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Apr 30 2018
Why Competency Based HR Systems are Unfair and Ineffective

Competency-based human resource management and talent development systems are profoundly unfair to people, and are inherently flawed. Competency models have a stranglehold on many HR departments, performance management processes, learning management systems, and other forms of performance assessment and instructional design in organizations.  I have railed against them for decades from the perspective of performance engineering and behavior science. But it has often been hard to push back against something that is so often accepted without question. 

Unquestioned acceptance of competency-based systems often reflects substantial financial stakes for those who establish competency models, promote training programs to address them, build performance management systems that leverage them, and control HR budgets that have invested in them for years. For decades, those who have questioned the use of competency models as a foundation for talent management and development have risked being figuratively “burned at the stake.” But enough is enough. We must speak up for more effective and fairer systems of talent development and performance management.

It’s good that some innovative HR organizations and leaders are beginning to ask if there is something better. It’s not so good that some of them are suggesting a replacement with “traits” – a throwback to an even earlier and more primitive era in personality psychology. Here’s why competency-based systems are unfair and therefore can lead to cynicism among those who use them.

Competencies are inherently abstract.  When one looks at typical competencies such as commercial awareness or results orientation, it’s clear that the behavior to which they refer will differ greatly from one situation to another, depending on what the employee or performer might be working to accomplish. It is ludicrous to think that such words and phrases, even when accompanied by examples of behavioral indicators, can be used to help individuals focus on behavior that is specific enough to reliably deliver value to the organization. I find such verbal abstractions appalling as I try to keep a straight face when people use them to describe and evaluate performance.

A competency is commonly defined as “an underlying characteristic of a person which enables them to deliver superior performance in a given job, role, or situation.“ Harvard Psychologist David McClelland is often cited for research related to competency models, as an alternative to aptitude and IQ testing for matching candidates for jobs. But how this approach emerged in human resources applications is quite revealing.

A few years ago, our colleague, Bob Reticker, who once worked at a major training provider to develop competency models for client organizations, shared with us the origin of workplace competency models. He explained that a group of analysts was attempting to identify behavior that characterizes excellent leaders. They identified a very long list of specific types of behavior, which was a difficult to manage because of its length. They sorted the behavior into piles or clusters, to break up the long list, and then named the piles.  Those category names become “competencies.” 

How crazy is that?  First, a specific behavior will vary from situation to situation depending on what the leader is attempting to accomplish, and why. So a generic description of behavior is already less specific than one can teach, much less manage or effectively measure from one context to another. But then we put a whole bunch of such generic behaviors into piles, name the piles, and think we can use those general category names to help people develop! At this point, I would expect someone not caught up in the doctrine of competency modeling to say something like, “Are you kidding?”

The next step away from specificity sufficient to support training or management is that people use rating scales to assess competencies.  “Let’s see…. Is she a 3 or a 4 on this one?”  In other words, people use what my late colleague, Dr. Eric Haughton, called “refined opinion.”  There is no absolute or standard measure of performance in this approach.

When delivering workshops and presentations I often ask the audience what they think about using rating scales for competencies. Many roll their eyes, clearly based on their own personal experience. When I ask if a ratings, easily influenced by the rater’s mood or particular circumstances at the time of rating, might produce cynicism among all involved, there are usually a lot of nodding heads.

Most thoughtful leaders, managers, individual contributors and HR professionals know this. But competencies are so convenient, so easy to use, and so widely accepted, that few push back.  And, as far as most people know, there are no compelling alternatives.

But there is a more practical and effective alternative to competency modeling. In his groundbreaking book, Human Competence: Engineering Worthy Performance, Dr. Tom Gilbert encouraged us to shift our focus from what he called “costly behavior” to “valuable accomplishments” – the things that people produce with their behavior and contribute to their organizations, or to society. In my view, accomplishments (or what we call work outputs) provide the missing link between people’s behavior and the organizational or societal results to which they contribute.  Furthermore, they are both more concrete and easier to assess than competencies.  Simply stated, one can count work outputs that meet objectively agreed-upon criteria rather than rating them based on subjective opinion.

Understanding that we can identify specific valuable accomplishments, instead of relying on abstract competencies to define what we need people to contribute, is a huge step forward. By anchoring our performance management, coaching, training design, and assessment in the valuable work outputs that people produce, we can better define specific behavior needed to produce those work outputs. In addition, with this approach we can often identify exemplary behavior – what exceptional performers do differently from others to achieve exemplary levels of work outputs.

To gain a better understanding of this, check out our Performance Chain model or take a look at my article, What It Really Means to Be Accomplishment Based. And stay tuned for more posts about how we can drive continuous talent development by enabling leaders and their teams to focus on valuable accomplishments (work outputs) rather than on vague and abstract competencies.

- Dr. Carl Binder, CEO

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