HRINTERACTIVE

Employee engagement (or disengagement) has become one of the hottest issues in the workplace today. But with recent research highlighting the fact that employee disengagement is a global epidemic, organisations still clearly have much work to do to ensure that their workforce can be properly inspired and motivated.

The many faces of employee engagement

Workers around the world are fired up by completely different things, according to new research, meaning that a global, one-size-fits-all approach to employee engagement will almost inevitably be doomed to failure.

A study of workers in 22 countries by HR consultancy Mercer has found sharp differences around the world in what makes workers tick. Employees were asked which of 12 factors most influenced their engagement at work, with surprisingly varied results.

For Britons and Americans it is all about respect. . Workers in France and India cited the type of work they were doing as the strongest driver of engagement . For workers in France and India it is the type of work they are doing. For Germans it is who they work with. But it was notable that in Japan – where respect is much more of a “given” in society and culture in general – it was considered a much less significant driver of employee engagement. In Japan, employees rated base pay as their most important factor, while in China, benefits topped of the list.

Employee engagement, it is clear, takes many different forms around the world. Employees across the world considered a healthy work-life balance to be an important driver of engagement, this was also less of a factor for workers in China and India.

Being able to provide good customer service was also a strong driver globally, especially in the UK, yet was rated by Japanese workers as the least important of their 12 factors.

“Even when workplace characteristics are shared – such as English as a first language – differences in national culture, the state of economic development and market conditions can have a significant influence on employee expectations and perceptions of the workplace and, subsequently, on employee engagement,” said Dr Patrick Gilbert, a principal and employee research expert at Mercer.

“In the absence of any other information, focusing on the popular engagement factors would allow a multinational company to address areas that could raise levels of employee engagement,” he added.

“However, because context is so critical, it is more powerful to look at country-specific and organisation-specific data to raise levels of engagement.

“That includes conducting your own employee research and comparing the findings to normative data, analysing the results to identify the strongest drivers, and then developing a comprehensive action plan to produce the desired changes,” he recommended.

It was also clear that surveys on employee engagement had to be interpreted with caution, and very much located within their cultural and geographical context.

For example, employees responding to the study gave an overall favourable rating of 57 per cent to the 130-plus study questions.

Yet countries such as India, Mexico and China had much higher overall favourable ratings, while countries such as Japan, Korea and Portugal had much lower overall favourable ratings.

“Employee research has long documented consistent cultural differences across countries,” said Gilbert.

“When an organisation looks at its own employee survey data, it needs to take these differences into account,” he added.

“Without the benefit of this perspective, it could reach an incorrect interpretation – perhaps assuming that there are significant issues among its Japanese workforce and few issues with its Mexican workforce when, in fact, employee survey scores simply tend to be lower in Japan and higher in Mexico,” he concluded.

TEN STEPS TOWARDS ENGAGMENT

It can be a tall order trying to keep your employees interested and engaged in their work. According to the business consulting organization SCORE, there are 10 things you can do that will help. Keeping these things in mind can help you manage better and keep your office productive.

1. Throw out any pre-conceived notions you may have about employees in general.
2. Try to approach your people with fresh eyes and take into account their unique perspective.
3. Make sure all of your people are equipped with what they need to do their job.
4. When you manage your employees make sure they understand exactly what is expected of them in their respective jobs.
5. Take time to get to know your employees and what their career goals are.
6. Pay the money needed and take the time to make sure your workers are properly trained.
7. Ask your direct-reports to evaluate you. Find out how they perceive you and your work and adjust accordingly.
8. Pay attention to the office rituals and what’s going on around you.
9. Recognize and reward employees who have done their job well and do a good job of this so others will want to do the same.
10. Be consistent. Don’t start programs and then drop them after a few weeks. So stick with it.

Whatever you do, taking the old adage of the manager who hides in his office is exactly the wrong way to go. Talk to your people, get to know them, and treat them like human beings and you’ll get a response in return.

DISENGAGEMENT GAP

As another survey suggests that over a third of the workforce is disengaged and unsure how they can make a positive contribution, perhaps it’s time to look a bit more closely at exactly what this means and what employers can do about it.

A poll of 14,000 employees across 10 European countries by consultants Watson Wyatt has confirmed what a number of similar large-scale surveys have been suggesting over the past few years - namely that there is a vast reserve of untapped potential in the workplace in the form uncommitted or actively disgruntled staff.

It also revealed that more than four out of 10 are actively considering leaving their current employer.

But whereas a 2007 poll of almost 90,000 workers by workplace consultancy Towers Perrin found that just a fifth felt engaged with their work, Watson Wyatt found that only 13 per cent – fewer than one in seven – displayed both strong commitment as well as having a good understanding of the part they could play in making their organisations successful - an understanding Watson Wyatt term “line of sight”.

It is this combination of commitment and focus – rather than a simple label of engaged or disengaged – that forms the basis of five categories coined by Watson Wyatt to describe individuals’ contribution and effectiveness within their organisations.

According to the firm, segmenting a company’s workforce in this way enables it to understand its people management issues and consequently focus resources that retain the right people and increase their performance.

That desirable 13 per cent who score highly for both commitment and line of sight are “value creators” who are significantly more likely to be the top performers who contribute substantially to organisational success.

In contrast, a far larger proportion of employees - some 36 per cent - score poorly for commitment and/or line of sight. Yet rather than being lumped together as “disengaged”, these can be further divided into three similar sized groups.

