Competency-based Management

March 24, 2010
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A competitive avantage for manufacturing companies

The manufacturing firms in industrialized countries such as Canada, the United States and France are facing increasingly tough competition as the need for higher productivity, effectiveness and efficiency does not cease to increase. In an era that will very likely prove merciless to businesses that fail to stand out, the need for a skilled workforce is dire. Fortunately, there is a proven approach to human resources management that can transform a company into a sucessful, flexible and innovative model that will give manufacturing firms a competitive advantage: The competency-based approach!

Although recent economic data confirms the recovery of the global economy, manufacturing firms in industrialized countries such as Canada, the United States and France are facing increasingly tough competition. Indeed, the need for productivity, effectiveness and efficiency are increasing, not only due to the growing presence of emerging superpowers in markets, but also from changes in workers’ competencies in these countries. Moreover, a recent study by the U.S. Council on Competitiveness[1] foresees, at best, stagnation, and at worst, significant declines in most industrialized countries’ competitiveness indexes in comparison to those of China, India, Korea and Brazil. Thus, it is simple and logical to predict that the manufacturing companies who emerge as champions in this new reality will also be those who win the “war for talent”[2] that began in the early 2000s. In practice, this means that managers should lead their organizations to overcome the challenges of attracting a skilled workforce and creative leaders who will promote innovation, both in terms of processes and products, and the challenges of planning for dynamic and highly competent staff retention and succession. However, there is a proven approach to human resources management that is particularly suited to transform the company into a successful, flexible and innovative model and that will contribute to solving recruitment and staffing problems: The competency-based approach.

For the past thirty years, the notion of competencies has attracted the attention of a growing number of professionals, researchers and managers[3]. Some authors have even gone so far as to suggest that competencies have become the common language of the human resources system and they represent “the material that holds an organization together, giving a holistic perspective to people, goals, processes andperformance[4]“. Thus, HR’s competency-based approach to management seeks to align the organization’s goals and strategies with its operations, through individuals, in order to multiply efficiency and productivity. Moreover, it is interesting to recall that many authors[5] place people at the heart of organizational models since they play a significant role in terms of organizational effectiveness, performance, and the ultimate success (or failure) of changes, and more. In the case of this management approach, these are the competencies that dynamically structure HR activities. In addition, this creates a conduit at the corporate level to influence the daily performance of employees according to the overarching strategic objectives. Specifically, human resources planning is done by considering organizational objectives and provides for the needs, in terms of competencies, in order to achieve them. Subsequently, the recruitment, screening and hiring of talent follows these needs. Training programs and career management are always designed to take organizational needs into account, as well as competencies available within the organization and individual needs. Finally, ongoing performance evaluation objectives are established based on the organizational reality and ensure that the remuneration matches them.

In short, this approach not only facilitates the recruitment of top talent and skills development for existing staff but its application also gives all employees a sense of direction and organizational objectives to achieve. Nevertheless, its integration always brings challenges. On the one hand, introducing changes to standardize HRM practices could meet resistance from managers who fear losing their discretion in hiring new employees. On the other hand, since this is a complex organizational change, it is important to manage it carefully, being attentive to employee concerns and incorporating it in a gradual and planned manner. The benefits of this approach to HR management nevertheless far outweigh the disadvantages and offer an excellent way to improve the competitiveness of organizations in an era that will very likely prove merciless to businesses that fail to stand out.

By : Philippe Longpré

EPSI

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EPSI

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