Lecture 2

HRM and performance

&
Competence-based HRM
 Part 1:
HRM and performance
Impact of HRM on organizational
performance
 High-performance work
systems (HPWS)

• High-performance work systems (HPWS) are bundles of HR practices

that facilitate employee involvement, skill enhancement and motivation
• Performance cultures are created by HPWS that embody ways of
thinking about performance in organizations and how it can be improved
 Features of an HPWS

• Job infrastructure – workplace arrangements that equip workers with the proper abilities to
do their jobs, provide them with the means to do their jobs, and give them the motivation to
do their jobs. These practices must be combined to produce their proper effects.
• Training programmes to enhance employee skills – investment in increasing employee
skills, knowledge and ability.
• Information sharing and worker involvement mechanisms – to understand the available
alternatives and make correct decisions.
• Reward and promotion opportunities that provide motivation – to encourage skilled
employees to engage in effective discretionary decision-making in a variety of environmental
contingencies
 The contribution of HRM

• HR contributes to enhancing organizational performance by providing

insights on the performance issues affecting the organization and its
employees.
• This means identifying the reasons for the issues, exploring their
implications for business and people management and conveying these
messages to management. The aim is to find new ways of meeting
performance challenges.
 Part 2:
Competency-based HRM
 1. Introduction

• Competency-based HRM is about using the notion of competency and

the results of competency analysis to inform and improve HR processes,
especially those concerned with recruitment and selection, learning and
development, and performance and reward management.
 2. Competency definition

• The term ‘competency’ refers to an underlying characteristic of a

person that results in effective or superior performance.
• Three types of competencies have been identified: behavioral
competencies, technical competencies and NVQs/SNVQs.
 2. Competency
definition

• Behavioral competencies define behavioural expectations, ie the type

of behaviour required to deliver results under such headings as
teamworking, communication, leadership and decision-making and are
sometimes known as ‘soft skills’.
 2. Competency
definition

• Technical competencies define what people have to know and be able

to do (knowledge and skills) in order to carry out and meet performance
expectations and are sometimes known as “hard skills”.
• They are related to either generic roles (groups of similar roles), or to
individual roles (‘role-specific competencies’).
 2. Competency
definition

• NVQ/SNVQ competences specify minimum standards for the

achievement of set tasks and activities expressed in ways that can be
observed and assessed with a view to certification.
• An element of competence in NVQ language is a description of
something that people in a work area should be able to do.
 3. Application of competency-based
HRM

Recruitment and selection

v Competencies are used in many organizations as a basis for person
specifications set out under competency headings developed through
role analysis.
v The competencies defined for a role are used as the framework for
recruitment and selection, and competency-based interviews are
structured around the competencies listed in the specification.
 3. Application of competency-based
HRM
Learning and development
v Role profiles, which are either generic (covering a range of similar jobs) or individual
(role-specific), can include statements of the competencies required. These are used to
assess the levels of competency achieved by individuals and so identify their learning
and development needs.
v Learning events can be based on competency analysis related to an organization’s
competency framework.
v Competencies are also used in development centres, which help participants build up
their understanding of the competencies they require now and in the future so that they
can plan their own self-directed learning programmes.
 3. Application of competency-based
HRM

Performance management
v Competencies in performance management are used to ensure that
performance reviews do not simply focus on outcomes but also consider
the behavioural aspects of how the work is carried out that determine
those outcomes.
v Performance reviews conducted on this basis are used to inform
personal improvement and development plans and learning
programmes.
 3. Application of competency-based
HRM

Reward management
v Competency-related pay relates additional awards to assessments of
competency but it has never become popular.
v However, more frequent use is made of contribution-related pay, which
provides for people to be rewarded according to both the results they
achieve and their level of competence