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A Competency Based Management System for Sustainable Development by Innovative Organizations : A Proposal of Method and Tool
Kankana Mukhopadhyay, Jaya Sil and N.R. Banerjea Vision: The Journal of Business Perspective 2011 15: 153 DOI: 10.1177/097226291101500206 The online version of this article can be found at: http://vis.sagepub.com/content/15/2/153

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Forster 153
Article

A Competency Based Management System for Sustainable Development by Innovative Organizations: A Proposal of Method and Tool
Kankana Mukhopadhyay Jaya Sil N.R. Banerjea

Vision 15(2) 153162 2011 MDI SAGE Publications Los Angeles, London, New Delhi, Singapore, Washington DC DOI: 10.1177/097226291101500206 http://vision.sagepub.com

Abstract
Competency Based Management has become the key tool for every firm to be in a strategically sustained advantageous position. The role of Competency Based Management System (CBMS) is to identify relevant and important competencies for successful accomplishment of desired tasks. In this article a holistic framework is proposed to review the Competency Based approach that will be practically feasible for organizational settings. It is based on the conceptions of human competencies and performance in the workplace. The application of CBMS is explained that can be used in an organization to systematically assess existing and future competencies required. Using this approach an organization will be able to more effectively use their limited resources to reap more benefits from their investments in both people and technology. Information Technology (IT) support for managing competencies is based on a rationalistic view of competency. While these competency systems might work in rationalistic organizations, it is argued that in more dynamic settings, such as in innovative organizations, the knowledge based actions that capture the emergent competencies of tomorrow require IT support.

Key Words
Competency, Competency Management, Latent Competency, Manifest Competency, People Capability Maturity Model, Competency Based Management System (CBMS)

Introduction
Human Resource Management (HRM) treats people as an organizational resource. The term human resource implies an available supply of manpower that can be drawn on and utilized to support or help in a desired task. A business-driven approach to HRM is more than a matter of muttering the right-sounding words in the boardroom. To work properly it has to apply detailed and practical approaches to various aspects of HRM. The starting point is an approach to competencies. In the last century, business has come full circle in its attitude towards workplace competencies. In the beginning of twentieth century, work demanded complex skills to perform the task. Typical business processes required specific competencies where skill is one of the components of competencies for the task to perform well. These competencies are required to be identified first and could be acquired only through on-the-job learning and practice.

Then came the era of Scientific Management where Frederick Taylor and Henry Ford focused on time and motion study instead of competencies. The outcome of scientific research revealed minimized complexity and maximized efficiency, but employees had little value. Process expertise left little scope for training of workmen. Later, in mid-century, World War II enforced management-centric views where officers gave orders to subordinates who obeyed their commands without questions. Even after the war there were still command and control hierarchy. The task broken into smaller tasks were done by specialists to improve efficiency. In the post-war decade, demand was unparalleled and competition was little. Later McClelland, founder of McBer, a consulting company, was asked by the US Foreign Service (USIA) to develop new methods that could predict human performance. The objective was to eliminate the potential biasness

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A Competency Based Management System for Sustainable Development

of traditional intelligence and aptitude testing. This was the journey of the field of competency measurement. McClelland (1973) began an attempt to gather concepts of competencies to find their way into mainstream business practices by asking the USIAs Personnel Director and some top managers the names of their most outstanding employees according to their perception. He also asked for the names of the people whose jobs were secured but who were in no way outstanding. To differentiate between the two groups, McClelland and his colleagues asked 50 people to describe three incidents where they felt they had outstanding performance and where they felt they had really messed up. To establish a clear picture, minute details were asked forwhat was said, what was done, when and where it all happened, who else was there and so on. These detailed descriptions enabled them to find out a pattern of what competencies the outstanding performers had demonstrated which others had not. Later in the thesis this has been described as differentiating competencies which differentiates the superior performers from average performers. In order to validate the conclusions about which competencies were necessary, McClelland tested them on another group of officers who had been identified as outstanding and a group who fell into mediocre category. Using psychological tests for the key competencies, he found that the officers identified as outstanding consistently performed very well on such tests, whereas those rated mediocre performed poorly. Thus, it was clear that the key competencies identified were indeed relevant to job performance.
Figure 1. Positional Competency Organizational Need

Competency Mapping
It is the process of identifying and mapping specific managerial competencies for all the representative positions. The identified competencies are to be further used for the purpose of recruitment and selection, performance management, training and development, career development and compensation. David McClelland is credited to have popularized the concept of competency mapping. Organizations operate in a real-time mode and the appropriate competencies visible in their defined operational manifestations can be called as positional competencies. Positional competencies can be further defined clearly within the strengths and constraints of the organizational variables like the functional needs and the nature of the departmentation (Figure 1).

