Capability models, performance management, and knowledge management: how they all fit together

Often the day-to-day demands of work prevent us from stepping back and seeing how the big pieces fit together. While you might not have the same ecstatic reaction of this guy discovering a rainbow in his backyard, hopefully this post will help you have an even better answer to “what does this mean” (if you can make it to 1:17 in the clip).

Capability (competency) model, performance management, knowledge management: many of these terms get interchanged, however, in my experience I have seen distinct and specific applications for the processes as businesses work to maximize their return on investment in human capital. Below the diagram is a quick definition of the terms with links for more information.

The whole is greater than the sum of the parts.
The whole is greater than the sum of the parts.
  1. Business Strategy: While Michael Porter has a longer answer, Jack Welch defines strategy (in his book Winning) as “making clear cut choices on how to compete.” In a previous post, I compiled the 9 Critical Questions on Strategy.
  2. Organizational Design: just as form follows function in art and nature (but not chickens), an organization’s structure should follow its strategy. Jaques takes a scientific yet pragmatic approach in Requisite Organization.
  3. Capability Model: while purists will prefer to use the term “competency” to emphasize demonstrated abilities (rather than future potential), in either case a model, such as SHRM’s, provides a framework for a hierarchy of skills that can be developed and applied at various levels of the organization.
  4. Role Definitions: each role (remember, each position can have multiple roles, just like a father can be a cook, landscaper and coach) needs a definition of its responsibilities and scope
  5. Role-based Capability Model: Combine 3 with 4, and you get an inventory of the capabilities (competencies) required to be successful in each role. This is an essential input to the processes below. Do not pass go, do not collect $89 (after taxes).
  6. Four related processes to improve an organization’s return on human capital
    1. Talent Intake: defining the requirements for each role will empower your recruiting organization to provide a better slate of candidates for vacancies, and help new hires get up to speed and contributing within the first phase of the talent cycle.
    2. Knowledge Management: a central repository for standards, policies, procedures, and other specific “tribal knowledge” accumulated with experience in any organization. A top-notch knowledge management system combines the “push” of compliance with the “pull” of recognition for contributors and highly accessible content (like wikipedia and TED).
    3. Performance Management: while a recent duel of data fit models has caught a lot of buzz, an effective performance management process gives employees meaningful, actionable feedback on their performance vs expectations in role, and allows the organization’s leadership to identify high-performing, high-capability players and put plans in place to address staff who are under-performing. Performance review surveys are typically more complicated than they need to be, and the best ones I’ve seen capture 360-feedback quarterly.
    4. Capability Development: programs combine training and succession planning to close development gaps identified in any of the above processes. Training can be delivered through self-study, online learning, classroom based training, and on the job coaching.

While none of these definitions go deep enough to be applicable on their own, hopefully differentiating between the terms with a few resources for further research will be a good start to helping your team go “all the way across the sky.”

What did I leave out? What other approaches have you seen work also? Leave a comment and let us know.

Use these metrics to rev your Talent Engine: Intake stage

Now that we’ve defined the four stages of the talent cycle as Intake, Development, Delivery, and Transition, it’s time to define the key metrics that will help you manage the first phase. Without getting lost in the philosophical nuances between Drucker’s Management by Objectives and Deming’s systems view, let me try to instill some passion for metrics that spark change with two fortune cookie management quotes:

hiring-funnelSo what are the outcomes you are trying to achieve from the Intake phase of the talent cycle? Anomalies in these metrics will point you to the parts of the system that must change in order to achieve different results.

  • Time to fill open requisition
  • Percent vacancies (open positions divided by total positions)
  • Activity rate and yield for each step in the funnel (see diagram)
  • Yield by channel (i.e., sourcing, agency, referral, inbound application), job function, hiring manager
  • Percent of early exits (involuntary and voluntary terminations before 90 days of employment)
  • Satisfaction: hiring manager, candidate, new hire, recruiter
  • Percent of opt outs (i.e., number of candidates who withdraw at each step in the funnel divided by number of candidates who started that step)
  • Average candidate quality (based on assessments by hiring managers based on required qualifications for each role)

if your applicant tracking system doesn’t generate a dashboard of metrics similar to these, you may have to build your own. Start with a white board and upgrade to Excel or an easily configured database (like Quickbase) once you know what you want to measure, when, and how.

Next up: key metrics for the Development phase of the talent cycle.

What metrics have you used to measure talent intake? which of these are useless? Leave a comment!
image: http://www.sourcecon.com

Get your Talent Engine Revving: the Four Stages

Most leaders would agree that having the right talent on their teams is essential for success, and recently Build Network has confirmed this hunch in a leadership survey. The goal of this post is to provide some structure to the talent cycle and help leaders get the most from their talent by segmenting the tenure of any employee into four phases: Intake, Development, Delivery, and Transition. While similar to the four stroke engine cycle, we’ll try to limit the amount of compression and ignition we put our employees through.


Except for the stereotypical Japanese salarymen, very few employers expect to need more than one hand to count the average tenure of staff. And while the US Department of Labor’s 2012 data showed average tenure across all industries has increased to 4.6 years from 4.4 in 2010, data compiled earlier in 2013 by Payscale showed employers in retail and IT companies should expect closer to 2, as reported by Business Insider. And based on the bankrupt and bailed out companies at the other end of the Payscale list, and the bankrupt and bailed out countries in the OECD data set from 2011, seeing tenure rise above 10 years should be a warning sign (especially when long tenure comes along with unsustainable pension obligations).

So let’s make the math easy and propose you’ll get 2 years of contribution, on average, from your employees. I’m defining the Intake phase as the period from the first touch during recruiting through the first 90 days of employment. Take off the last month before exit for Transition, and we are left with 20 months. So if the goal is to maximize the contribution to the business from each employee, it’s important to “compress” the Development period, which I’m defining as the length of time required for an employee to become fully competent in role.

  1. Intake: starts with first contact with a prospect during recruiting, ends at day 90 of employment. Recruiting, onboarding, and orientation are key processes. Coordination between HR, Facilities, IT, Finance, and hiring managers is essential to establish new employees with high engagement and reduce early exits.
  2. Development: from day 91 through the point at which an employee is fully competent in role. Coaching, training, and peer support will help ensure employees can contribute high quality work, independently, as quickly as possible.
  3. Delivery: could be as short as a few months for organizations with low overall tenure and long intake and development periods.
  4. Transition: allowing for knowledge transfer from an outgoing staffer to the incoming hire. Internal promotions will allow for longer transition periods, but most US employment agreements expect only 2 weeks notice.

An upcoming series of posts (linked in the list above) will look at the key metrics to track in each of these phases of the talent cycle, along with the most important processes to streamline in your organization to ensure your team is happy, developing, and delivering at each phase of the cycle.