Abstract
Over the years, competencies have received increasing attention from human resource managers and practitioners. Despite increasing popularity, published research in the area of competencies remains sparse. From management development perspective, it is essential to determine the extent to which managers possess the required competencies for successful performance. This could be achieved by identifying competency needs. The aim of the article is, therefore, to empirically investigate managerial competency needs. In doing so, the study draws on a sample of 202 managerial employees from a leading banking and financial service provider based in India. A total of six managerial competency clusters for existing proficiency and eight managerial competency clusters for future proficiency were identified. The findings reveal perceived levels of existing competencies, gaps pertaining to present and future competency requirements and competencies that managers wish to improve through challenging assignments. Study implications, limitations and direction for future avenues of research are discussed.
Introduction
Recent years have been marked by increased global competition, dynamic work environment and that of rapid change forcing organization to reconsider the dogmatic ways to dealing with situations (Griffin, Neal & Parker, 2007). Never before, in the past, have managers been seen as crucial and central in guiding and mentoring their teams to success. Managers have to, therefore, deal with a myriad of affairs within the organization’s social milieu. Developing managers, therefore, becomes an essential area of human resource development (HRD) so that they can expand their capabilities and be more effective in their roles (Brownell & Goldsmith, 2006; Lawler, 1994; Sengupta, Venkatesh & Sinha, 2013; Shippmann et al., 2000). In this context, for a sustained personal development, competency-based approach to expand one’s role marks a new development.
Competency is a behavioural characteristic that be articulated in terms of ability, knowledge, motive, trait or skill of an individual associated with effective performance in a given job, organization or culture (Hay Group, 2001). Soderquist, Papalexandris, Ioannou and Prastacos (2010, p. 326) refer to competency as “the heart of HRM” linking HR initiatives with the firm strategy. Competency framework helps link HR initiatives with strategic goals of the organization vertically and horizontally with various HR deliverables such as recruitment, training, performance management, career planning and succession planning. Recent studies have emphasized the role of competencies in HRD. Competency framework helps integrate HR systems to organization strategy and align HR practices (Lawler, 1994; Lievens, Sanchez & DeCorte, 2004; Schippmann et al., 2000; Sengupta et al., 2013) leading to competitive advantage (Campion et al., 2011; Sengupta et al., 2013). Hence, competencies have gained increasing importance in modern day organizations (Catano, Darr & Campbell, 2007; Lawler, 1994; Lievens et al., 2004).
From a practical standpoint, a generic list of desirable competencies is often provided by managers or advised by scholars. This generic list serves in decision making for HRD programmes (Hansson, 2001). Echoing this view, researchers (Markus, Cooper-Thomas & Allpress, 2005) have argued that organizations applying a competency framework create a list or catalogue specifying desirable competencies for effective performance, at the minimum. Later, Soderquist et al. (2010) offered three different perspectives of competency frameworks. First, deals with a generic versus organization-specific competencies model. These competencies are identified within a given job context either generally, that is, common to all individuals occupying specific job, or specific to the job in a given organization (Spencer & Spencer, 1993). The second model pertains to managerial versus operational competencies. These competencies refer to fulfilling requirements to carry out functions of a given role (McClelland, 1973). While managerial competencies pertain to interpersonal activities such as coordination and planning (Soderquist et al., 2010), operational competencies deal with specific actions associated in carrying out a given job of operational nature (New, 1996). Finally, the third framework describes competencies as skills versus competencies as behaviours. These refer to individual characteristics that are learned and describe fundamentally what people do in their job (Boytazis, 1982; Spencer & Spencer, 1993).
The present study borrows the behavioural perspective to identify competency requirements for present and future for multiple reasons. First, recent studies by Catano et al. (2007; Darr & Catano, 2008) have used behaviour-based competency measures as a reliable procedure for performance appraisal and selection process. They have argued for reliability and validity of psychometric properties of behaviour-based competency measures. Behavioural-based competency frameworks applied in organizations aid in decision making. Specific HRD programmes aimed at development of individual can benefit better by using behavioural perspective of competencies (Jackson, Cooper-Thomas, van Gelderen & Davis, 2010). For instance, competency gap analysis can be used to decide the training needs (Wickramasinghe & De Zoyza, 2009) or decide individual career plan within the organization (Schippmann et al., 2000). Second, proponent of behavioural perspective of competencies (Woodruff, 1993) argues that feedback can be better appreciated and incorporated in individuals’ behaviours when competency assessments are being carried out for development purposes. Lastly, Jackson et al. (2010) called for additional studies to understand the relationship between behavioural competencies and work-related outcomes such as training criteria, development interventions and productivity.
