Competency Models-benefits and Challenges

8/10/2019 Competency Models-benefits and Challenges

1/36

1Competency models

benefits and challenges

ADVISORY SERVICES

Competency models


Insights from 2010 survey on

practical application in Bulgaria


2/36


3/36

Content

Introduction 4

About the survey 5

KPMGs view on survey results 6

The results in detail 10

Appendix 33

2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limitedliability company and a member firm of the KPMG network of independent member firms affiliated withKPMG International, a Swiss cooperative. All rights reserved.


4/36

4 Competency models


Introduction

We all witness and actively participate in the changes in the economic

environment and their impact on the way we work. Faced with a variety of

challenges, companies are looking for more ways to optimise business processes

and costs, and increase individual as well as organisational efficiency.

Encouraged by the growing interest towards the topic of efficiency we at

KPMGs People & Change Advisory practice endeavoured to carry out a survey

on one of the methods for increasing personal and organizational efficiency the

competency models.

We will take a brief look at what competencies are and how they support the

achievement of high business results.

The term competency was introduced to the Human Resources management in

the early 80s of the 20th century. In 1982 the American scholar Richard Boyatzis

wrote his book The Competent Manager: A Model for Effective Performance,

which exerted serious influence among human resources management

specialists. For over three decades now, competencies and competency models

have become an inseparable part of Human Resources management and havebeen widely used as means for increasing personal and organisational efficiency.

As the terms competence and competency were gaining popularity in the

80s and 90s, a semantic differentiation between them was needed, namely

to use competency to denote specific behaviours and skills an employee

should possess in order to be able to achieve high performance levels, and

competence to refer to a level of specific knowledge and skills necessary

to carry out a task. With time a strong tendency has been imposed for

interchangeability of the two terms in both English and Bulgarian.

In this paper we use the term competency to denote a combination of experience,

knowledge, skills and the attitudes necessary for the successful performance of

a specific task or in a specific position. These can be developed through various

forms of learning, both at the workplace and in everyday life.

To support organisations in identifying and attracting suitable employeesand in acquiring the skills and behaviours necessary for the achievement of

business results, HR specialists develop integrated systems of complementary

competencies competency models.

Competency models are widely applicable in Human Resources management

processes for instance in recruitment and selection, learning and development,

career planning. The benefits from using them include employees having a clear

understanding about the behaviours and attitudes encouraged in the organisation,

transparency and fairness of the performance management and talent

identification and development processes.

Despite the indisputable benefits of the competency models, the development

and implementation process is long and complicated and accompanied by a variety

of challenges to be overcome.

That is why we decided to invite different organisations in Bulgaria to share theirexperience with competency models and the challenges they face.



5/36

5Competency models


About the survey

For the purposes of the survey on competency models we at KPMG designed a

questionnaire. It consisted of 12 statements focused on areas of application and

the process of designing and implementing competency models.

For each statement participants were asked to choose between a set of

predefined answers. For most, respondents had the opportunity to select more

than one option. For seven of the statements an additional response could be

provided.

Eighty-eight organisations from different industry sectors (Financial services,

Trade, Information Technology, Telecommunications, Media (ITM), Energy,

Pharmaceuticals, Public Administration and Manufacturing) took part in the survey

on competency models.

In order to identify some tendencies and differences, we have also split the

participants into different groups according to approximate number of employees

(Up to 50 employees, From 51 to 100 employees, From 101 to 500 employees

and Above 500 employees), type of ownership (International and Bulgarian) and

presence on the Bulgarian market (Up to 3 years, From 3 to 5 years, From 6 to 10years and 11 years or more). A detailed profile of the participants is presented in

the Appendix.



6/36

6 Competency models


KPMGs view on survey results

Our survey shows that most organisations take into consideration the need for a

competency model that supports corporate strategy and values, translating them

into common and comprehensive criteria for successfully performing activities in

a company. Introducing such a system is in most cases was triggered by the need

to increase personal and, resulting from that, organizational efficiency. Almost half

of the respondents aim at strengthening employee commitment. They rely on

competency models to also support management by providing practical guidance

and objectivity regarding the achievements and behaviours that need to be

encouraged in the organisation.

To achieve the above-mentioned aims, competency models are integrated into

different Human Resources management processes. In terms of increasing

personal efficiency and supporting the management, for instance, a significant

portion of the organisations apply competencies to performance management.

Within the performance management system competencies are integrated

predominantly with personal development goals (followed by business and

financial goals), which is once again related to the focus on employee engagement

and increased efficiency. In addition to this, the model is applied to training needs

analysis, career development, talent management, assessment and development

centres as well.

The purpose and areas of applicability of the competency model to a large extent

determine the level of detail in which it is developed. The survey results revealthat organisations which develop competencies in greater detail (with behaviours

and levels of demonstration) use them much more often for specific activities

such as training needs analysis, talent management and

360 degree feedback (compared to participants that present their competencies

by titles and descriptions only). Regarding the number of competencies included

in the model, organisations most frequently choose 6-9 competencies. The level

of detail of competencies has an impact on the efficiency of the model, its clarity

and accessibility, as well as employees attitude

towards it.

The introduction and application of a competency model is related to the stages

of development of an organisation. It is worth noting that a significant share of

small companies (up to 50 employees) as well as those that recently entered the

Bulgarian market (up to three years) do not envisage introducing a competency

model in the next 1-2 years nor, at the time of completing the survey, are they in

the process of developing or implementing one. Participants from companies with

a shorter presence on the Bulgarian market (up to three years) point out that their

competencies in most cases are presented by titles and descriptions only.

