Workshop with Arun Team Competency Model Development December, 2005

Workshop with Arun Team

Competency Model Development

December, 2005

2

Agenda

Competency Concept

Competency Model

Core Competency Development

Managerial Competency Development

Job Family Competency Development

3

Any characteristic of an individual that predicts outstanding

performance in a given job, role, organization or culture

Enable top performers to demonstrate critical behaviors:

• More often

• In more situations

• With better results

Hay Group’s Definition of Competency

4

Competency Concept – Iceberg Model

The characteristics was illustrated as an Iceberg.

The most important characteristics to determine high performance are in Behavioral Competency; difficult to identify and to develop.

Technical Competency is the necessary competency, but not sufficient.

KnowledgeSkill

Social Role Self Image

TraitMotive

Behavioral Competency

Technical Competency

5

Technical & Behavioral Competency

Technical Competency:

Skills are the things a person knows how to do well (word processing skills, reading a profit and loss statement)

Knowledge is what a person knows about a particular substantive area (accounting principles, medical, law)

Behavioral Competency:

Social Role is the image a person projects to others, reflects a person’s values – what one believes important to do (roles to develop others, roles to help and direct others)

Self Image is the way a person sees him/herself – the internal concept of identity (seeing oneself as a teacher or leader)

Traits are relatively enduring and stable characteristics of a person’s behavior (being a good listener, extrovert, introvert)

Motives are natural and constant thoughts and preferences in a particular area (Achievement, Affiliation, Power) that drive, direct and select a person’s outward behaviors

6

Key Tasks Basic Requirements Ideal Characteristics

Taxi Driver Competency

1.

2.

3.

7

Competency – Example

• Graduated from the best medical school

• 20 years experience

Doctor A Doctor B

• Graduated from the best medical school

• 20 years experience

• A “Healer”

• “I heal”

• Emphatic

• Influence Drive

• An “Expert”

• “I am a specialist”

• Perfectionist

• Achievement Drive

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Relationship between Competency and Job

Some competencies become more important as complexity of job become higher

Rel

ativ

e Im

po

rtan

ce

Low High Job Complexity

Natural Tendencies and Traits

For example:• Initiative• Interpersonal

Sensitivity• Self Confidence

Task-Related Knowledge and Skills

For example:• Companies product,• Labor Relations,• Law skill in active listening,

negotiating

9

Competency Dictionary Over three decades of its research on outstanding performers, Hay has been able

to develop a competency dictionary. These competencies used for developing competency model.

The following 21 competencies capture the most commonly characteristics seen in outstanding performers of various companies in many countries

Each competency has 3 to 6 level of competency which was defined in behavior indicators

12. Interpersonal Understandingei (Pemahaman Antar Pribadi)

13. Organizational Awarenessei (Pemahaman Organisasi)

14. Organizational Commitment (Komitmen Organisasi)

15. Relationship Buildingei (Pengembangan Hubungan)

16. Self-Confidenceei (Kepercayaan Diri)

17. Team Leadershipei (Kepemimpinan

18. Teamwork and Cooperationei (Kerjasama)

19. Change Leadershipei (Kepemimpinan Perubahan)

20. Concern for Orderei (Peduli terhadap Keteraturan)

21. Self Controlei (Pengelolaan Emosi)

1. Achievement Orientationei (Dorongan Berprestasi)

2. Analytical Thinking (Pemikiran Analitis)

3. Conceptual Thinking (Pemikiran Konseptual)

4. Customer Service Orientationei (Orientasi Pelayanan Pelanggan)

5. Developing Othersei (Pengembangan Orang Lain)

6. Directiveness (Pengarahan)

7. Flexibilityei (Fleksibilitas)

8. Impact and Influenceei (Dampak & Pengaruh)

9. Information Seeking (Pencarian Informasi)

10. Initiativeei (Inisiatif)

11. Integrityei (Integritas)

10

Example of Competency

Achievement Orientation (ACH)

Definition:

A concern for working well or for surpassing a standard of excellence. The standard may be one’s own past performance (striving for improvement); an objective measure (results orientation); outperforming others (competitiveness); challenging goals one has set; or even what anyone has ever done (innovation).

Thus a unique accomplishment also indicates ACH.

