CIPD - Competency and competency frameworks

Performance management

Revised May 2008

This factsheet gives introductory guidance. It:

defines the term 'competency' and its evolving use in HR
looks at developing a 'competency framework'
considers the application of competency frameworks.

Background

Competencies emerged in the 1980s as a response to organisational changes and to wider changes in society. In 1982 the US academic, Richard Boyatzis wrote The competent manager: a model for effective performance¹. This book proved to have considerable influence on the profession and, over the following two decades, competency frameworks became an increasingly accepted part of modern HR practice.

The use of competencies was featured as a special area of investigation in our 2007 Learning and development survey.

See the full survey results

The survey results revealed that 60% of the respondents had a competency framework in place for their organisation and of those who didn’t almost half (48%) intended to introduce one. That still leaves some fifth of respondents planning to move forward without a competency framework. However 40% of those are organisations employing 250 or less, and are mainly concentrated in the private sector. So, with the exception of a proportion of small private sector firms, competencies seem to be an accepted feature of a modern organisation.

Those organisations that had a competency framework in place were asked what proportion of employees were covered. The results showed that on average almost four out of five employees (78%) were included. Half of those with a framework in place (50%) reported that they had a single framework across the organisation. It is common therefore for competencies to extend across the organisation and be expressed as a single framework.

Competencies or competences?

Although in the 1980s and 1990s HR professionals drew a distinction between 'competencies' and 'competences', now the two terms are often used interchangeably. 'Competency' is more precisely defined as the behaviours that employees must have, or must acquire, to input into a situation in order to achieve high levels of performance, while 'competence' relates to a system of minimum standards or is demonstrated by performance and outputs. In line with the approach developed in a number of CIPD publications, including Competency frameworks in UK organisations², the term 'competency' will be used throughout this factsheet except when specifically referring to the use of occupational standards (that is, an 'outcome-based' approach) in which case the term 'competence' will be used.

Basic principles of competency frameworks

Competencies are a signal from the organisation to the individual of the expected areas and levels of performance. They provide the individual with a map or indication of the behaviours that will be valued, recognised and in some organisations rewarded. Competencies can be understood to represent the language of performance in an organisation, articulating both the expected outcomes of an individual’s efforts and the manner in which these activities are carried out.

In a 2008 report published by Incomes Data Services³, the authors argued that competencies are typically used to define the behaviours that an employer values and believes will help it achieve its long-term goals. Competencies usually fall into two categories behavioural and technical. This report, which contains a series of illustrative case studies of frameworks in organisations, uses the term competency/competencies throughout.

Originally competency frameworks consisted mainly of behavioural elements – an expression of the softer skills involved in effective performance. Increasingly however, competency frameworks have become broader and more ambitious in scope and include more technical competencies. This development has been given greater momentum by the use of the PC and the intranet.

In designing a framework care should be taken that only measurable components are included. It is important to restrict the number and complexity of competencies, typically aiming for no more than 12 for any particular role (preferably less), and arranging them into clusters to make the framework more accessible to the users. The framework should contain definitions and/or examples of each competency.

A critical aspect of all frameworks is the degree of detail. If a framework is too general (containing only general statements about communication, team working, etc), it will not provide enough guidance either to employees as to what is expected of them or to managers who have to assess their staff against these terms. If, on the other hand, it is too detailed, the entire process becomes excessively bureaucratic and time-consuming and may lose credibility.

According to our 2007 Learning and development survey (see link above), the most popular names found in employer competency frameworks are, in order:

communication skills
people management
team skills
customer service skills
results-orientation
problem-solving.

Very similar findings emerged from the 2004 IRS survey⁴.

Developing a competency framework

Competency frameworks can be developed in a number of ways. It is possible to draw on the competency lists produced in support of occupational standards and the framework of National and Scottish Vocational Qualifications. Frameworks developed in this way are often linked with progression towards recognised qualifications. Competency lists are available on the web and these will come from a variety of sources. Many organisations develop their competency frameworks through an internal research programme, sometimes aided by advisers from an external consultancy. Methods of developing a framework range from importing an existing off-the-shelf package through to developing the entire thing from scratch. The best solution usually lies between these two extremes, namely internally generating a framework that builds in business relevance, but do this by adapting existing models that have already been widely used and have proved successful.

The information on design from our 2007 Learning and development survey (see link above) was very clear-cut. The overwhelming proportion of frameworks (85%) were designed in-house or in-house with consultants. A very small proportion (8%) used frameworks produced and made available by an external organisation (for example a trade association or government body). Yet many of the subjects that were included in the framework fell under expected generic headings.

In a July 2007 People Management article Steve Whiddett and Sarah Hollyforde argued that:

‘Many organisations develop a competency/behaviour framework with a view to managing performance and progression more effectively. However, many managers and individuals find it hard to use the frameworks to help achieve their goals and, therefore, the goals of the organisation.

The most common reasons for this are that people don’t see the benefit of the framework and aren’t trained adequately; there aren’t clear links to what the business is aiming to achieve and many frameworks are a mix of different concepts which makes them unwieldy.’