The Sample Competency Model

Initially, a list of relevant competencies was prepared and a pilot survey was conducted in Eveready Industries India Limited to see to what extent the considered competencies are relevant to the job context. In an attempt to set the values of the preconceived competencies another pilot survey was conducted in Kitchen Appliances India Limited. A questionnaire was designed and distributed to the job incumbents and data was collected considering 180 degree approach. In order to design the questionnaire, the concept of People Capability Maturity Model was implemented. Basically there are five levels, viz., Initial, Repeatable, Defined, Managed and Optimizing. These levels can be further refined for use in establishing individual

Departmentation

Individuals Skills

Positional Competency

Individuals Knowledge

Individuals Attitude
Source: Darimella (2005).

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Kankana Mukhopadhyay, Jaya Sil and N.R. Banerjea competence standards and in authoring assessment questions. A general continuum of individual competence can be: 1. None: Employee has no knowledge or skills in this area. 2. Personal: Employee uses personal knowledge and experience to perform. 3. Process: Employee can perform to process requirements. 4. Advanced: Employee possesses advanced competence levels. 5. Developing: Employee can improve processes and/ or develop competencies in others. Considering the above-mentioned concept a questionnaire was designed, a part of which is given here: Competency: Organizational Information 1. I have no knowledge of basic organizational information. 2. I have attended the new employee orientation programme and have read all employee literature provided. 3. I know basic organizational information and can use my knowledge to find the answers to most of questions I am encountered with. 4. I have a wide network of contacts and keep myself up to date on organizational goals, objectives and issues. 5. I can use my extensive knowledge or organizational goals, objectives, issues and resources to help others learn more about the organization. This set of questions was filled by managers, peers or co-workers and by the job incumbent himself. The average value was considered as the standard which was later verified in consultation with the experts. We have considered five categories of employees. A competency matrix is
Table 1. General Competencies General Organizational Information: Knowledge about organizations vision, mission and objectives. Basic Industry Knowledge: Industry-specific knowledge like industry life cycle, competitors position, market growth rate. Policies and Procedures: Knowledge about organizations general statements or understandings which govern the various activities and which guide or channel thinking in decision making. Diversity: Knowledge about the varied values, ethics and behavioural differences due to sub-cultures amongst the employees and ability to work with any employee without bias.
Source: Personal elaboration on data: Kitchen Appliances India Limited (2008).

155 prepared considering the relevant competencies along the vertical axis and employee groups along the horizontal axis. The following Sample Competency Model depicts the cell values which are set according to the data gathered during pilot survey, and the verification was done in consultation with the industry experts (Table 1).

Application of Back Propagation Learning Algorithm in Verifying the Assumed Standards

Though the standards are set according to the data obtained during pilot and survey and were later verified in consultation with the industry experts, we thought of verifying the assumed standards further by considering the concept of Back Propagation Learning Algorithm of Artificial Neural Networking with the help of MATLAB 7.5 software package. The Back Propagation Learning Algorithm is one of the most important developments in neural networks. This network has re-awakened the scientific and engineering community to the modelling and processing of numerous quantitative phenomena using neural networks. The Back Propagation Learning Algorithm is different from other networks in respect to the process by which the weights are calculated during the learning period of the network. To update weights, the error must be calculated. The error, which is the difference between the actual (calculated) and the desired (target) output, is easily measured at the output layer. But, in our research we have got the actual (calculated) and desired (target) output, where we are going to consider a single hidden layer to find the error and to minimize the error. The training of the Back Propagation Network (BPN) is done in three stages: 1. The feed-forward of the input training pattern; 2. The calculation and back-propagation of the error and 3. Updation of weights.

Mgr 4 3 3 5

Personnel & Admin. 3

Team Leader 4 5

Sales 3 4 2 3

Tech 3 2 2 3

Finance 4 4 3 3

5 3

3 4

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Figure 2 shows the architecture of BPN. The considered input parameters required for a positional competency are knowledge, skill, attitude, organizations need and departmentation. In ANN (Artificial Neural Network), every parameter is to be considered in 0 to 1 point scale. Hence, we conceived the assumed values of the input parameters in 0 to 1 point scale. This concept is explained in the following. Following is one of the General Competencies.

