Competence, Perceptions, and Results

Figure 1: Comparison of Actual and Perceived Competence in Three Small Firms

Figure 1: Comparison of Actual and Perceived Competence in Three Small Firms

Most of us would agree that competence plays a critical role in performance and job success. If an employee fails to possess the knowledge, skills, and abilities necessary to perform their job, high levels of performance remains out of reach. Over the last several decades, many organizations have adopted more progressive and accurate means of identifying, measuring, and developing competencies, while implementing automated methods of managing human resources. This combination of readily available as well as actionable information has significantly altered how we hire, review, develop, reward, and promote employees. Moreover, by increasing our insight, it has transformed the way we think about performance and growth.

Recently, I reviewed a small collection of organizations that center their human resource management on competencies. Approximately ten years ago, each one transitioned from a more traditional, task-based approach to using competencies as the basis of managing performance and development. As part of working with them, a common concern arose related to the gap between employee perceptions of themselves and the perceptions of those around them, especially supervisors and peers. Specifically, each organization worried that self-evaluators tend to over-rate themselves and failed to seek necessary growth opportunities within their system. Put simply, even in an environment with insightful tools and numerous opportunities for growth, the low performers persisted in their assumption that they possessed the necessary competency levels.

The prevalence of this type of human behavior has resulted in extensive research and even a name for the phenomenon: the Dunning–Kruger effect (Kruger, Justin; Dunning, David (1999). “Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments”. Journal of Personality and Social Psychology 77 (6): 1121–34.). Utilizing data from students, the study demonstrated that lower performing students grossly overestimated their own performance, while excellent students somewhat underestimated theirs. Dunning and Krueger concluded that the effect occurs when a cognitive bias manifests in unskilled individuals suffering from illusory superiority by rating their ability much higher than reality. The bias stems from an inability to recognize our own ineptitude. Dunning and Kruger surmised that incompetent people fail to recognize their own incompetence due to: tending to overestimate their own level of skill; failing to recognize genuine skill in others; and failing to recognize the extremity of their inadequacy.

Similarly, the effect influences the skilled or competent by blinding them to the relative ability of others. Competent people tend to underestimate their relative competence by assuming that things easy for them must be easy for others.

Although research since 1999 offers mixed results, strong support exists for the supposition that most of us lack the capacity to assess our own competence and the probability of a poor estimate increases as our competence diminishes. In keeping with this concern, our clients asked us to assess the gap between self and group perception in their organizations. The combined results appear in Figure 1. The vertical axis captures the actual value of the competence based on peer and supervisor assessment, while the horizontal axis represents the difference between actual and perceived. As competence increases (moving from bottom to top of the graph), the difference decreases indicating that the more competent the employee, the more realistic the perception. Conversely, almost all those scoring in the lower third of competence over-estimate their abilities.  Although based on a small sample, the results mirror the findings of Dunning and Krueger.

What simple things can we conclude from these results that might help us on a day-to-day basis?
• Those that need development the most may not realize they need it.
• Managing performance is as much about educating as enabling.
• All capability levels of employees benefit from learning self-analysis.

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