Using Competencies and Rewards to Enhance Business Performance and Customer Service at the Standard Life Assurance Company

Linking competencies to pay is a controversial topic, with competencies often criticized for excessive complexity and lack of business relevance. The experiences of Standard Life, Europe’s largest mutual insurer, over the past decade demonstrate that competencies and rewards can have a powerful impact on business performance and staff commitment. Standard Life first used competencies in the late 1980s for development and then selection purposes. The linkages with rewards have been made primarily through the vehicle of an effective contribution management process, which the company introduced in 1996. But this has been done in the context of a much broader set of HR and rewards initiatives, including most recently grade restructuring and the introduction of job families. It also has been supported by intensive management training and staff communication and involvement. These processes have driven a transformation in the company’s culture, in personal and business levels of customer service and, consequently, in financial performance.