Sample Competency Model Considering Input Parameters

We have considered six employee categories, viz., Manager (M), Personnel and Administrative Staff Member (A), Team Leader (TL), Sales Personnel (S), Technical Personnel (T) and Financial Staff Member (F). Therefore, the output vector is [M, A, TL, S, T, F]. This was considered as the Actual Output which was then matched with the Targeted Output (Table 3). In case of any mismatch, the weights of the inputs were varied so that with weighted inputs the targeted outputs were reached.

Organizational Information
The inputs required for these competencies are: Knowledge (K) 0.8, Skill (S) 0.5, Attitude (A) 0.7, Organizations need (O) 0.7, Departmentation (D) 0.6. So, we have considered these as input nodes. For the assumed values of the input parameters we have taken the views of the managers only, which we have collected during the pilot survey conducted in Kitchen Appliances India Limited. Thus, the input Vector looks like [K, S, A, O, D] and the corresponding values are shown in Table 2.
Figure 2. Back Propagation Network

Data Analysis and Discussion

Our primary objective was to check whether the standard or benchmark competencies that we have assumed were correct. To check that we have utilized MATLAB 7.5 interface considering five inputs, viz., knowledge, skill, attitude, departmentation and organizational need and the benchmark as the output. This benchmark output was then compared to the system-generated output to see the error.

Source: Lin and Lee (1996).

Table 2. General Competencies Considering Input Parameters General Organizational Information Basic Industry Knowledge Policies and Procedures Diversity Mgr K 0.8, S 0.5, A 0.7, O 0.7, D 0.6 K 0.8, S 0.6, A 0.7, O 0.7, D 0.6 K 0.8, S 0.6, A 0.7, O 0.7, D 0.6 K 0.7, S 0.6, A 0.8, O 0.9, D 0.8

Table 3. General CompetenciesInput/Output (Managers) Output Competencies Organizational Information Basic Industry Knowledge Policies and Procedures Diversity K 0.8 0.8 0.8 0.7 S 0.5 0.6 0.6 0.6 A 0.7 0.7 0.7 0.8 O 0.7 0.7 0.7 0.9 D 0.6 0.6 0.6 0.8 Target o/p 0.8 0.6 0.6 1.0

Source: Personal elaboration on data: Kitchen Appliances India Limited (2008).

Source: Personal elaboration on data: Kitchen Appliances India Limited (2008).

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Kankana Mukhopadhyay, Jaya Sil and N.R. Banerjea Since the questionnaire was filled up by 10 employees in each group, that is, manager, personnel and admin staff members, team leaders, sales personnel, technical personnel and financial staff members, for each competency there are ten records. Following is the competency analysis of managers.

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Revised Model on Competency Standards

The revised managerial competencies standard levels of input/output are given in Table 4.

General Competencies (Managers)

When this data set was run using MATLAB 7.5, it generated the following output (Figures 3 and 4): The output function is Y = (0.99)T + (0.0037), where the best linear fit is Y = T. This shows that output versus target curves almost coincide, which reveals that systemgenerated output and the considered outputs are more or less the same, that means, the considered values were correct for general competencies for managers. Thus, these tested values can be considered as standards of measurement, against which the actual competencies can be measured.
Figure 3. Training ResultGeneral Competency (Managers)

Discussion on Developed Competency Management Software

A Competency Based Management Information System (CBMS) was developed keeping in mind the pre-defined and now established sets of competencies with values in five-point scale. The system shows whether a person is competent or where does he lack. Since we have tried to cover almost all the dimensions and most of the competencies, therefore this system is applicable to any company/ industry. The software package is developed using Visual Basic 6.0 in the front end and Microsoft Access 2006 in the back end. The system shows results after comparing the actual level of competency with the standard level of

Source: Personal elaboration on data: Kitchen Appliances India Limited (2008).

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Figure 4. Coefficient of CorrelationGeneral Competency (Managers)

Source: Personal elaboration on data: Kitchen Appliances India Limited (2008).

