From competence to capability: how to approach performance management
In the dynamic world of performance management, improving outcomes isn’t just about addressing surface issues. Instead, effective change comes from a thorough understanding of the deeper drivers behind employee performance—especially when it involves pinpointing what can truly unlock potential. Here, we explore key insights on understanding competence versus capability, finding root causes, and using behavioural analysis to achieve lasting improvement.
Competence vs capability: understanding the difference
A common pitfall in performance management is failing to differentiate between competence and capability. Competence refers to the knowledge, skills, and expertise a person possesses. Capability, on the other hand, goes further: it’s about whether the individual can apply their competence effectively within the specific context and conditions of the work environment.
Take the example of a skilled mechanic. While he may be highly competent, his capability could be limited by external factors, such as a lack of necessary tools, spare parts or other resources. This distinction is critical: you can be competent without being fully capable if the surrounding conditions aren’t right. Recognising this difference helps avoid quick fixes that focus on the individual and focus instead on the systems and environments that truly enable performance.
>> Further reading A Story About Learning and Development – On A Journey
Getting to the root cause: why performance diagnostics matter
When managers encounter a performance issue, the initial instinct is often to fix the immediate symptoms. However, sustainable improvement requires looking deeper. Managers often request training or coaching for their team members when the issue stems from other factors, such as unclear expectations, outdated processes, or environmental constraints.
This is where performance diagnostics come in. By stepping back and examining the entire system, we can identify which aspects of the environment or support structures may be holding people back. This holistic approach to performance often reveals root causes that training alone cannot address.
>> Check out a short video for more information Performance diagnostics for managers
In an ideal world, performance diagnostics is within the remit of the manager, but they seldom know how to look at performance as a system and instead focus on the failings of individuals, and then seek to ‘fix’ them. L&D can step into this gap, at least until the managers have been taken through that performance diagnostics process a few times and become self-sufficient at this critical management skill.
Behavioural needs analysis: a structured approach to sustainable change
A key to this is conducting a behavioural needs analysis (BNA) before considering any learning intervention. A BNA focuses on identifying the specific behaviours required for success. Instead of broad and ambiguous goals, L&D should be asking managers to pinpoint observable behaviours. What do they want their people to start, stop, or continue doing? And how would they know this has happened? What evidence criteria would they use to measure if the new behaviours they want have become embedded in their team?
Through a BNA, you can define the desired future state and compare it to the current state. This sets a measurable goal and highlights the behavioural gaps that need closing. Moreover, because it emphasises observable behaviours, a BNA allows both managers and L&D to track progress accurately, which is essential for ensuring any interventions are working.
Performance as a system: identifying levers and inputs
Consider performance as a system, where various inputs lead to desired outputs. If the outputs are not as expected, there is an issue within the system or with the inputs feeding into it. Here, identifying “performance levers”—the factors within your control that can be adjusted to produce different results—is vital.
>> Download the ebook to find out more about the 12 levers of transfer effectiveness (page 8)
Some levers might involve changes in process, technology, resources, or even managerial support. By adjusting these variables within the system, you can often create conditions that make it easier for people to perform well. For example, a slight adjustment to a workflow or better communication about expectations can sometimes be the difference between satisfactory and exceptional performance.
If you have done some diagnosis to identify the levers, you can ‘cost’ each lever. Some will be free or low cost compared with training which is high cost. It makes sense to try some of the low-cost levers first to see what affect they have on the performance system and if they move people towards the defined desired behaviours.
Applying the four success factors for behaviour change
Imagine a Sat Nav guiding you from point A to B. There are four critical elements for a successful journey: knowing where you currently are, knowing where you want to go, the steps needed to get from A to B, and a mechanism to monitor progress and bring people back onto the path if they stray.
These same four elements are critical to a learning journey designed for behaviour change, and hence performance improvement.
- Know the current state: Understand the starting behaviours—what are people doing now?
- Define the desired future state: What specific, observable behaviours do you want to see instead of the current behaviours?
- Design steps to create the new behaviours: Develop clear instructions that will guide the actions required to complete the journey between the current and desired behavioural states.
- Ensure people stay on track: Have in place a system to give visibility of progress and nudge people who are not progressing along the journey as they should.
Behaviour change happens as the result of a sequence of steps taken over time. It requires a journey of many steps which can involve experimentation, practise, reflection, research, learning, collaboration and more.
Given you have designed a set of steps that is fit for purpose to enable people to travel from their current behavioural state to a future desired behavioural destination, you need to deliver those steps to your people and hold them accountable for taking the steps.
>> Further reading Who is accountable for learning transfer?
If you want to scale this beyond a few people, you will need a digital system to track progress and provide early warning of people straying from the path. You will need a workflow tool like the People Alchemy learning workflow platform.
Bringing it all together: a performance-centred approach
By prioritising diagnostics and focusing on both capability and environmental factors, organisations can move beyond quick fixes. When managers approach performance as a system, they gain the tools to not only identify issues but also to address them at the source. This, ultimately, is what builds an adaptable, resilient organisation capable of achieving sustained improvement.
For those wanting to delve further, a good place to start is Paul Matthews’ book ‘Capability at Work: How to Solve the Performance Puzzle’. It’s like a field guide to performance diagnostics that shows you how to find the root causes of poor performance.
This approach to performance management offers a practical framework for any manager or L&D professional looking to move beyond symptomatic treatment of performance issues. It’s about building capability within the context of real-world work environments and creating the conditions for success.
