This is a great article, written by Frank Bafaro, Diana Ellsworth, and Neel Gandhi of McKinsey & Company (July 2017).
It talks about the benefits of HR stepping out of its traditional silo and taking on a strategic role, using talent to drive value. HR should be a driver of strategy and deploy talent in support of it. They can do this by utilizing new technological tools which unleash the power of data analytics.
But to use data analytics, there needs to be data. A robust Competency Management System (CMS) would be able to provide this data. But, too often organizations have a weak or nonexistent CMS, and there is limited valuable data.
A CMS is the foundational component supporting all aspects of Human Capital Management (HCM) across the entire business enterprise. This support and integration allows organizations to improve productivity in most areas of HCM. This includes (but is not limited to):
- Recruiting and Hiring
- Talent Development and Retention
- Job Performance and Evaluation
- Succession and Continuity Planning
- Sales and Procurement
- Learning Management
- Strategic Human Resource Planning
A robust Competency Based Human Capital Management system enables a capable tactical workforce, informs important business decisions, provides an intuitive picture of organizational capability, and empowers business strategy. A well implemented and intelligent system increases company agility; to better position an organization in today’s dynamic and challenging environment.
A good CMS will be clear, accessible and relevant to staff and managers throughout the organization. The nature of work is becoming more complex, skill requirements are overtaking the tradition distribution of ability in the workforce and creating a talent shortage. The ability to attract, select, and retain the best people is becoming a primary driver of business strategy.
Competencies create the best value for the individual and the organization when the dialogue around talent management starts with a focus upon individual competency and organizational capability. This will shift the culture from being primarily a deficit focus, to understanding how individuals, groups, and leadership work in unison through HCM processes and contribute to overall business success. Integration of the competency framework with the organization’s talent management policies and processes is essential to successfully embed the anticipated behavioral and performance changes. Organizations with a robust CMS typically boast:
- Dynamic Leaders
- Skilled Employees
- Learning and Innovation
- Workforce Recognition and Accountability
- World-Class Technology and Partnerships
- Benchmark Processes and Organization
The organization should design its CMS to ensure it not only improves staff motivation and performance, but critically reduces risks and potential for human error. The benefits of an effective CMS include:
- Improved employee motivation and performance on the job
- An organizational framework for talent identification, management, and development
- Reduction of incidents and accidents
- Greater efficiency
- A common framework which reduces administration and duplication across the organization
Whatever the nature of the organization, the competence of its people is the key to achieving business goals and objectives. It is also critical in ensuring a strong environmental, health, and safety performance. The need for organization-wide processes for both developing and monitoring the competence of staff is paramount within the organization and its supply chain.