Developing individual competencies profile and application to FPT corporation

V IE TNAM N A T IO N A L U N IV ERSIT Y
HANOI SCHOOL OF BUSINESS
TRUONG VU THANH THU Y
DEVELOPING INDIVIDUAL COMPETENCIES PROFILE
AND APPLICATION TO FPT CORPORATION
Major: Business Administration
Code:
MASTER OF BUSINESS ADMINISTRATION THESIS
SU PE R V ISO R : NGUYEN NGOC ANH
H A N O I, 2004
TABLE OF CONTENT
ABSTRACT
TÓM TAT
ACKNOWLEDGMENTS
TABLE OF CONTENT
CHAPTER
1. INTRODUCTION
2. LITERATURE REVIEW
2.1. Competencies concept
2.1.1. Organizational core competencies
2.1.2. Individual competence
2.1.3. Linkages between organizational core competencies
and individual competencies
2.2. Identify core competencies
2.3. Build individual based competencies profile
2.4. Application of individual competencies profile
2.5. Competencies’ roles
3. APPI ICATION TO FPT CORPORATION
3.1. Methodology of building individual based competencies profile
3.2. Application oflB CP into human resource management
3.2. !. Competencies based-Work design

3.2.2. Competencies based-Recruitment and selection
3.2.3. Competencies based-Performance management
3.2.4. Competencies bascd-Training
3.2.5. Competencies bascd-Otlicr application
4. LIMITATION OF THE THESIS 67
5. CONCLUSION 68
APPENDICES
A. FPT ORGANIZATIONAL CHART 69
B. SAMPLE INDIVIDUAL COMPETENCIES PROFILE 71
C. COMPETENCIES BASED CAREER PATH MATRIX FOR FPT 84
D. QUESTIONNAIRES FORM 85
REFERENCES 89
LIST OF TABLE xi
LIST OF FIGURE xii
x
LIST OF TABLE
1. Steps to identify competencies profile for FPT
LIST OF FIGURE
1. Competence component
2. Top-down and bottom-lip approach
3. Relation between competencies, HR practice and business strategy
4. Competencies base work design method
5. Competencies based performance management method
6. Competencies based training process
Chapter 1
INTRODUCTION
Managing activities internal to the firm is only part of the modern executive’s
responsibilities. The modem executive must also respond to the challenges posed
by the firm intermediate and remote external environment. The intermediate
external environment includes competitors, suppliers, increasingly scare resources,

government agencies and their ever more numerous regulations, and customers
whose preferences often shift inexplicably. The remote external environment
comprises economic and social conditions, political priorities, and technological
developments, all of which must be anticipated, monitored, assessed, and
incorporated into the executive’s decision making. However, the executive often is
compelled to subordinate the demands of the firm’s internal activities and external
environment to the multiple and often inconsistent requirements of its take holders:
owners; top managers; employees; communities; customers; and country. To deal
effectively with everything that affects the growth and profitability of a firm,
executives employ management processes that they will position it optimally in it
competitive environment by maximizing the anticipation of environmental changes'
and of unexpected internal and competitive demands. Once they foresee the changc
they can define their company, its market, and its core competence in order to
support competitive advantage and to help company prosper sustainably.
" Think o f a diversified com pany as a tree: the trunk and
m ajor limbs as core products, smaller branches as business
units, leaves and fru it as end products. Nourishing and
stabilizing everything is the root system: core competencies.
Focusing on core competencies creates unique, integrated
system s that reinforce fit among your firm 's diverse
1
2
production and technology skills-a systemic advantage yo u r
competitors ca n 't copy
However, who makes up the corporate core competencies? And who creates the
unique? It is the human. The advantage that the corporate can achieve is depended
on the efforts of individual, or the individual competencies. Although the concept
about individual competence was developed long time ago in the world, it is about
to appear widely in Vietnam. Many consulting firms have used competencies based
methodology as a tool to upgrade corporate initiative especially in human resource

