A TERM PAPER ON COMPETENCY BASED RECRUITMENT AND SELECTION

Kathmandu University School of Management

In partial fulfillment of the requirements for the

Master’s in Business Administration

Submitted To:

Asst. Prof. Seema Singh

Lecturer Bhawana Tamrakar

Submitted By:

Niranjan Prasad Awasthi (17104)

MBA 3rd term

18th September, 2018

 Acknowledgement

I would like to put forward my sincere appreciation and gratitude to our respected Asst.

Professor Seema Singh and Lecturer Bhawana Tamrakar for providing me with an opportunity to

do this term paper on Competency based recruitment and selection. This provided me an

opportunity to apply my theoretical knowledge on the topic and better understand the practical

side of it. I would also like to thank my friends for their constant support and guidance without

which I would not have been able to complete this term paper.

I am sure that the knowledge that I have gained after doing this term paper will be useful in my

future career.

Thank you

2
 Introduction

Recruitment and selection are important issues in today's workplace. Picking the right people is a

perennial challenge in any organization. When a vacancy occurs and the organization has

recruited many applicants, a common next step is to pick the best person for the job. Now the

question arises how to find the best person for the job who can contribute to sustained

competitive advantage. To answer this, there is shift from traditional recruitment and selection to

competency based recruitment and selection. Hiring the right person is important because the

average “bad hire” that leaves a company within six months costs the company approximately

$40,000 (Source: U.S. Department of Labor) .There are so many ways to enhance performance

but organizations have exhausted the options that once promised significant gains like financial

restructuring, reorganization or relocation. Therefore, getting the most from people has been a

major management focus. However, due to multiple crises such as rapid technological and

demographic change, the skills among available new employees are often misaligned with job

requirements. There are abundance of qualified employees but scarce of skilled workers. Thus,

organizations need to develop more sophisticated and systematic approaches in finding

competent employees (Sachs, 1990).

The idea of measuring competence was deemed to have originated in 1973 with McClelland who

studied approaches to testing individuals. Still recognized as a key contributor in this area, he

proved that success is not based on intelligence alone but on competencies which are expressed

in terms of behavior (Jevscek, 2016). Prior to this intellectual ability was the focus of testing for

potential candidates with little emphasis on any personal or behavioral attributes. McClelland is

widely credited with being one of the first academics to promote the fact that intellect was not an

adequate predictor of high performance. The greatest challenge for Organizations and academics

1
once the concept of competency was identified was to accurately define what the term really

meant. The use of competency based frameworks, developed in the 80’s became more popular in

the 1990’s for recruitment and selection purposes and indeed in day to day HR activities. A

competency model is a framework for organizing a collection of observable skills, behaviors,

and attitudes. A competency framework is designed to reflect the core competencies of an

Organization. A competency framework within an Organization may be used to structure

selection processes, training and development programmes and performance appraisal templates,

providing an integrated and coherent approach to the management of an Organizations human

capital” (Sutton and Watson, 2013, P. 1025).

The format or appearance of a competency will depend on many factors such as, what type it is,

how many competencies there are in the framework, specific organizational preference etc.

There are no hard and fast rules for designing either the framework or the definitions. The

ultimate aim of such a framework is to ensure fairness and consistency in comparison and

assessment. In considering a transition from traditional to competency-based recruitment and

selection, one question is uppermost: How can a competency-based approach improve the

organization's ability to predict successful job performance from prospective applicants? The

answer to this question is simple, but it does require some explanation. The success of a

competency-based approach depends on whether or not the organization has clarified work

performance requirements and kept them up-to-date. If, for instance, the organization's managers

have not clarified the desired work outcomes, then trying to match applicants to those ill-defined

goals will not be easy.