Competency models are in the process of being developed, introduced or

reviewed and updated in all companies from the Pharmaceutical sector that took

part in the survey, and they are opting for a smaller number of competencies.

Purpose

Applicability

Level of detail

Stage of introduction



7/36

7Competency models


Almost half of the manufacturing companies still do not have an implemented

model, which is either about to be developed or is not envisaged for developmentin the near future.

This sector also stands out in terms of the target group to which the competency

model is applied or is going to be applied most often to managers and to key

specialists only (Manufacturing). Organisations from the other sectors most

frequently apply their competencies to all employees.

In view of building a competency model applicable for the different target groups,

in most cases organisations integrate core, specific and technical competencies

(or just core and specific). Technical competencies are used in combination with

specific and/or core ones. Core competencies are valid for all employees in an

organisation and are aligned with its mission, strategy and values. They reflect

the core skills necessary for its success. The specific competencies are related

to certain behaviours, attitudes and skills relevant to the different functions in an

organisation and are focused on resolving more particular professional tasks and

problems, typical for the workplace and position.

The process of developing and implementing a competency model in the

organisation is a long one and is accompanied by carrying out in-depth analysis

and overcoming a variety of challenges. Likely due to this complexity and in view

of the need for the competencies to reflect corporate values, almost half of the

surveyed organisations utilise the opportunity to adapt a ready model from a

parent company (headquarters). Companies without international ownership rely

mainly on internal resources.

The choice of approach determines to a certain extent the critical moments

to be expected in the process of developing or adapting the model. Bulgarian

companies, for instance, as well as the Public Administration representatives

experience to a great extent difficulties related to the need to achieve consistency

between the different competencies and avoid overlap of content.

Overall, the most frequently experienced challenge is related to achieving a clear

alignment between the competencies and the organisations business goals.

Other difficulties include achieving clarity and user-friendliness, applicability of the

competencies to all employees and reflection of corporate values.

The difficulties that participants in the survey face at the implementation stage

are related to the practical application of the model, the purely formal attitude,

insufficient understanding of managers about the advantages of the model and

employee resistance towards accepting it.

A comparison between the challenges that restrained these organisations with

already implemented and operational models and those faced by participants

with models which are not functioning or are envisaged for update reveals some

interesting tendencies. Companies that evaluate their competency models

as not functioning have to a greater extent been hindered by an insufficient

understanding on the part of managers about the advantages of the model, as

well as by employee resistance to accepting the model. Participants that plan to

revise and update their models due to certain reasons share that they have also

Selecting an approach

Critical moments in theprocess of developmentand implementation

Types of competencies

Target group



8/36

8 Competency models


Useful steps

faced stronger employee resistance to accept the model as well as difficulties in

achieving relevance/applicability of the competencies to all employees from thetarget group and ensuring clarity and user-friendliness.

This group of participants more often points out the inability of the existing

model to meet the needs of top management as a reason for changing the

competencies. At the same time, generally the survey participants share the

opinion that a change in strategy would trigger a change in their competency

model as well.

The present economic situation encourages more and more organisations to

review and further develop their competency models or plan their introduction

if they do not have one already. One-fifth of the participants with implemented

competency models reveal that those models are currently not operational or

need to be updated. Results from the present survey coupled with KPMGs

experience in designing and introducing competency models as part of largerinitiatives help to identify key moments within the different phases of the process

that influence the success of the model:

precise definition of the purposes that the organisation aims to achieve by

introducing a competency model already during the planning phase. The

purposes determine to a great extent the selection of approach, areas of

application, target group, level of detail and types of competencies

analysis of the advantages and disadvantages of the possible options and

selection of an optimal approach, taking into account the specifics of the

business, the history of the organisation and the available internal capacity

clear definition of the areas of applicability of the competencies and planning

their smooth integration in the respective processes

analysis and definition of the necessary level of detail in view of the purposesand areas of applicability of the model

definition of the target group the employees to which the competencies will

be applied

alignment of competencies with corporate values and the organisations

strategy

clear, accessible and unambiguous presentation of the competencies most

often a description on a behavioural level that can be easily observed (and

respectively measured)

integration of the competencies in a unified model, avoiding overlap of their

content

analysis of the attitudes towards the introduction of a competency model

in the company, identification of the reasons for possible resistance (for the

different groups) and planning specific steps for overcoming it

preparation of a communication plan, messages and initiatives

envisaging employee availability for participation in the process of design and

introduction of the model and their involvement in view of gathering accurate

information and facilitating the acceptance of the model

checking of the relevance/applicability of the competencies to all participants

included in the target group at an early stage of the process

planning and conducting initiatives related to managers and employees

training on how to work with the model focusing on its practical benefits

follow-up on whether the competencies are up-to-date and timely

amendment if necessary.



9/36

9Competency models


It is our conviction that these steps can be useful in the process of developing and

introducing a competency model which pertains specifically to your organisation.We believe that the time, efforts and capacity required for its successful

integration are well justified as the competency model builds the core of Human

Resources management. Competencies provide a clear signal to employees

regarding encouraged behaviours and attitudes, guiding them towards achieving

high results. Different parts of the competency model complement each other

to enable the harmonious functioning of the processes in the organisation. Thus,

the model reflects the identity of your organisation both internally and externally

towards your partners and clients.



10/36

10 Competency models


The results in detail

Results from the survey reveal that one-third of participants that took part in

it (36.4%) already have an implemented and operational competency model.

Designing such a model is planned by 17.1% of participants and an update is

envisaged for 11.4%. The percentage of companies which are in the process

of designing a competency model equals that of organisations in the process of

implementing one (10.2%). For 9.1% of participating companies the model has

already been introduced but does not actually work. Only 5.7% of participants

state that they do not plan to introduce competencies in the next 1-2 years.