management. Base on this scenario, in this thesis, the author want to systemize the
idea about the organization core competencies and individual competencies for
further understanding and applying the competence concept. By identifying the
linkage between individual competencies and the organizational corc
competencies, and the role o f the core competencies in an organization the author
gives the answer about why organizations should focus on developing the
individual competencies profile and use that profile as a strategic human resource
management to upgrade the human capital, one of the most important factor that
helps to bring the success to the organization. For illustration, the author analyzed
the need to develop individual competencies profile for FPT Corporation and the
application of competencies based methodology in its strategy o f developing
human resource.
! C.K Prahalad and G ary Hamel, "The corc competence o f the corporation”. Harvard ¡Justness Review. April
1. 2001
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(. b a p t e r 2
LITERATURE REVIEW
2.1. C om petencies C on cep t
2It is said that the history of competencies as a development tool dates back to the
1960s when the U.S. Naval Department became interested in determining why
some submarine commanders consistently performed better than others. Since most
of these officers had similar work experiences and academic backgrounds, there
was an interest to find out if there were some differentiators that influence their
ability to perform. At that time, the help of Harvard behavioral scientist David C.
McClelland and a social scientist David Berlew was sought and so the two
proceeded with devising an approach based on M cClelland’s theory of motivation
and which focused on an individual’s relative level o f need for affiliation, power
and achievement. A trained researcher used a technique called “behavioral event
interview” and in the process, asked subjects to tell stories about how they
performed their jobs, decisions they found to be most difficult, and how they'

handled situations that did not go well.
Unknown to the researcher was the .fact that certain submarine commanders were
consistently high performers while others were consistently considered as average.
T his mix of performers had been sclcctcd to determine whether or not a common
set of differentiating behaviors emerged from the interviews with the high
performers. It was concluded that there was a statistically significant correlation
among the behaviors described during the interview by the commanders who had
2 E rnesto G. Espinosa, FPM , Competence, (http://ww w .pm ap org.ph/new sletter/april/fromdesk.htm )
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records of high performance. This research approach became the accepted method
for competency modeling in the years to come.
Nowadays, the word “competencies” is used in many contexts, with very different
meaning. Over the years, competencies have been used to denote organizational or
business competencies as well as individual or employee competencies.
Bellowing is the review o f competencies concept that is classified into
organizational core competencies and individual competencies.
2.1 .1 O rga n iz a tio n a l C o re C o m p e te n c ie s
Organizational core competencies are those capabilities that are critical to a
business achieving competitive advantage. The starting point for analyzing core
competencies is recognizing that competition between businesses is as much a race
for competence mastery as it is for market position and market power. Senior
management cannot focus on all activities of a business and the competencies
required to undertake them. So the goal is for management to focus attention on
competencies that really affect competitive advantage.
The main ideas about core competencies o f the corporation were developed by C.
K. Prahalad and Gary Hamel through a series o f articles in the Harvard Business
Review followed by a best-selling book - Competing for the Future. Their central
idea is that over time companies may develop key areas of expertise which are
distinctive to that company and critical to the company's long term grow th.1
3 Strategy-Core competencies ( http://w w w .tutor2u.n ct/business/strategy/core_ com petencies.htm )

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"In the 1990s managers will be ju d ge d on their ability to
identify, cultivate, and exploit the core competencies that
m ake grow th possible - indeed, they'll have to rethink the
concept o f the corporation it self. ” C K P rahalad and G
H am el 1990.
These areas of expertise may be in any area but are most likely to develop in the
critical, central areas of the company where the most value is added to its products.
For example, for a manufacturer of electronic equipment, key areas of expertise
could be in the design of the electronic components and circuits. For a ceramics
manufacturer, they could be the routines and processes at the heart o f the
production process. For a software company the key skills may be in the overall
simplicity and utility o f the program for users or alternatively in the high quality of
software code writing they have achieved.
A competence which is central to the business's operations but which is not
exceptional in some way should not be considered as a core competence, as it will
not differentiate the business from any other similar businesses. For example, a
proccss which uses common computer components and is staffed by people with'
only basic training cannot be regarded as a core competence. Such a process is
highly unlikely to generate a differentiated advantage over rival businesses.
However it is possible to develop such a process into a core competence with
suitable investment in equipment and training. It follows from the concept of core
competencies that resources that are standardized or easily available will not
enable n business to achieve a competitive advantage over rivals.
In 1994, Fogg. C. D. defines organization core competency as "those few internal
competencies at which you are very, very good, better than your competition, and
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that you will build on and use to beat the competition and to achieve your strategic
objectives."
In general, organization core competencies are strategic business capabilities that