2
 Literature Review

A study conducted by Sutton and Watson (2013) is extremely valuable to the competency debate

as it attempts to actually measure the benefit of competencies throughout the employee life

cycle. The Organization used in the research model linked competencies ratings at recruitment

and selection through to job performance and development needs. The researcher’s analyzed

scores from interviews on a sample of employees (over 200) and compared these with their

scores against the same competencies at appraisal stage. The outcome of the analysis highlighted

two significant findings. One of the most interesting findings from a core competence and indeed

cost saving point of view was the high correlation with ratings on three particular competencies

at section stage to employment outcomes. Leavers scored lower on three specific areas compared

to those in the sample who remained in employment. The Organization may wish to focus on

these competencies in the selection process to avoid turnover costs (Sutton and Watson, 2013).

The competency framework adopted was also purported to help identify future training and

development needs which is essential for an Organizations talent planning (Sutton and Watson,

2013). Both findings are important as they go further than most to advocate the quantifiable

benefits of competency frameworks to an Organization.

Rangriz and Soltanieh’s, (2015) research paper used quantitative methods to evaluate the effect

of managerial competencies and organizational capabilities on organizational effectiveness.

Cluster sampling techniques of knowledge based workers in different geographical locations

were used to achieve an accurate representation and surveys were issued to all respondents. The

findings reported that using managerial competencies had a positive effect on organizational

performance.

3
A different, yet valuable perspective on the benefit of competency models is evidenced by

Alban-Metcalfe and Alimo-Metcalfe (2013) as part of their paper on the reliability and validity

of a diagnostic tool for leadership. They report that a competency framework can achieve

“fitness for purpose” if empirical sector specific research is embarked on to ensure that what is

evaluated is relevant to managers and is not generic.

Matching employee competencies and job requirements can improve organizational performance

and employee performance leading to enhanced job satisfaction. - (McClelland and Spencer,

1992).

The competencies defined for a role are used as a framework for recruitment and selection and

competency-based interviews. The use of a competency-based approach within recruitment and

selection allows for a structured interview, meaning the interviewer or HR manager can structure

questions around the key competencies identified and required for the role through the use of a

framework (Roberts, 1997, p.188).

4
 Practical/Application Perspectives

In the current management context to identify the exemplary performers who can contribute to

sustained competitive advantage, almost every positions in organizations demands competency

based recruitment and selection. In a study conducted by the American Compensation

Association published in 1996, researchers found that 88% of respondents use competency-based

interviews, which is the most frequently cited competency-based technique. The study also

surveyed respondents on their decision-making practices in the five major staffing categories:

hiring and selection, job placement, promotions, succession planning, and terminations. Results

in these areas were as follows: for job placement, 70% used competency-based interviews and

59% used supervisor assessments; for promotions, 68% used supervisor assessments and 49%

used competency-based interviews; for succession planning, 54% used supervisor assessments

and 32% used multirater assessments; for termination, 42% used supervisor assessments. Results

from a 1999 survey of more than a thousand North American companies indicated that lower

turnover rates are experienced by 36% of those respondents that use competency-based selection

and hiring practices. The survey also indicated that 43% of respondents using competency-based

selection experienced higher levels of productivity (O'Daniell, 1999).

Dell uses competency based interviewing methods to elicit details about an individual’s past

performance to determine suitability to the Organization. Such a method has proved successful

and is proven by continued use. (Bagga and Kanna, 2014).

In Nepalese context, pure competency based recruitment and selection is still not used by

organizations. Though the recruitment and selection process is shifting from traditional

approach, many organizations are still using combined form of traditional and competency based

recruitment and selection. Public organizations select applicants through written test and semi

5
structured interview but some private organizations now are trying to make their recruitment and

selection process competency based by incorporating test that not only include subject matter

knowledge but also various tests that measure behavioral and personality parts. These

organizations are also making their interview structured so that there is fairness and consistency

in the process. In addition to this, Organization like Teach For Nepal is using competency based

recruitment and selection process through the use of Rubric. Globalization and increasing

standard business practices has increased the popularity of competency based recruitment and

selection as it selects the best person for the organization leading to improved organizational

performance resulting in increased productivity and decreased turnover. In Nepal Organization

like Teach For Nepal is using competency based recruitment and selection process through the

use of Rubric.