Competency Level:

1. Wants to Do Job Well; Expresses Affect or Feeling about Performance

2. Creates Own Measures of Excellence

3. Improves Performance

4. Sets and Works to Meet Challenging Goals

5. Makes Cost-Benefit Analyses

6. Takes Calculated Entrepreneurial Risks

11

Evidence that Competencies Equates to High Performance

In a study of more than 2,000 managers from 12 large organizations, 81% of the competencies that distinguished outstanding managers were related to emotional intelligence. Boyatzis, TCM (1982)

“181 different positions from 121 organizations worldwide…67% of the abilities deemed essential for effective performance where emotional competencies” (cf. Rosier, 1994)

“Reanalyzed data from 40 different corporations…to differentiate star performers from average ones..emotional competencies were found to be twice as important in contributing to excellence as pure intellect and expertise” Goleman, WWEI (cf. Jacobs and Chen, 1997

12

Evidence that Competencies Equates to High Performance

In Leadership Roles:

Study of 15 global companies attributes 85-90% of leadership success to emotional intelligence. At the highest leadership levels, EI accounts for virtually the entire advantage.

In Sales Roles:

Study of 44 Fortune 500 firms shows that high-EI salespeople produce twice the revenue of average performers.

In Technical Roles:

Programmers in the top 10% of EI competency can develop effective software three times as fast as those lower in EI.

For all Roles:

Emotional competence is twice as important as cognitive abilities for star performers in all jobs, in every field.

13

Competency & Bottom Line Results

Increased Retention

Incorporating Competencies in job-specific competency models leads to 90-percentile success rates in recruiting.

A global consumer products firm, which did not use emotional competence for hiring decisions, found that 50% of all division presidents left within 2 years of hiring, at a total search cost of $4m.

When the firm started to evaluate for competencies only 6% of new divisions’ presidents left within 2 years.

Increased Sales

Developing Competencies in Financial services agents increased sales to twice that of those who were weak in certain competencies.

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Agenda

Competency Concept

Competency Model




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Objective of Competency Model Development

Competency model is a means of communicating to employees of what is required to be outstanding in an organization

As the application, company should look for, develop and reward employees using characteristics in the Competency Model

In developing Competency Model, we need to:

Translate company’s vision, mission and values into core competency as the basis to integrate employees’ behaviours across department and functions

Determine competency required for managerial position

Define competency required for specif job or function in the organization structure

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Competency Model

There are three category in Hay Group approach in developing Competency Model:

Core Competency:

Competency that is translated from company’s vision, mission and values and need to be demonstrated by each employee across organization

Managerial Competency:

Competency that is related to managerial accountabilities and need to be demonstrated by employees in the managerial position

Job Family Competency:

Competency that is related to specific function in the organization and need to be demonstrated by employees that hold the job in that specific function

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Competency ModelL

evel

in

th

e O

rgan

izat

ion

Core Competency

forLevel 1

Core Competency

forLevel 1

Core Competency

forLevel 2

Core Competency

forLevel 2

Core Competency

forLevel 3

Core Competency

forLevel 3

Job Family 1 for

Level 1

Job Family 1 for

Level 1

Job Family 1 for

Level 2

Job Family 1 for

Level 2

Job Family 1 for

Level 3

Job Family 1 for

Level 3

Job Family 2 for

Level 1

Job Family 2 for

Level 1

Job Family 2 for

Level 2

Job Family 2 for

Level 2

Job Family 2 for

Level 3

Job Family 2 for

Level 3

Job Family 3 for

Level 1

Job Family 3 for

Level 1

Job Family 3 for

Level 2

Job Family 3 for

Level 2

Job Family 3 for

Level 3

Job Family 3 for

Level 3

...

...

...

... ... ... ...

Managerial Competency

for Level 1


for Level 1


for Level 2


for Level 2

...

