INDIAN ACCOUNTING ASSOCIATION

TITLE: COMPETENCY BASED PERFORANCE APPRAISAL

AUTHOR : Ms. Krupa Shah

Lecturer
JVIMS Jamnagar

Co –Author : Mrs. Shachi Pathak

Lecturer
 TITLE: COMPETENCY BASED PERFORANCE APPRAISAL

ABSTRACT:

Organizations typically envision competency based performance appraisal as providing a

unifying framework among the different human resource functions. As a building block
toward an integrated human resource system, competency models provide a broad
overview of the capabilities required to perform successfully within an organization.

Entrenched with traditional job analytic information (i.e., knowledge, skills, abilities and
other characteristics [KSAOs]), the resulting competency models provide a solid
foundation upon which various human resource programs can be based. This is especially
relevant in this recessionary environment where human capital is one of the most
important assets of an organization and needs to be nurtured. The system consists of
competency mapping, competency development and competency assessment.

With competency based performance appraisal system, employees are better equipped to
make informed career decisions and equip themselves with the knowledge and skills they
require to move up the career ladder. Competency based system not only helps know
your competencies but also your weak areas which can be worked upon. Besides
increasing employee morale and enhancing productivity, it induces fresh thinking, fosters
innovation and thereby aims to provide an enriching job experience.

Skills measurement systems provide a valuable resource for simplifying competency

model implementation and aligning modeling initiatives with measurable skills data as a
leading indicator for performance improvement.
“Knowing is not enough; we must apply. Willing is not enough
we must do.”

INTRODUCTION

Competence is a standardized requirement for an individual to properly perform a

specific job. It encompasses a combination of knowledge, skills and behavior utilized to
improve performance. More generally, competence is the state or quality of being
adequately or well qualified, having the ability to perform a specific role.

For instance, management competency includes the traits of systems thinking and
emotional intelligence, and skills in influence and negotiation. A person possesses a
competence as long as the skills, abilities, and knowledge that constitute that competence
are a part of them, enabling the person to perform effective action within a certain
workplace environment. Therefore, one might not lose knowledge, a skill, or an ability,
but still lose a competence if what is needed to do a job well changes.

Competencies include the collection of success factors necessary for achieving important
results in a specific job or work role in a particular organization. Success factors are
combinations of knowledge, skills, and attributes (more historically called "KSA's") that
are described in terms of specific behaviors, and are demonstrated by superior performers
in those jobs or work roles. Attributes include: personal characteristics, traits, motives,
values or ways of thinking that impact an individual's behavior.

The competencies have five characteristics, namely:

* Motives: Things a person consistently thinks about or wants that cause action,
motives drive, direct and select behavior towards certain actions.

* Traits: Physical characteristics and consistent responses to situations. Good

eyesight is physical traits of a pilot. Emotional Self Control and initiative are
more complex consistent responses to situations.
 * Self Concept: A person's attitude value or self image. A person's values are
reactive or respondent motives that predict what a person would do in the short
run.

* Knowledge (Information a person has in a specific work area) Example: An

accountant's knowledge of various accounting procedures.

* Skill (is the ability to perform certain mental or physical tasks) Example:
Mental competency includes analytical thinking.

Types of competencies”

1. Organizational competencies — unique factors that make an organization

competitive
2. Job/Role competencies—things an individual must demonstrate to be effective in a
job role, function, task, or duty, an organizational level,
or in the entire organization.
3. Personal competencies—aspects of an individual that imply a level of skill,
achievement, or output.