Mapping competencies to job requirements is an important issue in HRD programmes. For better design of HRD programmes, a robust competency assessment is crucial. Competency assessments expose the difference between the existing and required proficiency levels. Existing competency levels indicate competencies available to fulfil present job demands while required competency levels indicate competencies required to fulfil future requirements of the job. For instance, competency gap report can identify competency requirement for a given role, job, department or organization at large. Needs identified by way of competency gaps minimize managers’ individual biases towards a specific competency. There are multiple reasons for exploring competency needs. First, few studies have treated competency gaps as needs (Barber & Tietje, 2004; Sengupta et al., 2013; Wikramasinghe & Zoyza, 2009). Second, empirical studies in competencies have been largely driven by consultants (Athey & Orth, 1999); independent empirical research dealing with competencies as a developmental measure is scarce (Barrett & Depinet, 1991). Third, though all definitions broadly indicate that competencies are associated with superior performance, none of them mention about considering future requirements in which jobs need to be performed to ensure competitive advantage. Critics have argued that competency definitions tend to be either focused on past or present but never into the future (Robinson, Sparrow, Clegg & Birdi, 2007; Torrington, Hall & Taylor, 2002). Fourth, limited studies have been conducted in Asian context (Wikramashinghe & Zoyza, 2009, 2011; Xiao, 2006).
The study was undertaken in the Banking and Financial Services (BFS) industry in India. The Indian BFS sector is one of the fastest growing sectors and is facing competition (Arun & Turner, 2002). To remain relevant to the business and sustain competitive advantage, organizations need to exceed customer expectations by producing superior quality products and services and make them available at competitive rates. In order to achieve this end, policies are formulated in order to fuel productivity. Majority of reforms in the financial sector are pegged at improving efficiency of the financial systems in order to facilitate growth and development. In fact, major reforms aim at upgrading managerial competence and overall quality of human resources (Rangarajan, 1998). Managers in such organizations, therefore, play a crucial role. Outperforming managers have a positive influence on the profitability of the firm. Hence, competent managers are key assets desired by organizations in order to remain ahead of competitors. Indian BFS companies are aware of the growing volatility and complexity of managing performance amidst growing competition (Arun & Turner, 2002).
With the given background, the present study attempts to empirically identify managerial competency needs in the Indian context. The research is expected to contribute towards understanding of HRD initiatives that aim to address the competency needs.
Research questions:
What are the competency needs for present and future as perceived by managers?
What are present proficiency levels of competencies as perceived by managers?
Are there any gaps in proficiency levels and importance for present and future competency requirements?
In order to address the research questions, following research objectives were defined:
Capture current competency proficiency levels and importance for those competencies in the present and for the future.
Identify gaps between present and future required competencies.
Identify competencies that managers wish to develop for present and future through challenging assignments.
In the subsequent sections of the paper, theoretical background of the study is provided followed by methods. Findings of the study follow next. Finally, conclusion consists of discussion on implications and avenues for future inquiry.
Literature Review
Competency
White (1959) was the first to use the term competence to describe personality characteristics associated with superior performance. White posited “competence motivation” as underlying mechanism influencing interaction between the individual and the environment in addition to defining competence as “achieved capacity”. McClelland (1973) in his seminal article on “testing for competence than intelligence” argued that individuals’ scholastic achievements had nothing to do with their performance on the job. Subsequently, Boyatzis (1982, p. 21) used the term competency to define it as “underlying characteristics of an individual that are causally related to effective or superior performance”. Lack of agreement in defining the term competency is fairly evident (Hoffmann, 1977; Shippmann et al., 2000). Competency is often conceived as a “fuzzy concept” (Le Deist & Winterton, 2005). For instance, Boyatzis’s (1982) definition of competency included trait, motive, self-concept and knowledge required for successful performance that focused on underlying attributes of an individual. Spencer and Spencer (1993) use the “iceberg model” to define competency as knowledge, skills, trait, motive and self-concept required for superior performance. Range of competency definition vary from behavioural attributes associated with superior performance (Sparrow, 1997) to knowledge, skills, abilities and other characteristics that an individual needs to perform one’s job effectively (Jackson & Schuler, 2003). In absence of an agreed upon meaning of the term competency; the present research subsumes a broad definition of competency as any individual characteristic associated with superior performance or that distinguishes between average and superior performance (Spencer & Spencer, 1993). The focus is, therefore, that of individual development as suggested by Hay Group (2001). Competencies defined in terms collection of behaviours can, therefore, be developed (Wickramasinghe & De Zoyza, 2009).
Research has identified two broad areas of competencies: technical and generic (Woodruffe, 1993). Technical competencies deal with knowledge and skills required for effective performance in a specific area such as production, sales or quality. Generic competencies refer to competencies that are common across organizations and various occupations (Soderquist et al., 2010). Some examples include, motivating the team, organizing one’s work, following established rules and sensitivity towards people issues. Extant research suggests that the nature of managerial work associated with complexities and ambiguities make a generic application of competency profile across situations, both improbable and impractical (Brownell & Goldsmith, 2006; Campion et al., 2011). Therefore, the use of generic competencies is advisable only when the objective is to develop a framework of a given organization (Sparrow, 1997).
