If the Shoe Fits

If the Shoe Fits

Tracking employee competencies can help companies recruit, match people to jobs and even develop their staffs People are one of the business world's most important resources, so you would think we would be partial to them. But with respect to the attention we give computer-related issues, people definitely lag behind money and hardware. While we know a great deal about our companies' financial and physical assets, we know very little about their human assets.

Of course, payroll has always been with us - in fact, in 1952 General Electric's appliance business payroll became the first business application of IT- and for years companies have kept automated records on benefits and superannuation. But keeping track of how much people are paid and perked is arguably just another financial application, hardly the most noble of potential HR applications. Increasingly, though, companies are moving toward a greater appreciation of human resource information.

They are getting serious about applications that will help them assess skills, match people to jobs, and monitor employees' growth in knowledge and skills.

It's partly because companies are realising that people are a worthy asset and partly because they want to streamline manual HR processes.

So out of those mixed motives we are finally treating people as valuable sources of information.

Computers have always been good at matching demand and supply, so using IT to find people with the right skills for a particular job seems like a no-brainer.

But it's a lot harder than it looks. I first realised just how difficult it is in 1990 when I joined a consulting firm that had a skills database that was used ostensibly to staff consulting projects based on the expertise of consultants. At that time I considered my own skills to be in re-engineering, IT-enabled organisational change and IT strategy. While I was completing the skills questionnaire for entry into the database, I realised that none of my skills were mentioned! Clearly what I could do was not valued by the firm.

So I ticked a few skills at which I was at best mediocre (a skill level with no tick box), including focus programming, benchmarking and VM capacity planning.

Of course, re-engineering eventually made the questionnaire, but not until 1994 when I was on my way out of the organisation. By then I was focusing on knowledge management, and you can bet that no skill by that name graced the list. As you probably guessed, projects in this firm were staffed based on personal networks more than the skills database.

Later I realised I'd encountered a common problem with skill systems: The categories are difficult to establish and they change frequently. Since the skill categories are the fundamental vehicle for matching labour supply and demand, that is a big issue. There is a cure for it, but it's not tasty medicine. Skill category structures need to be complex and flexible. Both HR and line managers constantly have to monitor the categories used for both applicants and jobs. Further, those who seek jobs have to change their skill profiles regularly - more than once a year, in most cases.

With those sobering verities in mind, let's review the current offerings of vendors of skill systems and one ambitious internal proprietary system from Microsoft Corp. At the lowest level of functionality, general HR packages from PeopleSoft have a limited ability to store both employees' skills and skills required for particular positions. Because these broad packages typically are used for payroll as well, companies can link compensation to competencies. But the skill categories are simple and generic, and few companies take advantage of them.

At the next level of functionality are resume-oriented packages, which often are interfaced with broader systems like PeopleSoft. These systems scan in resumes, extract key concepts from resume text and compare them with traits desired in particular jobs. They can be used for either internal or external job candidates, though most companies focused more on the external labour market. They also can analyse resumes submitted from the Internet or an intranet.

Resume-oriented systems are geared primarily to reducing the cost and time of the staffing process, rather than to understanding and improving the competencies of employees. The skill categories, while better than general HR systems, are still limited and generic. To understand applicants' abilities, the concept analysis and search capabilities of these systems are only a starting point. Some of the systems now allow line managers to search and browse through the applicant databases directly rather than go through the HR function.

Some smaller vendors are attacking the competence issue directly and producing systems that are oriented to specific skill domains, notably IT. For example, Success Factor Systems has a tool that allows companies to specify factors that contribute to IS's success, such as knowledge, skills, potential and behaviours, and then match jobs and people with respect to those factors.

Within the IS function, a program called SkillView from SkillView Technologies lets employees, supervisors, peers or clients evaluate around 300 IT-related skills. The skills are granular enough so that an employee's skill profile can be used to create an individualised training program.

The problem with packages, however, is that they usually don't allow for a company-specific skill set. If a company is truly serious about skills and staffing, it should either develop its own skill categories and put them into a database or buy a very flexible package.

Microsoft is a company that has always been serious about those human resources issues. It goes to extraordinary lengths to hire people with strong intellects and capabilities. Microsoft's internal IT group faces the same pressures to produce software and to adapt to rapid industry change as its product developers. If Microsoft's product set includes object linking and embedding technology, for example, then the internal IS group must master that skill rapidly and incorporate it into internal systems.

Therefore, the IS group has focused intently on identifying and maintaining knowledge competencies. Susan Conway, a program manager in Microsoft's IS learning and communication resources group, is leading a project to take on that issue by creating an online competency profile for jobs and employees within Microsoft IS. A successful 1995 pilot project in an application development group led to full implementation of the system throughout Microsoft IS. The project, called "Skills Planning and Development" (or SPUD), focuses not just on entry-level competencies, but also on those needed to stay on the leading edge of the workplace.

The project objective is to match employees with appropriate jobs and work-team priorities. Once Microsoft's IS employees have a better understanding of what competencies are required of them, it follows that they will be better consumers of educational offerings within and outside Microsoft. Eventually the project may be extended throughout Microsoft and into other companies.

The five major components to the project are the following: - developing a structure of competency types and levels; - defining the skills required for particular jobs; - rating the performance of individual employees in particular jobs according to skills; - implementing the skills in an online system; - linking the competency model to educational opportunities.

Entry-level competencies are called "foundation knowledge" in the SPUD project model. Above the foundation level are local or unique competencies, which are advanced skills that apply to a particular job type. A network analyst, for example, might need a fault diagnosis competency for LANs.

The next level of competencies are global and all employees within a particular function or organisation would have them. Every worker in the controller organisation, for example, would be competent in financial analysis; every IS employee would be competent in technology architectures. The highest level in the competency structure is universal competencies for all company employees, such as knowledge of the company's field, its products and the industry drivers. Within each of those four competency types are two separate categories: explicit, which involves expertise in specific tools or methods, like Excel or SQL 6.0, and changes frequently with the marketplace; and implicit, such as requirements definition, which involves abstract thinking and reasoning skills. Together, the four levels include 200 explicit and 137 implicit competencies. In addition to being divided by category, each type of competency is also split into four defined skill levels: basic, working, leadership and expert. Each skill level for each competency is described clearly in the database in several bullet points, which makes them easy to measure.

A manager can rate each job in Microsoft IT according to the 20 to 60 competencies required to do it successfully. Managers also may evaluate workers in terms of the competencies they exhibit in their jobs. The initial rating is built in an iterative fashion by the employee and his or her supervisor; eventually the entire work team will participate.

The employee rating process is building an online competency inventory that will be able to be accessed across Microsoft. A manager building a team for a new project could ask the online system for the top five candidates with leadership skill levels in 80 per cent of the competencies for the job who are based in Redmond, Washington, where Microsoft's headquarters are located. The system now resides on a relational database, but is in the process of moving into a SQL Server with a Web front end for easy intranet access around the world.

The system's competency types and levels are also linked to specific educational opportunities inside and outside Microsoft. Ultimately, the learning and communications resources group hopes to recommend not just specific courses, but even specific material or segments within a course aimed at the targeted competency level.

No generic package could be as tailored to Microsoft's skill environment. The SPUD system is complex and places substantial demands on its HR and line IS managers, but remember, this is a necessary condition for skill systems success. You get out of these efforts what you put into them, and nobody (except vendors) said it would be easy. We've worked on financial systems for 40 years, so we have plenty of catching up to do on the people side.

Tom Davenport is a professor and director of the Information Management Program at the University of Texas at Austin

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