Tuesday 30 April 2013

Defining the Goals and Measuring the Impact of Competency-based Talent Management

Part 2 of 7 of the CompetencyCoreTM Guide to Designing a Competency-based Talent Management Framework

By Ian Wayne, M.Sc and Suzanne Simpson, PhD, C. Psych.

This is the second in a seven part series that looks at key decisions in designing and implementing a competency-based talent management (CbTM) framework:
  1. Some Basic Definitions
  2. Defining the Goals and Evaluating the Impact of your Initiative
  3. Competency Structure and Types
  4. Importance of Defining your Competency Architecture
  5. Developing Job Competency Profiles
  6. Project and Change Management
  7. Key Decisions in Selecting a Software System
Leaders chose to embark on implementing a fully integrated Competency-based Talent Management initiative for a variety of reasons.   Examples of drivers include:
  • Aligning talent and culture management with the vision and strategic goals of the organization
  • Improving productivity and profitability through talent
  • Attracting and retaining quality employees
  • Being an employer of choice
  • Ensuring a continuing pipeline of qualified candidates for key roles
These drivers are often translated into human resource goals such as:
  • Addressing skill shortages
  • Retaining talented employees
  • Developing high potential employees
  • Implementing succession plans for key roles
  • Achieving higher levels of employee satisfaction and engagement
It is important to engage leaders early in defining the key goals and success criteria for your initiative. This will ensure that it is designed to meet these goals, and will help determine whether the initiative is meeting the defined success criteria and having the desired impact for your organization.
Key Decisions
  • Do you have clearly defined goals?
  • Have you engaged relevant stakeholders to clarify your goals?
  • Have you defined the key success criteria to be used in determining whether your initiative is having the desired impact – e.g., increased employee retention; higher customer satisfaction scores;  higher revenue / profits per employees; increased sales; etc.
Having determined the goals and success criteria, it then becomes possible to put in place tools and processes for measuring the impact of your program.

Goals Success Criteria Measurement Tools / Process
Retain talented employees Improve employee retention from 70% to 90% within 2 years of implementation
  • Gather employee turnover data from HRIS prior to implementing CbTM framework and every 6 months thereafter
  •  Provide reports to senior management
Achieve a 60% increase in employee satisfaction with job and career opportunities within 2 years after implementation of CbTM framework
  • Determine relevant questions on employee survey for assessing employee satisfaction with job and career opportunities, and create composite score
  • Measure satisfaction using composite score prior to implementing CbTM framework and every year thereafter
  • Provide reports to senior management

Using the example shown in the table above, if a desired outcome is to improve retention rates for talented employees, it is important to have solid baseline data on employee retention prior to designing and implementing the initiative, and then to continue to periodically assess retention rates during and after the various stages and implementation.  If positive change is observed, then it would be reasonable to assume that the competency initiative is having the desired impact.  However, it is often necessary to use more than one type of data to confirm your hypothesis.  Thus, if employee retention is the desired outcome and increased employee satisfaction with job and career opportunities is assumed to be a contributing factor, then one also needs to measure employee satisfaction prior to, during and after implementation of the competency initiative.

The key is to determine the goal and key success criteria, and then design and implement measurement processes that will either directly or indirectly assess the impact of your initiative.
Key Decisions
  • What are the criteria for measuring success?
  • How will the impact of the initiative be measured and reported?
  • Who will be responsible for measuring and reporting the impact of the initiative?
  • Who will be responsible for implementing improvements?
Benefits of Competency-based Talent Management

To help define the goals for your initiative, here are some of the key benefits of using competencies as the foundation for managing talent.  Competencies:
  • Improve hiring and selection decisions because the competencies, which are used as the standards for assessment and selection, reflect the behaviors employees must have to be effective in their jobs and roles
  • Support the identification of areas for employee development that are directly linked to desired organization objectives
  • Help translate the organization’s vision and goals into the competencies employees need to have to perform effectively
  • Increase employee productivity and operational effectiveness because they focus employees on the required behaviors
  • Increase employee satisfaction and engagement leading to reduced turnover rate because employees have a better sense of what it takes to be successful in current and future roles
  • Shorten the learning curve for employees, by allowing both the organization and employees to focus on those competencies that need development
  • Allow the organization to identify and then close gaps between the skills and competencies that employees currently have, and the skills and competencies they need to achieve the organizational vision.

The next blog in this series explores more fully the different types and structure of competencies. Sign up to our blog’s mailing list through the form on the right-hand side to receive the rest of the series in your inbox.

HRSG is a leader in Competency-based Talent Management solutions. Contact us today to find out how we can help you.

Want to learn more? Competency-based Talent Management, or CbTM, is the best practice for defining job requirements and building effective HR programs to develop skilled, engaged and productive workforces. Download this Best Practice Guide to learn how competencies can increase workforce effectiveness and improve business practices.


  1. I believe that in a competency-based system, there is first a need to define the areas of competence or expertise that are strategic to the business as basis for deciding on which talent are aligned or need to be aligned with the strategic direction of the business. Having done this, we then need to define in more concrete terms how these talents contribute to the business which then become the target for measurement of the level of competence needed and held by the talent. Knowing the kinds of competencies (technical, management and behavioral) needed by the business, a step-wise development or training can then be devised. A panel of evaluators coming from business, HR, operations, etc. can then be formed to do a holistic evaluation of a candidate. For example, the evaluation will be based on actual projects or work assignments so that learning will be both theoretical through classroom training and applied in the workplace. I have used this system in different business units and management was happy with the result because the process was not only aligned to business strategy but was also objective, incisive, applied and developmental.

  2. Thanks for your comment Jun! We appreciate all feedback and points of view.

  3. Competition is the factor that can highlight your own hidden qualities. Competency based system is necessary to a business . If in such kind of environment performance reviews are done, business got to know the cream members of that particular organization that leads to generate the above mentioned benefits like profitability, quality etc.
    How does the performance reviews influences the business could be understood by the above link.