Competency Based Executive Performance Assessment in Manufacturing Units: An Empirical Analysis

Abstract

Competent people are the key to future success and offer organisations their only sustainable competitive advantage. Therefore, to obtain and develop an effective and competent workforce for superior performance has become a basic necessity for organisations worldwide in order to sustain and retain an edge in the competitive milieu. In recent years executives have become more concerned about personal effectiveness, since career progress is rightfully tied to ability. How well managers are able to accomplish the objectives, for which they are accountable, the degree to which they do so in a cost-effective manner, how their practices affect the willingness and ability of those they manage are related to their effectiveness. It is the responsibility of the lower and middle level executives to identify the core competencies of the enterprise and to ensure that the competencies required by the workforce are adequate and appropriate.
There has been insufficient research reported in the literature on competency mapping requirements of lower and middle level executives. Therefore, this study explores the competencies critical to the success of these executives. The core focus of this study was to carry out an empirical investigation on competency-based executive performance assessment processes in manufacturing units and the relationship between identified competencies towards organisational effectiveness. The basic objectives for conducting this research was; a) to identify competency levels of executives required for threshold and superior performance in an organisational setup, b) to recognise competencies and capabilities of the executives through competency modelling so as to help identifying and placing the right person in the right job, c) to conduct a competency based executive performance survey through questionnaire/ structured schedule using coded competencies, d) to collect empirical data from the industries to illustrate the impact of competency-based executive performance assessment model on organisational performance standard, and e) to find out the impact of developmental inventions as a moderator on the relationship between executive competencies and individual performance.
For the purpose of this research, three manufacturing units were chosen, i.e., Rourkela Steel Plant (RSP), National Aluminium Company Limited (NALCO) and Tata Steel Ferro Alloys Limited (TS Alloys Ltd.) to draw a clear picture of the impact of competency-based performance management system on the performance of individual executives and the organisation as a whole. A self-designed, pre-tested questionnaire was used for the purpose of the study. A hundred and twenty four items were included in the questionnaire, in view to the extensive combing of existing literature on executive competencies. A total of five hundred and sixteen useful responses was utilised for the study after examining the validity and reliability of the scales to make it statistically adequate. The responses obtained were subjected to analysis using the SPSS 22 and AMOS 22. Exploratory factor analysis was conducted, utilising a principal axis factoring extraction method with a varimax rotated solution, to ensure that the identified variables are suitable for testing the hypothesised model of this study adequately. The identified factor was further used for structural equation modelling; to get an overall fit for the model and to valid the hypotheses formulated. The findings of the study indicate that most of the executive competencies have significant influence on performance. The developmental intervention as a moderator was found to enhance the positive relationship between executive competencies and executive performance. Finally, at the conclusion of this study, practical implications and suggestions were provided for the executives of the manufacturing sector for the improvement of their performance within an organisational set up.