JKO

Competency Based Integrated HR Systems

The Journey & Way Forward

1
JK ORGANISATION
Excellence comes not from mere words
or procedures. It comes from an urge
to strive and deliver the best every
time. A mindset that says “When it is
good enough, improve it”. It is a way of
thinking that comes only from a drive
within.
Hari Shankar Singhania
President, JK Organisation
2
 MODEL FOR TALENT MANAGEMENT

Performance SBP
Management
System

Talent Management Talent Pool

System (Leadership HPO
Pipeline)

Potential
Assessment
thro’
Competency Execution
System Excellence

3
HPO: High Performing Organization
Leadership Pyramid

Leadership
Development

Succession
l Mgmt.
‘A’ Position with ‘A’ Person

Talent
Management

Performance Competency
Management Management

4
 OBJECTIVES
• The ultimate aim of the competency initiative is to
enhance business performance
• This initiative is led and driven by the Business
Heads with active support of Location Heads &
Corporate / Location HRD Heads
• The objective of the Competency Development
Initiative is to help individuals improve their
competencies, which will improve their job
performance and business performance.
• The focus is on ‘DEVELOPMENT’ and
‘MAKING BEST USE OF THE STRENGTHS’.
5
 Journey So Far

 The Competency Development Initiative was launched on 7th January 2004

by Chairman & Directors.
 All Presidents, VPs, GMs & DGMs (215 Nos.) attended the 3-Day
Development Centres conducted by SHL.
 150 Identified Talent at DGM & below levels attended 3-Day Development
Centres in 2006-2007.

6
 Journey So Far

 Several Business Heads attended Advanced Management Programmes at

Wharton, London Business School, Michigan, ISB etc.
 Chairman, Directors, Business Heads, Vice-Presidents & GMs (90 Nos.)
attended a one week (JK Business Leadership Programme) conducted by
Harvard.
 210 Identified Talent & Emerging Leaders at DGM & below levels attended
IIM-Bangalore & Outbound Experiential Training Programmes.

7
 Journey So Far

 Each President, VP, GM, DGM & identified talent (365 Nos.) have
Individual Development Plans (IDPs) which are helping them to improve
their competencies & performance. These are reviewed periodically.
 Talent Management Process has been implemented for last 3 years for
President, VP & GM levels, and for Identified Talents at DGM & below
levels.

8
 Journey So Far

 All recruitments at GMs & above levels are only after candidates attend a
One-Day Mini Assessment Centre (Mini AC) and qualify on competency
assessment. This has improved the quality of Senior Executives coming into
the company.
 Extensive & in-depth statistical analysis done by NITIE, Mumbai on
competency scores & data. For example, factor analysis, cluster analysis,
correlation, regression analysis etc.

9
 Journey So Far

 Brand Value of JK has substantially gone up and JK group is well

recognized in the market for Competency & Talent Management Initiative.
 President Corporate HR & VP (HR) have addressed several conferences
such as NHRD, IFTDO, CII, ASSOCHAM, AIMA etc.
 Executive Coaching initiated for select directors by external coach. Several
Senior Executives were also covered under Executive Coaching.

10
 Journey So Far

 Integration of Competencies in PMS for GM & above already initiated in

2005 and for DGM & below from 2007.
 50 Internal & 15 External Assessors have been trained.
 Competency Development Workshops for Innovation, Coaching &
Mentoring covering Presidents & VPs.

11
 THE RELEVANCE OF COMPETENCIES
“High performance organizations in India &
worldwide are moving to competency-based
integrated HRD systems”
(Dave Ulrich, Michigan University)

TS 16949, ISO 14000, ISO 9000 And CII EXIM Award

are incorporating competency-based systems

People Capability Maturity Model’ (PCMM) OF

Carnegie Melon University is fully based on
competency-based systems.