COMPETENCY BASED PERFORMANCE APPRAISAL:

Entrenched with traditional job analytic information (i.e., knowledge, skills, abilities and
other characteristics [KSAOs]), the resulting competency models provide a solid
foundation upon which various human resource programs can be based. This is especially
relevant in this recessionary environment where human capital is one of the most
important assets of an organization and needs to be nurtured. The system consists of
competency mapping, competency development and competency assessment.
 1. 2, 3.
COMPETENCY COMPETENCY COMPETENCY
MAPPING DEVELOPMENT ASSESSMENT

1. COMPETENCY MAPPING

MEANING:

Competency mapping is a process through which one assesses and determines one's
strengths as an individual worker and in some cases, as part of an organization. It
generally examines two areas: emotional intelligence or emotional quotient (EQ), and
strengths of the individual in areas like team structure, leadership, and decision-making.
Large organizations frequently employ some form of competency mapping to understand
how to most effectively employ the competencies of strengths of workers. They may also
use competency mapping to analyze the combination of strengths in different workers to
produce the most effective teams and the highest quality work.

Following are the steps to be followed to carry out the competency mapping process:

Identify the positions to be studied: The first step in competency mapping is to identify
the job positions to be studied and while doing competency mapping we need to keep in
mind that it is done for job positions and not for persons holding job position.

Job analysis: The next step is to conduct the job analysis of the selected job position
through observation, questionnaire, interview method, diary method, log record, critical
incident method or with the help of panel of experts.

Prepare job description and job specification to identify the KRA’ s and
KPA’s: Based on the information taken through the job analysis, prepare competency
based job description and job specification and also identify the KRA’s and KPA’s for
each job position.

Identify the required competencies: Based on identifying the KRA’s and the KPA’s for
each job position identify 6-7 most crucial competencies required to do a job.

Preparing a competency dictionary: Once the competencies are identified, then the
next step is to prepare a competency dictionary. For this, the competency has to be
defined first and then using the behaviorally anchored rating scales the competencies
need to be classified into 3-level or 5-level rating scale.

Preparing a competency matrix: Once the dictionary is prepared and the classification
is done for each competency, the next step is to prepare competency matrix clearly
showing the level of competency required for each job position against each competency.
The level required for each job position may be decided either by a brainstorming session
with the HR and the management or through 360 degree feedback depending upon the
suitability of the organisation.

Measuring the gaps: Once the matrix is designed the next step is to check the deviation
between the required level of competency and the actual level of competency possessed
by the employee holding a particular job position.The ratings may be given either by the
brainstorming session or through 360 degree feedback depending upon the suitability of
organisation.

Thus, these are the steps of competency mapping process and once the gaps are found in
the performance training can be given to employees to fill the gap; it can be used for
performance appraisal.

METHODS FOR COMPETENCY MAPPING:

Behavioral event interview

A behavioral interview is a structured interview that is used to collect information about
past behavior. Because past performance is a predictor of future behavior, a behavioral
interview attempts to uncover your past performance by asking open-ended questions.

Using the STAR Technique

The STAR technique is a way to frame the answers to each question in an organized
manner that will give the interviewer the most information about your past experience.
As you prepare to answer each question, consider organizing your response by answering
each of the following components of the STAR technique:

What was the S ituation in which you were involved?

What was the Task you needed to accomplish?
What Action(s) did you take?
What Results did you achieve?

Repertory grid

The repertory grid is a technique for identifying the ways that a person construes his or
her experience. It provides information from which inferences about personality can be
made, but it is not a personality test in the conventional sense.

A grid consists of four parts.

1. A Topic: it is about some part of the person's experience

2. A set of Elements, which are examples or instances of the Topic.
3. A set of Constructs. These are the basic terms that the client uses to make sense
of the elements, and are always expressed as a contrast.
4. A set of ratings of Elements on Constructs. Each element is positioned between
the two extremes of the construct using a 5- or 7-point rating scale system.

Critical incident technique

The CIT is a method for getting a subjective report while minimizing interference from
stereotypical reactions or received opinions. The user is asked to focus on one or more
critical incidents which they experienced personally in the field of activity being
analyzed. A critical incident is defined as one which had an important effect on the final
outcome. Critical incidents can only be recognized retrospectively. IT analysis uses a
method known as Content Analysis in order to summarize the experiences of many users
or many experiences of the same user.