Several studies have categorized managerial competency by way of clusters, for example, Boyatzis (1982) six competency clusters, namely, goal and action management cluster, leadership cluster, human resource management cluster, directing subordinates cluster, focus on others cluster and specialized knowledge; Cox and Cooper’s (1988) competencies of chief executives; Spencer and Spencer’s (1993) competencies of top performers; Bartram’s (2005) eight competency clusters associated with workplace performance; Young and Dulewicz (2009) four competency clusters associated with higher performance among naval officers and Hay Group (2011) four competency clusters associated with superior performance. To sum up, literature has emphasized the need to identify competency clusters required for various jobs (Parry, 1996). The next section of the article deals with the comparison of competencies for the past versus competencies for the future.
Competencies: Past, Present or Future?
Antonacopoulou and FitzGerald (1996) argue that while the intention of competency development is to enable managers deal effectively with the situations of the future, competency studies seldom address that and often focus on what managers need to deliver today. Increased focus on customer centricity, proactivity, ability to deal with complexity and uncertainty in today’s changing business environment have made managers’ role pivotal. Antonacopoulou and FitzGerald (1996) caution that in a rapidly changing environment, competency-based approaches pose jeopardy of developing managers’ of the past than of the future.
Competency-based approaches have received criticisms since they focus on behaviours that have already happened or at best, focus on present behaviours and, at worst, focus on past behaviours (Iles, 2001). Most competency framework explains past success rather than having a futuristic outlook by anticipating and aligning to change (Robinson et al., 2007; Torrington et al., 2002). Such situations might emerge during times of high levels of business transformation, wherein focusing on present will ensure that both, the identified competency profiles and the organization, remain in the past (Shackleton, 1992). Therefore, competencies should encompass an organization’s present and future requirements (Prahlad & Hamel, 1990; Sengupta et al., 2013).
Present competencies may be used to measure how successful managers are in meeting existing role expectations. Their role can be enhanced by assigning greater responsibilities thereby providing greater breadth. Most organizations also tend to use performance as a proxy to potential. Employees get categorized as having potential for the mere reason that they have consistently performed as per expectations in the past. However, one needs to question whether they have demonstrated competencies required for the future role? In other words, are we saying that performance is proxy to potential?
Robinson et al. (2007) presented an elaborate approach to identify future competency requirements considering a time period of five years. While one might argue that determining future competency requirements would be subject to speculation, nonetheless future competencies can be determined by selecting future scenarios that are relevant to the business dimensions (e.g., Robinson et al., 2007). Alternatively, competency forecasting could be made more effective by providing due consideration to the nature of business dimensions. This step is the “Achilles’ heel of competency modeling” (Catano et al., 2007, p. 227) and could aid in developing managers that provide competitive advantage for the future.
Competencies from a Behavioural Perspective
The focus of present research is on behavioural competencies in line with Woodruff (1993) who advocates that “competencies are clusters of behaviour”. Behavioural perspective on competencies emphasize on desirable behaviours expected from employees’ while they perform their jobs (Soderquist et al., 2010). A recent work by Catano et al. (2007) uses behaviourally anchored rating scale and used it as the basis to establish a valid method of employee assessment. Therefore, in line with Woodruff’s (1993) concept, the results of Catano et al. study provide evidence of applicability of competencies when defined in terms of behavioural clusters. However, Jackson et al. (2010) caution regarding competency titles being mistaken to be akin to traits. Such misconceptions of assuming competencies to act in ways similar to traits (i.e., stable across situations) have led to problems associated with multisource assessments (Darr & Catano, 2008). Applications of competency framework have largely been based upon behavioural consistency theory (Wernimont & Campbell, 1968) that defines consistency of behaviours demonstrated across various work situations. Put differently, the consistency notion compels to isolate recurring behaviours that contribute to effective performance (and therefore can be predicted) from those that constrain performance.
Unlike trait-based approaches, behaviour-based competency approach does not point this regularity in behaviour to any alternative cause (Jackson et al., 2010). Applications of behavioural competency approach originate from developmental perspective that states utility of behavioural feedback being superior to trait-based feedback (Lance, 2008). Further, such feedback is more likely to induce behavioural change (Lance, 2008). Murphy and Cleveland (1991, p. 92) mention, “feedback that is specific and behaviorally oriented is likely to be useful than feedback that is general and vague”. Competencies in terms of behaviours are defined as qualities that make an individual and that can be applied by the individual irrespective of the job or organization contexts (Nordhaug, 1998; Soderquist et al., 2010). It might be challenging to ascertain the adequacy of behaviours required for meeting the bare minimum expectations in the job. Behavioural competencies help in transforming organization by enabling it to challenge and question status quo and bring about positive change (Sengupta et al., 2013; Soderquist et al., 2010) and influence competitive advantage (Campion et al., 2011).
