Understanding competency from an organisational perspective

Is the much talked about competency approach actually helping the individual and the organisation to improve their effectiveness

The term ‘competency’ has been defined in literature from different points of view. Competency models are key tools in the human resource systems and practices. Research has shown that over the last few years there has been a worldwide expansion in the use of competency models as a major base for human resource strategy. The use of the competence approach is now promoted by experts in the field as it is likely to improve not just individual performance but also organisational effectiveness (Markus et al., 2005).

But how far is the competency approach actually helping the individual and the organisation to improve their effectiveness? One of the key factors sustaining the interest in the concept of competencies is the fact that the nature of work is becoming more complex; skill requirements are definitely overtaking the traditional distribution of ability in the workforce and creating a dearth in talent supply. In a survey canvassing opinions of senior executives, 80 per cent believed that the ability to attract, select and retain the best people will be the primary driver of business strategy by the end of this decade (Markus et al., 2005). Yet, most competency models do not address role-specific and technical competencies at all.

An integrated concept of social, emotional and cognitive intelligence competencies offers more than a convenient framework for describing various traits of humans. It offers a theoretical structure for the organisation of personality and links it to a theory of action and job performance. Goleman defined emotional competence as a “learned capability based on emotional intelligence, which results in outstanding performance at work”. In other words, if a competency is an “underlying characteristic of the person that leads to or causes effective or superior performance” (Boyatzis, 2008), then:

• Emotional intelligence competency is an ability to recognise, understand, and use emotional information about oneself that leads to or causes effective or superior performance;

• Social intelligence competency is the ability to recognise, understand and use emotional information about others that leads to or causes effective or superior performance; and

• Cognitive intelligence competency is an ability to think or analyse information and situations that lead to or cause effective or superior performance (Boyatzis, 1982).

Researches that have been published over the last 30 years show us that excellent leaders, managers and people in key jobs require three clusters of behavioural habits as threshold abilities, and three clusters of competencies as distinguishing outstanding performance. The threshold clusters of competencies are:

1) Expertise and experience are the threshold of competency

2) Knowledge (i.e. declarative, procedural, functional and meta-cognitive) is a threshold competency; and

3) Cognitive competencies, such as memory, deductive reasoning are threshold competencies

There are three clusters of competencies, which differentiate outstanding from average performers in various countries of the world (Boyatzis, 2008), and they are: cognitive, emotional intelligence and social intelligence. Systems thinking and pattern recognition are a part of cognitive competencies; self-awareness and self-management competencies are part of the emotional intelligence competencies; and social awareness and relationship management competencies are part of the social intelligence competencies.

Boyatzis (2008) argues that competencies are a behavioural approach to emotional, social and cognitive intelligence.
Sustainable competitive advantage does not generally come from doing the same things better; it comes from doing the critical things differently, in ways that are hard to copy. Various core competencies can achieve competitive advantage in the four different types of service businesses, focussing mainly on the Service Quality Attributes—responsiveness, empathy, assurance and so on.

At first glance, those core competencies may seem easy to copy. But the attribute of service quality is actually quite hard to build and copy; it can be implemented in many different ways. They are as much of human resources values as they are specific performance behaviours. Employees in excellent service companies tend to internalise them and live them out in their daily behaviour. Among the top five US companies with the highest stock market returns between 1972 and 1992 were three service firms that excelled in customer service: Circuit City, Southwest Airlines and Walmart. These companies sustained high levels of excellence because of outstanding human resource practices that included shared values, selective recruiting, incentive pay, high levels of employee participation and information sharing, and heavy investments in training. Competitors found it very difficult to match their service performance over a sustained period.

(The author is a PH.D scholar of TISS (Tata Institute of Social Sciences) Mumbai. Views expressed in the article are the author’s own.)