Key trends and issues in employers' use of behavioural competencies

Consultant John Milsom explores the latest trends and future relevance of employers' use of behavioural competency frameworks, such as their valuable role in communicating corporate values and objectives, and in fostering employee engagement.

Key points

  • This article analyses important trends in employers' use of behavioural competencies, including: aligning them with corporate values and strategic objectives; using them to promote employee engagement and motivation; giving priority to keeping competencies up to date; greater willingness to use external consultants to help design competency frameworks; reflecting cultural diversity in frameworks; and moving towards simpler, more focused sets of competencies.
  • We also highlight the importance of: giving managers practical tools to make sure they put competencies to use; ensuring competencies are forward-looking; guarding against unfair discrimination; and ensuring that end-users understand the purpose of competencies.

The competencies bandwagon is well and truly in its middle age. In 2013, it will be the 40th anniversary of David McClelland's landmark 1973 article for American Psychologist entitled Testing for competence rather than for intelligence (on the American Psychological Association website). Its publication kick-started the ideas that today underpin much of what is considered best practice within recruitment and employee development.

But what are the current trends in the ways in which organisations are using competencies? What have we learnt about using competencies in this time? Is there anything to suggest that this movement has run its course? And what should HR professionals be considering when developing new competency frameworks?

The impact of corporate values and objectives

One of the most significant trends over the past few years has been towards basing competencies more strongly on organisational values.

For many years, organisations sought to introduce comprehensive competency frameworks that clearly defined the full range of non-technical capabilities required from their managers and staff. These are often called "management competencies", and include such familiar domains as "impact and influence" and "planning and organising".

While this detailed approach to competency definition was hugely beneficial for defining roles up to middle management level, it failed to engage and stretch senior managers and executives. Nor has it supported the development of high-potential managers. In short, it has helped to improve the development of those whose performance is average, without stretching those at the top tiers of organisations.

Recently, many organisations have placed more emphasis on defining the behaviours required to support their current strategy or core values. These competency frameworks are often referred to as "leadership frameworks", and the organisations that favour this approach often talk about attempting to define their "leadership values and behaviours". Mothercare, Orange and Unilever are three examples of organisations that have adopted this approach.

The first practical implication of taking a more values-driven approach to competency development is that it leads to the identification of a smaller set (usually five or six) of focused criteria. These define the key priorities that organisations expect their leaders to demonstrate. In the case of Unilever, this has led to a dictionary of competencies being replaced with six leadership behaviours, known as the "standards of leadership". By extension, these frameworks do not attempt to define all of the detailed behaviours associated with the fundamental skills that managers need, such as negotiation and project management. Instead, they concentrate on communicating organisational priorities and translating them into a clear agenda for senior leaders.

Table 1 illustrates the changes that one organisation has made to the focus and objectives of its competencies.

The movement towards values-based competencies has in part been driven by a desire to develop those at the top of organisations. However, it is also a natural progression. In the 1980s, many organisations were still prepared to debate the relative importance of technical versus non-technical skills for managerial roles. More recently, there is discussion about the importance of values relative to non-technical skills or competencies. It is generally accepted that technical knowledge is a prerequisite for basic performance. It is a leader's ability to connect with and influence others within an organisation that really makes the difference - also known as their non-technical competence.

Encouraging employee engagement and motivation

Organisations are becoming increasingly keen to ensure staff are engaged with their mission and corporate brand. Research shows that consumers make judgments based on their interactions with customer-facing staff and the way they behave towards them. If leaders do not display the values and behaviours required to support an organisation's mission and brand, then how can those at the front line be expected to put them into practice in their interactions with customers?

Integrity and other values-based judgments are increasingly at the top of the corporate agenda. Organisations such as the BBC have sought to find ways of helping staff to make decisions that reflect the company's values. By defining values in behavioural terms, a values-driven leadership framework offers an effective way for organisations to explain how they expect decisions to be made. Organisations are then able to assess the thinking style and motivations of employees to ensure they are both rationally and emotionally engaged with their organisation's objectives and culture.

