Case Study – Business will only succeed if we have competent managers and employees.
The performance management system will fall down if we do not have competent managers and employees. It is essential that the organisation develops the position specification, based on the organisation strategic objectives, before we consider the employees or applicants. If not the organisation could just be reinforcing the past behaviours and practices.
Understanding both the Position first then the Employee
A quantitative performance management system, when integrated into an outcome-based competency approach, is certainly a means of identifying competency shortfalls of employees at all levels including managers, CEO and Board. It is the organisations that are prepared to address these shortfalls that will develop and grow. We have recently been commissioned to undertake the assessment of senior managers in a medium sized organisation one of its subsidiaries.
The commission was to design 17 ideal positions based on the organisations strategic direction for the next 3 years.
Assessing the Competence of the Incumbents against the Ideal Position
The next step was to assess the 19 incumbents against the ideal competency profiles using an outcome based competency approach. The findings were frightening (see the graph below):
1. 17 of the 19 assessments failed to reach the required level i.e. only 2 incumbents were fully competent against the positions they held and were being paid to do.
2. Five (5) incumbents were more than 10% under the required competency level and the most incompetent was 18% under capacity.
3. The average gap was 8.6% i.e. the organisation had managers that were on average 8.6% “under power” but some managers nearly 20% under power/under competent.
4. Performance of the functional areas broadly reflected the competence of the managers.
The “Spring Effect “of Incompetent Managers
The next interesting fact was that generally where a senior manager was less competent than they should be then the managers/employees under them were also operating at a level below where they should be. We refer to this as the spring effect where an incompetent manager will compress those below them. If this continues for an extended period those under the incompetent manager could over time lose competence – we refer to this as learned helplessness i.e. they can be less competent than when originally employed. The data on a selection of employees go back 14 years and while the position design/size has grown the incumbents could be going backwards where the manager is well below the competence required.
Competency Based Learning and Developing
The assessment of incumbents is similar to recruitment. The first step is:
1. Design the position specification is prepared by defining a) Outcomes the position delivers to the stakeholders; b) Performance measures (how do we measure the outcomes) and c) what are the competencies required to deliver the outcomes at the standard set by the performance measures. This design provides a role size and position evaluation by linking to market data in a smart human capital management system;
2. A specification now exists for the ideal role/position against which the incumbent, applicant or succession plan candidate can be assessed. The human capital management systems that size and value the roles can also generate the appropriate questions for the assessment. The assessment provides the employee or applicant size, value and competency gaps against the ideal role. From a size perspective, around Band 8 is a CEO sized position and Band 6 a departmental or regional manager level.

The design of the role/position allows for the “acquiring of the asset” through the matching processes like recruitment, assessment, succession planning etc. The role/position design also incorporates the performance measure a competent incumbent should be able to achieve. Therefore the performance achievement can be compared at any time to the set performance measures. When an envelope approach is used this will empower the employees to manage and report back on their performance. The performance management system now becomes a major component of the human asset “maintenance system” .
Max Underhill
Maxumise Consulting Pty Limited