provide a company with a marketplace advantage and it refers to the unique factors
that make an organization competitive. Core competence is a strategic concept that
captures organizational capabilities. Core competencies can relate to any
strategically relevant factor: greater proficiency in product development, better
manufacturing know-how, the capability to provide customers better after-sale
services, faster response to changing customer requirement, superiors performance
in minimizing costs, the capacity to reengineer and redesign products faster and
rivals, superiors inventory management systems, strong marketing and
merchandizing skills, specialized depth in unique technologies, or greater
effectiveness in promoting union-management corporation. H onda’s core
competence is its in-depth o f expertise in gasoline engine technology and small
engine design. Intel’s is in the design of complex chips for personal computers.
Procter and Gam ble’s core competencies reside in its superb marketing distribution
skills and R & D capabilities in the five core technologies- fats, oil, skin chemistry,
surfactants, and emulsifiers. Sony’s core competencies are its expertise iri
electronic technology and its ability to translate that expertise into innovative
products (miniaturized radios and video cameras, TVs, and VCRs with unique
features).
2.1 .2. I n d iv id u a l C o m p e te n c e
The concept about individual competence is various. Study in this area, one is
immediately struck by the lack of uniform definitions, very fine lines o f definition
distinction with terms such • as competence, competency, competence as the
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"power, ability, capacity to do, for a, task", whereas Merriam Webster4 defines that
competence and competency are synonymous as are competences and
competencies.
According to Guy Le Boterf,5 a Frcnch expert on competence, “Competence is the
combination of relevant resources that the individual mobilizes to reach a
particular result”. He says that competencies are not themselves resources in the
sense of knowing how to act, knowing how to do, or attitudes, but they mobilize,

integrate and orchestrate such resources. This mobilization is only pertinent in one
situation, and each situation is unique, although it could be approached as an
analogy to other situations that are already known.
From his theory, paradigm any analysis o f competence has to be contextualized to
the typology of product, service and organization. For example, a violin maker's
result, her or his performance (a wonderful violin with a perfect and harmonious
sound) is the result of the ability, the competence to perform a series o f key
activities by combining and mobilizing in the best possible way the wealth of
individual (personal) and network (external) resources. Similar examples of the
relation between resources, competence and results may be imagined for a skilled
producer o f Parmesan, a dress, a microchip. '
In 2000, looking at another approach Le Boterf define compctcncy as a construct,
which is the result of a pertinent combination o f a number of resources
(knowledge, information networks, relation networks, knowing how to do).
1 M erriam -W ebster is A m erica’s foremost publisher «N nnguagc-rclnlcd rcfcrcnec works, t he comgany
publishes a diverse array o f print and clcctronic products, including Meniam-Webster's Collegiate
Dictionary, Eleventh Edition— A merica’s best-selling desk dictionary— and Webster's Third New
Intei naiional Dictionary» Unabridged.
5 The concept of competence (http://prom o.kom pctens.net/indcx. 12— I htm l)
8
Richard Boyatzis6 (1982) defines work com petency as an underlying characteristic
of a person which can be a motive, a trait, a skill, an aspect o f his personal image
or o f his social role, or a body o f knowledge which he or she uses. To Boyatzis,
competence encompasses knowledge, skills or know-how, attitudes
and behaviors
that enable consistent delivery o f desirable results, which are defined as below.
Figure 2.1: Competence components
Knowledge is behaviors, skills and the ability to perform the major tasks of a job
are developed through the learning, application and practice o f specific Scientifit,
Technical and Job related Knowledge.