View the full article

They suggested the following simple steps to check whether a competency framework is fit for purpose:

Communicate the purpose - The first thing is to find out if employees understand what the purpose is. If they don’t understand how behaviours contribute to personal and organisational success, there is little point in updating or developing the framework
Identify key themes - Even if staff are clear about the purpose of the framework, it still needs to support the organisation’s aspirations (goals, values, business plans, and so on). If people aren’t all working towards these aspirations then some individual efforts are likely to be diversions from organisational success.
Get conditions right - The organisation’s procedures need to support the framework, and the culture, resourcing and management structures must be supportive too. Be realistic: if conditions inhibit behaviours then change the conditions or change the behaviours.
Tackle the root cause - As well as goals and conditions, behaviour is also influenced by underpinning characteristics (knowledge, skills and attitude). One underdeveloped characteristic, such as communication skills, can affect many different behaviours. If managers don’t understand this distinction they may focus on trying to improve the behaviour without tackling the root cause.
Keep it simple - There are two key elements to ease of use – language and structure. However ‘perfect’ the framework, if it’s too complicated, long or detailed it won’t be used. The language has to be meaningful to the people who use it.
Train, don’t blame - Once you have tidied up the structure make sure that everyone who uses the framework is trained in how to use it. A framework is a tool and, as with any tool, if users don’t know how to use it, it will fall into disuse or fail to meet its full potential.

This approach is based on material in their Competencies toolkit, published by CIPD.

Visit this item in the CIPD bookstore

When preparing a competency framework, it is important to take account of laws such as the Disability Discrimination Act 1995 and ensure that none of the competencies discriminate against any particular group of employees or potential employees.

The use of competencies

The early applications of competency frameworks were focused mainly on performance management and development, particularly of more senior staff. Today, however, it is recognised that an effective competency framework has applications across the whole range of human resource management and development activities.

Competency frameworks are now seen as an essential vehicle for achieving organisational performance through focussing and reviewing an individual’s capability and potential. Moreover a competency framework can be a key element in any change management process by setting out new organisational requirements.

For example, when the CIPD Change Agenda Focus on the learner considered the place of competencies it concluded that ‘competencies have been a feature of progressive human resources development for more than a decade. What is new is their central importance as a means of providing a framework for the learner, with his or her manager, to take responsibility for their own learning.’

Go to the Change Agenda

According to our 2007 Learning and development survey (see link above), the following in order are the main areas of application for competency frameworks:

underpins person reviews/appraisal
greater employee effectiveness
greater organisational effectiveness
more effective training needs analysis
more effective career management.

Whatever the application of competencies in the organisation it is possible to identify some important steps that must be taken to make them effective.

Research into the implementation and ongoing use of competencies in organisations has shown that employers consistently identify the same issues that can 'make or break' the effective use competencies. This is frequently seen to rest on building the motivation, understanding and commitment of line managers and employees.

Employers report that undertaking the following activities can help to build the commitment of employees and managers and therefore make for more effective use.

Involving managers and employees in the design and implementation of the framework.
Holding group briefings to explain the competency approach and the new framework.
Providing training to managers about the use of competencies which deals with the practicalities of using the framework to assess and manage staff.
Provide information and training to all employees, perhaps by producing a special leaflet or brochure to explain the new framework.
Raise awareness by publicising it in a staff newsletter or on the Intranet.

Strengths and weaknesses

The main benefits of a competency-based system

Employees have a set of objectives to work towards and are clear about how they are expected to perform their jobs.
The appraisal and recruitment systems are fairer and more open.
There is a link between organisational and personal objectives.
Processes are measurable and standardised across organisational and geographical boundaries. .

Criticisms of a competency-based system

To quote from the CIPD Competencies toolkit:

‘Criticisms of competency frameworks usually follow one of the following themes:

they capture the past and are therefore out of date
they cannot keep up to date with the fast changing world
they were introduced to improve performance and they have not done so
they are unwieldy and not user friendly
they create clones; everyone is expected to behave in the same way.

These criticisms have been levelled with justification at frameworks produced using poor practice. Such criticisms also reflect a lack of understanding of competencies .These are common and justified criticisms for some competency frameworks and their use in some organisations. However these criticisms do not challenge the need and usefulness of competency frameworks, highlight the need for care and understanding when developing and implementing competency frameworks’.

Case studies

Our website contains a number of examples of the use of competencies in learning and development. In particular, ‘Implementing a competency framework at the Jardine Engineering Corporation – Hong Kong’ offers a good illustration of the issues involved in developing a framework, and ’Using technology enablers to develop individual responsibility for learning: the Scottish Fire and Rescue Service’ provides some insight on how technology can be used to align organisational and individual development.

Visit the Helping People Learn case studies

References

BOYATZIS, R.E. (1982) The competent manager: a model for effective performance. London: Wiley.
MILLER, L., RANKIN, N. AND NEATHY, F. (2001) Competency frameworks in UK organisations: key issues in employers’ use of competencies. London: Chartered Institute of Personnel and Development.
INCOMES DATA SERVICES. (2008) Competency frameworks. HR studies, 865. London: IDS.
RANKIN, N. (2004) The new prescription for performance: the eleventh competency benchmarking survey. Competency & Emotional Intelligence Benchmarking Supplement 2004/2005. London: IRS.

Competency and competency frameworks