Around one in 10 score badly on both counts. Generally the lowest-performing employees, they are often cynical and disgruntled with corrosive attitudes that can quickly affect their colleagues.

These are classically ‘disengaged’ individuals, Watson Wyatt argue, whose poor performance, if left unchallenged, will affect everyone in an organisation.

Then there are “aligned sceptics” who score high or medium for line of sight but have low commitment. While these are individuals that companies are at most risk of losing, they are not yet a lost cause and can be re-engaged and enthused with the right handling and development.

The “lost believers” are those employees who are reasonably committed but have poor line of sight. These provide different challenges to employers. While they are unlikely to leave, their weak line of sight leads to weak performance. With them the focus needs to be on developing their focus and direction to enable them to understand what they can do to make a successful contribution.

That leaves the remaining half of the workforce who Watson Wyatt characterise as “core contributors” – individuals who are either medium scorers for commitment but high scorers for line of sight, high scorers for line of sight but medium for commitment, or medium on both counts.

“There are excellent opportunities for substantial gains in engagement with this group of employees,” said Andrew Cocks, a senior consultant at Watson Wyatt.

“A large proportion have relatively high commitment levels but do not have the line of sight that characterises value creators.”

Since this is also the group with the most potential for improvement, they also merit the most attention from employers, he added. And by moving medium-engagement employees up in terms of individual performance, organisations can reduce their recruitment and retention costs.

“Programmes that improve line of sight could pay off handsomely, transforming at least some of these employees into value creators and allowing the company to benefit from their improved individual performance,” he concluded.

ROAD MAP FOR EMPLOYEE ENGAGEMENT

Now that we have identified the key drivers of employee engagement, we can start to create – and implement - a road map for achieving outstanding organisational performance through the Service-Profit Chain.

Enhance leadership:-. Effective organisational leadership is simple:

1. have a vision of where you want to get to,
2. clearly and persuasively communicate that vision to employees, and
3. be consistent in your behaviours as strive to achieve that vision. Do this and your employees will follow. Fail and you will be out there on you own.

Involve your people and value their input. Business journals are also brim full with articles about change. Ignore these too because they typically start from the Machiavellian premise that “people hate change”.

This is nonsense of course. People LOVE change – in fact they can hardly get enough of it.

Through the 1990s the UK DIY retail multiples experienced growth of over 185 per cent and in 2004 the sector was estimated to be enjoying a turnover of just over £7.3 billion. People hate change? And when the paint brushes and electric drills are put away for the night, these same people are tuning-in to makeover shows and gardening programmes.

People hate change? No, if people are involved in change (Do It YOURSELF) and their input to the process is valued they will readily engage with it.

Look after your reputation. If the world believes that your organisation is a poor “corporate citizen” they will tell your people. If your employees believe what they hear they will increasingly distance themselves from the business. And if they don’t, they will get increasingly frustrated if they see that you are doing nothing to correct these misperceptions.

Either way, organisations that proactively manage their reputations will also enjoy higher levels of employee engagement.

Could it be any simpler?

Well, actually, it could – because a common theme runs through all three stages of the process: COMMUNICATION.

And a major study by Watson Wyatt – Connecting Organisational Communication to Financial Performance – has given the ultimate end-to-end measurement: from key driver of employee engagement (communication) to shareholder return on activity.

The research found that “a significant improvement in communication effectiveness is associated with a 29.5 per cent increase in market value” and that “companies with the highest levels of effective communication experienced a 26 per cent total return to shareholders from 1998 to 2002, compared to a -15 per cent return experienced by firms that communicate least effectively”.

Effective communications create engaged employees create loyal customers who in turn create bigger profits .Furthermore, they found that organisations that communicate effectively were “more likely to report employee turnover rates below or significantly below those of their industry peers.”

In short: Effective Communications create Engaged Employees create Loyal Customers who in turn create Bigger Profits.

But we need to be clear about what is being said here. The report highlights the return on effective COMMUNICATION, not information. And communication is not just about telling people what you want them to do or are about to do to them – it is about genuine two-way dialogue with both employees and the outside world. And although this is simple it is not easy.

In fact it is going to be REALLY DIFFICULT to implement because there are four substantial barriers in place in most organisations:

Managers do not see communication as part of their day job. Most managers focus on “hard” measures, delivering the required outcomes on time, on budget, and on target. The “soft” stuff is all too often done on the side of the desk, as an extra-curricular activity, or abdicated to Personnel.

Giving people the information and instructions they need to achieve these outcomes is clearly part of the manager’s role. Communication, however, is still seen as “soft” stuff, even though the reality is that it is the hardest driver of organisational performance managers have at their disposal.

Managers have not developed their communication skills. Human beings are, bar none, the most effective natural communicators in the animal kingdom. A change in inflection, the tilt of the head and a knowing look can convey the most subtle nuances and utterly transform the meaning of a sentence.

But this is NATURAL one-on-one or one-on-few communication using techniques our species has evolved over millennia and which we have practiced as individuals throughout our lives. ORGANISATIONAL communication operates on a totally different scale and uses thoroughly unnatural tools.

Mobile phones, email, PowerPoint, teleconferencing – all are immensely powerful tools for communicating with a large, widely spread audience but all have been blamed for our failure to communicate effectively.

Why? Because our natural communication skills are so good we take it for granted that we will be competent organisational communicators too.

