A holistic approach to performance contracts and the development of competence

Sustainable organisational success depends in large part on employee performance and traditionally, Job descriptions describe the functions that should be carried out by employees so that their jobs contribute to the performance of the company.

Job descriptions are considered to be the fundamental tool for many HR functions including job grading, recruitment, and skills development and performance management. They are so fundamental that it is possible to claim that the quality of the job description impacts on the quality of most of the human resources functions. Unfortunately, job descriptions have become a tool to manage efficiency at the expense of effectiveness. Their focus has been on responsibilities and tasks and not on outputs or results.

Standards of efficiency are established by the needs of the internal environment. Efficiency relates to how well policies, procedures and systems are applied and how well processes and tasks are carried out. Efficiency is also an expression of standards of accuracy, attention to detail and delivery within given time frames. It can be described as "doing things right".

Standards of effectiveness, on the other hand, are determined by the needs of the external environment. Effectiveness is associated with the organisation's response to the changing performance demands placed on it by factors such as technological advancement and changes in competitor behaviour, legislation, resource provision and customer’s needs. Effectiveness can be described as "doing the right things".

In the interests of improving organisational performance in an increasingly competitive and changing business environment, it is necessary to review the function of the traditional job description and to question its contribution to goal achievement, improved performance and skills development. We have to ask to what extent job descriptions support the organisation's standards of effectiveness and, considering the time and effort that goes into compiling and maintaining them, to question how cost effective they are.

Improving organisational competitiveness requires a shift in focus from internal to external. Job descriptions, recruitment, performance management and skills development need to support a focus on outputs and the achievement of goals and targets. In other words, the focus must shift from efficiency to effectiveness. Efficiency is obviously still important but it may no longer be at the expense of effectiveness. The shift in focus necessitates a change in the style and content of the job description. What need to be described are no longer the objectives, responsibilities and tasks of a position but the accountabilities, results and performance criteria. What is needed is more of a profile of effective job performance than a description of a position.

A job profile should include:

• A description of where the job fits in the organisational structure
• A purpose statement
• Competence-based job specification
• A position performance charter
• A list of critical safety, quality and work process procedures to be followed
• A detailed list of the ideal competencies required for effective performance in the job
• An indication of the career path that flows from the job
• A signed commitment by the incumbent and the organisation to achieve the key outputs of the job