Generic competency model: Business graduate key competencies for successful working at trading companies : case study from the Czech Republic

Dušek, Radim Article Generic competency model: Business graduate key competencies for successful working at trading companies : case study from the Czech Republic Global Business & Finance Review (GBFR) Provided in Cooperation with: People & Global Business Association (P&GBA), Seoul Suggested Citation: Dušek, Radim (2021) : Generic competency model: Business graduate key competencies for successful working at trading companies : case study from the Czech Republic, Global Business & Finance Review (GBFR), ISSN 2384-1648, People & Global Business Association (P&GBA), Seoul, Vol. 26, Iss. 4, pp. 65-76, https://doi.org/10.17549/gbfr.2021.26.4.65 This Version is available at: https://hdl.handle.net/10419/305830 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc/4.0/ Received: Feb. 11, 2021; Revised: Sep. 24, 2021; Accepted: Sep. 28, 2021 † Radim Dušek E-mail: [email protected] ⓒ Copyright: The Author(s). This is an Open Access journal distributed under the terms of the Creative Commons Attribution Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution , and reproduction in any medium, p rovided the original work is p roperly cited. GLOBAL BUSINESS & FINANCE REVIEW, Volume. 26 Issue. 4 (DECEMBER 2021), 65-76 pISSN 1088-6931 / eISSN 2384-1648∣Https://doi.org/10.17549/gbfr.2021.26.4.65 ⓒ 2021 People and Global Business Association GLOBAL BUSINESS & FINANCE REVIEW www.gbfrjournal.org9) Generic Competency Model: Business Graduate Key Competencies fo r Successful Working at Trading Companies - Case Study from th e Czech Republic Radim Dušek† I ng. Radim Dušek, Ph.D., Institute of Technology and Business (VŠTE), Department of Tourism and Marketing, Nemanická 436/7, 370 10 České Budějovice, Czech Republic A B S T R A C T Purpose: The aim of this paper is to create a generic competency model based on the entry-level positions’ requirements of human resource managers in trading companies operating in the Czech Republic. The proposed model should define an optimal set of key competencies that a competent graduate of business degree should have to be successful in specific selection processes for different graduate jobs in trading companies and thus be successful in performing job duties. Design/methodology/approach: The research question for this study was which key competencies business graduates need the most for entry-level positions in the field of trading and which ideal behaviour is expected for such competencies. Within the questionnaire survey, the degree of significance of the defined key competencies was subsequently determined. The target population consisted of trading companies with 25 - 249 employees b ased and operating in the Czech Republic that are willing to hire fresh graduates for entry-level positions. The quantitative data was finally obtained from 419 companies. On the basis of the data analysis results, a generic competency model of a university graduate of business degree was created. Findings: The generic model developed on the basis of the data from trading companies consists of two p arts. It defines an optimal set of 6 key competencies as well as the expected behaviour that a competent business graduate should have to succeed in specific selection processes for various positions in trading companies that require university education, and subsequently, to be successful in performing jobs in the trade sector. Research limitations/implications: The research limitations are caused mainly by two factors: the company size and products that the trading company is (re)selling. Although specific key competencies can be rated as very important by two different recruiters in the questionnaire, requirements, and expectations of a small company operating in an extremely competitive environment may be significantly higher than in the case of company with large staff and an extensive customer base, or vice versa. Originality/value: The resulting competency model can make the selection process more transparent for both recruiters and job candidates because of established standards concerning desirable key competencies for such p ositions in trading companies. At the same time, this tool can be an acceleration and suitable starting point for more extensive implementation of the modern competency-based approach for economics and business degrees at universities. Keywords: Competency Models, Key Competency, Trading Company, Business Graduates, HRM GLOBAL BUSINESS & FINANCE REVIEW, Volume. 26 Issue. 4 (DECEMBER 2021), 65-76 66 I. Introduction Trading companies currently represent an important link between producers or sellers and buyers. In case trading companies assume ownership, they act as a reseller, i.e. they buy different kinds of goods and sell it to the final consumers (general public, other businesses, or government). Nowadays, to start a successful career in a trading company, it is all the more important for the candidates for graduate jobs to possess and demonstrate the desired level of required key competencies in the selection process, as determined by employers (Rivera, 2020; Midhat, Quereshi, Memon et al., 2021). Modern higher education should undoubtedly aim to achieve the closest match between the key competencies required by employers and the key competencies that students can acquire and develop during their study. Therefore, a special effort has recently been made by universities to better prepare their