Scientific Knowledge: Scientific Knowledge refers to the general methods, rules
and principles o f the physical natural, economical and behavioral sciences
Scientific knowledge is generic and applicable in all situations relating to Ihc
particular scientific discipline being practiced. Science usually involves some soil
o f hypothesis testing mechanism or asking the question "what if'.
u Boyat/is, R F:. ( 1982) The Competent Manager; A Mode! for Effective Performance New York: John
W iley and Sons
9
Technical K now ledge: Technical Knowledge refers to specific techniques, rules
and principles relating to a particular technological application of the general
sciences, e.g. food technology, hanking technology, electronic technology, etc.
technical knowledge is more specific and only applicable to specific fields and
practices o f a particular technology.
.Job K nowledge: Job Knowledge relates to Scientific and Technical Knowledge. It,
however, refers to the very specific way it is applied within the company and to the
very specific safety knowledge, knowledge of specific tools, procedures, methods
and policies that apply to the performance of a particular Job in a very specific job
situation. This means that the job knowledge required to perform this specific task
will differ from another job environment or organization. (I.e. the way financial
transactions are handled in various companies is quite different from one company
to the other.
A S kill refers to a n u m b er o f micro tasks that have to be performed in a fixed way
to enable the performance of a major Task. These Micro tasks could be quite
complex. They are usually performed subconsciously and are typically completed
in several seconds or minutes. They are tasks that typically call for:
• Operations involving complex, subtle hand, finger, and eye co-ordination.
• Unusual movements, postures or rhythms not found in everyday life, e.g.
movements concerned with the hand-operated safety guards on power
presses.
• Abnormal use of the senses, e.g. inspection of hand-sewing needles

requires highly developed discrimination in the sense o f touch.
• C omplex information-processing activities relating to problem solving and
decision-making.
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Skills are usually tested by means of observation, practical application tests, role-
play, etc. It usually consists of the application of knowledge. Skills could be
cognitive, psychomotor or affective, depending on the dominance of their enabling
behaviors.
Cognitive Behaviors ("thinking" behaviors): Cognitive behaviors involve the
recall and classification o f specific information, the application o f information and
the analysis, evaluation and use of information in the process of problem-solving
and decision making.
Psychom otor behaviors ("acting" behaviors): Psychomotor Behaviors are those
requiring precise muscular movements in a particular way to achieve a particular
result.
Affective Behaviors ("feeling" behaviors): See attributes following.
The following are examples of skills:
• Problem solving skills
• Communication skills
• Budgeting and Controlling Costs skills
• Programming skills
• Typing skills
Attributes are the most difficult capabilities to measure or determine. Attributes
are usually tested by psychological tests and are usually noticeable in the overall
behav ior of an individual.
They are usually referred as Affective Behaviors ("Feeling Behaviors"). Affective
Behaviors, frequently hidden from observation, are the values that a person places
upon what they think or do. They are usually observed as a person's attitude or
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feelings towards performance. All Cognitive or Psychomotor behaviors are

accompanied by Affective behaviors. These Affective behaviors usually develop
as the direct result of learning processes related to the learning and mastering of
cognitive and psychomotor Skills. When a trainee perceivcs the learning oT a
cognitive or psychomotor skill as being successful, the affective feelings and
behaviors will automatically be positive. The opposite is also applicable. Honesty,
respcct, accuracy, and tidiness are the example of attribute.
McClelland' pointed out that Competence is understood as the relation between
human and work tasks, i.e. the concern is not about knowledge and skills in itself,
but which knowledge and skills are required to perform a specific task in an
efficient way.
Zemke (1982) interviewed several experts in the field to determine "precisely wlint
makes a competency" and he captured his findings tliusly: "Competency,
competencies, competency models, and competency-based training are all
Humpty-Dumpty words meaning only what the definer wants them to mean. The
problem comes not from malice, stupidity or marketing avarice, but instead from
some basic procedural and philosophical differences among those racing to define'
the concept and to set the model for the way the rest of us will use competencies.”
Fumhani (1990) states that " the term competence is new and fashionable, but the
concept is old. Psychologists interested in personality and individual differences,
organizational behavior arid psychometrics have long debated these questions of
personality traits, intelligence and other abilities "
David M cC lelland, whose research in the 60s ami 70s sheds a lot of* light on the influence o f com petencies
on people’s
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International Labor Organization8: Competence is the social construction of
significant, useful lessons for the productive performance in an actual working
situation, which is attained not only through instruction, but also - and to a great
extent - through learning by experience in specific job situations'1.
In the book Competencies in Action, Jane Weightman defined “Essentially,
competencies underlie the behaviors thought necessary to achieve a desired