Some differences in the results between organisations with a functioning

competency model and those of organisations with implemented but notfunctioning models are worth noting. The latter share that the process of

introducing the competencies has to a greater extent been hindered by

insufficient understanding by managers regarding the advantages of the model

(50% compared to 28% for organisations with a functioning competency model)

as well as by employee resistance to accepting the model (50% compared to only

9.4%).

Comparing the results of organisations with currently operational competency

models to those of respondents that envisage updates of their models, we note

that the second group has much more frequently been faced with difficulties

in ensuring relevance/applicability to the whole target group (70% compared to

28.1%) and ensuring clarity and user-friendliness (70% against 46.9%). They have

also faced stronger employee resistance to accepting the model (20% compared

to 9.38%) and point out the inability of the current model to meet the needs of

top management as a reason to change existing competencies (40% compared to

15.6%).

11.4%

17.1%

36.4%

5.7%

9.1%

10.2%

10.2%

0% 20% 40% 6 0% 80% 100%

Is not envisaged for implementation in

the next 1-2 years

Has been implemented but is not

functioning according to expectations

Has already been implemented and is

currently operational

Is in the process of development

Is planned for revision and update

Is about to be developed

Has already been implemented and is

currently operational

A significant portion of the

companies have a developed

competency model.

Figure 1. At your company, a competency model:

Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria



11/36

11Competency models


3.7713.2118.877.557.5513.2135.8511 years or more presence on the Bulgarian market

11.1111.115.5622.225.5644.44From 6 to 10 years presence on the Bulgarian market

10.0010.0020.0020.0040.00From 3 to 5 years presence on the Bulgarian market

28.5714.2928.5714.2914.29Up to 3 years presence on the Bulgarian market

4.0016.0020.008.0016.008.0028.00Without international share

6.359.5215.8711.117.949.5239.68With international share

14.2920.0014.292.8611.4337.14Above 500 employees

4.7614.2919.059.5214.299.5228.57From 101 to 500 employees

9.0918.189.0918.1845.45From 51 to100 employees

19.054.769.529.5219.0538.10Up to 50 employees

15.387.6930.777.6915.3823.08Manufacturing

30.0010.0010.0050.00Public Administration

33.3333.3333.33Pharmaceuticals

20.0020.0020.0040.00Energy

5.5616.6711.1116.6711.1138.89Information Technology, Telecommunications, Media

10.0015.0010.0015.0015.005.0030.00Trade (Retail and Wholesale, FMCG)

5.2621.055.2610.5310.5347.37Financial Services

Group

Is not envisaged

for

implementation in

the next 1-2 years

Is planned for

revision and

update

Is about to be

developed

Is in the

process of

development

Is currently

being

designed

Has been

implemented

but is not

functioning

according to

expectations

Has already

been

implemented

and is currently

operational




28.5714.2928.5714.2914.29Up to 3 years presence on the Bulgarian market



14.2920.0014.292.8611.4337.14Above 500 employees

4.7614.2919.059.5214.299.5228.57From 101 to 500 em ployees


19.054.769.529.5219.0538.10Up to 50 employees

15.387.6930.777.6915.3823.08Manufacturing



20.0020.0020.0040.00Energy




Group

Is not envisaged

for

implementation in

the next 1-2 years

Is planned for

revision and

update

Is about to be

developed

Is in the

process of

development

Is currently

being

designed

Has been

implemented

but is not

functioning

according to

expectations

Has already

been

implemented

and is currently

operational

It is worth highlighting that of all the sectors covered in the survey, Manufacturing

has the largest number of companies with implemented but not functioningmodels (15.4%). For approximately one-third of the organisations in this sector

a competency model is still to be developed (30.8%). Another 15.4% do not

envisage introducing a competency model in the next 1-2 year.

None of the Pharmaceutical companies that took part in the survey has

an implemented and operational competency model. An equal number of

organisations from this sector are either in the process of developing the model or

are planning to revise and update it (33.3%).

In 19% of small companies (with up to 50 employees) the implementation of a

competency model is not envisaged for the next 1-2 years. The percentage of

companies that are in the process of implementing a model is the same.

Similar tendencies can be observed in companies that have recently entered the

Bulgarian market (up to three years). An equally large percentage of them are in

the process of developing a model (28.6%) or do not envisage implementation ofa model for the next 1-2 years (28.6%).

These results support our practical observations that the stages of an

organisations development determine the moment of introducing a competency

model. With the number of employees increasing, the need for clarity and

transparency regarding the standards and criteria for successful performance

becomes even more tangible. In the initial stages of a companys penetration in a

specific market its focus is usually on attracting clients and winning market share.

Figure 2. At your company, a competency model:




12/36



For most of the organisations that took part in the survey the introduction

of a competency model was triggered by the need to increase efficiencyon organisational (68.2%) and personal (52.3%) levels. Almost half of the

respondents aim at supporting the management (44.3%) and increasing employee

engagement (44.3%). For 34.1% the introduction of a competency model resulted

from following instructions from a parent company, whereas 26.1% aimed at

supporting a change process in the company (including mergers).

44.3%

52.3%

68.2%

2.3%

26.1%

34.1%

44.3%

0% 20% 40% 6 0% 80% 100%

Other

Support a change process in the

organisation

Follow instructions from the

headquarters/ parent company

Support the management

Increase employee engagement

Increase personal efficiency

Increase organisational efficiency

Boosting effectiveness is the main

reason for introducing a competencymodel.