We are therefore making the assumption that we can use unnatural tools to engage with an unnaturally large audience without acquiring any additional skills. Naturally we are wrong!

Communication channels are absent, inappropriate, or over-subscribed. Decades of failing to take organisational communications seriously means that in many businesses appropriate channels have not been created or effectively maintained.

As the head of internal communications for a major blue-chip corporation recently commented “a decade ago the ‘internal communications department’ was an ex-journalist who churned out the employee newsletter once a month”.

Now things have moved on considerably, but even within progressive organisations there is still a legacy of poor channel infrastructure, usage and management to be tackled.

Communication around corporate citizenship is disjointed. Like internal communications, “community communications” is a new and developing discipline which is working through a host of legacy issues. Foremost amongst these are the need for organisations to enter into a true dialogue with the communities within which they operate and for all of the positive interactions within these communities to be “joined up”.

Again much progress has been made, but although Corporate and Social Responsibility (CSR) teams have done great work in gathering and promoting a wide range of issues, few companies could claim a truly strategic approach. And even fewer could claim that CSR is owned by each and every employee, which is where it needs to be if employees are to feel personal ownership and pride in the organisation they work for.

A manifesto for outstanding organisational performance : It is clear, therefore, that employee engagement is a major driver of organisational performance. And effective organisational communication is a significant driver of employee engagement.

If, as I do, you find the argument persuasive and you want to begin the process of breaking down the barriers to successfully harnessing the Service-Profit Chain for your organisation, I believe that you should sign-up to the following four-point manifesto:

1. Education: Every manager in your organisation must understand how effective communication drives performance
2. Development: Every manager in your organisation must recognise the difference between natural and organisational communication and commit to developing the required skills
3. Infrastructure: The organisation must invest in the development and maintenance of appropriate channels of communication
4. Community: The organisation must actively mange its reputation as corporate citizen and positively engage employees and the wider community alike

This is a simple plan, but it is not a sequential plan – all four areas can, and should, be tackled simultaneously.

This means that it will not necessarily be an easy plan to deliver, but business leaders MUST deliver because with almost nine out of 10 employees currently being either “disengaged” or just “moderately engaged” at work, the opportunity to drive outstanding organisational performance is simply too enormous to ignore.

THE WHAT & WHY OF EMPLOYEE ENGAGEMENT

In the past, it has been labelled the biggest commercial untruth since “the cheque is in the post”. Today, however, there is clear evidence that business leaders are not simply saying that “our people are our most important asset” – they are actually beginning to mean it too.

Why the change of heart? Because the body of evidence that employee engagement is a key driver of organisational performance grows almost daily. But with recent research by Towers Perrin highlighting the fact that employee disengagement is a global epidemic, organisations still clearly have much work to do to ensure that their workforce can be properly inspired and motivated.

The Service profit chain :- For many, the employee engagement story begins in 1994 when James Heskett and his colleagues at the Harvard Business School published their seminal paper Putting the Service-Profit Chain to Work.

The Service-Profit Chain model they had created could hardly be more intuitive: Employee Satisfaction drives Employee Retention drives Employee Productivity drives Service Value drives Customer Satisfaction drives Customer Loyalty drives Profitability and Growth.

Engaged employees create loyal customers who in turn create bigger profits . In short: Engaged Employees create Loyal Customers who in turn create Bigger Profits.

For a few, including Richard Branson at Virgin, this simple premise was the basis upon which they had already begun to build their businesses. As Branson says:

“We embarked on consciously building Virgin into a brand which stood for quality, value, fun and a sense of challenge. We also developed these ideas in the belief that our first priority should be the people who work for the companies, then the customers, then the shareholders. Because if the staff are motivated then the customers will be happy, and the shareholders will then benefit through the company’s success.”

Others, however, would need a more rigorous analysis if they were going to commit their organisations to this somewhat radical vision of “the shareholders come last”. Yet the Service-Profit Chain model’s greatest problem was that it was only supported by data collected by different companies at different points on the chain.

For example, in the banking sector it was known that a 5 per cent increase in Customer Loyalty could produce Profitability increases from 25 per cent to 85 per cent. Meanwhile, an insurance company had shown that when an experienced employee left the business Customer Satisfaction levels dropped from 75 per cent to 55 per cent.

In fact only quick-service restaurant chain Taco Bell had begun to do anything like an end-to-end analysis of the chain, observing that the 20 per cent of stores with the highest Employee Retention rates enjoyed double the sales and 55 per cent higher profits than the 20 per cent of stores with the lowest Employee Retention rates.

As a result, although the Service-Profit Chain model seemed logical and sensible, the potential return on investment was unknown. This made it difficult for business leaders to assess how much effort they should be making to embed it within their organisations.

Welcome to the 21st century

What a difference a decade makes, because today’s business leaders have end-to-end Service-Profit Chain data coming at them from all angles!

Sirota Consulting studied 28 multinational companies though 2004 and found that the share prices of organisations with highly engaged employees rose by an average of 16 per cent compared with an industry average of 6 per cent.

Meanwhile, an ISR study published in August 2005 showed that companies with low levels of employee engagement saw net profit fall by 1.38 per cent and operating margin fall by 2.01 per cent over a 36-month period. In companies with above average levels of employee engagement profits rose by 2.06 per cent and operating margin rose by 3.74 per cent over 36-months.

