Behavior Competency and Compensatory Base pay
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What Are Behavioral Competencies?
Behavioral competencies are any behaviors, attitudes, or personality traits that help predict how successful a candidate will be at the job they are applying for. These competencies may also include knowledge, skills, and actions that distinguish a candidate from the hiring pool.
Examples of Behavioral Competencies
While most competencies will be sought after by every employer, different industries may value certain competencies over others. Here are some examples:
- Negotiation and networking might be competencies for a sales team.
- Organizational awareness and data literacy might be competencies for office managers.
- Creativity and innovation might be competencies for marketers.
- Project management and facilitation might be competencies for leadership teams.
- Attention to detail and problem-solving might be competencies for software developers.
What Are Behavioral Indicators?
A behavioral indicator is an observable behavior that proves a candidate possesses a particular competency. For example, you would know that a new hire is adaptable when they successfully pivot on a strategy after being hit with a curveball.
Why Are Behavioral Competencies Important?
Behavioral competencies are especially important to check when screening and hiring new employees. That way, you can ensure the new hire can help meet the goals of the company or team they will be a part of.
Additionally, well-established behavioral competencies for specific roles can help the management team determine what skills they need to help their employees develop.
What Are the Different Types of Competencies?
Behavioral competencies are just one kind of competency employers will note when hiring new talent. In total, there are four different types of competencies:
- Behavioral Competencies: These are the soft skills that dictate a candidate’s actions and relationship with other coworkers and clients. Competencies that fall into this category could be communication, ability to focus, and adaptability.
- Core Competencies: These are competencies companies possess that give them a specific advantage over their competition. These can be having specialized techniques or access to software. Employers may prioritize candidates who have experience with these techniques.
- Functional Competencies: These are the job-specific and technical skills that are focused on high performance. Functional competencies will ensure the employee can offer a quality result while working in a certain role. In the case of a graphic designer, employers should look for competencies like an in-depth understanding of Adobe products.
- Managerial Competencies: These are the specific attributes that prove a candidate’s management potential. Competencies like problem-solving, team leadership, and achievement orientation would be at the top of the list.
How Do You Appraise and Assess Behavioral Competencies?
To properly assess behavioral competencies, your company should establish measurable competency models.
Competency models are a collection of capabilities employees must display to effectively complete their tasks. Usually, each competency will include a description that explains what it means to encompass said competency.
Once you have a competency model established, there are three different ways you can use them for behavioral competency assessments:
- Self-Assessment: This is a great method to allow your employees to rate themselves based on the company standard. It gives an employee time to reflect on their performance and think of ways to improve. However, self-assessments should never be used on their own—at least one of the two ways listed below should be used as well to provide a clear picture of an employee’s competency.
- Manager Assessment: These assessments should not be a simple opinion from the manager, which is subject to bias. Rather, manager assessments should be made from the result of months of observation. One way to do this is to have the employee complete a project that directly corresponds to their behavioral competencies. Once that project is completed, the manager can make an objective observation of how the employee displayed the competency in question. This is generally good practice for entry-level recruits.
- Peer Assessment: Employees may be approached to give feedback to their peers. They may simply rate the employee in question by the company standard established in the competency model.
What Is Competency-Based Pay?
Competency-based pay is a pay structure that compensates employees based on their skill set, knowledge, and experience rather than their job title or position. A competency-based pay plan encourages employees to reach the pay rate that they want by taking charge of improving their skills and work.
What Is the Difference Between Competency-Based and Traditional Pay Plans?
The main difference between competency-based and traditional pay plans is employee potential. Because traditional pay plans are based on an employee’s job title and position, their pay can be limited by their ability to move up in seniority at their organization. However, in a competency-based pay plan, employees are able to increase their pay potential by improving on their skills and gaining knowledge related to their field.
Competency-Based Pay Pros and Cons
Like all compensation plans, competency-based pay has both advantages and disadvantages. The following are some examples of competency-based pay pros and cons to help you determine if this pay structure could work for your company
Pros
- Individual self-motivation: Instead of basing pay on seniority and job level, the employee achieves as much as they’re willing to and is rewarded for it.
- Company-wide motivation: Competency-based pay encourages a culture of self-motivation and self-improvement within the company. It can create a company of employees who are actively seeking to improve their skills and finding new ways to contribute to the company. Competency-based pay helps to tie your company’s culture directly to the success of the company.
- Increased transparency: Employees will better understand what they have the potential to earn with a competency-based pay system and what skills they need to acquire to reach the pay they desire.
- Reduced turnover: Employee turnover is costly for a company, and a competency-based pay plan curbs that by helping employees feel that their skills and knowledge are important to the company, which improves retention.
Cons
- Greater pay subjectivity: As your company strays away from a traditional pay system, things become more open to interpretation and that brings subjectivity into the equation. The actions of an employee might not be judged correctly or, worse, they might be overlooked.
- Vulnerability to favoritism: Employees may start to see favoritism when one worker gets rewarded more than another. Employees might think that they are being treated unfairly and that their skills are not being recognized by the company.
- Inaccurate measurement of company needs: It’s tricky to determine which skills are important to a company or which skills translate to productivity. Since that’s the basis for this pay system, it may introduce more inaccuracy when gauging company needs.
Why Use Competency-Based Pay?
As we mentioned above, a competency-based pay plan can be a great motivator for an employee and could help them take their work to the next level. Competency-based pay doesn’t follow the traditional paying system, but that’s it’s main advantage, too. It might just be the change that motivates your employees to improve.