What “Competencies” IS………? In financial Sector

 

                                              


There has always been a tension that exists when defining Competencies. There is talk of core competencies personal competencies, job competencies etc. Where do skills abilities and knowledge fit in?

One definition mostly used is that competency is: “ An underlining characteristics of a person which results in effective and superior performances in job” (Boyatsis, 1982, p. p21) and later definition came from the training commission in 1988 which states that competencies is “The ability to perform the activities within an occupational area to the levels of performance expected in employment”.

Both these definitions suggests that the skill levels and knowledge need to be present in order to display the competency ,otherwise it would be deemed to be a form of incompetence until the necessary skill and knowledge level could be demonstrated.

There appear to be increasing use of competencies in financial service organizations, particularly in recruiting and developing people According to McCelland in 1973, who suggested that “When recruiting managers should assess competencies rather than intelligence”. This implies that it’s not what a person knows that important rather that what they actually do at work which matters.

Most of the financial institutions in Sri Lanka believe that competencies will enhance the performance and success of the organization (Annual report HRM section of Financial institutions Sri Lanka) and the individuals. These competencies incorporated with the performance management system so that individuals can gain feedback on the key competencies required to perform the work.

Types of competencies:

Competencies can be applied in different ways. For examples it could be argued that competencies can be based on various factors such as: Core competencies, Team competencies, Industry, Job/role oriented competencies, Organizational competencies.

 

Core competencies:

According to an article by Gary Hamel and CK Prahlad – core competencies are the skills, characteristics, and knowledge that form the defining strengths of a company.

They provide value to the customers, are rare to find, and are hard for competitors to imitate perfectly.

Business strategist  Daniel W. Rasmus  has talked about “Emotional infrastructure.” This infrastructure refers to the bonds and work relationships that develop between employees of the company. That bond gets fractured when that work is outsourced to external partners.

“If firms want to do more than execute themselves into a corner, if they want to create innovative products, processes and services, then they need to invest in fostering relationships that shore up their faltering emotional infrastructure.” (Daniel W. Rasmus, “How Clinging to Core Competencies is breaking your Organization’s Heart”)

 Team Competencies:

The term ‘teamwork’ gets used a lot, but what is it based on? Team competencies are the answer. Every team might require a particular set of competencies depending on the project or function. From Team competencies can acquire following advantages

·         Collaboration: Fact sharing, and fact-checking, by volunteer writers and editors.

·         Neutrality: Ensuring that the content is factual, unbiased, and neutral.

·         Knowledge integration: Providing encyclopaedic value by putting the data in its proper context, with explanations supported by verifiable sources.

Role/Individual competencies

There are job specific such as business planning and financial control and are very functional and therefore quite clear about the behaviour and output expected.

Personal competencies

There are skills and abilities demonstrated by an individual at an adequate level such as team working, motivation of self and others, leadership communication. Personal competencies enhance an individual’s marketability and can be cross financial so far example of good team leader would be welcome in planning department a financial department or IT Department.

Advantages and disadvantages of Competencies

Advantages

Disadvantages

Allow a degree of flexibility for the organization and individual facilitating horizontal movements well as vertical movement within an organization. Can enhance marketability of individuals facilitating movements between departments ,this helps for carrier planning

Keeping competencies up to date in a fast changing environment may be difficult and require lot pf time, effort and cost.

Encouraged a widening and deepening of skills for the organization and individuals thus helping to establish and promote standards and benchmarking

Assessments of competencies can also be fraught with difficulties because of differences in definitions and interpretations

Evaluate the added value of the added value of the person not the job there by permitting recognition for the competencies used to perform the job

Managing the expectations of users and clarifying how the competencies will be used in consistent and fair manner across the organization

Competencies can be integrated with the Human resources system of the organization there by enabling a company to recruit the right competencies ,train and develop in the right competencies, appraise the performance of the competencies and align compensation system with the aim of maximizing organizational resources

 

Can be use as a part of culture change incorporating behaviours and competencies to assess and reward what people actually do-

Example: Chase Manhatten Bank attempted to redefine the role of manager from the traditional view of a manager ( i.e. More senior, better privileges higher status)to a more business focused manager responsible for budget and cost management achievement of targets and being an entrepreneur)- case study by Martin -1995

 

 

 References:

The Training Commission (1988)  Classifying the components of Management Competencies Employment Services (1991) Management Development Framework.

Martin S (1995)  Ä Futures market for competencies"Peoplle Management  March

Marchington M and Wilkinson A(1997) Core Personal and Development Institute of Personal & Development P 160

Daniel W. Rasmus, “How Clinging to Core Competencies is breaking your Organization’s Heart”

Macfarlane B and Lomas L (1994) "Competencies based management Education and needs of the learning organizations "Education and Training

 

         

Comments

  1. Himani MBA 2023April 30, 2023 at 5:33 AM

    You have done a good job.Thanks for sharing your work with us. Good luck

    ReplyDelete

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