Competency Based Training– A competency is defined as “a relatively enduring characteristic of an individual which statistically predicts effective or superior (one standard deviation above the mean) performance in a job”
The superior performance definition of competence, performance one standard deviation above the mean (the top 14%, or roughly the top one out of 10 performers in a job) is preferred for two reasons known economic value, as shown in Figure 1. Hunter, Schmidt and Judiesch (1990) found that, depending on the complexity of the job, performance one standard deviation above the mean is worth between 19% and 48% economic value-added in non-sales jobs, and 48-120%increased productivity in sales jobs.
Figure1. Economic Value Added by Superior Performance
A study of sales in 44 firms by Sloan and Spencer (1991) found that for salespeople earning an average of $41,777, superior performers sold an average $6.7 million where typical performers sold $3 million. Superior salespeople sold 123% more than average salespeople. These data suggest the practical economic value of a competency model which enables an organization to find or train even one additional Superior salesperson: $3.7 million in additional revenues—a benefit that can cost-justify a considerable investment in competency research. Hunter, et.al.’s global estimation methodology and findings provide powerful tools for estimating and evaluating the economic value of competency-based human resource applications (see “Applications” below).
Benchmarks and direction for ADDING value As with any “best practice” benchmark, competence defined as the best a job can be done drives human resource applications to add value— do better than individuals’ or firms’ present average level of performance. Any human resource approach that does not use an explicit benchmark superior to its present performance risks staffing, training and managing to mediocrity—it will be unlikely to improve on its existing (average) performance level.
A competency is any individual characteristic which can be measured reliably and which distinguishes superior from average performers, or between effective and ineffective per- formers, at statistical levels of significance. “Differentiating” competencies distinguish superior from average performers.
“Threshold” or “essential” competencies are required for minimally adequate or average performance. The threshold and differentiating competencies for a given job provide a template for personnel selection, succession planning, performance appraisal, and development.
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