Competencies represent a significant

systemisation and maturation of HR processes 12
 MAJOR ORGANISATIONS IN
INDIA USING COMPETENCY
BASED HRD SYSTEMS
• LARSEN & TUBRO • MARICO
• RPG ENTERPRISES • ASIAN PAINTS
• TATA STEEL • ZUARI AGRO
• TATA POWER • EICHER
• TATA CHEMICALS • WIPRO
• BILT • INFOSYS
• MAHINDRA & MAHINDRA • BPCL
• GODREJ CONSUMER • MADURA COATS
PRODUCTS
• PHILIPS
• ITC
• COCA COLA
• AV BIRLA GROUP
• XEROX
• SMITHKLINE BEECHAM
• LAFARGE
• BHARTI GROUP
• HLL

13
 Competencies: A Simple
Definition

• Sets of behaviours that are instrumental in

the delivery of superior job performance
• Competencies provide a clear
specification of individual knowledge,
skill, characteristics, attributes, values
and culture-fit requirements

14
 Competencies: The Iceberg Analogy

Skills Relatively easy

VISIBLE to develop

Knowledge

More difficult
to develop
Attitude
HIDDEN
What’s below the
Talent
waterline makes a
major difference in
Values performance!

15 at Work”
From “Competence
by Spencer & Spencer
 Criteria For An Effective
Competency Model:
• Manageable number
• Aligned to future business strategy (key business drivers)
• Aligned to culture and values of organization
• Minimal overlap
• Comprehensive
• Expressed in a way that facilitates the process in focus
• Have a visionary element (capable of extending the
organization rather than simply maintaining the status
quo)

16
WHAT DOES A COMPETENCY MODEL LOOK LIKE?
LEADERSHIP COMPETENCIES AS IDENTIFIED BY LEADING
GLOBAL COMPANIES

1. Strategic Thinking/Strategic Planning

2. Business Focus
3. Customer Focus
4. Drive for Result
5. Making difficult decision
6. Enabling People Performance
7. Team Leadership
8. Communication & Networking
9. Innovation
10. Coaching & Mentoring
11. Technical Excellence

Note: Study conduced on 12 Fortune 500 Companies 17

Typical categories of competency
models:

1. TECHNICAL
2. BEHAVIOURAL

In this Initiative we are looking at only Managerial

Level Behavioral Competencies

18
WHY A “COMPETENCY BASED
APPROACH”?

19
Evidence supporting a competency-
based approach
• AS A PART OF TALENT MANAGEMENT &
IMPROVING QUALITY OF MCS

• ASSESSED COMPETENCIES ARE HIGHLY

CORRELATED WITH, AND PREDICT
SUPERIOR PERFORMANCE (AT&T)

• THE GAP BETWEEN A SUPERIOR AND

AVERAGE PERFORMER IS 220%

(DATA BASED ON “TOPGRADING : HOW TO BUILD ‘A’ PLAYER TEAM” BY

Dr. BRADFORD SMART PRENTICE HALL PUB. 1999) 20
 COST OF “MIS-HIRE”
(DATA BASED ON “TOPGRADING : HOW TO BUILD ‘A’ PLAYER TEAM” BY Dr.
BRADFORD SMART PRENTICE HALL PUB. 1999)

PERFORMANCE OF PERSONS RECRUITED TO

‘KEY POSITIONS’ ( AFTER 1 YEAR )

49 % [ 17% ‘A’ PLAYERS,

GOOD 32 % ‘B’ PLAYERS *]

51% [ ‘C’ PLAYERS,

NOT GOOD PERFORMANCE MUCH
BELOW EXPECTATIONS]

* Research has shown that ‘A’ player Performance is ‘220%’

as compared to ‘B’ Avg. Players’ Performance . 21
 COST OF “MIS-HIRE” BASED ON SURVEY OF 54 LARGE
ORGANISATIONS IN USA ( 2 Yrs period cost)

FOR TOP MANAGEMENT (KEY BUSINESS POSITIONS )

25 TO 40 TIMES CTC for each Mis-Hire

Estimating CTC at Rs 20 Lacs/yr, for JK this will
be 5 to 8 crores for each Mis-Hire.

 Major Tangible Costs: Mistakes, Failures, Missed Business

Opportunities, Losing Existing Customers,
Losing Market Share & Lost Profits etc.

