Competency modeling: A theoretical and empirical examination of the strategy dissemination process

• Published date: 01 May 2020
• Date: 01 May 2020
• Author: Michael C. Campion,Donald J. Schepker,Juan I. Sanchez,Michael A. Campion
• DOI: http://doi.org/10.1002/hrm.21994

ORIGINAL ARTICLE

Competency modeling: A theoretical and empirical

examination of the strategy dissemination process

Michael C. Campion

1

| Donald J. Schepker

2

| Michael A. Campion

3

| Juan I. Sanchez

4

1

Department of Management, University of

Texas at Rio Grande Valley, Weslaco, Texas

2

Department of Management, Moore School

of Business, University of South Carolina,

Columbia, South Carolina

3

Krannert School of Business, Purdue

University, West Lafayette, Indiana

4

College of Business, Florida International

University, Miami, Florida

Correspondence

Michael C. Campion, Department of

Management, University of Texas at Rio

Grande Valley, Weslaco, TX 78596.

Email: michael.campion@utrgv.edu

Abstract

One of the most important functions of a competency model is to translate organiza-

tional strategy into employee behavior. Yet, virtually no theoretical attempts to eluci-

date this process exist, and no empirical evidence has been offered demonstrating

that it occurs. Drawing on the strategic management literature, we develop a concep-

tual framework delineating this process. We theorize that structurally distributed

knowledge, attention, and behavior results in coalitions of individuals at different

hierarchical levels (top managers vs employees) developing different dominant logics.

These differences across levels in habituated modes of processing information and

conceptualizing roles impact the initial importance assigned to competencies that are

added to the model as an organization's strategy evolves. However, over time, com-

petency models enable top managers to drive their dominant logic downward

through the organization. As the importance of certain competencies is reinforced

through performance management, schemata of high-performers shift, becoming

better aligned with those of top managers'. Using data from focus groups, surveys,

and archives collected at two points in time (6 years apart) capturing change in the

strategy of an organization of professional jobs in the U.S. government (n= 218),

results were supportive. We then use our model to generate an agenda of research

questions and topics to enhance competency modeling scholarship.

KEYWORDS

communication, control systems, core competencies, strategic human resource, strategic

planning systems

1|INTRODUCTION

Organizational environments are becoming progressively more

dynamic and volatile in many industries. As a result, organizational

survival increasingly depends on the ability to synchronize employee

activities with external demands by promoting internally consistent

behavior that aligns with the organization's adaptive strategy

(Ancona & Chong, 1996; McCarthy, Lawrence, Wixted, & Gordon,

2010; Perez-Nordtvedt, Payne, Short, & Kedia, 2008). Core to this

process is creating a direct line of sight between employee knowledge

and behavior and organizational strategy. Therefore, it is not surpris-

ing that practices such as competency modeling that are purported to

promote strategically aligned behavior have become viewed as invalu-

able (Campion et al., 2011; Green, 1999; Lievens, Sanchez, & De

Corte, 2004; Lucia & Lepsinger, 1999; Sanchez & Levine, 2009;

Schippmann et al., 2000). However, little is known about the process

through which competency models actually align and coordinate

employee behavior with organizational strategy.

We define competency models as collections of behaviors that are

needed for effective performance on the job (see Bartram, 2005;

Lievens, Sanchez, Bartram, & Brown, 2010 for similar definitions).

These individual competencies are rooted in clusters of knowledge,

skills, abilities, and other characteristics (KSAOs) (Campion et al.,

2011; Sliter, 2015; Spence & Spence, 1993; Tett, Guterman, Bleier, &

DOI: 10.1002/hrm.21994

Hum Resour Manage. 2020;59:291–306. wileyonlinelibrary.com/journal/hrm © 2019 Wiley Periodicals, Inc. 291

Murphy, 2000). The promise of competency modeling is that it can be

used as a mechanism to drive an organization's strategy down to the

level of employee behavior (Campion et al., 2011; de Sá Sousa, & do

Prado Leite, 2017; Green, 1999; Levenson, 2018; Profiroiu & Hur-

dubei, 2018; Rodriguez, Patel, Bright, Gregory, & Gowing, 2002;

Sanchez & Levine, 2009; Schippmann et al., 2000; Sliter, 2015;

Spence & Spence, 1993). Although there has been some limited

research on how different strategies may require different competen-

cies (e.g., Diaz Fernandez, Lopez Cabrales, & Valle, 2014; Diaz

Fernandez, Lopez Cabrales, & Valle Cabrera, 2013) and how compe-

tency models can be used to assess strategic thinking (Goldman &

Scott, 2016) and entrepreneurship (Menke, 2018), there is an impor-

tant but unaddressed need to understand how competency models

help implement strategies. The reality is that psychological explana-

tions thus far have somewhat simplistically treated the concept of

strategy as a set of abstract organizational goals and objectives. As a

consequence, the path competency models pave between organiza-

tional strategy and employee knowledge and behavior remains poorly

understood. This lack of theoretical development inhibits our ability

to identify the problems surrounding the use of competency models

in practice that may in turn undermine their value to organizations.