A large number of organisations are accepting the advantages of defining a smaller set of more values-driven competencies. Some are taking this approach further, and are using these competencies to screen new recruits against their company values.

Purina Petfoods (a division of Nestlé) is leading the way in this area. Its recruitment processes include tailored psychometric reports on candidates produced by Saville Consulting's Wave tool, combined with a tailored "values-based interview guide" produced by Wickland Westcott.

The recruitment of people using competencies based on organisational values is not easy. Even so, increasing importance is placed on finding people who fit organisations' cultures and who buy in to their corporate goals.

Ensuring competencies remain relevant

Another trend within the development and use of competencies is an increase in the number of organisations that review and update their frameworks on a regular basis. Two factors seem to be at play here.

First, there is a growing realisation that competencies can be powerful levers for change and can help to develop organisational capability. This demands that the competencies accurately reflect the latest corporate priorities.

Second, organisations are recognising that competencies need to be subject to regular, planned reviews as the best means of ensuring they stay abreast of change. Ad hoc amendments are likely to overlook some important developments, and are less likely to produce a consistent, coherent competency framework.

Business Link Northwest (external website) sought to refresh its competencies, just one year after introducing them. It is one of the network of government-funded business support, advice and information agencies under the Business Link banner, and is managed by the Northwest Regional Development Agency.

Business Link Northwest HR director Kate Jenkinson explains: "Our organisation was only formed 18 months ago, and we have grown significantly in this time. We are also just about to expand our range of services considerably in support of the Government's 'Business Support Simplification' programme. Our competencies drive recruitment, appraisals, development and reward, and it is therefore essential we keep them up to date so that they are continually stretching the organisation."

Business Link Northwest also took the opportunity to introduce additional challenges to its senior managers and directors when reviewing the competencies. By adding behaviours prompted by academic research into leadership and board-level excellence, the organisation has sought to ensure that the competencies drive the development of everybody from the managing director down. For example, articles such as How well-run boards make decisions (on the Harvard Business School website), from the November 2006 issue of Harvard Business Review, prompted the development of new performance indicators for all executives at Business Link Northwest.

Bringing in a consultancy to design competency frameworks

Another practical trend within the competencies marketplace is obtaining expert help with the development of competency frameworks. It was common during the 1980s and 1990s for organisations to spend substantial sums of money on consultancies to conduct interviews and focus groups with managers to help develop management competency frameworks. Over time, such work has been brought in-house. More recently, though, organisations have shown renewed interest in obtaining external help from business psychologists when reviewing their competencies or finalising their design.

The reasons for organisations seeking more help from external consultancies are not entirely clear. However, it seems that the growing emphasis on linking competencies to organisational values is prompting some organisations to look for assistance. While HR leaders recognise that management competency frameworks may not differ greatly from one organisation to another, values-based competencies or leadership frameworks that have not been developed specifically for their own organisations will not reflect their own vision and values.

It therefore follows that while management competencies may be generic, leadership frameworks require more careful development in order to capture accurately an organisation's unique values. This work may require levels of experience and skill that are not available in-house.

Good consultancies also understand that organisations are looking for a more top-down approach, with greater input from senior management into the content of leadership frameworks.

The growing importance of diversity

Cultural issues, and the need to ensure the cross-cultural sensitivity of organisations' competencies, have given rise to another important trend within the competency arena: diversity.

Even if organisations operate within a single market, their competency frameworks need to reflect the ethnic diversity of the workforce. The alternatives are not only legally and ethically concerning, they also have commercial implications. As people's culture and background inevitably have a huge influence on their behaviour, it is critical that organisations define their competencies to set out what is genuinely required. Companies should avoid lists of behaviours that are in vogue or just thought to be important.

Bentley Motors has grappled effectively with the challenge of incorporating diversity into its competency framework. The organisation knows that its success hinges on the quality of its engineering. Its cars not only have to be the best, they have to feel the best, in order to protect the brand and the future of the business. This demands that the company recruits engineers who combine true craftsmanship with the ability to constantly question the way things are done - and herein lies the challenge. Bentley's search for world-class engineers frequently leads them abroad, and to identify candidates from cultures that research shows are not entirely consistent with Bentley's competency framework (known as the "the Bentley Behaviours").