Level 1Level 1

Level 2Level 2

Level 3Level 3

...


for Level 3


for Level 3

Job Family CompetenciesCore

CompetenciesLeadership

Competencies

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Competency Model – Example

The higher the job level in the organization, the higher the requirement of competency level

Different job family have different competency requirement

Core CompetencyLeadership

Competency

• Achievement Orientation

• Analytical Thinking

• Integrity

• Strategic Orientation

• Team Leadership

• Developing Others

Job Family Competency

Marketing & Sales

Logistics

General Affairs

Human Resources

Legal

Operations

HSE

Engineering Support

Internal Audit

Maintenance

Customer Service

Information Technology

Finance & Accounting

General Management

ILLUSTRATIVE

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Core Competency

Vision & Mission Vision & Mission

Focus Group – Executive TeamFocus Group – Executive Team

Benchmark Competency

Model


Model

• What do we want to be ?• How are we going to achieve it?• Current Core Competency Model, if any

• What do we want to be ?• How are we going to achieve it?• Current Core Competency Model, if any

• What behaviors do we like to see in our people?• What are the behaviors needed for outstanding performance

in the company?• What drives outstanding performance in the company?• What are the qualities required to succeed in the future of the

company?

• What behaviors do we like to see in our people?• What are the behaviors needed for outstanding performance

in the company?• What drives outstanding performance in the company?• What are the qualities required to succeed in the future of the

company?

• What is the core competency model in other benchmark companies?

• What is the core competency model in other benchmark companies?

Core Competency

Core Competency

Target Work Culture – CSort

Exercise

Target Work Culture – CSort

Exercise

• What is important the company?• What are the behaviors and values that we like to emphasize

to our employees?• What are the behaviors and values that we don’t like to

emphasize to our employees?

• What is important the company?• What are the behaviors and values that we like to emphasize

to our employees?• What are the behaviors and values that we don’t like to

emphasize to our employees?

20


Managerial Accountabilities in

the Company

Managerial Accountabilities in

the Company


Model


Model

• What are the main accountabilities for managerial position to achieve their main purposes?

• Current Competency Profile, if any

• What are the main accountabilities for managerial position to achieve their main purposes?

• Current Competency Profile, if any

• What is the leadership competency model in other benchmark companies?

• What is the leadership competency model in other benchmark companies?

Managerial CompetencyManagerial

Competency

21

Sales Production Management Engineering

Lev

el i

n J

ob

Fam

ily

Job Family Competency

Job Family is a set of jobs or positions that have common and similar nature of work and require broadly similar skills, knowledge and competencies

Example

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Integrated Human Resources Management

Vision & Mission

Values

BusinessObjectives

Business Strategies

Job Evaluation

Competency Model

Org

aniz

atio

n S

tru

ctu

re

Job

An

alys

is

Sel

ecti

on

&

Rec

ruit

men

t

Per

form

ance

Man

agem

ent

Tra

inin

g &

D

evel

op

men

t

Car

eer

Man

agem

ent

Rem

un

erat

ion

Sys

tem

Business Business ResultsResults

Business Business ResultsResults

Strategic Strategic Intentions Intentions Strategic Strategic

Intentions Intentions

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Integration of Competency Model with HR system

Calculation of Merit Increase

Distribution of Annual Bonus

Core Competency Assessment

Results of Competency Gap

Managerial Competency Assessment

Job Family Competency Assessment

Results of KPI Achievement

Career Planning System

Performance Management

System

Company’s Given Budget

Compa Ratio

Career Experience and

Background

Company’s Given Budget

Training & Development

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Agenda

Competency Concept

Competency Model




25

Arun’s 2010 Vision Statement

To be a reliable Plant and ready for further services that give maximum benefits to the stakeholders as a legacy in LNG Industry

Reliable PlantReliable Plant

• Keep the plant running until the last gas supply

• Plant operation closed with minimum waste (pollution)

• Keep utilities running reliably

• Keep the people high morale, motivated and loyal





Ready for Further Services

Ready for Further Services

• Utilize assets for other purposes e.g. tank for bunkering business

• LNG port transfer to be Commercial port

• People are high sellable, competitive and competent

• People are on demand

• Employee shouldn’t worry with their future by securing skill, financial, mental and health






Give Maximum Benefit to Stakeholders

Give Maximum Benefit to Stakeholders

• Facilities that beneficial for community distribute to them

• Facilities (housing) will be distributed to employee

• Transfer all facilities becoming Education Center

• Support local government in developing places to work after Arun





Legacy in LNG Industry

Legacy in LNG Industry

• Want to be remembered as reliable, safe and reputable LNG company

• Former Arun employees will proud being part of the company



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Vision – Competency
































• Concern for Health, Safety & Environment

• Organization Commitment


• Concern for Health, Safety & Environment



• Technical Competency


• Technical Competency

• Integrity• Integrity • Organization Commitment


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Arun’s Values

IntegrityIntegrity

Acting in a way that is consistent with what one says; is important; that is,

one’s behavior is consistent with one’s

values (values may come from business, society, or

personal moral codes)





