I just completed a detailed interview with Gary Short, Kimberly Clark’s director of Talent Management.  The company has had a legacy performance management process for 20 years which had limited adoption but a very long term history.  The old process grouped employees into only three levels:  meets expectations, exceeds, or does not meet expectations.  As one can imagine, most employees were rated in the “meets” category and since there were very few guidelines for establishing these categories (objectives and competency management were not required), employees also felt the ratings were somewhat arbitrary.

The use of Clear and Distinct Competencies

 In 2003 they decided to revamp the process and build an entirely new process which allowed greater granularity, clear guidelines for objectives, and a new competency model for every employee in the company.  After studying many competency models the company decided to create six major competencies:  Decisiveness, Innovative, Inspiration, Visionary, Collaborative, Building Talent. 

Each of these competencies is applied toward employees with different “behaviors” depending on whether they are an executive, first line manager, or individual contributor.  For example, “building talent” to an individual contributor means increasing your own skills in your job.  The company developed a 9-box rating scale which rates competency assessment on the vertical axis and goal attainmnent on the horizontal axis  (this is common, typically called "performance" on the horizontal and "potential" on the vertical).  This way Kimberly Clark can clearly see how people compare between behavioral development and business goal attainment, yet the same competencies are used throughout the organization.

A Common Strategy for Performance Management

This overall approach is what we call the "coaching and development" centric approach to performance management.  Other companies such as Aetna use a similar approach, but in Aetna's case there are hundreds of competencies.  The goal here is to differentiate between "performance" (goal attainment) and "potential" (competency assessment).  Competency assessment tells the organization (and the individual) "how" they are accomplishing their goals.  It enables the manager and the individual to understand how they can improve their performance, and it gives them specific areas to seek out coaching and development.

As we describe in High Impact Performance Managememt, and in much of our most recent research on the Top 22 High-Impact Talent Management Processes, coaching and development are far more important drivers of organizational performance than simply assessing people against their goals.  Consider what a winning football coach does:  he doesn't have to remind the quarterback that he threw an interception -- what he does is identify why such an error occurred and work with the quarterback and the offensive line to make sure that such behaviors and results can be prevented in the future.

Competencies form the Basis for Coaching

The reason that competencies are so important is that they give the individual and the manager a language and a set of tools for coaching and development.  Why did a product manager at Kimberly Clark create a product which may not have succeeded?  Perhaps he or she was not "decisive" enough, in the right way.  Once again we see that competencies make up the bone-structure of many of our high-value talent management processes.