outcome. A competency is something you can demonstrate.” “Competency is about
performance - how we define it, assess it, develop it, acquire it, and so on. Some
desired performances, or competencies, are easy to define measure and develop. [. .
.] However, many desired performances or competencies are much more complex
and are difficult to observe or measure. [. . .] But even in these difficult-to-judge
areas, we can usually agree that some individuals’ performance is more effective
than that of others. [. . . ] What the competency movement tries to do is to analyze
what it is that makes some people’s performance better than others, and to list the
component factors which go to make up these competent performances.”
The American Compensation Association defined competencies as " . . . individual
performance behaviors that are observable, measurable and critical to successful'
individual or corporate performance" (Canadian HR Reporter-Press Release,
1996).
Marshall, Patricia (1996),0“A competency is an underlying characteristic of a
person, which enables them to deliver superior performance in a given job, role or
situation.”
* The International Labor O rganization is the UN specialized agency which seeks the prom otion o f social
justicc and internationally recognized human and labor rights. It was founded in 1919 and is the only
surviving major creation of the Treaty o f Versailles which brought the League o f N ations into being and it
became the first specialized agency o f the UN in 1946
9 ILO. Formación profesional. Glosario de término.'; escogidos. G eneva. 1993. (http://w tvw.ilo.ort’)
10 M arshall, Patricia (1996), “Why are some people m ore successful than others?”, in People and
competencies, edited by Nick B oulter, M urray Dalziel and Jackie Mill, Kogan I’agc, second edition.
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Ducci (1997) defined competency as an identifiable and evaluable set of
interrelated attitudes, values, knowledge and skills that allow for satisfactory
performances in actual working situations, according to standards used in that
occupational area.'1
In a dynamic conception, competencies arc continually acquired (education,
experience, daily life), mobilized and developed, and they cannot be explained or

demonstrated independently of a context. This conception locates competency in
the individual's head, it is part of his patrimony and his intellectual and human
capital.
Overall, a generally accepted concept establishes competency as an effective
ability to successfully carry out some work activity which, which includes:
• Things an individual must demonstrate to be effective in a job, role,
function, task, or duty, an organizational level, or in the entire
organization.
• Aspects o f an individual that imply a level of skill, achievement, or output.
Individual Competencies Level
/
Normally, competencies are defined at different level. The fundamentals to clarify
each level are various. The level o f competencies is in function of the complexity
and diversity of the tasks. The specialization of competencies is related with the
amplitude o f knowledge demanded by the equipment and machinery used, the
material they work upon or with which they work, as well as the nature of the
goods and services produced.
11 Ducci, María Angélica. El enfoque de competencia laboral en la perspectiva internacional (n: Formación
basado en competencia laboral. Cintcrfor/ILO. Montevideo. 1997.
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12In the applied system of the United Kingdom, the levels have been structured
beginning with the analysis o f the productive functions. Their intention was to
create a frame of reference sufficiently ample so as to conserve a sense of
flexibility and maintain the possibilities individuals have to transfer their
competencies to new labor contexts.
The definition o f levels makes up part of the structures o f standardized systems of
competency- certification; its use allows a person to visualize the possibilities of
promotion and transferal among different qualifications.
I
The five competence levels defined in the United Kingdom are:

Level 1: Competence which involves the application of knowledge in the
performance o f a range o f varied work activities, most of which may be routine
and predictable.
Level 2: Competence which involves the application of knowledge in a significant
range of work activities, performed in a variety o f contexts. Some of these
activities are complex or not routine and there is some individual responsibility or
autonomy. Collaboration with others perhaps through membership o f a work group'
or team may often be a requirement.
Level 3: Competence which involves the application of knowledge in a broad
range o f varied work activities performed in a wide variety o f contexts most de
which, most o f which are complex and non-routine. There is considerable
responsibility and autonomy and control or guidance of others is often required.
Level 4: Competence which involves the application of knowledge in a broad
range o f complex technical or professional work activities performed in a wide
L What is the competence level (www.ilo.on;)
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variety of contexts and with a substantial degree of personal responsibility and
autonomy. Responsibility for the work of others and the allocation of resources is
often present.
Level 5: Competence which involves the application of a range of fundamental
principles across a wide an often unpredictable variety of context. Very substantial
personal autonomy and often significant responsibility for the word of others and
for the allocation o f substantial resources features strongly, as do personal
accountabilities for analysis, diagnosis, design, planning, execution and evaluation.
In other approach, the level of the competencies is identified by the proficiency
and/or by the degree/certificate for the knowledge. Base on this approach,
competencies can be defined at three levels: knowledgeable, proficiency, and
advance or even more detail by describe at four levels. Each level is defined as
below:
Level 1: The awareness level. At this level the person has some knowledge o f the