And it gets even better, because the research has now been completed which identifies the key drivers of employee engagement. In other words, a “road map” for achieving outstanding organisational performance through the Service-Profit Chain has been developed and is ready for immediate implementation.

You are a smart person. You got good grades in a good school and you had your choice of careers. Some people thought you should be a doctor, and some people thought you should be a lawyer. A few said “Investment banking.” The world is your oyster.

And then you pick a career in Human Resources, and everyone from your college career counselor to your parents scratch their heads and wonder why you are throwing your life away. You could be so big and important in those other jobs. Why HR?

Here’s why ??

Stephen Covey’s The Seven Habits of Highly Effective People was one of the best selling books of all time. Two years ago Mr. Covey followed that book with an equally compelling reading experience titled The 8^th Habit: From Effectiveness to Greatness. Covey says that there is a great unmet need in corporate life for purpose and clarity.

To get this point across, he provides the following information: (page 2 and 3)

I frequently ask large audiences, “How many agree that the vast majority of the workforce in your organization possesses far more talent, intelligence, capability and creativity than their present jobs require or even allow?” The overwhelming majority of the people raise their hands, and this is with groups all over the world.

He then provides the following data from a Harris Questionnaire of 23,000 U.S. residents employed full time within key industries and in key functional areas:

• Only 37 percent said they have a clear understanding of what their organization is trying to achieve and why.
• Only 1 in 5 was enthusiastic about their team’s and organization’s goals.
• Only 1 in 5 workers said they have a clear “line of sight” between their tasks and their team’s and organization’s goals.
• Only half were satisfied with the work they have accomplished at the end of the week.
• Only 15 percent felt that they organization fully enables them to execute key goals.
• Only 15 percent felt they worked in a high-trust environment.
• Only 17 percent felt their organization fosters open communication that is respectful of differing opinions and that results in new and better ideas.
• Only 10 percent felt that their organization holds people accountable for results.
• Only 20 percent fully trusted the organization they worked for.
• Only 13 percent have high-trust, highly cooperative working relationships with other groups or departments.

To drive his point home, he ends with the following:

If, say, a soccer team had these same scores, only four of the eleven players on the field would know which goal is theirs. Only two of the eleven would care. Only two of the eleven would know what position they play and know exactly what they are supposed to do. And all but two players would, in some way, be competing against their own team members rather than the opponent.

Every single one of the problems listed above is an area where HR, more than any other function, can have a positive impact on the competitive advantage of the enterprise.

And this is why it is so critical for you to do whatever it takes to get out of the administrative crap that weighs you down and prevents you from getting to your real HR work. Want to know what the “Real HR Work” is? Just look at the list above. Raise those numbers and you raise shareholder value.

EFFECTIVENESS  OF PMS

Traditionally, appraisal systems have been measured against percentage completion and timeliness. However, such a measurement is incomplete and does not bring out the best from this powerful people development tool.

Efficiency & Effectiveness

There are two sides to measurement. Measuring efficiency is the most commonly practised. While recruitment efficiency has been measured against time-to-hire and hiring cost, training efficiency is based on the man-days of training conducted, reaction-level evaluation, schedule integrity and employee attendance. The efficiency of the performance appraisal system has been frequently measured against its adherence to timelines for goal-setting and review/rating, the employees covered for completion, and the like.

The primary motivation for efficiency measurement has been the ease of measuring these parameters. The real challenge lies in measuring the not-so-easy effectiveness of HR systems. The measurement of effectiveness can have an impact on enhancing the human capital of the organisation. Effectiveness dimensions provide qualitative insights essential for making fruitful decisions on the part of the stakeholders.

Stakeholder advantage

While efficiency-focused measurements of the performance management system may benefit the HR function or department, key stakeholders like the employees themselves and their managers do not stand to gain anything from this level of measurement. To that extent, efficiency-oriented measurements become “pseudo measurements” that do not deliver any value.

We should have a more complete ‘assessment model’ for assessing an organisation’s performance management system. While there can be many other frameworks, we should have a framework suiting our organisation . This will  help us to get the maximum benefit for all the stakeholders involved, in leveraging the developmental tool of the appraisal system.

The Staircase approach

The staircase model combines both the efficiency and effectiveness required of a good appraisal system, ensuring that the system delivers the intended benefit. The approach covers the holistic perspective for measurement.

Level 1 – Process compliance: Most organisations measure the effectiveness of their performance management systems at this level. Process compliance refers to satisfying a check-list of parameters relating to system implementation. This check-list includes, amongst others, adherence to timelines while goal-setting; quarterly, mid-year or annual reviews; and signatures of employees appraiser and reviewing managers and HR as the system may warrant.

Level 2 – Content completeness: In some organisations, the HR function takes the measurement to the next level by either randomly or entirely checking the appraisal documents. This ensures that the employee, appraiser and the reviewing managers have filled out the form in detail. If a manager has not done a good job, HR sends the appraisal document back. The manager is also invited to go through a refresher module so that the nuances and seriousness of doing a comprehensive appraisal is understood for the future.

Level 3 – Vitality curve analysis: Mature organisations go beyond levels 1 and 2. They also do a detailed analysis of the employee distribution in terms of their rating category and draw up a “vitality curve” or what is popularly known as the “bell curve.” The vitality curve and accompanying analysis helps organisations segment talent, which is the first step towards creating a high-performance culture besides identifying a slate of high-potential candidates when viewed along with a robust potential identification process. Talent segmentation is also necessary to tailor specific development actions.