TeamworkTeamwork

Implies the intention to work cooperatively with others, to be part of a

team, to work together, as opposed to working

separately or competitively




Open-mided/ RespectfulOpen-mided/ Respectful

The ability to value the contribution of others, the

willingness to hear and respect others point of

view and opinion



view and opinion

CreativeCreative

Capacity to improve both individual and business

performance by identifying and/or developing a new

way forward



way forward

TransparentTransparent

Open, honest and sincere on the process of sharing

information and discussion amongst team



ExcellenceExcellence

A concern for working well or for surpassing a

standard of excellence



ComplianceCompliance

Capacity to understand, adhere to and promote organisational policies,

practices and standards to support the effective day-to-day functioning of the

business



business

CareCare

Feeling and exhibiting concern and empathy for company, society and for

the whole member of company



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Values – Competency

















view and opinion



view and opinion



way forward



way forward

IntegrityIntegrity TeamworkTeamwork TeamworkTeamwork Achievement Orientation

Achievement Orientation

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Values – Competency











business



business





• Integrity

• Teamwork

• Integrity

• TeamworkAchievement Orientation


Organization CommitmentOrganization Commitment

Interpersonal UnderstandingInterpersonal

Understanding

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TARGET WORK CULTURE vs CURRENT WORK CULTURE

z

FunctionalDisciplinedReliability

ProcessUnified

Responsiveness

Time-basedAdaptive

Opportunism

NetworkFlexible

Venturesomeness

-.8

VerySimilar

VeryDissimilar

-.6

-.4

-.2

0

.2

.4

.6

.8 Current work culture

Target work culture

Sim

ilar

ity

to H

ay M

od

els

(Co

rrel

atio

n)

Gap=-.19P30

Gap=+.03P20

Gap=+.07P19

Gap=-.06P12

1.0

-1.0

Similar

Dissimilar

Arun’s C’Sort Result

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FUNCTIONAL

Learn and Apply Specialized Technologies

Assure Reliability

Limit Risks

TIME-BASED

Flexible Technology

Market Dominance

Maximizing Returns on Assets

PROCESS

Continuous Improvement

Customer Satisfaction

NETWORK

Innovation

Mobility

Partnerships and Strategic Alliances

The Basic Purpose of Each Work Culture

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FUNCTIONAL Bottom Line

Performance Return on Equity Reputation

TIME-BASED Program Teams Multi-functional

Expertise

PROCESS Team-based

Performance Customer-driven

Processes Benchmark Image

NETWORK Venture driven Situational Roles Relationship

Management

The Focus of Performance and Measures of Success

33

FUNCTIONAL Professional Expertise Achievement

Orientation Concern for Order Self Control

TIME-BASED Self Confidence Initiative Flexibility Impact and Influence

PROCESS Customer Service

Orientation Teamwork and

Cooperation Continuous

Improvement

NETWORK Initiative Relationship

Building Trail-Blazing

The Key Competencies Required in Each Work Culture

34

Executive Team - Focus Group Ideal Characteristics

What behaviors do we like to see in our people?

What are the behaviors needed for outstanding performance in Arun LNG?

What drives outstanding performance in Arun LNG?

What are the qualities required to succeed in the future Arun LNG ?