For example, in highly respectful, high-status cultures, such as those found in parts of Asia, challenging superiors and colleagues is frowned on. This cultural trait has been identified by researchers such as Fons Trompenaars in his 1996 article, Resolving international conflict: culture and business strategy and by Geert Hofstede in his 1984 article for the Asia Pacific Journal of Management, Cultural dimensions in management and planning (on the Springer website). The clash between the behaviours required by Bentley and specific cultural norms, such as these, means that its competencies need to be applied with great cultural sensitivity. Recruiters are provided with guidance on how the behaviours should be reconciled with the demands of different cultures from within the UK and around the world, based on a detailed understanding of how they relate to each other. In this way, Bentley has been able to recruit and develop a diverse, yet focused workforce.

Bentley is not alone in seeking to ensure that its competencies are prepared and applied sensitively across different cultures. Global organisations are putting more and more emphasis on ensuring the international frameworks that underpin their recruitment, development and succession processes are not unfairly discriminating against certain groups or holding the company back from working in newer and more lucrative ways. Overall, an increasing number of organisations are seeking to do this in order to avoid turning away strong candidates, and as a means of fully capitalising on the capabilities of their people.

Creating differentiated competency frameworks

A final trend is a move towards defining different competencies for different levels within organisations. This contrasts with the approach taken hitherto by many organisations, in which they have sought to develop a set of competencies that applies to all or most parts of their organisational hierarchy in an unfocused way.

However, there is a growing view that this approach can lead to overly complex frameworks being developed, with large numbers of competencies being defined that are not relevant or stretching enough for specific levels or departments.

These older-style frameworks often do not clearly explain to employees what they need to develop in order to be promoted from one level to the next. They give the impression that more senior roles require the same behaviours to be demonstrated in more complex and challenging situations, rather than highlighting new capabilities that need to be developed.

Decision-making is an example of one such behavioural competency. Its behavioural indicators often refer to gathering the facts, spotting links, generating options and making clear decisions. To differentiate behaviours at junior level from those at executive level, organisations have inserted phrases such as "day-to-day" or "tactical" in respect of decision-making at the lower levels. For their executives, the wording changes to "strategic" or "long-term" decision-making. However, the behaviours essentially remain the same.

Some organisations and experts are finding that it is more helpful to define the context, responsibilities and decisions expected from different levels of management, instead of making minor changes to the wording of essentially the same required behaviours.

The "leadership pipeline" represents a fresh approach to the challenge of succession planning, and is described in Ram Charan, Stephen Drotter and James Noel's 2000 book, The leadership pipeline: how to build the leadership powered company (on the Jossey-Bass website). As well as supporting people in developing themselves, this approach can help managers to understand why and how their jobs are graded. By defining the key leadership dimensions that differentiate between different levels in the leadership pipeline, organisations can communicate these differences to managers.

The concept of leadership or talent pipelines offers an alternative to the use of competencies, according to such writers as Peter Goodge and Jane Coomber. However, in practice, most organisations have sought to combine the pipeline approach with behavioural competencies.

Manchester Airports Group took this approach a few years ago, identifying seven key factors that differentiate between management roles from a first line manager to its executive directors. These factors have been used to pinpoint the behavioural competencies required at different levels and to underpin a comprehensive management development programme, and are as follows:

  • Role in the delivery of core services.
  • Level of leadership and management responsibility.
  • Planning (timeframe).
  • Planning (content).
  • Role in driving change upwards (ie using operational and technical experience to improve performance, safety and efficiency).
  • Role in driving change from the top down.
  • Key relationships (internal/external).

This approach certainly leads to a clearer definition of what is expected at specific levels within organisations. This is a key tenet of the competencies approach, and represents another step forward in competency thinking that designers of organisational competencies will find useful to consider.

