Skills Assessment | How to Effectively Measure Skills and Competencies

Understanding and optimizing the skills and competencies of employees is not just an advantage; it’s essential for organizational success. Many organizations already recognize the importance of assessing and managing their employees’ skills, understanding that identifying gaps and leveraging strengths are crucial for strategic utilization. Despite this awareness, the choice of methodology for skills assessment frequently leads managers to lean towards either subjective or objective extremes. This often results in missing out on a third option that could provide the comprehensive data necessary for making informed decisions – the structured subjective approach.

The challenge lies not only in identifying what skills exist within the workforce, but in accurately assessing these skills to pinpoint gaps, leverage strengths, and foster growth. Effectively addressing this challenge requires blending subjective insights with objective data, ensuring a comprehensive and accurate depiction of employee capabilities.

What is a skills assessment?

A skills assessment is a systematic process used to identify and measure an individual’s abilities, competencies, and knowledge in a specific area or field. It involves evaluating an employee’s skills to identify strengths, reveal gaps, and understand their proficiency levels. This assessment can be conducted using various methods, ranging from subjective evaluations, like self-assessments and supervisor feedback, to objective measures, such as standardized tests. The goal is to gain a comprehensive understanding of the workforce’s capabilities to inform talent management strategies effectively.

What are the benefits to measuring skills?

The benefits of skill assessment are multifaceted, contributing significantly to organizational growth and individual development and helps to:

  • Enhance the accuracy of understanding around  employee capabilities, enabling targeted development programs.
  • Reduce biases in evaluations, fostering a more inclusive and equitable workplace.
  • Improve the strategic utilization of workforce strengths, ensuring that employees are placed in roles where they can perform optimally.
  • Create a culture of collaboration where employees and managers can talk to the same data points and create employee development plans based on genuine skill gaps or areas of interests. 

Additionally, identifying skill gaps allows for timely intervention, ensuring that the organization can adapt and respond to changing market demands efficiently.

Overcoming the Challenge of Skills Assessment

Organizations often grapple with the significant challenges presented by the extremes of skills assessment: the subjective and the objective. While each method holds value, they also bring inherent pitfalls that can undermine the effectiveness of talent management strategies if relied upon exclusively.

Subjective assessments offer flexibility but are prone to inaccuracies due to biases and a lack of structure, compromising the reliability of the evaluation. On the other hand, purely objective methods, like standardized testing, often overlook the nuances of skills application and personal development interests. This can lead to a misleading organizational strategy, as these assessments fail to capture the full breadth of an employee’s capabilities, especially those more nuanced or context-dependent qualities that are critical for holistic performance.

The Subjective Approach

Subjective assessments are inherently flexible, allowing for the consideration of personal qualities and behaviors that are difficult to quantify. This flexibility, akin to the unstructured input of skills on business-centric social platforms, offers an unrestricted and adaptable approach similar to resume preparation.

However, this lack of structure often results in accuracy and reliability issues. Subjective assessments are prone to biases—conscious or unconscious—with personal relationships, preconceptions, and the halo effect potentially skewing results. This can lead to favoritism without objective justification, particularly in environments where individuals are motivated to present their skills in a certain light, such as seeking a pay rise or promotion.

The unrestricted nature of subjective assessments, while easy to manage and maintain from an administrative perspective, comes at a significant cost to data accuracy. Without clear guidelines or validation, there’s no solid frame of reference for measuring skills, leading to a reliance on individuals’ self-reported proficiency. This approach can hinder efforts to compare and group employees based on their skills effectively. The free-form answers and lack of coordination in skill categorization create a non-level playing field, making it nearly impossible to structure these skills in a logical way, detect duplication, and confidently report on the competencies that matter for organizational success.

For instance, in a purely subjective environment, an employee’s ability to articulate their achievements or network within the organization could unduly influence their assessment. This might overshadow the quiet competence of others in critical but less visible areas, further highlighting the challenge of using subjective assessments for systematic development and strategic planning within organizations.

Despite its accommodating nature, the subjective approach’s limitations make it unsuitable for effective skills management in an organizational context.

The Objective Approach

At the other end of the spectrum, objective methods, such as standardized testing, offer a way to measure skills and knowledge without personal biases, mirroring the academic approach used in higher education institutions. This method ensures a level playing field by assessing each skill uniformly, allowing for consistent comparison and grouping of individuals within the organization. The strict guidelines and controls inherent in objective assessments can effectively remove bias in performance measurement.

However, these assessments often fail to capture the full breadth of an employee’s skills, particularly those more nuanced or context-dependent qualities like leadership, creativity, and teamwork. The reliance on objective data can lead to a narrow view of an individual’s capabilities, potentially overlooking valuable strengths.

Additionally, objective assessments can sometimes push employees to focus on test-taking strategies rather than genuine skill development. They may also engender a competitive rather than collaborative environment, potentially stifling innovation and teamwork.