Level 4 – Employee experience: At this level, HR partners the different business units within an organisation to measure the employee’s experience with the appraisal review process. This involves choosing randomly 12 to 15 per cent of the employees and asking them questions on their experience with the performance management cycle. The focus is on the quality of the appraisal review session, the quality of the dialogue, the manager’s willingness to receive feedback and the nature of the discussions around developmental actions and the like.

While levels 1 and 2 represent the efficiency focus, levels 3 and 4 make up the effectiveness focus of the measurement of the performance management system. Interestingly, the higher levels of measurement in the staircase model do not call for sophisticated tools. Well-trained HR partners and those responsible for HR analytics can do this with ease.

Value creation

Have you seen the  bill-board advertisement of a popular brand of two-wheeler some 20 years ago. It read: “Fill it, Shut it and Forget it!” This was to communicate how easy it was to handle the bike.

Looking at the way in which some organisations handle performance management, one is reminded of a similar approach. Organisations are more concerned with filling it, closing it and filing it away without much thought being given to the action that should follow a good appraisal session.

The appraisal process conducted along the staircase model promises clear value creation. Until then, McGregor taking an uneasy look at appraisals is well justified!

Many business leaders have few kind words for the HR Function. They just don’t understand the vital role it can play .

At a leadership conference , the president of a large manufacturer. explained  ”We’ve done a lot to turn the division around but we have a ways to go. I’m saddled with a weak human-resources group,They’ve slowed our key initiatives. That’s the way it goes when you’re dealing with HR, “

Can you imagine a division president complaining that  he’s been saddled with a weak sales force or a weak product team.  

Leaders get the staffs they deserve, and HR groups are no exception.”

Why is it that HR is so often the scapegoat when companies aren’t getting the results they want? True, there are HR people out there who are abysmally ineffectual. But they keep their jobs at the pleasure of CEOs.

Why is that?

Liz Ryan ,  a veteran of 20 years in HR,  offers three reasons .

Business leaders don’t understand HR. Meaning, CEOs often don’t know what results they should expect. This is odd because, for me, the HR role is as clear as day. Look at it this way: Your CFO is responsible for dollars in and dollars out, for short-term accounting and long-term financial leadership. It’s his or her job to keep the company fiscally sound. Ditto for the HR leader, only substitute the words “talent” and “organizationally” for “dollars” and “fiscally.”

You can tell that a lot of corporate leaders don’t understand this just by observing how low their expectations are when they hire an HR leader. Browse Monster.com and you’ll see openings for vice-presidents of HR that don’t mention vision or excellence or talent. Instead, they stress recruitment , Salary/Payroll  Admn , and succession planning. That would be like advertising for a chief financial officer who was an expert in general ledger accounting and accounts receivable. Earth to CEOs: Do you want a visionary HR leader or a functional specialist?

Top execs often undervalue the HR leadership role. I’ve noticed that many of the companies that display their leaders’ bios on the About Us page of their Web sites leave out the HR leader. Should it bother anyone that many companies have a vice-president of sales, a vice-president of marketing, a CFO, CIO, and a vice-president of operations, but only a lowly director of HR? Or that many top-level HR leaders report to the CFO or general counsel rather than to the CEO?

Here’s the thing: You can’t say that people make your organization what it is and then discount the human-resources function.

Reporting structures send a signal. If HR reports to the CEO, then the company may be serious when it brags that “people are our most important asset.” Stick it under legal or finance, and the implication is: “We were only kidding when we said that our people set us apart from our competitors.”

A company that is serious about developing its people will make its top HR post an executive team position. And it will find a business person with world-class qualifications to put there.

I have this advice for anyone who interviews for the top HR spot: When the conversation turns to your compensation, say: “I will require the same compensation as your CFO.” Of course, as HR leader you’ll be privy to this information, so there’s no fooling you. Why would a company hesitate to pay its top people officer just what its top money officer is earning? Beats me — unless the company doesn’t value its people as much as it says it does.

VICIOUS CIRCLE :-  Many HR leaders don’t exactly burn the house down. Notwithstanding some wonderful counterexamples, the level of HR leadership in many companies falls short of what it might be, could be, and should be. Inspired and inspiring leaders aren’t as often drawn to HR as one would wish — or they’re drawn to it early in their careers before being hired away for more rewarding assignments.

It’s a vicious circle: HR doesn’t pay what it should, so good people leave, and brilliant candidates aren’t attracted to the field, so HR doesn’t pay what it should, and so on.

Any CEO can snap her fingers and break that cycle, however. To do so only requires a relentless determination to find a creative, fearless, and business-savvy HR leader. Pay this person appropriately, demand that he produce results — meaning, assemble a championship team both for now and the future — and stand back.

With the business world changing so quickly, what competitive advantage can an organization hope to build and sustain beyond the abilities of its people? Surely not its equipment, its methods, or even a financial advantage. You have to have the team that can win — well equipped, smartly led, and highly motivated — if you want to get ahead of the pack and stay there. If, by contrast, it’s important to you to save a few bucks on your coaching staff payroll, you had better get comfortable in the minor leagues.

If your HR team is an impediment, upgrade. When you decide that you’re serious about the results you want, you’ll do that. In the meantime, a weak HR group is a great excuse for things that don’t go the way you want.”

Could this be another reason for the mediocrity of HR leadership in. organizations — that when things go wrong, it’s always nice to have someone around to blame?

