The era of the yearly performance review is over. Competency frameworks are next for review.
by Phil LeNir
October 5, 2015
Running annual performance reviews can be a stressful ordeal for managers. They will procrastinate or avoid the process altogether leading HR to implement strange policies such as only releasing managers’ raises when all their employees’ performance reviews are completed.
Worse, many organizations assume a yearly performance review process is necessary because others organizations do it; it is a best practice. A cow following the herd is also following best practices. Fortunately leaders see the connection to their own work. That’s why the yearly performance review process is now on its way out. This trend has been widely reported in the Harvard Business Review, the Washington post, the New Yorker and other outlets.
Many large organizations from Adobe, Microsoft, Accenture to Deloitte have already dumped the annual staple. Competency frameworks are the next to go. Those large static lists of competencies usually developed at great cost have no positive impact on organizational performance.
Competency frameworks have their origins in the late 1960s. The concept of ‘managerial competency’ comes from the work of McClelland and the McBer consultancy group in the 1970s. A major study commissioned by the American Management Association in the 1980s grounded the concept by defining a competency as “an underlying characteristic of an individual that is causally related to effective or superior performance in a job.”
Having a competency framework makes sense. To link individual performance to business goals we need a list of competencies: the knowledge, skills, behaviors and attributes people need to perform a job. With a standard set of competencies for each role people know the kind of behaviors the organization values and requires. A yearly performance review framed by the competency framework completes this loop ensuring the organization always operates at maximum performance.
However, as Henry Mintzberg, author of “Managers Not MBAs,” points out: “acquiring various competencies does not necessarily make a manager competent.” Contrary to the assumption of most leadership competency frameworks, there is neither a linear, nor even causal, relationship between competencies and job performance.
By their very nature, competency frameworks:
Break up the management role rather than representing it as an integrated whole. A good manager is not good because of this or that competency. A good manager is good because of the inter-relationship between all of his or her competencies, behaviors, skills and more.
Assume common capabilities no matter what the nature of the situation, individuals or task. In an organization each individual needs a variety of different competencies for different situations and tasks.
Tend to focus on current or past needs rather than future requirements.
Tend to focus on measurable behaviours and outcomes to the exclusion of more subtle factors.
Competency frameworks lead to a very limited and mechanistic approach to management and leadership development. They make organizations believe that identifying the skills’ gaps in the people on leadership teams requires measuring against a competency framework and then delivering training to improve in the areas suggested. Therefore, the outcome of the skills gap analysis will improve overall workplace performance.
But this isn’t how organizations work. Organizations are communities of human beings, not collections of human resources. So competency frameworks are ignored by savvy managers in most organizations because they distract from the real job of managing.
It’s time leaders stop following the herd and start using common sense and good judgement. Senior leaders in organizations need to ask themselves: if the organization deleted the competency framework from the corporate server, and it was never ever mentioned again, how would this negatively impact workplace performance?
Running annual performance reviews can be a stressful ordeal for managers. They will procrastinate or avoid the process altogether leading HR to implement strange policies such as only releasing managers’ raises when all their employees’ performance reviews are completed.
Worse, many organizations assume a yearly performance review process is necessary because others organizations do it; it is a best practice. A cow following the herd is also following best practices. Fortunately leaders see the connection to their own work. That’s why the yearly performance review process is now on its way out. This trend has been widely reported in the Harvard Business Review, the Washington post, the New Yorker and other outlets.
Many large organizations from Adobe, Microsoft, Accenture to Deloitte have already dumped the annual staple. Competency frameworks are the next to go. Those large static lists of competencies usually developed at great cost have no positive impact on organizational performance.
Competency frameworks have their origins in the late 1960s. The concept of ‘managerial competency’ comes from the work of McClelland and the McBer consultancy group in the 1970s. A major study commissioned by the American Management Association in the 1980s grounded the concept by defining a competency as “an underlying characteristic of an individual that is causally related to effective or superior performance in a job.”
Having a competency framework makes sense. To link individual performance to business goals we need a list of competencies: the knowledge, skills, behaviors and attributes people need to perform a job. With a standard set of competencies for each role people know the kind of behaviors the organization values and requires. A yearly performance review framed by the competency framework completes this loop ensuring the organization always operates at maximum performance.
However, as Henry Mintzberg, author of “Managers Not MBAs,” points out: “acquiring various competencies does not necessarily make a manager competent.” Contrary to the assumption of most leadership competency frameworks, there is neither a linear, nor even causal, relationship between competencies and job performance.
By their very nature, competency frameworks:
- Break up the management role rather than representing it as an integrated whole. A good manager is not good because of this or that competency. A good manager is good because of the inter-relationship between all of his or her competencies, behaviors, skills and more.
- Assume common capabilities no matter what the nature of the situation, individuals or task. In an organization each individual needs a variety of different competencies for different situations and tasks.
- Tend to focus on current or past needs rather than future requirements.
- Tend to focus on measurable behaviours and outcomes to the exclusion of more subtle factors.
Competency frameworks lead to a very limited and mechanistic approach to management and leadership development. They make organizations believe that identifying the skills’ gaps in the people on leadership teams requires measuring against a competency framework and then delivering training to improve in the areas suggested. Therefore, the outcome of the skills gap analysis will improve overall workplace performance.
But this isn’t how organizations work. Organizations are communities of human beings, not collections of human resources. So competency frameworks are ignored by savvy managers in most organizations because they distract from the real job of managing.
It’s time leaders stop following the herd and start using common sense and good judgement. Senior leaders in organizations need to ask themselves: if the organization deleted the competency framework from the corporate server, and it was never ever mentioned again, how would this negatively impact workplace performance?