Competency Gaps
The ISO 9000:2000 standards define competency as “demonstrated capacity” (Serpell & Ferrada, 2007). Clearly behaviours not being able to meet required standards qualify as gaps. By definition, competency gaps arise when individuals possesses competencies at lower levels than mandated for effective performance (Agut & Grau, 2002; Sengupta et al., 2013). Competency development is better appreciated when needs are articulated in terms of competency gaps (Barber & Teitje, 2004; Sengupta et al., 2013; Wickramasinghe & De Zoyza, 2009). Once competency gaps are identified, appropriate mechanisms can be deployed to bridge these gaps such as training (Agut & Grau, 2002), job enrichment (Frese & Zapf, 1994) and challenging assignments (DeRue & Wellman, 2009; McCuley, Ruderman, Ohlott & Morrow, 1994).
Current competency requirements entail prerequisites for effective performance in the present job. Future competency requirements involve requisites to fulfil future requirements of the job. Current competency gap is the difference between present competency requirements and present importance. Future competency gap is the difference between future competency requirements and future importance.
Although self-identified deficiencies may be speculated as preference (Latham, 1988), nonetheless, it provides useful information within the organization contexts (Viitala, 2005). Past studies (Barber & Teitje, 2004; Vittala, 2005; Wickramasinghe & De Zoyza, 2009) have used self-ratings to identify competency importance for present and future.
Training presents a very obvious choice to eliminate gaps (Camuffo & Gerli, 2004; Jackson & Schuler, 2003). The present study examines requests of managers to address competency gaps through challenging assignments which is elaborated in the next section.
Bridging Competency Gaps through Challenging Assignments
Extant literature (DeRue & Wellman, 2009; McCall, Lombardo & Morrison, 1988; McCauley et al., 1994) has considered challenging work experience as a mechanism that aids in managerial competency development. Therefore, variety of experience provides greater scope for developing competencies crucial for success. Based on the work of McCauley et al. (1994), subsequent studies have demonstrated the utility of challenging experiences in building managerial competencies (Dragoni et al., 2009). Challenging assignments present unique situations exposing individuals into circumstances where they have to deal with complex problems and make deliberate decisions under risk and uncertainty (DeRue & Wellman, 2009). Kanfer and Ackmerman’s (1989) motivation-based theory proposes that challenging assignments facilitates development by inducing individuals to exert extra effort in dealing with unique circumstances to acquire relevant competencies.
Challenging work experiences present learning motivation to bridge the competency gaps among individuals (McCauley, 2001). Such gaps become evident when individuals do not meet the requirements of role. McCall et al. (1988) and McCauley et al. (1994) argue that developmental assignment provides challenges and motivates managers to move away from their comfort zones and enhance their existing capabilities and provides a forum to make a positive impact on the work environment. This type of learning involves experiences acquired while dealing with challenges involving application of managerial knowledge and skills. In the research conducted by McCauley et al. (1994) identified dimensions of work experiences that demand individuals to deal with challenges in order to develop into managerial roles (e.g., creating change, influencing people without having formal authority, manage job transitions). DeRue and Wellman (2009) conducted their research on leadership development by identifying developmentally challenging assignment that included creating change, managing business diversity, working across boundaries and increased responsibilities.
Prior researches done on challenging assignments (McCall et al., 1988; McCauley et al., 1994) provide several arguments to expect a positive relationship between developmental challenge and development of managerial competencies (e.g., Dragoni et al., 2009). Challenging experiences facilitate development of an individual’s cognitive and strategic skills by stimulating individuals to evaluate a situation critically, identify causes of novel problems and evaluate implications of their decisions (DeRue & Wellman, 2009). Research studies (McCall et al., 1988; McCauley et al., 1994) have validated these claims by proving that challenging experiences improves on-the-job learning.
Challenging experience demanding facilitation of organization change process that enhance individuals’ business knowledge and strategic thinking skills by compelling them to review barriers of change and accordingly allocate resources (DeRue & Wellman, 2009; Dragoni et al., 2009). The sheer challenge of developmental work experience induces managers to acquire relevant knowledge and skills to bridge these gaps. For example, challenging work experience could enhance a manager’s interpersonal skills by enabling to actively try out unique ways to influence people with varying cultural and demographic backgrounds and get work done through people on whom they do not have any direct and/or formal authority. When faced with work challenges, managers learn to deal with crisis situations, handling contingency, engage in boundary spanning roles, influence people who do not directly report to them and ensure goal attainment.