business graduates for meeting current requirements for entry-level positions in the field of trading, such as junior trading manager and sales representative. These efforts include also specific competency development approaches, e.g. project-based learning (Bender, 2012), business case studies (Anderson, Schiano, 2014), or business simulation games (Tiwari, Nafees, Krishnan, 2014; Kiss, Schmuck, 2020). A suitable unifying manual based on current labour market requirements should be the starting point for the aforementioned efforts for competency-based approach in higher education. Unfortunately, in most cases it is either based on outdated information, improper assumptions or, worse still, it does not exist at all. Also human resource managers and recruiters, especially in small trading companies, should consider competency-based approach tools and manuals based on the results of the current research when hiring suitable workers for entry-level positions. Thus, the aim of this paper is to create a generic competency model based on the entry-level positions’ requirements of human resource managers in trading companies (resellers) operating in the Czech Republic. The proposed model should define an optimal set of key competencies that a competent graduate of business degree should have to be successful in specific selection processes for different graduate jobs in trading companies and thus be successful in performing job duties. II. Literature Review A. Key competencies In terms of human resources management, one of the key personnel activities in small and medium-sized enterprises (SMEs), including those in the trading sector, is definitely the employee selection process, which is currently based mainly on assessing the key competencies of candidates for offered positions (Malik, Froese, Sharma, 2020; Rivera, 2020). Therefore, to succeed in the selection process, candidates for jobs in the field of trading, including university graduates of business or economics degrees, should have the desired level of required practical abilities and skills rather than theoretical knowledge. In 1973, American psychologist David McClelland published an innovative article entitled Testing for competency rather than for intelligence (McClelland, 1973), where he recommended to consider especially the competencies when hiring new employees, that is, their capability, abilities, and skills, not only their intelligence, as it had been so far. His assumption was based on the hypothesis that simply testing individuals’ knowledge does not enable predicting reliably their ability to perform the required tasks resulting from a given job. According to the research conducted by McClelland’s consulting company, the competencies important for successful performance of managerial position included e.g. sufficient entrepreneurial and work maturity skills, interpersonal skills, or intellectual maturity (Raven, 2001). The key competencies in terms of the individuals’ employability in the job market and their personal development were first defined by Mertens (1974) as the abilities that help individuals cope with the reality around them and thus respond better to ever-changing requirements and new challenges of the labour market. In the early 1980s, Richard E. Boyatzis, an expert in Radim Dušek 67 the field of emotional intelligence, made a significant contribution to the popularization and subsequent application of the competency-based approach in human resources management. According to Boyatzis (1982), competency is one of the components contributing to the efficiency of work performance. In the studies published in the 21 st century, the authors agree (Belz, Siegrist, 2001; Armstrong, 2011; Bunker, Wakefield, 2004; Mitchell, Skinner, White, 2010) that key competencies can be defined as abilities, skills, knowledge, attitudes, and values that enable individuals to act adequately in various situations of personal and professional life. Moreover, they enable them to perform various positions, as they include a wide range of longterm qualifications and prerequisites for flexible response to changing requirements of the global labour market. It can thus be said that the key competencies are not directly dependent on the requirements of a specific position but represent certain universal abilities for coping with constant changes. Key competencies reflect the ability of people to use various skills in parallel and act adequately in a given (problem) situation (Belz, Siegrist, 2001). The competencies as such, however, are content-neutral, since they are applicable in any life or professional situation. Their acquisition and development are always associated with solving a specific task or a problem (Weiss, Kolberg, 2010; Klaus, 2007; Wiek, Withycombe, Redman, 2011). Individual competency to desired or required ideal behaviour of an individual is created by the interaction of the following specific groups of key competencies (Weber, Finley, Crawford, 2009; Rao, 2010; Stevens, 2012; Hadrich, 2020; Rieckmann, 2012): •competencies related to problem-solving: e.g. creative problem solving, negotiating, presenting, information processing, •social competencies (relational, interpersonal): e.g. ability to communicate, empathy, ability to work in a team, ability to lead and motivate people, establish contacts and relationships, etc., •self-management: e.g. ability to work independently, flexibility, willingness to learn, self-motivation, assertiveness. B. Competency models Currently, the selection of suitable