BIRLA INSTITUTE OF TECHNOLOGY,

MESRA, RANCHI

ASSIGNMENT ON

STRATEGIC HUMAN RESOURCE MANAGEMENT

SUBMITTED TO: SUBMITTED BY:

MRS.SUJATA PRIYAMBADA DASH ANKITA

MBA/10027/18
Discuss the advantage of Competency based Performance Management
over Traditional Appraisal. Under what condition one Competency based
Performance Management System most appropriate?

ANS: Competency management systems allow employers to evaluate employees'

performance. Use of these systems allows managers and supervisors to identify gaps, deploy
remedial training, recruit staff and compensate current employees appropriately. Developing
competency-based performance management systems typically involves creating
comprehensive competency models for all jobs and assessing employees against those
models during annual performance reviews. Employers may use these systems for all staff or
restrict their use for only salaried employees. By identifying core competencies that align
with the company’s mission, vision and goals, management can consistently and fairly rate
employees who contribute to the bottom line. Successful organizations also encourage
employees to establish personalized objectives that allow them to develop their abilities while
supporting company goals.
 Advantages of Competency based Performance Management over
Traditional Appraisal

Incorporating competencies into performance management activities demonstrates that

companies connect achievement to compensation, align employee work to strategic goals and
objectives, and reinforce behavior that leads to excellence. In addition to traditional business
metrics, such as revenue and sales, employers who use competency-based performance
management systems can quantify and qualify the work done by employees. For example,
using comprehensive assessments, such as 360-degree reviews, employers gather extensive
data about an employee’s work. This also allows company executives to more effectively
manage resources and designate individuals to take over leadership positions.

Challenges

Defining the skills and behavior required to complete a task successfully requires time, effort
and coordination between multiple sources. Getting agreement on the relevancy of a
particular competency, such as business acumen, communication or team management, may
require numerous meetings and discussions to get consensus among multiple company
executives. Defining the process for assessing individuals against the model may also take
time. Additionally, conducting competency-based performance reviews tends to be time-
consuming.

Alignment

Successful companies align competencies defined in the performance management system

with the company’s strategic objectives. For example, companies that want to improve
customer satisfaction and loyalty may require employee competence in personal effectiveness
competencies, such as communication, influencing and integrity. These skills involve
speaking, writing and listening effectively to co-workers, partners and customers. Formally
linking employee development to performance management systems ensures that knowledge
transfer, succession planning and employee training needs get met as part of daily operations
rather than remedial actions taken only when problems occur. Career development activities
contribute to improved employee morale and retention. This tends to reduce absenteeism as
well.
Implementation

Implementing a competency-based performance management system typically begins by

analyzing the business environment and listing the job roles needed to achieve strategic goals.
By identifying the skills and behavior required to perform these jobs, effective HR
professionals develop competency models. They publish these models on intranet pages,
distribute newsletters and run workshops to explain how these frameworks can be used by
employees for career development. Then, employees create their development plans aligned
with the company’s mission. When managers conduct performance reviews and enter data
into the performance management system, they can evaluate each employee fairly and
consistently. Many systems also permit employees to conduct a self-assessment.

For high-performing organizations, a competency-based performance management system is

an essential part of an overall competency management plan. With a competency-based
performance management system in place, you can better motivate staff, align training with
company goals, clearly define roles and the skills needed to perform each job well, as well as
optimize the hiring process. Here are seven key components to optimizing your competency-
based performance management plan.

1. Determine Goals
When it comes to performance management, determining goals should be step one. Having
set goals at all levels allows everyone involved to have something to strive toward, measure
and be accountable for. By planning out specific goals and setting expectations, you will
motivate employees to work effectively, help management to communicate clearly and allow
tasks to be completed in an efficient manner.
Whether you’re setting goals individually or at a team level, make sure they’re geared
towards developing the core competencies of the company and supporting your
organization’s mission, vision and values.
2. Communication

One of the most important elements of a performance management plan is communication.