Murky Ground of Measuring Competencies
Despite increasing popularity, measuring “competencies” as a construct continues to remain controversial (Lawler, 1994; Le Deist & Winterton, 2005; Lievens et al., 2004; Sengupta et al., 2013). While consistent judgement is concerned with face validity, content validity implies that the competency list is an accurate representation of the universal set (Wickramasinghe & Zoyza, 2009). Sparrow (1997) cautions with regard to behavioural competencies, not to fall prey to predictive validity but rather focus on content validity. Content validity of competency would entail list of behaviours that job holder associate with superior performance (Catano et al., 2007). In a way, Catano et al. study highlights the relevance of competencies when articulated in terms of behavioural clusters. In fact, Jackson et al. (2010) cautioned regarding competency names being mistaken for traits. Such misconceptions of assuming behaviours to act consistently across situations, as in case of traits, have compounded errors in multisource assessments (Darr & Catano, 2008).
Needless to mention that operational definition of competency would determine their utility. Largely, competencies have been assessed using three different approaches: self-evaluation, stakeholder evaluation and peer evaluation to capture perspective of others who are in a similar role (Camuffo & Gerli, 2004). Therefore, Brownell and Goldsmith (2006) emphasize challenges associated with measurement of competencies.
Method
Participants and Procedure
Data for the study was collected from a leading banking and financial service (BFS) provider where one of the researchers worked before pursing research career. The human resources (HR) department was explained the purpose of the study by the researcher who coordinated data collection. Data collection was manually done in two phases from middle level managers of the organization. Out of 451 managers, only 334 could be contacted during the time of data collection since others were either travelling or were on leave. Data collection was done by means of physically administering the questionnaire. The questionnaire carried a covering letter explaining the purpose of the study and assured complete anonymity of the responses. During the first phase employee demographics such as age, gender, tenure, department and existing competency proficiency was obtained from the respondents. The HR department helped in coordinating with the managers by having them come to a training room located within the premises of the organization at a designated time. The researcher was also physically present to collect the data. A reminder was sent through electronic mail to the managers available every day requesting them to participate in the survey. At the end of phase 1 that lasted for 10 working days (two weeks) response from 277 managers was obtained.
After a time lapse of a month data on competency importance for present and future was collected from managers who took part during phase 1. This temporal dispersion was introduced to limit the chances of common method bias by reducing chances to recall the earlier responses (Podsakoff et al., 2003). Managers’, who volunteered to participate in phase 1, were requested to participate in final phase 2 of the survey. During phase 2, data regarding competency importance for present and future was obtained from the respondents.
Similar to the process followed in phase 1, the researcher went at the designated time for data collection. Reminder mail was sent on a daily basis to the earlier respondents requesting them to complete the final part of the survey. This phase also lasted for 10 working days (two weeks). A total of 236 managers volunteered to participate in phase 2.
Collation of the responses obtained in phase 1 and phase 2 was done with the help of serial number printed on the questionnaire during each data collection effort. This serial number was known only to the researcher and it helped in tracking the responses obtained in both data collection efforts.
The final sample resulted in 202 usable responses since others had incomplete data resulting in response rate of 60 per cent. The average age of the participants was 39 years. A total of 72 per cent of the respondents were males and 28 per cent were females. 95 per cent of the respondents were married. 85 per cent were either graduates or possessed a professional qualification. Their average tenure in the organization was 11.3 years and in the given department was 4.5 years. Each manager had 5–7 subordinates reporting to them directly.
Measures
The first step was to identify relevant managerial competencies required for successful performance in the job. In order to derive an exhaustive list of competencies, approaches adopted in recent studies were examined (e.g., Agut, Grau & Peiro, 2003; Barber & Tietje, 2004; Wikramasinghe & Zoyza, 2009). While some authors have used competencies by drawing from previous literature, others have developed their own. For the present study, Portfolio Sort Cards of the LEADERSHIP ARCHITECT (Lominger Limited) was used as an instrument for competency modelling. These Portfolio Sort Cards consists of 67 cards giving vivid description for each competency according to behaviourally anchored rating scale (Lombardo & Eichinger, 2003). The Portfolio Sort Cards were chosen since it is commercially available for the purpose of competency modelling and allows for a semi-structured, Q-sort method for identifying and rating competencies (e.g., Lievens et al., 2004). Moreover, the Portfolio Sort Cards depict characteristics applicable for determining competency requirement as suggested by Shippmann et al. (2000). For instance, the Portfolio Sort Cards provide indicative list of behaviours against each competency descriptor. The present study reported an internal consistency of 0.79.
Identification of competencies required for banking and financial service (BFS) industry consisted of four steps. First, Portfolio Sort Cards consisting of 67 competencies were used as the hypothesized list of competencies. Second, panels of industry experts were approached to rank order the importance of each competency for practicing managers in the BFS domain. Finally, randomly selected team of senior managers (vice president and general manager levels) belonging to BFS area of the company where the study was being carried out, were consulted to rate the relevance and importance of the competencies required for successful performance. This was done to ensure that the identified competencies were relevant and applicable for working managers. As a final step, competency ranking was obtained from both panels were independently analyzed by the researchers to arrive at the important competencies in the BFS industry. In the process duplicate competencies were eliminated. The final list consisted of 34 competencies and reflected the critical success factors required for superior performance.