employees is becoming more and more complicated and demanding because of the increasing number of job applicants. Due to the requirements for matching the needs of companies, including trading ones, with individual employee abilities, human resource managers currently tend to use a competency-based approach to select the most suitable candidate. The competency-based approach consists in the specification of the desired framework of the individuals’ key competencies for specific positions by means of a competency model as a basis for the selection of suitable applicants for a given position (Dubois, Rothwell, 2004; Gonsalvez, Calvert, 214; Campion, Fink, 2011). Competency model defines a combination of priory skills, abilities, and knowledge that are necessary to effectively perform the tasks related to a specific position within an organization. Competency models can thus be characterized simply as a strategic tool of human resources management, which helps meet the defined objectives of a company by defining measurable levels of the required behaviour, thus improving the preparedness of the company for constant changes in global markets (Dubois, Rothwell, 2004; Vazirani, 2010). Specific models serve as a basis for hiring, evaluating, motivating, and rewarding human resources, as well as for their education and development. On the one hand, competency models provide employees with clearly defined tasks and objectives; on the other hand, they represent a specific assessment tool for the employees’ superiors (Emery, 2002). On the basis of the objectives that companies use as a platform for creating and application of competency models, competency models can be divided into two basic types - generic and specific models. When defining a generic model, emphasis is put on the creation of a universally applicable and proven competencies model that would reflect the requirements essential for any organization regardless of a position performed. In such a case, it is most often a model of required key competencies. These generally applicable models represent a company’s first step to the successful implementation of a competency-based approach in relation to the GLOBAL BUSINESS & FINANCE REVIEW, Volume. 26 Issue. 4 (DECEMBER 2021), 65-76 68 development of human resource management. Unlike the generic model, a specific competency model defines such competencies that are a prerequisite for the required performance of a given employee occupying a specific position in a company. This kind of model, which is used especially for managerial positions, describes in detail the expected behaviour of an individual when performing activities to achieve the set objectives, which are closely related and matched with the company strategy in this case (Dubois, Rothwell, 2004; Sanghi, 2004; Liebenow et al., 2020; Aisha et al., 2019). III. Data and Methods A. Analysed set of key competencies The research question for this study is which key competencies business graduates need the most for entry-level positions in the field of trading and which ideal behaviour is expected for such competencies. Following the analysis of relevant secondary resources (Belz, 2001; Bunker, Wakefield, 2004; Mitchell, Skinner, White, 2010; Wiek, Withycombe, Redman, 2011; Weber, Finley, Crawford, 2009; Rieckman, 2012; Horton, Hondeghem, Farnham, 2002; Hay, 2008; Humburg, Velden, Verhagen, 2013), a set of priority key competencies for the research was defined. In addition to the aforementioned studies, each key competency was selected after considering the characteristics, activities, tasks, and outputs as well as the employer’s often recurring requirements (described in many job advertisements published online) for most common positions in trading companies suitable for fresh graduates with business, economics or related degree, such as trading assistant, trade coordinator, junior trading manager, sales representative, trading analyst, etc. The chosen competencies are as follows: 1. Flexibility, 2. Willingness to learn, 3. Ability to communicate, 4. Creative thinking, 5. Ability to find and select information, 6. Ability to work independently, 7. Ability to be assertive, 8. Ability to cooperate, 9. Ability to work under pressure, 10. Ability to solve problems. B. Sample, questionnaire and data collection process Within the questionnaire survey, the degree of significance of the key competencies defined above was subsequently determined. The target population consisted of trading companies (resellers, i.e., companies reselling merchandise for profit) with 25 - 249 employees based and operating in the Czech Republic that are willing to hire fresh graduates for entry-level positions. The minimum number of 25 employees was set due to the assumed existence of a more sophisticated human resource management strategy as well as the potential utilization of a competency-based approach in the selection process. Based on the information provided by the Czech Statistical Office and several databases of organizations (RES, Merk, B2Bdata), trading companies from all 14 regions of the Czech Republic were addressed via phone and emails in the period of 2015 - 2019. After excluding companies that responded they do not hire fresh graduates for full-time jobs, target population included 853 trading companies that met the specified characteristics. While respecting the condition of equal representation of all regions of the Czech Republic in the sample, quantitative data was finally obtained from 419 companies (n = 419). Data was primarily