Core Competencies and Values

How to use
Core Competencies
to shape Organizational Culture

Centranum’s guide explains how values-driven core competencies can actively shape organizational culture and elevate individual performance.  It compares generic versus custom libraries,and provides an evidence based set.  To build custom libraries it details five steps—identify imperatives, overall structure, define behaviours, choose rating scale and validate. It links supporting assessment methods, research evidence and competency-management software.

Organizational culture is the set of common but tacit assumptions and beliefs that determine ‘ the way we do things here’.  It has a direct impact on the effectiveness and the efficiency of the organization. 

It is possible to actively shape this culture by defining the core and values based competencies as individual requirements and including them in performance management processes.

The importance of Organizational Culture

Should we use Proprietary or custom competencies?

Many vendors promote and sell their own proprietary competency libraries.  Most  include factors that are personality traits or individual attributes such as intellectual ability.  These are more relevant to selection processes than performance management.

Many decades of research have established that cognitive ability is the single best predictor of job performance.  Those with better ability are quicker to learn job relevant knowledge and skills.    The high level personality factor of Conscientiousness is also associated with better performance.    This factor includes elements of motivation, personal organisation and compliance.

For these mainstream psychometric properties there are a number of reputable suppliers whose test products have been validated through independent research.

Despite vendor claims, the proprietary competency  libraries are not validated in terms of a cause and effect link with performance.    Performance is rated subjectively.   Competencies are weakly correlated around r=.2  which explains only 4% of variance in performance.

Correlation scatter plot where r = 0.2

As you can see the scatter plot for this degree of correlation is close to random.

Many claims of scientific evidence are based on correlational data.    It is not well understood that correlational data demonstrates only a relationship,   not a causative relationship.

Further many correlational relationships may not be in the direction expected.   For example high engagement levels are associated with more successful organizations.    It could well be that engagement levels are high because staff like working for a successful company.  Not because highly engaged employees underpin a successful enterprise.

Proprietary libraries come at a cost.   They use very generalized terminology.   The risk is that they may not seem relevant to the staff in your organization

For this reason it recommended that organizations adopt their own custom library of core competencies.  The best approach is to use the research to select competencies that are linked to better performance.  Then  develop definitions that are specific to, and resonate with,  your organization.

Developing a custom set of core competencies to shape culture

The I/O Psychology literature does give some insight into the kinds of behaviours most likely to be linked with better performance.    There are five areas where there is some evidence that individual behaviours are linked to better performance.   These are termed Citizenship Behaviours in the I/O Psychology literature.

They include conscientiousness,  altruism and peacekeeping, courtesy,  civic spirit and sportsmanship.     For more details see What is a Core Competency?

Translating these concepts into practical business terms  there are 5 main areas;

  • Teamwork
  • Conscientiousness
  • Service
  • Supporting the Organization
  • Business Acumen

Team work includes elements of  Communication, Collaboration and Courtesy.

Conscientiousness covers  Focus -attention to detail,  Efficiency, Persistence- following through,    Initiative,   Excellence, and Personal Development.

Service applies to internal as well as external customers.   It includes elements of Responsiveness, Empathy, Professionalism and Dependability.

Supporting the organization  includes  Advocacy, Flexibility, Speaking Up and Compliance

Business Acumen means Understanding  –  of the organization ‘s purpose,  its environment, structure,  the process flow and how profit is made and costs controlled.

Step 1 Identify Imperatives

As a consultative process identify those competency areas that are most important to the success of your organization. It is vital that people in the organization buy into the core competency set.

Step 2. Structure follows Purpose

Decide on the structure or framework for your competency set. This will depend on how you are going to use these competencies. Ideally core competencies are used to indicate core values and shape the culture of the organization. To communicate what is most important

form follows purpose for core competencies

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In this case you should keep the number of competencies to a minimum  so that they will be memorable. Five is a good number.
The simplest approach to start with is a basic set of values based behaviours that apply to all.

You may also decide to have a separate set of more detailed Core competencies or ‘Soft Skills’ that you want to develop. In this case it may be advisable to have different competency sets for different groups of people. Depending on the size and complexity of your organization you may also decide to have different definitions for different groups of staff.

Step 3. Defining the behaviours.

Defining core competencies

When defining the behaviours keep in mind how these are going to be measured. The most common measurement scales are agreement, frequency and competency. Phrase the behaviours to suit the scale you are using.

You may decide to measure the competency as a whole, in which case the behaviours will be part of the description.
Alternatively you may decide to rate the behaviours individually, or use a combination. For values based behaviours top level competency rating may be sufficient. You could also enable people to highlight strengths and weaknesses at the behavioural level.

For each competency ideally have no more than 5 behaviours. People doing the assessments will
lose focus if there are too many, and then your assessments won’t be valid.

Consider whether you want to include behaviours that you definitely don’t want to see  ‘counter
productive work behaviours’.  You can phrase these in the negative or as avoids
Including some negatives can be a good way to ensure that raters do pay proper attention to the
behaviours they are rating.
Make sure each behaviour covers only a single point. If you include multiple behaviours in one
description it is not clear what has been rated – an average, the weakest or strongest behaviour.
Measurement will not be accurate, nor consistent between raters.

Step 4. Choosing a suitable scale

measuring core compertenciesScales with 7 points better distinguish between good and poor performers.
This is because people very rarely use the top and bottom points. With a 5 point scale that leaves only 3 usable points. This is not sufficient to distinguish in a statistical way.

Ensure the rating points don’t overlap. The descriptions must be clear enough that different raters will interpret them in the same way.

If you are including negative behaviours then you will need a reverse rating scale as well.

Step 5. Validation

Once you have defined the competency descriptions and or behaviours it is essential to do another validation exercise with a representative sample of people from all levels and functions across the organisation.
Make sure that the descriptions cover what is most important to the organisation.
Make sure that each description is specific enough that they will be interpreted consistently by different people.

When to measure core competencies?

Core competencies are usually measured as part of the performance management system.   It can be done by self and manager as part of this process.   Ideally there are ongoing conversations and notes about this during the year.

It may also be useful to gather feedback more widely from direct reports and colleagues.  If gathering the wider feedback this is best done as an anonymous 360 feedback developmental exercise so that more honest feedback is provided.

When this kind of feedback is linked to performance management and  compensation recommendations people are reluctant to provide constructive criticism, so the feedback will not be as accurate.

Values vs Competencies

We are often asked what is the difference between Values and Competencies.  The answer is that Values are or should be a subset of your Competency Framework.

Values are those strategies and actions that are critical for your organization’s success.  This will be particular to your operation and environment.   For traditional businesses values are often customer related, for large organisations with high staff churn it may be their leadership practices, for technology businesses innovation is often the priority.

So, as with all things, people respect what you inspect. Values should not just reside in your mission statement – they should be part of the Competency Framework, actively assessed and developed.