Figure 3. The introduction of a competency model in the company was/is driven

by the need to:


2010KPMGAdvisoryEOOD,awhollyownedsubsidiaryofKPMG

BulgariaOOD,aBulgarianlimitedliabilitycomp

anyandamemberfirmoftheKPMG

networkofindepend

entmemberfirmsaffiliatedwithKPMGInternational,aSwisscooperative.

Allrightsreserved.


13/36

13Competency models





14.2914.2942.8657.1457.1457.1428.57Up to 3 years presence on the Bulgarian market



31.4345.7142.8640.0051.4340.00Above 500 employees

28.5738.1042.8671.4385.7123.81From 101 to 500 em ployees

9.0936.3645.4545.4581.8236.36From 51 to100 employees

9.5223.8152.3847.6257.1471.4333.33Up to 50 employees

23.0853.8546.1546.1553.8530.77Manufacturing

10.0050.0040.0060.0050.0040.0020.00Public Administration

33.3333.3333.3333.3366.67Pharmaceuticals

60.0080.0080.0060.0080.0040.00Energy


25.0050.0050.0070.0080.0040.00Trade (Retail and Wholesale, FMCG)

5.2610.5331.5821.0547.3757.8942.11Financial Services

Group

Other

Support a

change process

in the

organisation

Increase

employee

engagement

Support the

management

Increase

personal

efficiency

Increase

organisational

efficiency

Follow instructions

from the

Headquarters/

mother company




14.2914.2942.8657.1457.1457.1428.57Up to 3 years presence on the Bulgarian market



31.4345.7142.8640.0051.4340.00Above 500 employees

28.5738.1042.8671.4385.7123.81From 101 to 500 employees

9.0936.3645.4545.4581.8236.36From 51 to100 employees

9.5223.8152.3847.6257.1471.4333.33Up to 50 employees

23.0853.8546.1546.1553.8530.77Manufacturing

10.0050.0040.0060.0050.0040.0020.00Public Administration

33.3333.3333.3333.3366.67Pharmaceuticals

60.0080.0080.0060.0080.0040.00Energy




Group

Other

Support a

change process

in the

organisation

Increase

employee

engagement

Support the

management

Increase

personal

efficiency

Increase

organisational

efficiency

Follow instructions

from the

Headquarters/

mother company

It should be noted that almost all companies from the ITM sector (88.9%) have

introduced competencies in view of increasing organisational efficiency. In the

Energy sector, the percentage of companies that introduced competencies for the

same reason is again very high (80%). The same percentage marks the need to

support management and increase employee engagement. In the Public sector

the need to support the management can be seen as a primary reason (60%). A

possible reason is the need for legally well-sustained and objective management

decisions.

Figure 4. The introduction of a competency model in the company was/is driven by the need to:




anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


14/36



Analysis of the survey results shows that competency models are most widely

applied in relation to performance management (75%). Organisations also utilise

competencies for training needs analysis (58%), career development (55.7%),

recruitment (53.4), talent management (40.9%), assessment and development

centres (27.3%) and 360 degree feedback (26.4%).

53.4%

55.7%

58.0%

75.0%

40.9%

27.3%

26.4%

2.3%

0% 20% 40% 6 0% 80% 100%

Other

360 degree feedback

Assessment and development centres

Talent management

Recruitment

Career development

Training needs analysis

Performance management

Competency models are widely

applied in different HR management

processes.

Figure 5. The competency model in the company is (will be) applied for:




15/36

15Competency models


1.8930.1926.4260.3869.8139.6266.0454.7211 years or more presence on the Bulgarian market

27.7833.3350.0044.4455.5688.8944.44From 6 to 10 years presence on the Bulgarian market


14.2914.2914.2942.8628.5714.2971.4342.86Up to 3 years presence on the Bulgarian market

4.0012.0012.0064.0056.0032.0072.0056.00Without international share

1.5931.7533.3352.3858.7344.4476.1952.38With international share

31.4342.8660.0071.4351.4377.1462.86Above 500 employees


18.189.0936.3654.5518.1872.7363.64From 51 to100 employees

9.5223.819.5257.1433.3319.0566.6747.62Up to 50 employees

30.7723.0853.8561.5423.0853.8538.46Manufacturing

20.0010.0010.0070.0050.0010.0060.0060.00Public Administration


60.0060.0080.0080.00100.0080.0060.00Energy

38.8916.6750.0027.7861.1172.2255.56Information Technology, Telecommunications, Media



Group

Other

360 degree

feedback

Assessment

and

development

centres

Career

development

Training

needs

analysis

Talent

management

Performance

managementRecruitment

1.8930.1926.4260.3869.8139.6266.0454.7211 years or more presence on the Bulgarian market



14.2914.2914.2942.8628.5714.2971.4342.86Up to 3 years presence on the Bulgarian market

4.0012.0012.0064.0056.0032.0072.0056.00Without international share

1.5931.7533.3352.3858.7344.4476.1952.38With international share

31.4342.8660.0071.4351.4377.1462.86Above 500 employees


18.189.0936.3654.5518.1872.7363.64From 51 to100 employees

9.5223.819.5257.1433.3319.0566.6747.62Up to 50 employees

30.7723.0853.8561.5423.0853.8538.46Manufacturing

20.0010.0010.0070.0050.0010.0060.0060.00Public Administration


60.0060.0080.0080.00100.0080.0060.00Energy

38.8916.6750.0027.7861.1172.2255.56Information Technology, Telecommunications, Media



Group

Other

360 degree

feedback

Assessment

and

development

centres

Career

development

Training

needs

analysis

Talent

management

Performance

managementRecruitment

Survey data reveal some differences in the priority areas for the application of

competency models in the sectors surveyed. All respondents from the Energy

sector (100%) point out that competencies are applied for talent management and

development. Representatives of Public Administration apply competencies to the

greatest extent in career development (70%), whereas manufacturing companies

concentrate on training needs analysis (61.6%). For the remaining sectors the

area most frequently pointed to is performance management.