A purely objective approach comes with its challenges. It requires the creation or acquisition of a vast array of exams, potentially numbering in the hundreds or thousands, to cover the full range of skills within an organization. This not only proves costly to administer and maintain but also places a heavy burden on ensuring the content remains up-to-date and relevant. The emphasis on exams to judge knowledge or ability can lead to scrutiny and disengagement among employees, particularly if they perceive the assessments as flawed or not reflective of their true capabilities. Such disengagement is counterproductive to the goal of fostering a positive organizational culture geared towards continuous improvement and skill development.

While addressing some deficiencies of the subjective approach, the purely objective method poses its own set of problems when applied within an organizational context. The substantial effort and cost involved, combined with the potential for creating a narrow and possibly misleading picture of workforce skills, can compromise the effectiveness of skills management initiatives. Ultimately, while seeking to establish fairness and remove bias, the objective approach must be carefully balanced with considerations of its impact on employee engagement and the overall credibility of the skills assessment process.

Bridging the Gap: Towards a Balanced Assessment Approach

The downsides of relying exclusively on either approach can be far-reaching. Teams might be formed with members chosen for their quantifiable skills alone, missing out on the dynamic synergy of diverse talents. Promotions could bypass individuals with exceptional potential that hasn’t been captured through objective measures, or conversely, elevate those whose apparent competencies might not translate into real-world effectiveness.

Ultimately, an imbalanced approach to skills assessment can lead to misaligned talent management, where the organization fails to fully leverage its human capital, potentially stalling growth and innovation.

By acknowledging these challenges, it becomes clear that neither subjective or objective assessments can stand alone as the sole method for evaluating employee skills and competencies.

The next sections will explore how combining the strengths of both approaches within a structured subjective framework can mitigate these pitfalls, offering a more balanced, accurate, and comprehensive method for assessing and developing talent within an organization.

The Structured Subjective Approach

The Structured Subjective Approach leverages a blend of traditional assessment methods to balance the pros and cons of each, enhancing the accuracy of skills assessments and significantly reducing biases. This method not only fosters a more inclusive and equitable workplace environment but also aligns with emerging trends in talent management.

As organizations increasingly recognize the value of deep, actionable insights into their workforce’s capabilities, the integration of skills intelligence into key organizational functions becomes essential for sustaining growth and competitiveness.

By adopting a Structured Subjective methodology, supported by tools like Skills Base, organizations are better equipped to navigate the complexities of modern workforce management.

The following seven components support this approach and enable it to operate effectively; we’ll outline their benefits and then explore each in more depth below.

1. Organization-Authored Assessment

Identify the Data Schema and Skills to Manage

Custom assessments aligned with organizational objectives.

Above all else, it’s important that your organization defines, authors, and controls your own skills assessments. This allows them to be purposefully designed to achieve your organization’s specific objectives and ensures the best possible chance of success.

It also helps establish consistency and fairness across your organization when skills assessments are centrally managed; facilitating the ability to effectively compare individuals and teams.

The organization-authored assessment component sets the foundation of this approach and influences the remaining six controls.

2. Curated, Structured List of Skills

A relevant and evolving list of skills tailored to organizational needs.

A small team of relevant people within your organization should curate a structured list of skills which specifically align with your needs. This ensures only necessary data is collected and the right level of abstraction is achieved from the outset.

This process should be ongoing to make sure the list evolves over time and always remains relevant to your organization.

Looking for a list of skills to get started? See what the Skills Base Library has to offer.

3. Skills Assigned by Job Function

Role-specific skill assessments for focused development.

Considering every area of specialization can mean the list of skills that’s created can grow exponentially. To overcome this, skills should be assigned to people by their job function, specifically relating to their day-to-day work responsibilities. This will also help reduce the size of assessments you need to give and make them easier for team members to complete in a shorter time frame.

Assigning skills by job function allows for consistency in tracked skills between similar roles in the organization. For example, a group of Business Analysts can be better compared with each other because they have assessed the same set of skills.

4. Single, Standardized Numeric Rating Scheme

Consistent, quantifiable measures of skill proficiency.

One of the benefits of using the Structured-Subjective approach to skills measurement is that the assessment results can be quantitatively analyzed. Using a single, standard numeric rating means you’ll end up with a consistent, cohesive data set. That data set can then be sliced and diced in any direction, across any group, role, location, or skill set.

This data-driven approach removes the complexity that comes with a traditional subjective approach.

5. Defined Rating Criteria

Clear benchmarks for each rating, enhancing assessment accuracy.

When it comes to skill assessment, a numeric rating scale on its own is not enough. Assessors need to have minimal doubt about the rating they should select, so it’s important to define and set out clear and comprehensive criteria. This gives meaning to each rating and greatly improves the accuracy and consistency of responses, reducing bias.

Rating criteria are generally defined as a set of bullet points, since some criteria may better fit a particular person and skill, and others may better fit a different person or skill. The key is to be comprehensive so you can cover as many scenarios as possible.

6. Self-Assessment

Employee-driven insights into personal skills, guided by structured criteria.

It’s certainly beneficial to have a deep and intimate knowledge of each individual’s skill levels in order to effectively assess an organization as a whole. In reality though, there’s no one more knowledgeable of a person’s skills than themselves. Guided by the previous controls, a skills self-assessment provides first-hand information about your employees’ skills and can be an accurate and valuable input into skill insights. It’s also a way of supercharging the time it takes to get worthwhile data.