subject or has some skill in applying the knowledge. To be effective the person
needs further training or practical application of his/her skill to be able to apply it'
effectively in the job. During the application therefore the person needs close
supervision or assistance to ensure that the output to be delivered adheres to the
standards as specified. (Customer focus skill - Investigates and takes action to
meet customers’ current and future needs - Level one: Demonstrates concern for
how customers will use his/her products or services. Works effectively with
customers 1:1 or in small groups in clarifying and responding to their needs.
Demonstrates a strong customer service orientation, and takes responsibility to
follow up with customers to ensure their needs and expectations are satisfied)
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Level 2; The functional application level. At this level the person has a good
knowledge of the subject and can apply his knowledge effectively. Outputs
delivered conform to the standards and minimum supervision or assistance is
required to deliver the outputs. New knowledge gained can be applied in the
workplace but needs guidance and assistance in the application thereof. Still needs
training on the subject and must be lent on training courses to leam new skills.
(Customer focus level two: Understand customers, proactively gathering
information to learn about their needs and expectations. Builds ongoing
relationships with customers. Sets customer expectations appropriately.
Collaborates with other teams to ensure the customer gets a flawless product or
service).
Level 3 : The expert level. At this level the person has an extremely good
knowledge of the subject and can work completely on his/her own. he/she learns
any new items regarding the subject out of own will and can easily find new ways
of applying the knowledge and skills. The person's knowledge and skills is of such
standard thflt he/she can train, guide or assist others in gaining the knowledge and
skills that he/she has. (This does not reflect that the person must have training
skills or knowledge to operate at this level.) (Customer focus - at this level: thể
person will adapt products and services to customer feedback; Design and monitors

interfaces between his/her group and customer satisfaction; Be alert and
appropriately responsive to any data indicating a customer opportunity or change
in customer needs; talk and acts with customer service in mind; Serve as a role
model in providing exceptional customer service) Only the end-result or the output
is clicckcd when delivered to others and it usually conforms to standards specified.
Level 4 : The specialist. At this level the person has gained all the knowledge
available regarding a subject and keeps him/herself up to date with any changes
regarding the subject on a continuous basis. It is a person that can apply his/her
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knowledge effectively without any supervision or assistance. At this level the
person can train, guide and assist others in the application of the knowledge in
creating the outputs according to standards specified. At this level the person
creates new things regarding the subject that is not included in the knowledge
lie/she has gained so far or training courses presented on the subject. (Customer
focus - nt this level the person will design his/her organization for optimal
customer focus and service; is outstanding in developing strategic, ongoing
customer relationships, gaining trust and respect for the company; develops long
term product or service plans and strategies that anticipate and channel customer
needs and expectations; Strategically and effectively positions products and
services in the mind o f the customer.)
No matter what approach to identify level of competencies, defining level of
competencies helps the individual to upgrade his or her competencies by setting up
study path. Human resource managers can also using competencies level to design
job profile. Both five-level system and four-level system can also be the
benchmarking tool to design standard criteria in recruitment, performance
management, training and compensation. Competencies levels may or may not link
with the hierarchy level in the organization. Regularly, in the competencies based'
methodology, competencies levels are described integrating to hierarchy level so
that it is easier for human resource managers in human resource planning and
practice.