Figure 6. The competency model in the company is (will be) applied for:




anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


16/36



In the appraisal/performance management system competencies are in most

cases integrated with personal development goals (83%). Following are business(63.6%), financial (33%) and goals related to functional change (26.1%).

83.0%

63.6%

33.0%

26.1%

1.1%

0% 20% 40% 6 0% 80% 100%

Other

Goals related to

functional change

Financial targets

Business goals

Personal

development goals

Figure 7. In the appraisal/performance management system the competency

model is (will be) integrated with:





networkofindepend


Allrightsreserved.


17/36

17Competency models


1.8922.6483.02

64.1537.7411 years or more presence on the Bulgarian market

33.3383.3355.5627.78From 6 to 10 years presence on the Bulgarian market


28.5771.4357.1428.57Up to 3 years presence on the Bulgarian market

4.0020.0076.0064.0040.00Without international share

28.5785.7163.4930.16With international share

2.8620.0091.4360.0025.71Above 500 employees

28.5776.1961.9033.33From 101 to 500 employees

27.2763.6472.7354.55From 51 to100 employees

33.3385.7166.6733.33Up to 50 employees7.6961.5453.8546.15Manufacturing

10.0060.0090.0040.0020.00Public Administration

33.3366.6766.67100.00Pharmaceuticals

40.00100.0080.00Energy

22.2272.2255.5638.89Information Technology, Telecommunications, Media

30.0085.0075.0030.00Trade (Retail and Wholesale, FMCG)

15.79100.0073.6826.32Financial Services

Group

Other

Goals related to

functionalchange

Personal

developmentgoals

Businessgoals

Financialtargets

1.8922.6483.0264.1537.7411 years or more presence on the Bulgarian market






2.8620.0091.4360.0025.71Above 500 employees



33.3385.7166.6733.33Up to 50 employees7.6961.5453.8546.15Manufacturing



40.00100.0080.00Energy




Group

Other

Goals related to

functionalchange

Personal

developmentgoals

Businessgoals

Financialtargets

An interesting fact is that all Pharmaceutical companies (100%) integrate their

competencies with financial goals, which could be related to the specifics of thebusiness as well as to the stage of the models development. The other sectors

integrate their competencies primarily with personal development goals. A

significant part of the participants from the Public Administration (60%) integrate

their competencies with goals related to functional change. This might be related

to reform in the public sector and the strengthening of the administrative capacity.


Figure 8. In the appraisal/performance management system the competency model is (will be) integrated with:



anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


18/36



Most of the participating organisations (70.9%) apply their competency model

to all employees. For 19.8% of them competencies are used for both managersand key specialists in the company. A small percentage of respondents apply the

model only to key specialists (4.7%) or to managers (3.5%).

70.9%

1.2%

3.5%

4.7%

19.8%

0% 20% 40% 6 0% 80% 100%

Other

Managers

Key specialists

Managers and

key specialists

All employees

In most organizations, the model

applies to all employees.

Figure 9. The competency model in your company applies/will apply to:





networkofindepend


Allrightsreserved.


19/36

19Competency models


Only manufacturing companies apply competency models most often to

managers and key specialists. Pharmaceutical companies apply competencies

equally often to all employees (33.3%), to managers only (33.3%) and to both

managers and key specialists (33.3%).


27.7872.22From 6 to 10 years presence on the Bulgarian market


14.2914.2942.86Up to 3 years presence on the Bulgarian market

8.004.0020.0068.00Without international share

1.593.173.1719.0569.84With international share

2.862.862.8628.5762.86Above 500 employees

23.8176.19From 101 to 500 employees

9.099.0981.82From 51 to100 employees

9.529.524.7666.67Up to 50 employees

7.6946.1530.77Manufacturing

10.0090.00Public Administration


40.0060.00Energy

11.1116.6772.22Information Technology, Telecommunications, Media

10.0020.0070.00Trade (Retail and Wholesale, FMCG)

5.265.2689.47Financial Services

Group

OtherKey specialistsManagers

Managers and

key specialistsAll employees






1.593.173.1719.0569.84With international share

2.862.862.8628.5762.86Above 500 employees

23.8176.19From 101 to 500 employees


9.529.524.7666.67Up to 50 employees




40.0060.00Energy




Group

OtherKey specialistsManagers

Managers and

key specialistsAll employees

Figure 10. The competency model in your company applies/will apply to:




anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


20/36



The largest proportion of the surveyed organisations combine core, specific and

technical competencies (29.1%). Similar is the percentage of companies with acombination of core and specific competencies (25.6%). Core competencies are

only used by 20.9% and specific by only 15.1% of participants.

25.6%

29.1%

20.9%

15.1%

8.1%

1.2%

0% 20% 40% 6 0% 80% 100%

Core and technical competencies

Specific and technical competencies

Specific competencies

Core (generic) competencies

Core and specific competencies

Core, technical and specific competencies

Competency models in most

cases consist of core, specific andtechnical competencies which are

presented in detail.


Figure 11. The model includes (will include):




networkofindepend


Allrightsreserved.