Skills Management is no longer a mystical, secretive process run by management – it’s now tangible and visible to everyone in the team. People appreciate that their input has been sought; this greatly enhances the cultural change activity inherent with any new process in an organization.

7. Supervisor Assessment

While a tightly controlled self-assessment yields rapid and accurate data, no amount of controls can eliminate all inaccuracies. Introducing an additional supervisor assessment serves to verify and validate self-assessment responses, further increasing accuracy.

It’s recommended you conduct the supervisor assessment after the self-assessment, so your supervisors can factor the self-assessment ratings into their decision criteria. Any disparity between the self and supervisor assessments will highlight a potentially interesting point of discussion. Why did one assess a lower or higher rating than the other? Is there a perception misalignment, or are there real skill gaps to discuss? The disparity can often draw out needed discussion items.

Measuring Skills: The Three Phases of Skills Assessment

Adopting a skills-based talent management strategy is essential for sustained business growth; however, the process of measuring your employees’ skills in the first place isn’t always straightforward. We recently shared how to effectively assign skills to your employees, but there are several phases to this that we want to go over further.

Initial Measurement (The Storming Phase)

Establishing a baseline and identifying skill strengths, weaknesses, and gaps.

The first phase of measuring your employees’ skills is critical for establishing a baseline for your organization. It’s often the most revealing stage of the process, with reams of new data emerging. It’s also at this point when many organizations find areas of skill strength or weakness, skill gaps, pockets of desire, or lack thereof. This information is, in many cases, compelling enough to motivate organizational change.

Most organizations are new to skills-based management using a measurement approach, though, and it’s easy to miss things or get priorities wrong – initial measurement exercises aren’t typically optimized.

When your initial assessments are complete, you can begin analyzing skill gaps, strengths, and desires. Having the ability to report on this through a skills matrix can often be the most eye-opening part of the journey.

Subsequent Measurement (The Norming Phase)

Refinement and action based on initial data, expanding the skill list, and aligning organizational expectations.

The results of the initial phase tend to prove the value of skills management activity but also show the myriad of larger-scale opportunities available with a more sophisticated approach.

There’s typically a lot of information to go through at this point in the measurement process. You may have also identified obvious opportunities and begun to take basic but impactful actions at an individual level. There are further steps you can take, though, to make the most of the opportunities you’ve discovered.

During this subsequent measurement phase, look to refine, expand or consolidate your list of skills, better structure people and hierarchies, introduce additional measures, and better align expectations within the organization.

Use the experience and learnings gained in the initial measurement phase to discover deep insights into your workforce. This will help you embed suitable actions into everyday business processes and make meaningful business decisions beyond the individual level. Transform the way the organization works and create positive impacts at a workforce scale, like a collective uplift in skills, better allocation of resources, and optimized training programs.

Ongoing Measurement (The Performing Phase)

Embedding skill measurement into daily activities for continuous improvement and leveraging data for high-level performance.

Historically, the act of assessing skills or competencies was linked directly to performance reviews or half-yearly checkups. However, as your teams and organization become more confident in the process, you can begin to unlock more opportunities.

Eventually, it will be easy to embed skill measurement exercises into the flow of work rather than seeing them as individual activities. Changes and improvements can be collected, reviewed, and implemented in an ongoing improvement cycle.

This phase of the measurement process is where you can begin to rely on skill measurement data to function at a high level of performance on a daily basis. However, for this process to be sustainable and scalable, it’s important to use more sophisticated tools than an Excel spreadsheet. (As nicely formatted as yours may be).

Implementing a Structured Subjective approach to skills assessment transforms the way organizations understand and develop their workforce. By integrating improved accuracy, bias reduction, and enhanced skills management, this method provides a solid foundation for identifying the true competencies within an organization. Self-assessment and supervisor assessment play pivotal roles in this strategy, offering a dual perspective that captures a comprehensive view of employee competencies. This approach not only acknowledges the individual’s perception of their skills but also incorporates managerial insight to validate and adjust these perceptions, ensuring a balanced and objective evaluation.

Effective skills assessment is a catalyst for organizational growth, providing a roadmap for targeted training, career progression, and ultimately, strategic talent management. By accurately identifying skill gaps, organizations can tailor their training programs to meet the precise needs of their workforce, ensuring that development efforts are both efficient and impactful.

Empowering Growth: The Future of Skills Management

The journey towards effective skills and competency management within an organization is both complex and critical for sustained success. The Structured Subjective methodology not only overcomes the limitations of traditional assessment methods, blending the precision of objective data with the depth of subjective insights. This balanced approach not only enhances the accuracy of skills assessments but also significantly reduces biases, fostering a more inclusive and equitable workplace environment.

Embracing a Structured Subjective method, supported by tools like Skills Base, offers a way forward that promises not just to understand and measure employee skills but to develop them dynamically. We encourage all organizations to consider this approach, not just as a method for assessment, but as a cornerstone of their talent management strategy, paving the way for a future defined by growth, innovation, and success.

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A Skills Base Whitepaper

The Skills Base Methodology
A Framework for Skills-Based Organizations and Teams