Consistent with resent research in this area (Viitala, 2005; Wikramasinghe & Zoyza, 2009; Xiao, 2006), self-assessment was used to measure the existing proficiency of a specific competency in performing the job. Although it has been argued that individuals are poor appraisers of their own performance (Hogan & Warrenfeltz, 2003), however, inaccurate competency judgement might seem, these subjective evaluation impact individual’s self-development (Viitala, 2005). Proponents in the field of managerial development have advocated improving self-awareness as the basis of all developmental initiatives (e.g., Camuffo & Gerli, 2004). The Portfolio Sort cards were used to assess competencies at three levels—existing proficiency, existing importance and future importance. Similar approach has been used (Robinson et al., 2007) asking design engineers from the aerospace industry to rate the importance of competencies in their present job and in the future, as perceived by them. In the present study, proficiency and importance were measured as follows:
Present competency proficiency level: 5-point Likert scale was used to establish the existing proficiency levels ranging from: 5 = extremely high proficiency, 4 = high proficiency, 3 = moderate proficiency, 2 = low proficiency, 1 = none. For a given area of operation, responding managers, estimate their proficiency for all the 34 competencies.
Competency importance for present success: 5-point Likert scale was used to establish the existing proficiency levels ranging from: 5= essential for success, 4 = very important or necessary, 3 = nice to have, 2 = less important and 1 = not important. For a given area of operation, responding managers estimate the importance for all the 34 competencies required for present success.
Competency importance for future success: 5-point Likert scale was used to establish the existing proficiency levels ranging from: 5 = essential for success, 4 = very important or necessary, 3 = nice to have, 2 = less important and 1 = not important. For a given area of operation, responding managers estimate the importance for all the 34 competencies required for future success (up to next 3 years).
Specifically, two types of gaps were determined—present and future (e.g., Robinson et al., 2007; Sengupta et al., 2013).
Present competency gaps: The quantum of competency gap was established by calculating the difference between the present proficiency levels of competency and the importance for present success. Gaps, for all 34 competencies were calculated for each of the respondents.
Future competency gaps: The quantum of competency gap was established by calculating the difference between the present importance levels of competency and the importance for future success. Similarly, gaps, for all 34 competencies were calculated for each of the respondents. Gaps were identified based on criterion proposed by Agut and Grau (2002).
Unlike the traditional approach of training to bridge competency gaps, the present study explored challenging assignments (DeRue & Wellman, 2009; McCuley et al., 1994) to address those gaps. Researchers (Lawler, 1994; Soderquist et al., 2010) have challenged the traditional job-based HRM system to a competence-based system and questioned the traditional approaches to bridge skill gaps. The argument put forth for using challenging assignments as a method used to build competency is that, it translates into practices, shaping, the way people learn in organizations (McCall, 2004). To assess individuals’ interest through challenging assignments, the following questions were used: ‘Do you want the organization to provide challenging assignments to improve competencies for your present success?’ and ‘Do you want the organization to provide challenging assignments to improve competencies for your future success at the existing workplace?’ These dichotomous questions led to two responses (Yes, developmentally challenging assignments required and No, challenging assignments are not required) for addressing competence development for present success and for future success. If the respondents indicated affirmatively that they needed challenging assignments, then another question was asked: “If your answer is ‘yes’, indicate the competencies that you wish to improve at the existing proficiency and future proficiency (up to seven choices were possible at each level).”
Data Analysis
Descriptive statistics was used to arrive at existing level of expertise, present importance and future importance of competencies and to identify gaps. Paired sample t-tests were performed to identify differences between existing proficiency levels for present and future importance to arrive at critical competencies. McNemar test was performed to compare the present and future request to bridge competency gaps through challenging assignments. In order to identify dimensions reported by participants, present and future gaps of 34 competencies were subjected to exploratory factor analysis (with Varimax rotation) separately. Six managerial competency clusters for present success and eight managerial clusters for future success were identified. The Kaiser–Meyer–Olkin (KMO) and Barlett’s statistics were computed accordingly. The KMO statistics for present competency level was 0.896 and for the future competency proficiency was 0.827. Barlett’s test of spherecity was significant for both present and future levels at 0.000.
Results
Table 1 provides the summary of three competency levels. Mean values against the competencies indicate the proficiency for present, importance for present and future performance.
Existing Proficiency Level, Present Importance and Future Importance of Competencies
Table 2 provides the summary of results of paired sample t-test for present and future competency needs.