21/36

21Competency models


16.987.5528.301.8926.4218.8711 years or more presence on the Bulgarian market





13.116.5629.511.6426.2322.95With international share

14.298.5725.712.8631.4317.14Above 500 employees

14.294.7623.8123.8133.33From 101 to 500 employees


15.7910.5331.5821.0521.05Up to 50 employees

10.0020.0030.0040.00Manufacturing



40.0060.00Energy

16.675.5633.3327.7816.67Information Technology, Telecommunications, Media



Group

Specific

competencies

Specific and

technical

competencies

Core, technical

and specific

competencies

Core and

technical

competencies

Core and

specific

competencies

Core (generic)

competencies

(for the whole

company)







14.298.5725.712.8631.4317.14Above 500 employees



15.7910.5331.5821.0521.05Up to 50 employees

10.0020.0030.0040.00Manufacturing



40.0060.00Energy

16.675.5633.3327.7816.67Information Technology, Telecommunications, Media



Group

Specific

competencies

Specific and

technical

competencies

Core, technical

and specific

competencies

Core and

technical

competencies

Core and

specific

competencies

Core (generic)

competencies

(for the whole

company)

In the Energy sector core competencies for the whole company prevail (60%).

Pharmaceutical companies are focusing on specific competencies, using them

on their own (33%), combining them with core and technical (33%) or just with

technical ones (33%). Respondents from the ITM (33%), Financial Services

(36.8%) and Trade (25%) sectors most often integrate core, technical and specific

competencies. Representatives from the last two sectors just as frequently apply

only core and specific competencies (Financial Services 36.8% and Trade

25%).

Figure 12. The model includes (will include):




anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


22/36



More than half of the organisations (51.1%) have applied a detailed approach

to developing their competencies besides titles and descriptions they includeobservable behaviours and levels of demonstration. The same is the percentage

of companies that use titles, descriptions and observable behaviours (21.6%)

and just titles and descriptions (21.6%). Only 3.4% of respondents have their

competencies developed as titles only.

51.1%

21.6%

21.6%

3.4%

0% 20% 40% 6 0% 80% 100%

Titles

Titles and descriptions

Titles and descriptions with observed

behaviours

Titles and descriptions with observed

behaviours and levels of demonstration

Figure 13. The competencies are (will be) presented as:





networkofindepend


Allrightsreserved.


23/36

23Competency models


56.6020.7518.873.7711 years or more presence on the Bulgarian market

14.2942.8614.29From 6 to 10 years presence on the Bulgarian market



56.0020.0024.00Without international share


71.4314.2914.29Above 500 employees



33.3323.8128.574.76Up to 50 employees


40.0010.0050.00Public Administration

100.00Pharmaceuticals

80.0020.00Energy




Group

Titles and

descriptions with

observed

behaviours and

levels of

demonstration

Titles and

descriptions

with observed

behaviours

Titles and

descriptionsTitles










33.3323.8128.574.76Up to 50 employees


40.0010.0050.00Public Administration


80.0020.00Energy




Group

Titles and

descriptions with

observed

behaviours and

levels of

demonstration

Titles and

descriptions

with observed

behaviours

Titles and

descriptionsTitles

The largest percentage of representatives of the Public sector (50%) share that

the competencies are presented with titles and descriptions only, which probablyinfluences the purely formal attitude towards the model, a challenge mentioned

by participants from that sector. All participants from Pharmaceutical companies

(100%) have competencies developed to the level of observable behaviours.

Companies with shorter-term presence on the Bulgarian market (up to 3 years)

in most cases point out that their competencies are presented as titles and

descriptions (60%).

Data analysis identifies differences in the level of detail to which competency

models have been developed depending on the purpose and application of the

competencies. Only 15.8% of the organisations which have their competencies

presented as titles and descriptions only use the model for talent development.

For comparison purposes, the percentage of organisations with defined

behaviours and levels of demonstration is 57.8%. Similar tendencies can be

observed regarding the applicability of competencies to training needs analysis(26.3% to 77.8%) and 360 degree feedback (5.26% to 40%). Competency

models developed in detail serve as a sound basis for designing successful talent

development programmes.

Figure 14. The competencies are (will be) presented as:




24/36



Nearly half of the respondents (48.9%) have 6-9 competencies, 30.7% above 10

and the rest 18.2% 5 or less.

48.9%

30.7%

18.2%

0% 20% 40% 6 0% 80% 100%

5 or less

10 or more

6 to 9

32.0850.9416.9811 years or more presence on the Bulgarian market





34.9242.8619.05With international share


23.8161.9014.29From 101 to 500 employees


23.8138.1028.57Up to 50 employees



33.3366.67Pharmaceuticals

40.0060.00Energy




Group

10 or more6 to 95 or less

32.0850.9416.9811 years or more presence on the Bulgarian market





34.9242.8619.05With international share


23.8161.9014.29From 101 to 500 employees


23.8138.1028.57Up to 50 employees




40.0060.00Energy




Group

10 or more6 to 95 or less

It should be noted that Pharmaceutical companies tend to use a smaller

number of competencies. A larger percentage of them (66.7%) have five or less

competencies. Trade companies rely on 6-9 (40%) and 10 or more competencies

(again 40%). This tendency is valid for participants from the Manufacturing sector

as well (30.1% have 6-9 competencies and another 30.1% 10 or more).


Figure 15. How many competencies are included in the model?

Figure 16. How many competencies are included in the model?





networkofindepend


Allrightsreserved.


25/36

25Competency models


Almost half of the organisations that took part in the survey (44.3%) have

developed their competency models by adapting an existing model from theirparent company (the Headquarters). More than one-fourth of the participants

(26.1%) relied on entirely internal resources, 14.8 % on external advisors, and

12.5% of them used a ready model from another organisation.