By clearly communicating what your plan is, what your goals are and why, you can get
employees on board and motivated to participate.
Why. Make sure the purpose is communicated clearly, and often. If employees don’t see the
point, they may not do their best to progress toward your goals.
What and When. It’s also important to set clear expectations. If you’re planning on setting
deadlines for individuals or teams to complete training or to give feedback, let staff know that
you’re expecting them to complete the activity at that time and it’s not just a suggestion.
How. Give staff clear steps toward any goals you have set. With a step-by-step guide, the
process will be as effortless and possible.
One great benefit of performance management is that the feedback gives HR better clarity
when recruiting, which saves time and resources. This is why it’s so important to clearly
define each job.

3. Define Job Types

Great employees want to excel in their positions–and understand what is needed to move up.
Make it easier for them by outlining what skills are needed to perform to the best of their
ability. By understanding job responsibilities and expectations, employees can be more
confident in their position, as well as their future, within the company.
In addition to your current employees, it’s also important to plan for the subsequent
workforce. With your organization’s core competencies in mind, define what job types you
would like to hire for in the future. Complete the communication loop by speaking with HR
about these decisions. This will help you hire the most competent people to fulfill needs
within your company.

4. Identify Skill Gaps

Once you agree upon and outline the skills needed for each job type, you can better
understand where skill gaps exist. Whether it’s through surveys, interviews, performance
 reviews, or coaching sessions, learning what your employees need to know in order to
perform well in their position is invaluable.
Additionally, by identifying skill gaps you can begin to see a clearer picture of where there
may be job-type holes in your workforce. There may be job types that you’ve never hired for
previously that would be the perfect addition to your team.

5. Coaching and Development

After you’re able to identify your skill gaps, the next step is to nurture staff and bring them
up-to-speed. Whether it’s by way of company-wide training days or simply management-to-
team member weekly one-on-ones, the best way to encourage continued learning is by setting
up a coaching development program.
With a coaching and development plan, your organization can accomplish multiple goals:
bridging skill gaps, vetting employees for future positions and putting them on track for a
planned career trajectory.

6. Monitor, Document and Give Assessments

Three key elements of all successful evaluation programs are monitoring, documenting and
assessments.
 Monitoring continued learning activities, enables you to understand where to make changes,
 Diligent documentation will make it easier to make data-backed decisions moving forward,
and
 Assessments allow you and others to better understand what is working and what needs to be
changed.
While some feel that conventional, annual assessments are tiresome, anxiety-inducing and
many times, fruitless, it’s still important to have some kind of progress touchpoint in order to
set up your workforce for success. Move away from monthly or annual evaluations and
toward a process of continuous coaching and improvement. With actionable, constructive
criticism, you can position your workforce to perform to the best of their ability.
For some organizations, creating a unique performance management system is in order.
Depending on your organization, a performance management program may mean you’ll have
frequent face-to-face evaluations or it could mean virtually zero. The more organized and
 planned out your program is, the less face time will be required. We’re experts at mapping
out successful competency-based performance management plans. For more information on
developing a customized performance management plan, contact us.
With the data you gather through defining job types, evaluating skill gaps and the results of
continued learning activities, you can put together the evaluation program that works for your
company.

7. Revise and Recognize

With feedback from management and staff, it’s important to regularly revise your
performance management plan. Be sure to:
 Tie all activities back to reaching company goals and company core competencies,
 Listen to management and staff feedback and make changes to the plan accordingly,
 Motivate staff by putting an emphasis on career trajectory,
 Give recognition and reward your workforce.

8. (BONUS) Stay Organized with Performance Management Software

The most comprehensive performance management plan in the world won’t be effective if
everyone involved doesn’t have adequate access, can’t easily give feedback, and data can’t be
collected and viewed by leadership. In order to keep everything organized across the
organization, performance management software is a must.