Training programs are under constant pressure to demonstrate a positive return on investment, so it is crucial to evaluate and understand the impact of training on the company’s bottom line. A competency management method makes it easy to see exactly where training dollars are having the strongest impact.
Competency management creates opportunities to correlate human capital investments with metrics from the organization’s results. An important part of establishing a competency management system is the on-going evaluation and measurement against the identified skills gaps. Evaluation and measurement are a crucial step in the process to determine whether the organization is on target to meet its goals or has veered off course.
To facilitate the process, key performance metrics (KPMs) must be established to guide the organization in measuring its progress. Without measurement, the organization will not have insight into whether its goals are producing results.
Because they tie back to each organization’s goals, KPMs will be different in every organization, and may even change from job role to job role. For any KPM to provide insight, it must be measurable and link directly to the competency it measures.
The process for observing and recording the KPM must be clearly defined, and that process should occur at a frequency that allows for change to occur in between measurements. Too frequent analysis – or too infrequent analysis – can quickly lead to performance that is off-target.
It is important to guard against random or unrealistic expectations when establishing KPMs. These guidelines are important to follow. A KPM must:
- be quantifiable
- be repeatable
- reflect the organization’s goals
- be clearly defined prior to implementing the competency management method
- be defined in a way that is applicable from year to year
Overall, the number of KPMs for each job role should be kept to a minimum, so that each employee’s attention can remain focused on achieving the organization’s goals.
KPMs Driving Organizational Success
Metrics are usually solidly embedded in an organization’s daily functions. In some cases, there is so much data to consume and analyze that there aren’t enough employees to make sense of it all. Yet, tying KPMs to the bottom line remains a crucial activity that produces results.
A division of a United States federal agency unintentionally demonstrated the value of KPMs when working with Avilar to develop a customized development planning tool. They also uncovered some additional benefits they hadn’t expected. Here’s their story:
A Case in Point
A large government agency retained Avilar to conduct a training needs analysis, which was intended to benefit the organization’s training department as well as its 9,000+ worldwide employees. Recently, the agency had implemented a policy requiring the creation of individual development plans for each employee, and had taken steps to define competencies and tasks for each job role.
Avilar reviewed 625 different jobs with more than 2,200 tasks and competencies and validated them. This became the foundation for the agency’s employees to use self-assessments and evaluate themselves against the competencies required for their own job roles.
With the completion of the self-assessments, skills gaps were then identified, from which individual development plans were created. The competency management system that was developed during this process also connected employees with learning resources which could be tapped to close their identified skills gaps.
By implementing the competency management system, the agency was able to direct their training investment to the most-needed areas. Typically, these were areas where a manager and an employee agreed that additional training for the employee would yield results such as closing the skills gap and also positively impacting organizational performance.
After training was completed, the competency management system was again used to assess employees’ skill levels. The information generated in this subsequent phase allowed the agency to determine whether training was positively impacting employee performance.
The agency also used the competency management system to provide career planning for its employees. This next phase aided employees in identifying their desired career path, along with the competencies needed to successfully pursue that path. The agency provided additional learning resources where necessary to ensure that employees could obtain and master the competencies they needed in their future.
It’s well known that employees and their skills are among the most important assets in any organization. Investing to improve that asset is essential for the growth and longevity of the company. However, KPMs are often underappreciated or overlooked.
While all the activities and efforts involved in competency management requires both time and financial investments, the payoff in performance and conquering targets is well worth it. If you’re ready to get started, contact Avilar for a free consultation or download our white paper The Progressive Impact of Competency Management.