44.3%

26.1%

14.8%

12.5%

0% 20% 40% 6 0% 80% 100%

By using a model from another company

With the help of an external advisor

Entirely with internal resources

By adapting an existing model from the

parent company/ headquarters


Figure 17. The development of the competency model in the company was/will be

done:

Participants choose different

approaches to developing the model.



anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


26/36









22.865.7145.7125.71Above 500 employees



4.7614.2947.6223.81Up to 50 employees

23.0815.3823.0823.08Manufacturing



40.0040.0020.00Energy




Group

With the help ofan external

advisor

By using a

model fromanother

company

By adapting an

existing model

from the parentcompany/

headquarters

Entirely withinternal

resources







22.865.7145.7125.71Above 500 employees



4.7614.2947.6223.81Up to 50 employees

23.0815.3823.0823.08Manufacturing



40.0040.0020.00Energy




Group

With the help ofan external

advisor

By using a

model fromanother

company

By adapting an

existing model

from the parentcompany/

headquarters

Entirely withinternal

resources

All representatives from the Pharmaceutical Sector (100%) adapted their

headquarters model. The same approach is most widely used in the Energy

Sector (40%), accompanied by the use of a model from another company (again

40%). Manufacturing companies share that besides a model from their parent

organisation (23.1%), they rely on their internal resources (23.1%), as well as on

external advisors (23.1%). It is possible that the specifics of this sector call for

highly specific competency models, adapted for respective organisations.

Organisations with international participation preferred to adapt their headquarters

model (54%), whereas Bulgarian companies relied on internal resources (44%).

Figure 18. The development of the competency model in the company was/will be done:





networkofindepend


Allrightsreserved.


27/36

27Competency models


The most frequently mentioned challenge when developing and adapting the

competency model is the achievement of clear alignment between competencies

and the organisations business goals (60.2%). More than half of the participants

(51.1%) were faced with difficulties in achieving clarity and user-friendliness.

Further challenges include achievement of applicability of competencies to allemployees (38.6%), consistency between different competencies and avoiding

overlap of content (37.5%) as well as reflecting corporate values (27.3%).

51.1%

60.2%

38.6%

37.5%

27.3%

4.6%

0% 20% 40% 6 0% 80% 100%

Other

Reflecting the corporate values

Reaching consistency between the different

competencies and avoiding overlap of content

Achieving relevance/applicability of the

competencies to all employees from the target

group

Ensuring clarity and user-friendliness

Achieving clear alignment between

competencies and business goals

Figure 19. During the development/adaptation of the competency model we en-

countered/expect the following challenges in:

Companies are faced with numerous

challenges when developing and

implementing the competency

models.




anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


28/36






10.0020.0030.0030.0040.0060.00Up to 3 years presence on the Bulgarian market

8.0064.0036.0052.0024.0064.00Without international share


5.7145.7137.1451.4322.8665.71Above 500 employees



9.5252.3833.3357.1428.5761.90Up to 50 employees

30.7738.4669.2315.3853.85Manufacturing



40.0040.0040.0060.00100.00Energy


25.0050.0060.0030.0050.00Trade (Retail and Wholesale, FMCG)


Group

Other

Reaching consistency

between the different

competencies and

avoiding overlap of

content

Achieving

relevance/applicability of

the competencies to all

employees from the

target group

Ensuring clarity

and user-

friendliness

Reflecting the

corporate

values

Achieving clear

alignment between

competencies and

business goals




10.0020.0030.0030.0040.0060.00Up to 3 years presence on the Bulgarian market

8.0064.0036.0052.0024.0064.00Without international share


5.7145.7137.1451.4322.8665.71Above 500 employees



9.5252.3833.3357.1428.5761.90Up to 50 employees

30.7738.4669.2315.3853.85Manufacturing



40.0040.0040.0060.00100.00Energy




Group

Other

Reaching consistency

between the different

competencies and

avoiding overlap of

content

Achieving

relevance/applicability of

the competencies to all

employees from the

target group

Ensuring clarity

and user-

friendliness

Reflecting the

corporate

values

Achieving clear

alignment between

competencies and

business goals

All organisations from the Pharmaceutical and Energy sectors as well as most

of the participants from the Financial Services (57.9%) and ITM (55.6%) sectorspoint out the achievement of clear alignment between competencies and their

organisations business goals as the most significant challenge. Achieving clarity

and user-friendliness is the most frequently shared difficulty by Trade (60%) and

manufacturing companies (69.2%). Public Administration to a great extent faced

difficulty because of the need to achieve consistency between the different

competencies and avoid overlap of content (90%).

The same difficulty is encountered more often by Bulgarian companies (64%) than

by those with international ownership (27%), which may be due to the fact that in

most cases the latter use complete models from their headquarters.

Figure 20. During the development/adaptation of the competency model we encountered/expect the following challenges in:





networkofindepend


Allrightsreserved.


29/36

29Competency models


46.6%

53.4%

34.1%

20.5%

11.4%

8.0%

0% 20% 40% 6 0% 80% 100%

Other

Integrating the model in the HR activities

Employee resistance to accepting the model

Insufficient understanding from the

managers about the advantages of the

model

Formal attitude towards the model

Difficulties in the practical application of the

competency model

The most frequent challenges in the process of implementation are related to

the practical application of the model (53.4%), the purely formal attitude towardsit (46.6%), insufficient understanding by managers about its advantages (34.1%)

and employee resistance to accepting it (20.5%). Only 11.4% of the organisations

have difficulties integrating the model in their HR activities.