Competencies Profile
A competency profile is generally composed o f five to ten competencies but can
include as many or as few as are required to accurately reflect performance
variations in the position. T here arc may possible types of competencies: excellent
skills in manufacturing a high quality product, know-how' in creating and operation
D A I HOC Q U Q C G tA H A N p l
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a system for filling customer orders accurately and swiftly, the capability to
provide better after-sale service, a unique formula for selecting good retail
locations, unusual innovativeness in developing new products, better skills in
merchandizing and product display, superior mastery of an important technology, a
carefully craft process for researching customer needs and tastes and spotting new
market trends, an unusually effective sale force, outstanding skills in working with
customers on new applications and uses o f product, and expertise in integrating
multiple technologies to create whole families of new products. The company can
do profiling and matching by comparing the incumbents’ knowledge, skills and
behavior, the current and potential future jobs, and the performance o f employees
of assigned jobs.
2.1.3. Linkages Between Organizational Core Competencies and
Individual Competencies
Competency can refer to either an organization or an individual. Organizational
competence and core competency link an organization's essential values and
business to those of its employees. In other words, individual competencies link
tightly to the organizational competence. A company as a whole has specific goalfe
and objectives it would like to attain to ensure its survival and economic growth
within a national and international competitive environment. Within most
companies there are various occupational groups and jobs (e.g. Finance.
Administration, Sales etc.) depending on the nature o f the company's business. If
the company is to achieve its strategic goals and objectives, it must clearly define

the core competencies and the specific outputs that have to be delivered upon and
these core competencies and outputs should be used as a yardstick to judge the
company's success by. The outputs must be linked to a specific occupation chain
in the value chains and the employee in the role in order to ensure that performance
can be measured and delivered against a set o f agreed standards or requirements
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defined by the company or its clients. Each occupation or job has certain pre
determined deliverables or outputs that must be delivered by the employee in that
particular role. These outputs must be delivered at a specific lime according to
specific company standards, specific requirements of the client and adhering to any
internal company procedures. In order to deliver upon these outputs the employee
will require certain enabling factors or competencies that he/she would apply in the
process o f creating and delivering the required outputs. These competencies
consist of a combination of specific knowledge, skills, attributes or qualities that
he/she must apply in certain ways in order that the end result or outputs ate
delivered according to the standards and requirements outlined by the company
and client.
Resourcc-bascd analysis (Lado and Wilson, 1994) suggests n tight link between
individual and organization core competencies is a good way to achieve sustained
competitive advantage. One definition of employee core competency, for example,
suggests "(it is) a principal or critically essential competency for successful job
performance for a given job at a given level in an organization hierarchy" (Dubois,
1993).
Differences in definitions notwithstanding, Hendry and Maggio (1996) suggest that
when competencies are linked to the broader goals of an organization, the
following common elements emerge as outcomes of a comprehensive competency
model:
• Identification of characteristics and behaviors that differentiate top
performers from others in relation to their contribution to strategic
objectives;

• Clarification, communication, assessment, and development of
characteristics that focus individuals on core organization goals;
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• Practical observation help prescribe and validate behavioral descriptions
that achieve the desired results;
• Description o f skills, attitudes, traits, and behaviors that can be attached to
pay, performance measurement, hiring criteria, training, organizational
staffing, career development, and succession planning.
To conclude, high performance organizations have shown improved efficiency and
effectiveness in translating corporate values into meaningful performance
objectives and actions through the increasing use o f competencies in their
performance management programs. Individual competencies, on the other hand,
utilized in hiring new employees or developing existing employees, make dramatic
differences in organizational capabilities.
2.2. Identify Organizational Core Competencies
Prahalad and Hamel suggest three factors to help identify core competencies in any
business:
The first factor: Provides potential access to a wide variety of market
The key core competencies here are those that enable the creation o f new products
and services.
I
Example: Why has Saga'3 established such a strong leadership in supplying
financial services (e.g. insurance) and holidays to the older generation?
Core Competencies that enable Saga to enter apparently different markets:
• Clear distinctive brand proposition that focuses solely on a closely-defined
customer group
• Leading direct marketing skills - database management; direct-mailing
campaigns; call centre sales conversion
M Saga group is based at Folkestone, UK. Saga group focuses exclusively on the provision of high quality,
value for money scrvice for people 50 and over. These includc holidays to worldwide destinations including

cruise in our own ship, and award-wining magazine, insurance and finance products, and radio stations