Competency Gaps for Present Need and Future Need
Paired sample t-test was performed to identify competency needs at present and future levels. The results of t-test identified competency gaps for present and for future. For instance, present gap of “action orientation” (−0.41) was obtained by subtracting the present proficiency of the competency “action orientation” from present importance of “action orientation” (Table 2). Similarly, the future gap of “action orientation” (−0.27) was obtained by subtracting present importance of competency “action orientation” from future importance of “action orientation” (Table 2). The results of t-test reveal significant difference in mean values for all competencies indicating that through managers considered the competencies as crucial in present work context, they perceived its increasing importance to ensure success in the future. As the BFS industry is marked by increasing competition in India, managers could be aware of the challenges involved in ensuring continuity of business. Results indicate that there is a need felt to increase competencies across all levels in order to gain competitive advantage in the future.
Tables 3 and 4 display the results of principal component factor analysis for managerial competency gaps at present and future levels respectively. A total of 34 competencies were categorized into different clusters for present and future. Although all competency clusters showed adequate internal consistency, cluster 1 showed substantial variance at present and future levels.
Factor Analysis for Present Competency Needs
Factor Analysis for Future Competency Needs
Table 5 shows request for challenging assignments for bridging competency gaps for present and future. Out of 192 managers who responded, 166 respondents expressed their interest in bridging competency gaps for present and 171 respondents expressed their interest in bridging competency gaps for future.
Interest to Bridge Competency Gaps through Developmentally Challenging Assignments
Table 6 shows list of competencies that respondents expressed to improve for present and future.
Break-up of Competencies Desired to be Bridged through Challenging Assignments
166 respondents put forth 492 requests for bridging competency gaps for present and 171 respondents put forth 397 requests for future levels. On an average there were 3 and 2.3 requests for challenging assignments for present and future, respectively. Results of McNemar test indicate that the number of managers who wish to improve their competencies for future performance is significantly greater than the request made by managers to improve their competencies for present performance.
Discussion and Implications
The purpose of study was to identify critical competencies for successful performance in the BFS domain. A standardized competency modelling instrument, Portfolio Sort Cards was used. Each respondent was asked to indicate the importance, proficiency and future needs of competencies for 34 competencies. Competency gaps were subsequently identified for present and future success. The respondents were also asked to express their interest in bridging these gaps through challenging assignment. From a theoretical perspective, the study contributes to making managerial capability assessment through competency ratings. By making use of challenging assignments, organizations can benefit in two ways: (i) having managers handle novel responsibilities and thereby improve their exposure; (ii) have real-time assessment on competency development through such assignments.
The study operationalizes gap in terms of competency needs (Barber & Teitje, 2004; Wickramasinghe & De Zoyza, 2009). Competency gaps identified can be used for multiple purposes: (i) Comparing individuals across competency gaps. For instance, “dealing with ambiguity” showed the highest level of gap compared to “organization agility” and “negotiating” that had the lowest gaps at present level; (ii) level of gap could also indicate the priority to be given to address the gap. For example, “dealing with ambiguity” shows a larger gap compared to “innovation management” suggesting that bridging gap in “dealing with ambiguity” is a priority; (iii) factor analysis showed the different competency clusters. As challenging assignments is being used as a strategy to bridge competency gaps, these assignments need to be linked back to existing levels of proficiency levels. Ideally interest expressed by individuals to bridge gaps through challenging assignments should tally with their existing competency gaps. Since challenging assignments involve working with unfamiliar and novel responsibilities, the demonstration of acquired competency can easily be measured on the job.
The organization where the study was conducted was keen to enhance competencies of their employees across all levels. In such a work context, HR can maintain a repository of competencies against each employee to track their movements through internal job transfers based on proficiency levels of these competencies. By bench-marking required competencies for the new/existing role, interested individuals’ applying for the position can be rank ordered based on the competency gaps. Business can make informed decision while mobilizing internal resources based on these competency gaps so that effort in bridging these gaps can be reduced. Therefore, this attempt would benefit the employees and organizations both alike. It can help employees in meeting individual aspiration and enhance career satisfaction and the organization benefits in putting the “right” people in “right” jobs by way of internal staffing mechanisms.
Self-reports have been used to identify present competency proficiency gaps consistent with similar approaches being used by researchers (Barber & Tietje, 2004; Wickramasinghe & De Zoyza, 2009). To overcome errors associated with single data source, temporal dispersion by introducing a time lag of one month was provided as recommended by Podsakoff et al. (2003). Unfamiliarity with the assignment might make the job of managers demanding (DeRue & Wellman, 2009); therefore, choice was given to the respondents to express their interest to address competency gaps through challenging assignments. The results show that the major areas where challenging assignments were requested pertained to competency cluster 3 to improve present and cluster 2 to improve future competency needs. But, factor analysis indicated that competency cluster 1 had highest percentage of variation in data due to that factor for both present and future competency needs. Therefore, organization needs to decide which cluster they would like to address first. There were no challenging assignments requested in competency cluster 1 for present and clusters 1, 4, 7 and 8 for future levels. Merely because respondents have not requested for challenging assignments for some competency clusters, does not imply that those gaps do not need to be addressed as there are significant gaps in those competencies as well. A plausible explanation could be that managers might have doubts whether those could be addressed through challenging assignments. Clearly, challenging assignments present only one of the means to bridge competency gaps.