6
 Key Issues and Their Implications

Competency base selection and recruitment is highly correlated with job performance and job

performance is highly correlated with organizational productivity. This is because the competent

applicants are able to better perform at job than others that results in increased productivity and

decreased turnover. But there are certain issues with competency based recruitment and section.

One repeated criticism of competency models is that they are behavior based; there is a lack of

emphasis on skill. The focus is on people and not process with models reflecting behaviorally

specific descriptions of the required competency (Mansfield, 1996). When academia thinks it has

developed sounds knowledge to guide practice there is often little connection between academia

and practice (Cascio, 2015). Criticisms have been leveled with justification at poorly-developed

frameworks that reflect a lack of understanding around competencies. Johnson and Dimitratos

(2014) refer to points raised by Leonard-Barton (1992) that if not monitored correctly core

competencies can be transformed into core rigidities, they can be hindered by their dysfunctional

ties- referring to the belief that models don’t blend skill, capability and knowledge correctly.

While competencies and competency models have not escaped censure, such criticisms do not

necessarily detract from the usefulness of competency frameworks. They merely highlight the

need for care and understanding when developing and implementing such frameworks (CIPD,

2015). Core competency models need to link the competency at individual and organizational

level to ensure success. A clear map of strategic content and context should enable a company to

attain its strategic goals (Yang, Wu, Shu and Yang, 2006). The link between competencies and

competitive advantage is a common theme throughout past and present literature on

competencies yet competence models will suffer if not implemented correctly. Redmond’s

research aligns with this assertion by stating that competency models have been a source of

7
tension for employees especially when they are unable to see their individual fit into such a

model or when there is distrust around management strategy (Redmond, 2013). In addition to

this, it is a long process, competency identification and modeling also demand commitment of

time and other resources, Using competency-based job information in recruitment could

dramatically increase the cost of advertising and Competency-based approaches are not

appropriate for recruiting and selecting unskilled or semiskilled workers .In Nepalese

organizations, mostly public organizations lack to commit the necessary resources to initiate and

implement competency based recruitment and selection.

8
 Recommendations for improvement in practices

 A standardized system and process having higher reliability and validity should be used

in competency based recruitment and selection so that it ensures fairness and consistency

in the selection procedure selecting the best people for the organization.

 Based on Redmond’s research it states that competency models have been a source of

tension for employees especially when they are unable to see their individual fit into such

a model or when there is a distrust around management strategy (Redmond,

2013).Therefore, the model should be well communicated with all employees in the

organization to ensure the trust among the employees and employers and acceptability of

the model.

 In Nepalese organizations both public and private, the written test for selection should not

only include subject matter and job knowledge but also address the personality and

behavioral dimensions of the applicants. The interview should also be structured so that

the applicants are equally evaluated ensuring the fairness and consistency in the questions

asked.

 Since competency based recruitment and selection is a long and costly process the

organization should commit time and other resources for competency identification and

modeling.

9
 References

Boyatzis, R. E. (2008) ‘Competencies in the 21st Century’. Journal of Management

Development, 27 (1): pp. 5-12.

Mulder, M. and Collins, K. (2007) ‘Competence development in selected EU member states’ in

Sengupta, A., Venkatesh, D.N. and K. Sinha, A. (2013) ‘Developing performance-linked

competency model: a tool for competitive advantage’. International Journal of Organizational

Analysis, 21(4): pp. 504-527

Rangriz, H. and Soltanieh, F. (2015) ‘Exploring the Effects of Organisational Capabilities and

Managerial Competencies on the Organisational Effectiveness’. Journal of Strategic Human

Resource Management, 4 (2): pp. 1-12.

Sutton, A. & Watson, S. (2013) ‘Can competencies at selection predict performance and

development needs?’. Journal of Management Development, 32 (9): pp. 1023-1035.

https://www.cscollege.gov.sg/Knowledge/Documents/Events/William%20Rothwell/Article-

Competency-based%20Selection%20by%20Dr.%20Roth

http://blog.competencycore.com/2012/12/commonly-used-talent-acquisition-tools_6.html

10