2. COMPETENCY DEVELOPMENT:

Focus on… the real changes needed for success

As challenges change, businesses need to adapt. Individuals need to know how to
respond, and what specifically they need to do differently. They need this information in
credible language and models they can understand.

Our approach to competency framework design is to work closely with key players in
organizations to develop or update their competency models, positioning the content to
the end user needs. We avoid ‘consultancy-speak’ and ensure there is buy-in and
ownership of the model at all levels of staff.

We identify the appropriate behaviors that are going to make the difference, between
mediocre and excellent performance and also to consider the future demands that are
going to be placed on the business. Organization approach involves the following
activities:

• Competency Workshops - involving staff volunteers from across the business to feed
in business strategy and vision and encourage staff ownership.
• Research Interviews – interviews with talented individuals within the business in order
to tease out high performance behaviors and future competency profiles.
• Design of Behavioral Competence Model – once we understand what each
organization is expecting their competency model to help them achieve, we work closely
with the client towards the developing optimal competency solution.
Key Benefits:
Effective competency models are imperative to business success. They form the
backbone and drive many HR and business activities including:
• Communicating the direction and culture of the business
• Explicitly stating what excellent work behaviors look like
• Providing objective measures for assessment in both selection and development
situations
• Identifying specific strengths and on-going development areas for individuals.
• Supporting appraisal systems and personal development plans
• Tailoring the competency model to individual jobs or roles
• Providing a robustness in the light of Equal Opportunities and compliance with
Employment Legislation

3. COMPETENCY ASSESSMENT

Competency assessment involves the measurement of an individual's competencies.

Measures include cognitive ability tests, biodata instruments, structured interviews, job
knowledge tests, diagnostic and promotion tests, and measures of customer service, and
social skills. With the advent of increased agency responsibility for staffing decisions,
valid personnel selection assessments are more critical than ever.

Key Features

• Selection methods cover the entire spectrum of job-relevant abilities, including

reasoning and social skills, and are offered in a variety of formats
• Complete documentation of development process and validity analysis
• Nationwide network of test administrators can effectively and efficiently
administer tests of OPM design

METHODS OF COMPETENCY ASSESSMENT:

Assessment Center Exercises An Assessment Center can be defined as a variety of
testing techniques designed to allow candidates to demonstrate, under standardized
conditions, the skills and abilities that are most essential for success in a given job.
Assessment centers usually have some sort of in-basket exercise which contains contents
similar to those which are found in the in-basket for the job which is being tested. Other
possibilities include oral exercises, counseling simulations, problem analysis exercises,
interview simulations, role play exercises, written report/analysis exercises, and
leaderless group exercises.

360 degree feedback: In human resources or industrial/organizational psychology, 360-

degree feedback, also known as 'multi-rater feedback', 'multisource feedback', or
'multisource assessment', is employee development feedback that comes from all around
the employee. "360" refers to the 360 degrees in a circle. The feedback would come from
subordinates, peers, and managers in the organizational hierarchy, as well as self-
assessment, and in some cases external sources such as customers and suppliers or other
interested stakeholders. It may be contrasted with upward feedback, where managers are
given feedback by their direct reports, or a traditional performance appraisal, where the
employees are most often reviewed only by their manager.

STRATEGIES FOR COMPETENCY BASES MANAGERMENT PROCESS:

Skills measurement systems provide a valuable resource for simplifying competency
model implementation and aligning modeling initiatives with measurable skills data as a
leading indicator for performance improvement.

Measurable Business Goals Provide Crucial Level of Focus

Once primary business objectives are identified, decision-makers can build a program
based on core competencies. By identifying select competencies that influence specific
outcomes, companies can not only build smaller, more actionable competency modeling
programs, they can then track program success by tying it to measurable business results.

Skills measurement innovations simplify competency model implementation

The skill measurement systems enable decision-makers to quickly build requirements for
key competencies, and they provide the tools for tracking skills levels for individuals and
across the organization with enterprise reporting flexibility. With definitions and online
assessments for a broad range of professional skills, online measurement systems
dramatically simplify the process of determining competency requirements.