HR strategies can be better aligned to organizational goals. By identifying competency clusters, HR can determine whether to buy or build those competencies. Present study has implications specifically in the area of management development. Performance in challenging assignments can indicate standards and criteria of evaluation for a given competency. By defining expected outcomes from assignments, behaviour approach to learning can be adopted. Behavioural objectives for learning interventions can be then based on the standard for performance and criteria for evaluation. Organizations can filter employees based on their demonstrated behaviours that drive performance in challenging assignments and expedite their career progression within the organization. Individuals can gain by acquiring competencies that fuel their career growth and organization stands to gain through flexibly deploying HR systems to manage employee aspiration.
Decisions on designing course content based on competency gaps can be made. Effectiveness of learning outcomes can be established based on the extent to which individuals have been in a position to exhibit behaviours desirable after learning intervention. Organizations need to decide the extent to which individuals would want training and the extent to which training can be usefully imparted. An important element of training needs also pertains to certification process that ensures that individuals not only develop skills and competencies relevant to the business but also maintain and utilize them as long as they paid (Lawler, 1994). Finally, by providing actual exposure to challenging assignment employees can also experience the impact of competencies at workplace. Factor analysis also suggested that competency cluster 3 accounting for higher percentage of data variation due to that factor.
Finally, there are implications for South Asian countries in general and India in specific. Increased level of internationalization of business, competition and growth of new markets (such as in southern Asia and India) have compelled HR managers to react to similar concepts and pressures as their counterparts (Budhwar & Sparrow, 2002). The Organisation for Economic Cooperation and Development (OECD) on skill development and pathways in Asia (2012 report) highlights the increasing knowledge intensity and skill development at modern workplace. While the report highlights the lack of investment in promotion workplace training, it also reiterates that organizations need to take greater responsibility of developing their workforce by incorporating new ideas and approaches. The study examined managers’ request to bridge competency gaps by way of challenging assignments which offers an alternative approach to the traditional training to bridge competency gaps. Competencies subsequently shape the development and deployment of HR systems in a cross-national context (Budhwar & Sparrow, 2002). With rapidly growing emerging economies such as India, developing managerial talent through challenging assignment is an under-studied area that has immense potential.
Limitations and Future Directions
One of the important limitations is that the study uses self-reports of managers to identify competency gaps. Objectively reported competency gaps can be bridged through various means to improve overall job performance (Wickramasinghe & De Zoyza, 2009). Self-reports could indicate one’s preference (Latham, 1988) resulting in either inflating or under-reporting present competency proficiency or importance. While use of self-reports to identify gaps have been used in the past (Barber & Teitje, 2004; Wickramasinghe & DeZoyza, 2009), the importance of competencies for present and future could be validated through top management team, customers and peers (Campion et al., 2011; Catano et al., 2007) and through critical incident interview (Robinson et al., 2007). Greater consistency in competency requirement can be enhanced through frame of reference training (Bernardin & Buckley, 1981). The respondents in the study were asked to express their interest of bridging their competency gaps through challenging assignments; the success of using such assignments would largely depend on the individuals’ openness to novel experience, learning orientation, extent of openness to feedback or even prior exposure to such intervention. Clearly, these speculative remarks warrant further research. Organization work climate would definitely impact the implementation of learning interventions. While one might expect that some employees prefer working in a structured environment, others might be more comfortable with novelty of cues as expected from challenging assignments. Adequate supervisor support becomes crucial in this scenario. Examining the role of organization support in challenging assignment presents an area that requires further probing. Furthermore, challenging assignment was considered as an option to address competency needs. Subsequent studies need to examine other options of bridging competency gaps such as job enrichment (Agut & Grau, 2002; Lawler, 1994), job content innovation (Peiro, 1999), enhancing organization climate (Glodstein, 1993) or job redesign (Bee & Bee, 1994).
Past studies have highlighted the role of organization context influencing consensus in competency ratings (Lievens & Sanchez, 2007). It appears that by involving SMEs, industry experts and customers, one can gain better consensus for future competency requirements. Validation of the competency model needs to be explained through longitudinal study designs. Since the present study used an established competency modelling instrument in the findings can be generalized in the BFS industry. Future studies can examine the role of using the assessment centre approach to identify competency gaps or through a panel of experts. While this might demand more time, effort and money, nonetheless, the approach is more robust compared to self-ratings (Atkins & Wood, 2002). Measuring the impact of competency framework on role performance would further validate the model. This will further establish the validity of the competency model.
Footnotes
Acknowledgements
We would like to express our sincere gratitude to Associate Editor, Anjali Chowdahary and two anonymous reviewers for their helpful comments on an earlier draft of this paper.