WHAT IS HR COMPETENCE ?

Competence refers to an individual’s knowledge, skills, abilities, or personality characteristics that directly influence his or her job performance. The concept of individual competence has a long tradition in the managerial field. Most of this work has focused on leaders and general managers. Other research has sought to specify HR competencies through interviews with executives within a single firm or from a limited set of firms. Many companies have tried to identify HR competencies by asking line managers within the company what they expect from HR and the kinds of competencies HR professionals should exemplify (e.g. what line managers need from HR) This approach assumes that each company may have unique expectations of its human resources professionals and that, as clients, line managers play a central role in defining those expectations.

Defining HR competencies company by company through executive interviews has some advantages. For one thing, it anchors the findings in behaviors, because the questions asked in the interviews can target actual cases in which HR professionals within the company demonstrated competence. It also tailors the process to the specific needs of the companies in question. However, the danger is that executives may not know what they donot know. That is, they may identify only those competencies they have seen, when in fact other HR competences may have more importance for their firm if they only knew about them. This approach may also lead to biased results, depending on the sample of executives chosen for interviews. Executive’s managerial orientation, rather than the actual needs of the business, may influence their expectations of HR. For example, line managers that have never seen HR professionals in a strategic role may not be able to think of HR as anything other than administrative overhead. Firms generally have idiosyncratic requirement for implementing strategy. Therefore, while firm-specific studies may yield some interesting examples, these case studies alone will not provide an overall competency model for the HR profession

Three large-scale HR competency studies, conducted in the 1990s, have shed some interesting light on the status of this profession. In the first study, Towers Perrin collaborated with IBM to survey 3,000 HR professionals, consultants, line executives, and academicians about a broad range of HR issues. The work revealed a rather diverse perspective on HR competencies. Among the four groups surveyed, the most commonly identified competencies included the following:

* Computer literacy (line executives)

* Broad knowledge of and vision for HR(academics)

* Ability to anticipate the effects of change (consultants)

* HR’s education of and influence on line managers (HR executives)

The second study was recently sponsored by the Society of Human Resource Management Foundation. This work focused on the future competency requirement of HR professionals. Based on data from 300 HR professionals from different industries and companies of different sizes, this study concluded that core human resources competencies center on leadership, management, functional, and personal attributes that must be augmented by level and role specific competencies.

The third and most extensive of the HR competency surveys was conducted at the University of Michigan School of Business in three rounds over a ten-year period (1988 to 1998). This work involved more than 20,000 HR and line professionals and identified human resources competencies across HR functional specialties, industries, firms, and time. The study aimed to create a competency template for the entire HR profession, not just for a single firm.

CREATE A STRATEGY MAP

A strategy map  means that a strategy for the firm must have a suitable plan for implementation. Strategy precedes planning and planning must follow strategy. This sounds more of a theory but helps the concerned managers how to go about creating the strategy map or structure or guidelines for the firm.

Clarifying your firm’s strategy sets the stage for implementing that strategy. But it is just the first step. In most organizations, the customer value embodied in the firm’s products and services is the result of a complex, cumulative process- what Michael Porter refers to as the firm’s value chain. All firms have a value chain even those that have not articulated it”and the company’s performance measurement system must account for every link in that chain.

To define the value-creation process in your organization, we recommend that the top and mid-level managers who will be implementing the firm’s strategy develop what Bob Kaplan and Dave Norton call a strategy map to represent the firm’s value chain. Such graphic representations of the company’s value chain reveal how the firm creates value in terms that managers and employees alike can grasp and act on. The value-chain mapping process should involve managers from all functions across the organization. This broad participation not only improves the quality of the strategy map but also increases buy-in among critical players. To begin the mapping process in your own organization, take a close look at your company’s strategic objectives and ask yourself the following questions:

* Which strategic goals / objectives / results are critical rather than nice to have?

* What are the performance drivers for each goal?

* How would we measure progress toward these goals?

* What are the barriers to the achievement of each goal?

* How would employees need to behave to ensure that the company achieves these goals?

* Is the HR function providing the company with the employee competencies and behaviors necessary to achieve these objectives?

These simple questions can generate a wealth of information about how well a firm’s HR function has been contributing to the organization’s success. These discussions should be  supplemented with a variety of other information gathering tools, including questionnaires to test employee’s understanding of the firm’s goals, and surveys to generate additional data about the firm’s performance drivers and organizational capabilities. Once you think you have a full picture of your firm’s value chain, translate the information that you have gathered into a conceptual model using language and graphics that make sense in your organization. Then test for understanding and acceptance in small groups of opinion leaders and though leaders throughout the firm.

A strategy map of the value-creation process contains hypotheses, or predictions, about which organizational processes drive firm performance. Normally, a company validates these hypotheses only after achieving targets on performance drivers and observing the impact of these results on firm performance. However, if the organization can graphically depict the relationships among performance drivers while mapping the firm’s value chain, it can have that much more confidence in its strategy implementation planning.

COMPETENCY BASED JOB ANALYSIS

Not coincidently, many employers and job analysis experts say traditional job analysis procedures cannot go on playing a central role in HR management. Their basic concern is that in high performance work environment in which employers need workers to seamlessly move from job to job and exercise self-control, job description based on lists of job-specific duties may actually inhibit (or fail to encourage) the flexible behavior companies need. Employers are therefore shifting toward newer approaches for describing jobs, one of which, competency-based analysis.