• Orang yang bersemangat, tidak perlu disuruh

• Kerja tuntas, dan berkualitas

• Proaktif, tidak menunda-nunda

• Disiplin

• Ulet, gigih

• Bersemangat

• Berani mengambil resiko yang terkalkulasi

• Forward Thinking

• Bertanggung jawab (Konsekwen)

• Rela (bersyukur, ikhlas)

• Mencintai pekerjaan

• Ingin selalu maju

35

Focus Ideal Characteristic – Competency


Orang yang bersemangat, tidak perlu disuruh

Kerja tuntas, dan berkualitas

Disiplin

Ulet, gigih

Bersemangat

Berani mengambil resiko

Ingin selalu maju

Initiative

Proaktif, tidak menunda-nunda

Forward Thinking

Integrity

Bertanggung jawab (Konsekwen)

Rela (bersyukur, ikhlas)

Organization Commitment

Mencintai pekerjaan

36

Integration Process to Identify Core Competency

37

Arun’s Core Competency


Integrity

Organization Commitment

Teamwork

Concern for Health, Safety & Environment

*See Definition of each Competency in Competency Dictionary

38

Agenda

Competency Concept

Competency Model




39

Direct and manage activities in the work unit in order to enser

the efficiency and effectiveness of work

performance and results

Direct and manage activities in the work unit in order to enser

the efficiency and effectiveness of work

performance and results

Have intention to increase team

effectiveness to get high productivity

Have intention to increase team

effectiveness to get high productivity

Team Leadership (TL)

Team Leadership (TL)

Prepare work unit plan in order to

ensure the implementation of

plan and program in accordance to overall

business plan and objectives

Prepare work unit plan in order to

ensure the implementation of

plan and program in accordance to overall

business plan and objectives

Capable to prioritize and prepare work

plan which is aligned with company’s

strategic plan and objectives

Capable to prioritize and prepare work

plan which is aligned with company’s

strategic plan and objectives

Strategic Orientaiton (SO)

Strategic Orientaiton (SO)

Identification of Managerial Competency

Motivate, coach, and identify employees

development needed in order to improve

their competency and capability

Motivate, coach, and identify employees

development needed in order to improve

their competency and capability

Main Accountabilities

of Managerial Positions

Behavior Characteristics

Needed


Have intention to foster others

development process

Have intention to foster others

development process

Developing Others (DEV)Developing

Others (DEV)

ILLUSTRATIVE

40

Identification of Managerial Competency

41

Arun’s Managerial Competency

Developing Others

Directiveness

Team Leadership

Strategic Orientation

*See Definition of each Competency in Competency Dictionary

42

Agenda

Competency Concept

Competency Model




43

Job Family – Definition & Concept

Job Family is defined as:

Broad groupings comprising a set of jobs or positions where the nature of the work is similar and has common themes

Linked activities – similar activities are undertaken at a progressively senior level in the family

Which are likely to require similar skills, knowledge and competencies in order to drive performance

Which represent a natural career path, though lateral movement across job families may take place.

Job Family is not:

Not organization structure – Job Family do not describe reporting relationship

Not reflecting salary structure – Job Family focus on roles, accountabilities and characteristics of the job

44

Using Job Family Approach

Job Family is suitable in situations:

Reorganization – need to redefine the accountabilities of the jobs

There is a need to enhance the flexibility of career movement

In order to introduce competency-based performance management

There is a need to empower employees in planning and monitoring their own career management

Job Family is not suitable in situations:

On-off job

Small organization where there is only one function in the organization

45

Job Family Identification in Arun

Marketing&

Sales

Projects

Pla

n

Lo

gis

tic

Co

ns

tru

cti

on

Operations

Maintenance

CustomerServices

Mar

gin

Margin

Finance, Accounting, Legal, Audit

Human Resources


Engineering Support

Primary Activities (Creation of Services/ Products for Customers)

Su

pp

ort

Act

ivit

ies

(S

up

po

rt C

rea

tio

n o

f S

erv

ice

s/

Pro

du

cts

fo

r C

us

tom

ers

)

&Sales

Projects

Pla

n

Lo

gis

tic

Co

ns

tru

cti

on

Operations

Maintenance

CustomerServices

Mar

gin

Margin

Human Resources


Logistic, General Affairs, Security, HSE

Primary Activities (Creation of Services/ Products for Customers)

Su

pp

ort

Act

ivit

ies

(S

up

po

rt C

rea

tio

n o

f S

erv

ice

s/

Pro

du

cts

fo

r C

us

tom

ers

) Value Chain Analysis

46

Job Family Identification

MaintenanceMarketing & Sales

Operations Customer Service

Logistic General Affairs

HSE Engineering Support


Human Resources

Finance & Accounting

Legal Audit

ILLUSTRATIVE

Documents

Workshop with Arun Team Competency Model Development December, 2005