 Intangible Costs: Low Team work, Low Morale & Work Climate,
Exit of Talent, Lowered Co. Image/ Brand Value,
Customer/Consumer Trust etc.
22
 CORRELATION OF OUR PROCESS TO JOB
PERFORMANCE W.R.T. GLOBAL STANDARD
(Ref “Competence at Work - Models for Superior
Performance” By Spencer, John Wiley Publications Pg 242)

METHODOLOGY CORRELATION (r ) JKO Study

1. COMPETENCY BASED 0.65 Correlation (r)
ASSESSMENT CENTRES
0.71
2. BEHAVIOURAL EVENT 0.48 - 0.61
INTERVIEWS
3. ABILITY TESTS 0.54
4. ‘MODERN’ PERSONALITY TESTS 0.39

5. STRUCTURED COMPETENCY 0.38

BASED BIODATA
6. ROBUST REF.CHECKS ON 0.23
COMPETENCIES
7. NORMAL INTERVIEWS 0.05 to 0.19
23
COMPETENCY BASED INTEGRATED HR SYSTEMS

COMPETENCY BASED RECRUITMENT

( JOB-PERSON-CULTURE FIT )

TALENT SEARCH
PERFORMANCE MGMT,
( IDENTIFY HIGH
REWARDS &
POTENTIALS
RECOGNITION INTEGRATED & ASSESS
SYSTEMS COMPETENCY BASED COMPETENCIES )
HRD SYSTEMS
( TALENT STRATEGY )

SUCCESSION PLANNING
TO KEY POSITIONS TRAINING AND
DEVELOPMENT
OF HIGH POTENTIALS

CAREER PLANNING &

FAST TRACK GROWTH
24
 SHL

• World’s leading consultancy in the assessment

& development of people at work

• More than 25 years old, 1000 staff, 5000

corporate clients in 30 countries

• Are able to bring global perspective as well as

local experience
25
 The SHL approach….
SHL are market leaders in the business of
improving the performance of people at work.
We do this through providing better systems and
tools to objectively assess people, jobs and
organisations
Our vision is to provide significant commercial
advantage to our clients by making HR
management a focused, systematic and data-
driven process

26
 Sample of SHL India Clients
Manufacturing Technology Banking and FMCG and Public sector,
and Engineering financial services services international

Asian Paints Bharti Tele- Barclays Capital Britannia Indian Railways

Ballarpur Ventures HSBC British Airways Bharat Petroleum
Industries Cognizant ICICI DHL GrameenPhone,
Birla Management Technology
IDBI-PRINCIPAL GE Capital Bangladesh
Corporation Solutions
JM Morgan Stanley Hindustan Lever Commercial Bank,
CIBA Speciality Compaq
Sri Lanka
Chemicals IBM Standard Chartered Marico
United Nations
Hindustan Infosys Warburg Dillon Virgin Atlantic
Construction Technologies Read
Company Lucent
Larsen & Toubro Technologies
Murugappa Group Mahindra British
Novartis Telecom

RPG Group Siemens

Tata Steel Wipro

27
 WAY FORWARD
2007-2009
 Presidents & VPs (60 Nos.) will go through 360 Degree Assessment on
Leadership Impact (By Hewitt).
 Executive Coaching for select Business Heads & VPs by Hewitt for next 12
months to improve leadership impact.
 All DGMs (below 55 years of age) have already been covered in 3 Day
Development Centres & IDPs formulated (July – September 2007)

28
 WAY FORWARD
2007-2009
 Displaying of competencies at work integrated with PMS system (GMs &
above – 2005 and DGMs & below – 2007). Robust implementation is now the
focus.
 Communication of Competency Model to all MCS (3500 Nos.) so that
Competency becomes a way of life & Competency Based HR Systems are
robustly implemented – PMS, Training & Development, Recruitment, Talent
Management, Succession Planning, Career Planning, Leadership Development
etc.

29
 WAY FORWARD
2007-2009
 Phase I : 2007-08 - Communicate : Understanding
- Operationalise: PMS & Training
 Phase II: 2008-09 - Communicate : In-depth Understanding
– Operationalise: IDP, Talent Management & Recruitment
 Phase III:2009-10 - Communicate : Way of Life
- Operationalise: Career & Succession Planning and
Leadership Development
 We will be reviewing the progress of each phase in the Annual Inter-Company
HR Conference

30
 WAY FORWARD
2007-2009

 All new additions to Identified Talent List 2007 to attend IIM-Bangalore

Programme / Pegasus 2007-08.
 To develop simple & effective tests to spot high potentials from PMS Cluster 1
& 2 (50% of MCS i.e. 1600 people). This is to widen the net to identify high
potentials in all JKO Businesses.

31
Thank You

32