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Kankana Mukhopadhyay, Jaya Sil and N.R. Banerjea

Table 4. General CompetenciesStandard Input/Output (Managers) Values Output Competencies (Managerial) Organizational Information Basic Industry Knowledge Policies and Procedures Diversity K 0.8 0.8 0.8 0.7 S 0.5 0.6 0.6 0.6 A 0.7 0.7 0.7 0.8 O 0.7 0.7 0.7 0.9 D 0.6 0.6 0.6 0.8 Target o/p 0.8 0.6 0.6 1.0

159 so as to make it user friendly. The same is depicted in Figure 5. As and when need arises the competency levels of any employee can be assessed considering the benchmark values fed into the database. A sample competency assessment form is shown in Figure 6. If the Employee ID is properly selected, the Employees Designation is reflected in the subsequent text box and the sub-competencies are visible. The list box shows that each competency is measured in a five-point scale. The message is generated in the following manner: 1. If the benchmark level exceeds the actual level, a message box appears and it shows that The Person is less competent. 2. If the actual level exceeds the benchmark level, a message box appears and it shows that The Person is more competent.

Source: Personal elaboration on data: Kitchen Appliances India Limited (2008).

competency. The system also generates a comprehensive report depicting not only the deficiency areas but also the levels of deficiencies which can be further used for training need assessment. The competencies are divided into eight broad categories with further classifications and appropriate definitions
Figure 5. Competency Groups

Following are the identified relevant competencies for the organizations Competencies
Report on Previous Assessment

Show Report

Exit

Back

General Managerial

Administrative and Personnel Sales and Marketing

Technical Personal Computing

Personal Total Quality Management 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) Assertiveness Persuasive Communication Conflict Management Risk Taking Creativity Change Management Decision Making Effective Meetinga Humour Listening Memory Management Presentation Skills Time Management Writing Assess Now

12) Presentation Skills: Can present effectively using established guidelines by organizing relevant information.

Source: Self-developed software.

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Figure 6. Competency (General) Assessment Form
General

A Competency Based Management System for Sustainable Development

Employees Competency (General) Assessment Form 3

Exit Back

Special Employees ID:

The Employees Designation is: ADMINISTRATOR

Enter the level of competency present in the employee:

Organizational Information: Basic Industry Knowledge: Policies and Procedures: Diversity:
3 3 3 2

The person is competent This is not a required competency The person is less competent The person is less competent Submit

The desired level of competencies are given below:

Organization Information Basic Industry Knowledge Policies and Procedures Diversity

Source: Self-developed software.

3. If the benchmark level equals the actual level, a message box appears and it shows that The Person is competent. 4. If the competency is not required, a message box appears and it shows that This is not a required competency. Once the assessment is over, the required levels of competencies are shown. Furthermore, the assessed competency levels can be saved in the database which is reflected in the report. This form shows a comprehensive report on Employees Competency Assessment covering all the dimensions of competencies. The manager can confine his attention to an individual employees report to see where exactly the employee is lacking. Figure 7 depicts an individuals competency assessment report. As we have considered a five-point scale, the deviation can at most be four. It may happen in certain cases that a particular competency is not desired to be present in an employee, that is, in a specific designation. It is indeed the task of the HRD to decide what level of deviation they should consider for training need assessment. Thus, this competency management package is an enabling tool to formulate the future HR strategies pertaining to specific situations.

Summary and Conclusion

In this article an attempt was made to identify the important and relevant competencies specific to the job contexts in consultation with the job incumbents. The identified competencies were generic by nature, so that in most of the innovative organizations these can be perfectly utilized to achieve the desired outputs. Initially a list of 64 competencies was prepared and a pilot survey was conducted in a reputed fast moving consumer good (FMCG) organization to see to what extent the identified competencies were relevant. Most of the responses were favourable. Later a revised list was developed with further extensions and 128 competencies were broadly classified into eight categories. Six employee groups were considered and the concept of competency matrix was introduced considering the employee groups horizontally and the eight competency heads vertically. The cell values of the matrix indicate the required or desired competency levels of different categories of employees. The benchmark values were set after conducting another pilot survey in a reputed organization. A questionnaire was designed considering the concept of People Capability Maturity Model. Each competency definition was broken into hierarchical five statements, where the statements were arranged from preliminary to advanced

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Kankana Mukhopadhyay, Jaya Sil and N.R. Banerjea

Figure 7. Individuals Competency Assessment Report
Individual Employees Competency Report Select Employees ID: The Employees Designation is: Emplyees Name: 1 MANAGER KM

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The Person is lacking in the following Competencies and the deviations from standards are:
General Organizational Information: Policies and Procedures: Diversity: Managerial Planning: Leadershp: Ethics: Interviewing: Performance Planning: Performance Reviews: Salary Administration: Coaching/Counselling: Technical 2 1 2 1 2 1 2 2 3 2 1 Administration Personal Policies: Sales and Marketing 2