Challenges and risks

Competencies have been criticised for a variety of reasons since the concept was first introduced. So what are the challenges and risks facing competencies? And what should people who use competencies watch out for?

Limits of competencies

First, it is important to appreciate the limits of what competencies can do, and recognise that they only provide a platform for other tools and solutions. When designing or relaunching competencies, this process needs to be completed in conjunction with the provision of practical tools, such as recruitment interview guides, appraisal procedures and development resources. This ensures that competencies are put into practice rather than simply gathering dust in the HR department. It is important that HR takes a lead in developing and communicating these tools because competencies are a means to an end - and that end relates to the effective management of people.

Poor design and implementation

Much of the criticism levelled against competencies tends to be prompted by inappropriate usage, or poor design. Backward-looking competencies are usually those that have been put together without any thought of the future demands of an organisation. If time is taken to consider the future, there is no reason why competencies cannot be used as a means of preparing the business for what lies ahead.

Clearly, there is a risk that competency sets will become out of date over time if they are not refreshed. There is, therefore, a responsibility on senior HR leaders to regularly monitor to the relevance of their organisation's competencies to their aims and objectives.

Additionally, when constructing or reviewing competencies it is critical to carefully understand their intended uses and goals, and the culture of the organisation within which they are to be used. That said, it is easy to highlight a competency framework's conceptual flaws. This overlooks the fact that each competency represents an attempt to simplify a myriad of different behaviours that lead people to be successful. It can involve compromise in order to make it usable on a practical level. Users of a set of competencies must take care not to over-stretch them by using them for purposes for which they were not intended.

Unfair discrimination

Risks associated with unfair discrimination are highlighted above, and represent a real and growing challenge to those using competencies. This is especially the case for frameworks based more heavily on values than traditional management competencies.

Aside from cultural issues, the practice of unquestioningly applying a standard set of criteria for all roles also raises the possibility of candidates being screened against criteria that are not genuinely required in the role for which they have applied. The risk here is that competencies can make it too easy for users, such as recruiters, to make mistakes due to the simplicity of the solution they offer. In practical terms, this should not be a significant problem, but it is important that checks are completed to show how and why corporate competencies are required within individual roles. As well as serving to highlight any unintended issues, even a cursory review of criteria will help recruiters identify the specific demands of roles and will improve the accuracy of the selection process.

Clear communication

It is advisable to ensure that competency frameworks are clearly communicated. As with any initiative, it is important to be able to explain in simple terms how competencies link with other initiatives within the organisation, such as its mission, vision, values and strategic priorities.

The answer here will be different in different organisations, but one model used by Wickland Westcott is shown in figure 1. The idea of the model is to emphasise that an organisation's vision and its values drive its strategy, which in turn defines what the business needs to be good at, and therefore where its employees' strengths must lie (ie its competencies).

practical implications and the future

The idea that competencies might be a fad is not new, especially within the notoriously fickle and fashion-conscious domain of management theory. Introducing behavioural competencies will not on its own transform organisations, and there are some warnings for those who use them.

However, the use of competencies has proved to be an enduring approach that organisations today are still applying to optimise performance and achieve results as did the first pioneers of the competency approach almost 40 years ago. There have been some powerful developments in the way in which competencies are used, and these developments show how the approach is evolving in order to make it even more effective.

Table 1: An organisation's adoption of a values-driven competency framework

Original management competency framework New values-driven leadership framework
Adaptability
Analytical thinking
Commercial acumen
Communication skills
Concern for accuracy
Confidence
Creativity and innovation
Customer focus
Decisiveness
Developing and coaching others
Influence and persuasion
Information seeking
Initiative and proactivity
Interpersonal skills
Leadership
Organisational alignment
Organisational awareness
Planning and organising
Relationship building
Resilience
Results orientation
Self-development
Teamwork
Technical and professional expertise
Visionary thinking
Corporate networking and teamwork
Customer and commercial focus
Setting direction
Leading change
Continuous improvement
Talent management
Source: Wickland Westcott.

Figure 1: A model showing how competencies link with organisations' values

Source: Wickland Westcott.