Competencies can be simply defined as demonstrable characteristics of the person that enable performance . Job competencies are always observable and measurable behaviors comprising part of a job. Unfortunately, once we get beyond that simple definition, there is some confusion over what exactly Competencies mean. Different organizations define ✠competencies in somewhat different ways. Some define them more broadly and use competencies synonymously with the knowledge or skills or abilities a person needs to do the job. Others define competencies more narrowly in terms of measurable behaviors.

Competency-based job analysis means describing the job in terms of the measurable, observable, behavioral competencies (Knowledge, skills and/or behaviors) that an employee doing that job must exhibit to do the job well. This contrasts with the traditional way of describing the job in terms of job duties and responsibilities. Traditional job analysis focuses on what is accomplished on duties and responsibilities. Competency analysis focuses more on how the worker meets the job’s objectives or actually accomplishes the work. Traditional job analysis is thus more Job focused. Competency-based analysis is more worker focused specifically, what must he or she be competent to do?

Why use Competency Analysis? There are three reasons to describe jobs in terms of competencies rather than duties. First as mentioned earlier, traditional job descriptions with their lists of specific duties may actually backfire if a high performance work system is the employer’s goal. The whole thrust of these systems is to encourage employees to work in a self-motivated way, by organizing the work around teams, by encouraging team members to rotate freely among jobs (each with its own skill set) by pushing more responsibility for things like day-to-day supervision down to the workers and by organizing work around projects or processes in which jobs may blend or overlap. Employees here must be enthusiastic about learning and moving among jobs. Giving someone a job description with a list of specific duties may simply breed a that is not- my-job  attitude, by compartmentalizing workers too narrowly.

Second, describing the job in terms of the skills, knowledge, and competencies the worker needs to be more strategic. For example, Canon’s strategic emphasis on miniaturization and precision manufacturing means it should encourage some employees to develop their expertise in these two strategically crucial areas.

Third, measurable skills, knowledge, and competencies are the heart of any company’s performance management process. As at Canon, achieving a firm’s strategic goals means that employees must exhibit certain skills and competencies. Performance management means basing employee’s training, appraisals, and rewards on fostering and rewarding the skills and competencies he or she needs to achieve his or her goals. Describing the job in terms of skills and competencies facilitates this.

Examples of Competencies: In practice, managers often write paragraph-length competencies for jobs, and organize these into two or three clusters. For example, the job’s required competencies might include general competencies such as reading, writing, and mathematical reasoning, leadership competencies such as leadership, strategic thinking, and teaching others and technical competencies which focus on the specific technical competencies required for specific types of job and/or occupations.

Illustrations:

Some technical competencies for the job of systems engineers might include the following:

1. Design complex software applications, establish protocols, and create prototypes.

2. Establish the necessary platform requirements to efficiently and completely coordinate data transfer.

3. Prepare comprehensive and complete documentation including specifications, flow diagrams, process patrols, and budgets.

Similarly, for a corporate treasurer, technical competencies might include:

1. Formulate trade recommendation, by studying several computer models for currency trends, and using various quantitative techniques to determine the financial impact of certain financial trades.

2. Recommend specific trades and when to make them.

3. Present recommendations and persuade others to follow the recommended course of action (Note that exhibiting this competency presumes the treasurer has certain knowledge and skills tat one could measure).

History of Competencies

A team of Educationists lead by Benjamin Bloom in the USA in mid fifties laid the foundation for identifying educational objectives by defining the knowledge attitudes and skills needed to be developed in education.

David McClelland the famous Harvard Psychologist has pioneered the competency movement across the world. His classic books on “Talent and Society”, “Achievement Motive”, “The Achieving Society”, “Motivating Economic Achievement” and “Power the Inner Experience” brought out several new dimensions of the competencies. In the article published in American Psychologist in 1973 McClelland presented data that traditional achievement and intelligence scores may not be able to predict job success and what is required is to profile the exact competencies required to perform a given job effectively and measure them using a variety of tests. This article combined with the work done by Douglas Brey and his associates at AT&T in the US presented evidence that competencies can be assessed through assessment centers and on the job success can be predicted to some extent by the same has laid foundation for popularization of the competency movement.

Latter McBer a Consulting Firm founded by David McClelland and his associate Berlew have specialized in mapping the competencies of entrepreneurs and managers across the world. They even developed a new and yet simple methodology called the Behavior Event Interviewing (BEI) to map the competencies. With increased recognition of the limitations performance appraisal in predicting future performance potential appraisal got focused. And Assessment centers became popular in seventies.

Competency mapping is the process of identification of the competencies required to perform successfully a given job or role or a set of tasks at a given point of time.

It consists of breaking a given role or job into its constituent tasks or activities and identifying the competencies (technical, managerial, behavioral, conceptual knowledge, an attitudes, skills, etc.) needed to perform the same successfully.

What is Competency?

Any underlying characteristic required performing a given task, activity, or role successfully can be considered as competency. Competency may take the following forms: Knowledge, Attitude, Skill, Other characteristics of an individual including: Motives, Values, Self concept etc.

