Wed 19 Nov 2008
Organizations use performance appraisals to determine an employee’s level and span of competence. They use this information both to place employees in the job for which they are most qualified and also to create a plan to help in their professional development. In an ideal situation, the goal is to both increase the employee’s value to the organization and also enhance their career potential. To get the most out of such appraisals, organizations should try to find points of convergence between the individual, current organizational operations, and the demands of a changing external environment. In this post, I want to explore some of the reasons why competency-based assessment systems sometimes fail to achieve their intended purpose and also explore the possibility that the Knowledge-Wisdom matrix (described in the previous post) might provide a model for coming up with a more holistic approach to performance assessment.
I would like to suggest that, if these competency-based assessments fail to take into account the intersection of knowledge and wisdom, they will fall short of their objective. Only by taking a holistic approach to assessing employee competence can the organization gain an accurate understanding of that employee’s potential for improvement and growth.
Despite the wide usage of competency-based assessments–which would appear to argue for their effectiveness–some researchers point out that these systems begin with misguided assumptions. For example, Hollenbeck, et al. (2006) question the assumption that skill at carrying out the activities necessary to perform a job with efficiency necessarily translates into optimal organizational performance (p. 171). Just because you can skin a cat with great skill and efficiency, does not mean that the external environment wants a skinned cat.
Other critics cite problems with the fundamental assumptions underlying competency-based assessments (Finegold, Lawler, & Ledford, 1998; Jubb & Robotham, 1997). For example, there is little research to support the assumption that individual competency necessarily influences organizational performance. In fact, there is a body of research that indicates that excellent leaders are likely to fail competency-based assessments (Cunningham, 2006, p. 4). Hollenbeck et al (2006) point out cases where the adoption of competency-based assessment systems has actually been counterproductive to the effort to develop leaders. This is because such assessments use measures based on past performance, whereas what is needed for developing leadership potential is a way to assess how well an employee is able to tackle the unanticipated realities of the future and of change.
Perhaps the main reason why competency-based assessments fall short of achieving their purpose is that they focus entirely on knowledge (as defined in the previous post) and fail to measure wisdom, which is much more critical for leadership. They focus almost exclusively on the measurement of observable behaviors, ignoring other critical factors such as: personal values (Kouzes & Posner, 2002, pp. 49-51), emotional intelligence (Stein, 2006), and the spiritual dimension of human nature (Occhiogrosso, 1993; Rigoglioso, 1999). Competency-based assessments also rarely consider organizational dimensions or the impact of the external environment.
A holistic approach to assessment would not only measure competencies (knowledge), but would also seek to measure wisdom, that is to say, they would seek to measure the internal dimensions of the individual such as values, hopes, personal vision, self-esteem, and one’s sense of meaning. Attempts to reduce employees to a set of external skills and cognitive intelligences are unable to detect the hidden potential of an employee. A holistic approach to assessment would seek to discover the strategic intersections between the employee’s total person and the organization’s competitive strategy for dealing with the future. Leaders would be able to look at the combination of an employee’s knowledge and wisdom and design strategies for developing both dimensions as it plans for the future.
Despite the problems and concerns regarding competency-based assessments, they can still play an important role in the pursuit of organizational effectiveness. However, I would encourage leaders to look at these assessments as only one part of a more complete, holistic approach to assessment. Whatever systems are put into place, an effort should be made to identify those individuals who have grown in wisdom and who may be ready to take on new challenges that would require the development of new knowledge. Leaders should also seek to identify the strategic intersections between the individual as a total person and the organization as a total system, including its mission, strategy, internal culture, and external environment.
Note: When I started this post, I was intending it to be a summary of an article that my good friends and colleagues, Bob Gerwig and Scott Yorkovich, and I wrote together and presented at the 34th Annual Conference of the Northeast Business and Economics Association (2007). However, the further I got into it, the more I realized that this post has become a totally new article. Nevertheless, I want to acknowledge my indebtedness to Bob and Scott for their contribution to the discussion of the limitations of competency-based assessments.
Sources Cited
Cunningham, I. (2006). “We need more than competence: What about excellence?” Development and Learning in Organizations, 20(2), 4-4.
Finegold, D., Lawler, E. E. I., & Ledford, G. E. (1998). “Organizing for Competencies & Capabilities.” In Mohrman, S. A., Galbraith, J. R., Lawler, E. E. I., & Associates (Eds.), Tomorrow’s Organization: Crafting Winning Capabilities in a Dynamic World. San Francisco, CA: Jossey-Bass.
Hollenbeck, G. P., McCall, M. W., & Silzer, R. F. (2006). “Leadership competency models.” The Leadership Quarterly, 17(4), 398-413.
Jubb, R. & Robotham, D. (1997). “Competencies in management development: Challenging the myths.” Journal of European Industrial Training, 21(4/5), 171-175.
Kouzes, J. M. & Posner, B. Z. (1993). Credibility: How leaders gain and lose it, why people demand it. San Francisco, CA: Jossey-Bass.
Occhiogrosso, P. (1993). Through the labyrinth: Stories of the search for spiritual transformation in everyday life. New York: Viking Penguin.
Rigoglioso, M. (1999, October 8 2007). “Spirit at work: The search for deeper meaning in the workplace.” Working Knowledge for Business Leaders.
Stein, S. J. (2006). The EQ Edge: Emotional Intelligence & Your Success: San Francisco: Jossey-Bass.