Figure 21. During the implementation of the competency model we encountered/

are expecting the following challenges:



anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


30/36









2.868.5754.2914.2954.2954.29Above 500 employees



4.764.7647.6238.1061.909.52Up to 50 employees

7.6961.5423.0846.1523.08Manufacturing

10.0010.0060.0040.0060.0040.00Public Administration


40.0080.0040.0060.0040.00Energy




Group

Other

Integrating

the model in

the HR

activities

Formal

attitude

towards the

model

Employee

resistance to

accepting the

model

Difficulties in the

practical application of

the competency model

Insufficientunderstanding from

the managers about

the advantages of

the model







2.868.5754.2914.2954.2954.29Above 500 employees



4.764.7647.6238.1061.909.52Up to 50 employees

7.6961.5423.0846.1523.08Manufacturing

10.0010.0060.0040.0060.0040.00Public Administration


40.0080.0040.0060.0040.00Energy




Group

Other

Integrating

the model in

the HR

activities

Formal

attitude

towards the

model

Employee

resistance to

accepting the

model

Difficulties in the

practical application of

the competency model

Insufficientunderstanding from

the managers about

the advantages of

the model

The practical application of the model is most often pointed out as challenging

by representatives from the Financial Services (47.4%), Trade (65%),

Pharmaceuticals (66.7%) and Public Administration (60%). The last group face

equally frequently problems caused by the purely formal attitude toward the

model (60%). Participants from ITM (55.6%), Energy (80%) and Manufacturing

(61.6%) face the same challenge.

Figure 22. During the implementation of the competency model we encountered/are expecting the following challenges:





networkofindepend


Allrightsreserved.


31/36

31Competency models


65.9%

38.6%

23.9%

9.1%

0% 20% 40% 6 0% 80% 100%

Other

Current model not meeting needs of top

management

External economic environment*

Change in the companys strategy

A significant number of the surveyed organisations (65.9%) anticipate a need

to change their competencies when their companys strategy changes. Otherreasons include the external economic environment (38.6%) and the inability of

the existing model to meet the needs of top management (23.9%).

*(Including regulatory changes, political changes, macroeconomic indicators)


Figure 23. The change of competencies in the organisation is due (would be due)

to:

Change in organisational strategy

usually leads to an update of thecompetency model.



anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


32/36









8.5725.7125.7168.57Above 500 employees



14.2919.0547.6261.90Up to 50 employees




60.0040.0080.00Energy




Group

Other

Current model

not meetingneeds of top

management

External economic

environment (regulatorychanges, political changes,

macroeconomic indicators)

Change in thecompanys

strategy







8.5725.7125.7168.57Above 500 employees



14.2919.0547.6261.90Up to 50 employees




60.0040.0080.00Energy




Group

Other

Current model

not meetingneeds of top

management

External economic

environment (regulatorychanges, political changes,

macroeconomic indicators)

Change in thecompanys

strategy

All Pharmaceutical companies point out the external economic environment as a

reason for reviewing and updating their competency model, whereas for all othersurveyed sectors a change in company strategy is the most frequent reason.

Figure 24. The change of competencies in the organisation is due (would be due) to:





networkofindepend


Allrightsreserved.


33/36

33Competency models


Appendix

According to the industry sector in

which the organisations operate,

participants were distributed in seven

groups:

Financial services

Trade (Retail and Wholesale, FMCG)

Information Technology,

Telecommunications, Media (ITM)

Energy

Pharmaceuticals

Public Administration

Manufacturing

Industry sector

Public Administration

11.4%

Financial Services

21.6%

Trade (Retail and

Wholesale, FMCG)

22.7%

Information

Technology,

Telecommunications,

Media

20.5%

Energy

5.7%

Pharmaceuticals

3.4%

Manufacturing

14.8%

According to the approximate

number of employees working in

the organisation, we have grouped

participants as follows:

Up to 50 employees

From 51 to 100 employees

From 101 to 500 employees

Above 500 employees

Approximate number of employees

Above 500

employees

39.8%

From 101 to 500employees

23.9%

From 51 to100

employees

12.5%

Up to 50 employees

23.9%

Participants profile





anyandamemberfirmo

ftheKPMG

networkofindepend


Allrightsreserved.


34/36



Based on the type of ownership, we

split participants into two groups:

International ownership

No international ownership

International ownership)

No

28.4%

Yes

71.6%

Presence on the Bulgarian market

11 years or more

60.2%

From 6 to 10 years

20.5%

From 3 to 5 years

11.4%

Up to 3 years

8.0%In terms of the years of presence

on the Bulgarian market, we divided

participants in the following groups:

Up to 3 years

From 3 to 5 years

From 6 to 10 years11 years or more





35/36


36/36

Contacts

Gergana Mantarkova

Managing Partner

Tel +359 2 9697 500

Fax +359 2 9805 340

[email protected]

Anna Pavlova

Director, Advisory

People & Change

Tel +359 2 9697 350

Fax +359 2 9805 340

[email protected]

Borislava Loboshka

Manager, Advisory

People & Change

Tel +359 2 9697 350

Fax +359 2 9805 340

[email protected]

KPMG in Bulgaria

Sofia

45/A Bulgaria Boulevard

Sofia 1404, Bulgaria

Tel +359 2 9697 300

Fax +359 2 9805 340

[email protected]

Varna

3 Sofia StreetVarna 9000, Bulgaria

Tel +359 52 699 650

Fax +359 52 611 502

[email protected]

kpmg.bg

2010 KPMG Advisory EOOD, a whollyThe information contained herein is of a general nature and is not intended to address the

Documents

Competency Models-benefits and Challenges