Competencies may be grouped in to various areas. In classic article published a few decades ago in Harvard Business Review Daniel Katz grouped them under three areas which were later expanded in to the following four: Technical. Managerial, Human and Conceptual. This is a convenience classification and a given competency may fall into one or more areas and may include more than one from. It is this combination that are labelled and promoted by some firms as competency dictionaries. A competency dictionary of a firm gives detailed descriptions of the competency language used by that firm. It contains detailed explanations of the combinations of competencies (technical, managerial, human and conceptual knowledge, attitudes and skills) using their own language. For example Team work or Team Management competency can be defined in terms of organization specific and level specific behaviors for a given origination. At top levels it might mean in the case of one organization ability identify utilize and synergize the contributions of a project team and at another level it might mean ability to inspire and carry along the top management team including diversity management. In competency mapping all details of the behaviors (observable, specific, measurable etc.) to be shown by the person occupying that role are specified.

Who Identifies competencies?

Competencies can be identified by one of more of the following category of people: Experts, HR Specialists, Job analysts, Psychologists, Industrial Engineers etc. in consultation with: Line Managers, Current & Past Role holders, Supervising Seniors, Reporting and Reviewing Officers, Internal Customers, Subordinates of the role holders and Other role set members of the role (those who have expectations from the role holder and who interact with him/her).

What Methodology is used?

The various methods used in combination for competency mapping : Interviews, Group work, Task Forces, Task Analysis workshops, Questionnaire, Use of Job descriptions, Performance Appraisal Formats etc.

How are they Identified?

The process of identification is not very complex.

1. Simply ask each person who is currently performing the role to list the tasks to be performed by him one by one, and identify the Knowledge, Attitudes, and Skills required to perform each of these. Consolidate the list. Present it to a role set group or a special task force constituted for that role. Edit and Finalize.

2. Appoint a task force for each role.

What Language to Use?

Use Technical language for technical competencies. For example: knowledge of hydraulics.

Use business language for business competencies. Example: Knowledge of markets for watch business or Strategic thinking.

Use your own language or standard terms for Behavior competencies. Example: Ability to Negotiate, Interpersonal sensitivity, Sales techniques. Too technical and conceptual knowledge align to the organization and people may create more problems than help

Who can do it?

Competency mapping is a task which can be done by many people. An Employee with Experience and Training can develop these competencies. Conceptual Background and Understanding of the business is important. Familiarity with Business, Organizations, Management and Behavioral Sciences is useful. HR Managers, Management Graduates, Applied Psychologists are quite qualified to do this. Most institutions specializing in HR train the candidates to do this.

STEPS OF COMPETENCY MAPPING

For competency mapping to be productive, the organisation has to be clear about its business goals in the short- as well as long-term and the capability-building imperatives for achieving these business goals.

The process starts from as macro an endeavour as understanding the vision and mission of the organisation and how that translates into specific, time-bound business goals.

It then goes on to delineating the organisation structure clearly, and identifying the various levels and positions, as well as the reporting relationships obtaining within that.

For each position / level, the mapping exercise should outline the roles and responsibilities of the position; short-term goals to the extent that they are qualified; skill sets required for the job; and soft skill sets required for the job plus interaction with other units / personnel.

Some Tips on How to do it?

The following are some of tips to do competency mapping at low cost:

Pick up a job or a role that is relatively well understood by all individuals in the company. Work out for this role and give it as an illustration. For example Sales Executive, Production Supervisor, Assistant HR Manager, Receptionist, Transport Manager, PR Manager, etc. are known to all and easy to profile.

Work out competencies for this role if necessary with the help of job analysis specialist or an internal member who has knowledge of competency mapping. Prepare this as an illustration.
Circulate these others and ask various departments to do it on their won.
Circulate samples of competencies done by others
Illustrate knowledge, attitudes, skills, values etc.
Choose a sample that does not use jargons
Explain the purpose
Interview of past successful job holders helps
Current incumbent who are doing a good job along with their Reporting officers is a good enough team in most cases.
Once prepared even on the basis of one or two individuals inputs circulate to other role set members

USAGE OF COMPETENCY MAPPING

Competency mapping comes in very useful in the following situations:
job-evaluation;
recruitment
performance management and performance diagnostics
Succession planning
Employee potential appraisal for promotion;
Training needs identification; training and development
and Self-development initiatives.

A problem with competency mapping, especially when conducted by an organization is that there may be no room for an individual to work in a field that would best make use of his or her competencies. If the company does not respond to competency mapping by reorganizing its employees, then it can be of little short-term benefit and may actually result in greater unhappiness on the part of individual employees. A person identified as needing to learn new things in order to remain happy might find himself or herself in a position where no new training is ever required. If the employer cannot provide a position for an employee that fits him or her better, competency mapping may be of little use.

However, competency mapping can ultimately serve the individual who decides to seek employment in an environment where he or she perhaps can learn new things and be more intellectually challenged. Being able to list competencies on resumes and address this area with potential employers may help secure more satisfying work. This may not resolve issues for the company that initially employed competency mapping, without making suggested changes. It
may find competency mapping has produced dissatisfied workers or led to a high worker turnover rate.

In good organisations competency mapping existed already. Traditionally HR Directors and their top management have always paid attention to competencies and incorporated them mostly in their appraisal systems. For example when L&T, LIC or NDDB, NOCIL, HLL, Bharat Petroleum etc. revised their Performance appraisal systems they focussed on the assessment of competencies. Role analysis was done and role directories prepared by the Indian Oil Corporation in mid eighties.

Competency mapping is important and is an essential exercise. Every well managed firm should: have well defined roles and list of competencies required to perform each role effectively. Such list should be used for recruitment, performance management, promotions, placement and training needs identification.