For example, these problems may come in the form of organizational

and psychological factors that impede the strategy dissemination pro-

cess. Moreover, by not challenging this promise of competency

modeling, our ability to understand how it opens a conduit between

organizational strategy and employee knowledge and behavior

remains constrained.

Accordingly, the purpose of this article is to draw insight from the

strategic management literature, a domain devoted to understanding

the nature of organizational strategy, to extend existing psychological

research on competency models and, as a consequence, clarify how

competency models operate to translate organizational strategy into

employee behavior. By integrating research from the strategic man-

agement and psychology domains, we attempt to illuminate the link-

ages between organizational strategy, competency models, and

employee knowledge and behavior. Thus, this article makes two over-

arching contributions to the competency modeling literature.

First, we intend to advance competency modeling scholarship by

drawing from strategic management theory to develop a conceptual

framework delineating how competency models translate the organi-

zational strategy into employee knowledge and behavior. In so doing,

we identify individual knowledge, attention, and behavior as insepara-

ble components supplying the principal theoretical mechanism

through which this process is likely to occur (Brymer, Hitt, & Schijven,

2011; Ocasio, 1997; Orlikowski, 2002). Second, we use our frame-

work and competency modeling data collected from a large organiza-

tion at two separate points in time to develop and test predictions.

2|THEORETICAL OVERVIEW

Our theoretical perspective on competency models is derived from

three insights from the strategic management literature. First, an

impediment to strategy dissemination is likely to exist such that orga-

nizational members across hierarchical levels will initially, if not invari-

ably, disagree with respect to their understanding of which

competencies best capture “core,”or strategically aligned behavior.

This is because the types of work- and task-related factors individuals

at different levels of the organization attend to differ (and often quite

dramatically) (Ocasio, 1997) and, as a consequence, the nature of

knowledge across hierarchical levels also differs (Ireland, Hitt, Bettis, &

de Porras, 1987; Nonaka & Takeuchi, 1995; von Krogh & Roos, 1996).

This has important implications for the practice of competency model-

ing. For example, it may inhibit an organization's ability to obtain buy-

in from lower level employees. This lack of consensus, in turn, may

undermine the strategic value of the competency model upon imple-

mentation, since individuals at different levels may emphasize differ-

ent sets of behaviors that, in their opinion, best capture the

organization's strategy.

Second, if knowledge is inextricably linked to behavior as some

strategic management scholars suggest (e.g., Brymer et al., 2011;

Cook & Brown, 1999; Orlikowski, 2002), a “virtuous loop”may exist

in the relationship between employee knowledge of competency

importance and job performance. Employees begin with an initial

understanding of how important specific competencies might be to

their jobs. They then test this knowledge of competency importance

by examining whether enactment of these behaviors leads to positive

consequences through their job performance. Following this, they use

this outcome as feedback in re-evaluating their understanding of each

competency within the model. Thus, changes in the importance

employees assign to the competency model over time are reinforced,

at least in part, by whether their enactment of competency-related

behaviors results in positive outcomes and recognition.

Third, competency models are unlikely to translate the organiza-

tion's intended strategy (see Mintzberg, 1978) into employee behavior

as is often the implicit argument in competency modeling theory

(e.g., Campion et al., 2011;Sanchez & Levine, 2009; Schippmann et al.,

2000). If this were the case, high-performing employees would rate

most, if not all, competencies as highly important because all

competency-relatedbehavior would be equally reinforced by top man-

agement. Instead, competencymodels may communicate the organiza-

tion's realized strategy. This is because they cascade the “dominant

managerial logic,”that is, the cognitive schema and behavioral scripts

top managers' have developed over time (Prahalad & Bettis, 1986),

downward throughthe organization. As such, high performersare more

likely to exhibit rating patterns of competency importance similar to

top management. This creates a convergence in the degree to which

high-performing employees' and top managers' cognitive schemata

align over time. In short, overtime high-performing employees will dis-

criminate among competencies they choose to enact because they

begin to interprettheir roles to include only those behaviors that better

represent the strategicperspective of top management.

Figure 1 delineates our conceptual model. It posits a multistep

process whereby an organization's strategy is translated into

employee behavior, and is divided horizontally into two parts: under-

lying theoretical mechanisms and observable processes. It is also

292 CAMPION ET AL.