Ensure Program Support with Planning, Communication and Incentives

For any competency modeling initiative, participation will ultimately determine program
success. To ensure acceptance and participation by employees and company decision-
makers, a results-oriented focus is needed for all facets of implementation. Maul points
out three areas of opportunity for dramatically improving the effectiveness of the
competency modeling initiative

Create Incentives—Link Program Participation to Career Development

The positive value of an assessment system is significant, If positioned properly and
communicated effectively, every assessment becomes an opportunity—an opportunity for
career advancement, for self-fulfillment, for financial improvement. Backed by an
effective communications effort and a skills measurement system for taking action,
competency models can be tied to what Maul refers to as “positive consequences,” a key
strength for any competency program.

Putting Information Security Awareness into Practice

Companies and government agencies are recognizing the need to build awareness and
establish accountability for information security knowledge. Using online skills
measurement to build awareness is a relatively new approach to improving information
security. However, it is an approach that is delivering results, helping organizations track
and improve employee awareness with a new level of consistency, objectivity, and ease.

APPLICATION OF COMPETENCY MAPPING AND ASSESSMENT

TECHNIQUES:
It is very important development tool for HR function. It provides much nedded
objectivity to HR activities. These programs contribute to organization effectiveness.
Business process focus and objectivity are the main advantages of the competency bases
system. It is having following implications:

1. Candidate appraisal for recruitment: Selection of candidates for employment

is very importance decision for any organization. Competency maps for the job
position and assessment of candidates fro the required competencies gives
comparatively reliable indication about the suitability of the candidate. The
assessment also provides guidelines in the training needs fro the candidate if
selected. Normally only core competencies are assessed fro selection.

2. Employee potential appraisal for promotion or functional shift: Every job

position requires different set of competency and hence an excellent performer in
junior position may not necessarily perform to the expectations. Departmental
shifts and promotions need careful assessment of the competencies of the person
with respect to the required competencies of the new position. Hence it is
recommended to assess core competencies fro promotion or function shifts.

3. Employee training need identification

Competency mapping and assessment provides clear indication of employee’s
developmental needs. As competency based training need identification has direct
relation with the employee performance, effectiveness of training can directly be gauged
through the assessment of performance and competencies.

4. Employee performance diagnostics: Competency bases assessment provides

excellent understanding of performance problems. Observed non performance of
an employee can be due to factors that are out of the control of the employees or
due to lack of required competencies.
 5. Employee self development initiatives: It helps the individual to understand
direction for their own development. They can easily identify the gaps and work
on the inadequacies. It indicates the competencies that are required for
performance and behavioral indicators shows that factors that build up the
competency. Organization should develop a competency map document

CONCLUSION:

Entrenched with traditional job analytic information (i.e., knowledge, skills, abilities and
other characteristics [KSAOs]), the resulting competency models provide a solid
foundation upon which various human resource programs can be based. The system
consists of competency mapping, competency development and competency
assessment.With competency based performance appraisal system, employees are better
equipped to make informed career decisions and equip themselves with the knowledge
and skills they require to move up the career ladder. Competency based system not only
helps know your competencies but also your weak areas which can be worked upon.
Besides increasing employee morale and enhancing productivity, it induces fresh
thinking, fosters innovation and thereby aims to provide an enriching job experience.

BIBILIOGRAPHY:
1. Radha r. Sharma, (2002),360 degree feedback, competency mapping and
assessment centres –Tata Mcgraw hill
2. Flippo, E.B.(1994) Principles Of Personnel Management. New Delhi : Tata
Mcgrawhill.
3. Saiyadain, M.S.(2003) Human Resources Management .New Delhi : Tata
Mcgrawhill.
4. Saiyadain, M.S.(2003) Organisational Behaviour .New Delhi : Tata Mcgraw Hill.
5. Sanghi, S.(2004) The Handbook Of Competency Mapping. New Delhi: Sage
Publications.