Personal Personal Computing Creating system: Change: Effective Metings: 1 1 LAN Access: 1

Source: Self-developed software.

levels. The data were collected by administering the questionnaire to managers, peers and to the job incumbents. The average markings were considered and later the values were verified in consultation with the experts of the respective organizations. These values were once again verified using the concept of Back Propagation Algorithm pertaining to Artificial Neural Networking utilizing the features of MATLAB 7.5. The verified values were then fed into the database so as to check the deviations between the actual levels of competencies present in the job incumbents in comparison to the fed standards. The deviation is favourable when actual is greater than or equal to standards, and the deviation is unfavourable when actual is less than standards. A software was developed using Visual Basic 6.0 in the front end and Microsoft Access 2003 in the back end, not only to assess the levels of competencies present in the employees, but also to notice the extent of deviations for future reference. The extent of deviation could be an indication for future HR strategy formulation regarding training need assessment. Before I conclude this research analysis, I need to address the following points: Why do companies require this? Again the answer is simple and focused. Competency enhancement was done for: 1. Business needs; 2. Aligning behaviour with business strategies and 3. Integration of HR systems based on competencies.

Information literacy combines an awareness of the value of information and knowledge to the organization with the skills and competencies that enable an individual to play a full, effective and rewarding role in knowledge environments. Here, through this research several job-related competencies were identified. The standard levels of these competencies were set in consultation with the industry experts, rather as recommended by industry experts. The recommended standards were tested against system-generated standards and that revealed favourable results. Thus, the standard levels of the competencies were set and fed into the database. Considering these standard levels, a database of competency is developed and several forms are designed so that with these forms the user can interact with the database. Hence, any company, irrespective of its type of business practices, can have the following advantages: 1. A list of generic competencies. 2. Set standards for the pre-defined competencies. 3. A software package which measures the actual levels of the competencies present in the employees and generates reports on individuals competencies for future reference, which helps the managers in making valuable decisions. 4. The performance gap can be identified with the help of this software package which can be further utilized for training need assessment.

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Jaya Sil (js@cs.becs.ac.in) is presently Professor and Former Head of the Department of Computer Science and Technology department of Bengal Engineering and Science University, Shibpur. She was awarded Ph.D. in Computer Science and M.E. in Computer Science and Engineering from Jadavpur University and B.E. in Electronics and Tele Communication from Bengal Engineering and Science University, Shibpur. Three Ph.D. theses are awarded under her guidance and eight are in progress. Her research interests include Image Processing, Pattern Recognition and Bio-Informatics. N.R. Banerjea (nrb_dr@yahoo.co.in) is the Former Chairman of the West Bengal Electronics Industry Development Corporation Ltd, Kolkata, India. He was the Vice Chancellor of Bengal Engineering and Science University, Shibpur and Chairman, AICTE, Eastern Regional Committee. He was responsible for HRD functions in CESC, Coal India and GEC. He was awarded Ph.D., M.E and MBA by Calcutta University and B.Tech by IIT, Kharagpur. He adjudicated a number of D.Phil. and Ph.D theses of Calcutta University and Netaji Subhas Open University. His research interests include Organizational Climate, Performance Management, Productivity and TQM. He taught management and engineering students for more than three decades.

5. After identifying the areas where the employees are lacking, the Master Training Schedule can be prepared. Surely, this Competency Based Database Management System will enhance the capability of the firms human resource substantially which will lead towards gaining competitive advantage over other players in the market. References
Darimella, Suresh. (2005). Positional competencies: A checklist for product abd brand managers. HRM Review, 4751. Lin, Chin-Teng, & Lee, George C.S. (1996). Neural fuzzy systems. Prentice-Hall. Kankana Mukhopadhyay is Assistant Professor at Dayananda Sagar Institutions, Bangalore and Former Lecturer-cum-PostDoctoral Fellow at Indian Institute of Plantation Management, Bangalore, India. She has been a Lecturer at Bengal Engineering and Science University, Shibpur. She was awarded Ph.D. in Management Sciences and has MBA with specialization in Human Resource Management from Bengal Engineering and Science University, Shibpur, and MCA from Indira Gandhi National Open University. Her research interests include Competency Management, Performance Management, Strategic Human Resource Management and Artificial Intelligence.

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