Most competency users unlikely to make link with pay

COMPETENCE-RELATED PAY

Employers' use of competencies continues to expand and evolve, yet only one in three organisations (35%) that have adopted competencies tie them to reward. That's the main conclusion of a new study by Industrial Relations Services.

According to the IRS research, the application of competencies to reward represents their "final frontier", but "one that now seems unlikely to be crossed by the majority of competency users".

Continued expansion

Whilst competency-related pay is still languishing on the periphery of mainstream reward practice, the tenth in the annual series of benchmarking studies conducted by the IRS journal Competency & Emotional Intelligence discovered that overall organisations are making more and more use of their competencies. Competency veterans, it seems, are actively extending their frameworks to additional groups in the workforce.

"Once these existing users have started applying competencies -- often, for a particular group of staff or a specific purpose -- they naturally want to make the best of what has usually been a considerable investment in time and resources in developing their framework," says Neil Rankin, the author of the IRS report.

Other organisations are extending their competency frameworks from their original purpose -- which is often in the performance assessment of managerial staff -- to other personnel and HR practices.

Five main uses of competency frameworks

At present, employers use competencies widely in five important areas of their HR and personnel processes:

Nearly nine in ten employers (89%) that have introduced competency frameworks use them as the basis for performance management.
Joint second in terms of prevalence (85% of organisations) comes the use of competencies in training and development and selection.
As many as 81% use them in recruitment and 50% employ their competencies in reaching promotion decisions.

Increasingly, organisations are using behavioural competencies to broaden the performance management process to include the way in which a job is performed. Technical competencies are then employed to provide a clearer definition of what the job involves.

A final word

"The relatively low usage of competency-related reward among organisations with established competency frameworks is an indication of both the difficulties that have to be overcome in making such a link and the controversial nature of this approach" -- Neil Rankin, Competency & Emotional Intelligence Benchmarking, 2003.

Want to know more?

Title: "Raising performance through people: the tenth benchmarking survey", by Neil Rankin, Competency & Emotional Intelligence Benchmarking, 2003.

Availability: Contact Industrial Relations Services, tel: 020 8662 2000 or email: customer.services@lexisnexis.co.uk.

Web site: To find out more about IRS, jump to www.irsonline.co.uk.

Posted 10 November 2003