct reports rate higher than other groups
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ASSESSMENT: Distribution
Absolute Sort
Assign any rating to any competency Susceptible to rater bias, tendency to put majority of cards in an extreme pile
Forced Sort
Equal number of competencies in each rating If using Not Applicable rating, subtract number in that pile from total and divide the remainder by total number of available ratings
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Gap Analysis
Importance
High High Medium Low
Clear strength
Medium
Keep on using
Low
Beware overuse!
Skill
Important need
Keep on using
Ignore
Urgent need
Need
Ignore
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Putting It All Together

Identify the best of the best Identify potential differentiators Assess everyone against the database of potential differentiators Isolate the true differentiators Compare and contrast everyone to the highperformer profile Develop plans to source, attract, select, develop/succeed, deploy, and retain Reward high performers financially and best matching employees with moves
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Applications
ATTRACT
PROFILES
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Darin Phillips, PhD, CPT

Darin believes in sharing best practices so that HR can increase their strategic role in organizations and build global credibility through value-added contributions to the business. By adopting a model of transferring research-based and field-tested best practices (as opposed to creating confusion and dependency like many consultants), Darin has built a sizable global network of professional contacts that freely share their own lessons and new ideas. This model has created long-term value for everyone involved and has allowed Darin to stay abreast of contemporary benchmarks while still maintaining a normal career and family life. This includes spending a lot of quality time with his 15year old and 2-year old sons, loving wife, and feisty dog after getting home from his job at Royal Caribbean Cruise Lines.
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Darin recognized several years ago that the manual processes for leveraging the best practices in competency-based talent management systems was incredibly time-consuming and labor-intensive (expensive). Therefore he created an automated solution for his employer that integrated performance and talent management. Four years later he is on his third generation of software and it is even more robust and user-friendly than every before. If you or someone you know would be interested in test-driving the latest automated solution please contact Darins wife, Francisca Phillips, at fran@darinphillips.com or visit our website at http://www.darinphillips.com and follow the links!
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Darin was originally known for his activity-based training solutions. He took experiential learning activities that were being used in schools and counselors offices and re-wrote many of them to help corporate groups learn how to work more effectively together. These activities teach adults how to communicate more effectively, lead during times of transition, and be a more effective team player. If you are interested in those activities please look up Darins books at http://www.booklocker.com
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Final Notes
This presentation is NOT copyrighted in any way, shape, form, or fashion. This means you may pass this presentation on to anyone who needs or wants this type of information without asking for permission! All I ask is that you dont remove any of the information about the author or take credit for the material yourself. Please give credit where credit is due when sharing best practices with others! Thank you and have a great day!
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How To Build A Competency-Based Talent Management System

Commercial Interpersonal Models

Other models based on 360 results

Different for Each Level

Systems and Org Down

Up & some Down Shares it

Down & some Up Shapes it

How to Create Value

How Competencies Impact Value

Example from Development:

Improve customer satisfaction

How Competencies Help HR

Research also indicates that HR practices can lower shareholder value if

Begin With the End in Mind

New Position - Define Success Profile - Follow above steps

PROFILE: Point in Time

PROFILE: Organizational Slice

whether you are managing self, others, process, or the organization

what is unique to similar families of jobs

what is unique to each individual job

EXPERT: High-Performer Profile

EXPERT: Success Profile

Bring expert panel together (360 pool)

Audit/Validate the Profile

Manual comparisons can be done using research

Translations can be generated

Audit/Validate the Profile

Pen and Paper

360 Pool (aka Multi-Rater)

Putting It All Together

Darin Phillips, PhD, CPT

Darin Phillips, PhD, CPT

Darin Phillips, PhD, CPT

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