collected from persons responsible for recruitment process - HR managers, recruiters, or directors in some cases. Using a 5-point scale (from 1 to 5, where 1 = most important competency and 5 = totally unimportant competency), the respondents rated the importance of 10 key competencies (see above) that applicants should have to successfully perform duties of a job suitable for university graduates of business degrees. In the second part of the questionnaire, respondents were asked to define their description of the optimal and expected behaviour of a competent graduate for each specific key competency from the set. Radim Dušek 69 C. Data analysis The data obtained was statistically analysed using the STATISTICA 9 software. As the collected data is ordinal in nature and thus does not follow the normal (Gaussian) distribution, only non-parametric tests were used for its analysis. To test the hypotheses on the corresponding significance of an individual professional and key competencies, the Friedman test (Friedman ANOVA) was used. Kruskal-Wallis test with subsequent Post-hoc analysis was applied for the identification of the individual clusters of competencies with similar importance levels for the surveyed companies. By comparing the correspondence of the medians of each pair of quantities, the Post-hoc analysis determines the p-value in the interval <0,1>. Medians correspondence is confirmed if p-value is > 0.05. The closer the p-value is to 1, the stronger the relation of the individual competencies is in terms of their significance, and the competencies can be included in one specific group. To determine the dependence between the two competencies, Spearman’s correlation coefficient was calculated. The coefficient indicates the strength of the relation of the quantities X and Y in the case they do not come from a normal distribution. Based on the mentioned data analysis results, a generic key competency model for entry-level positions in the field of trading was created. IV. Results A. Significance of individual key competencies The first step is to determine the significance of specific key competencies that could be potential components of the resulting competency model. Using the Friedman ANOVA, the following hypotheses were tested at the significance level of α = 0.05: • H 0 : The significance of individual key competencies determined by the surveyed companies is identical. • H A : non H 0 • Results: ANOVA = 427.1906; df = 9; N = 419; p-value = 0.000 At the significance level of α = 0.05, the null hypothesis about the correspondence of the significance of individual key competencies for companies was tested using Friedman ANOVA. Considering the obtained p-value = 0.000, the null hypothesis is thus rejected. This means statistically significant differences were identified in the trading companies’ perception of the individual key competencies significance when recruiting suitable university graduates with business higher education. The average significance (represented by means) of individual key competencies based on the requirements of the surveyed companies is shown in Table 1. The closer the individual means are to 1, the higher the significance of a specific key competency is for employers. On the basis of the results, it is possible to define the basic profile of the desired graduate for entry-level trading-related positions in terms of the key competencies as follows: a communicative individual with the ability to effectively solve problems both independently and as a member of a team. In order to achieve the goals, the graduates should be willing to learn new things as well as be able to find and select relevant information necessary to complete tasks as assigned. The advantage is flexibility and the ability to work under pressure. On the other hand, the graduate does not have to be a typical creative person; the ability to be assertive is not considered very important as well. Key competencies Mean St. dev. ability to work independently 1.32 0.59 ability to communicate 1.39 0.61 ability to solve problems 1.46 0.62 willingness to learn 1.59 0.67 ability to cooperate 1.65 0.79 ability to find and select information 1.71 0.77 flexibility 1.88 0.73 ability to work under pressure 1.97 0.87 creative thinking 2.28 0.98 ability to be assertive 2.35 0.86 Source: Application and own processing Table 1. Average significance of individual key competencies for employers GLOBAL BUSINESS & FINANCE REVIEW, Volume. 26 Issue. 4 (DECEMBER 2021), 65-76 70 B. Identification of homogeneous groups of key competencies Kruskal-Wallis test was used to test the following hypotheses at the significance level of α = 0.05: • H 0 : Medians of individual key competencies are identical. • H A : non H 0 • Results of Kruskal-Wallis test: Q = 483.3967; df = 9; N = 419; p-value = 0.000 Based on the Kruskal-Wallis test, the null hypothesis about the correspondence of the medians was rejected. By subsequent application of the Post-hoc analysis, there were identified 3 different groups of key competencies based on the statistically significant medians correspondence of the individual competencies (i.e. p-value > 0.05; see Table 2). The closer the p-value is to 1, the stronger the relation of the individual competencies is in terms of their significance level for questioned companies and can be included in one specific group. Each of the groups given below is characterized by a mutual relation of the competencies in terms of the similar high significance for surveyed companies. This means that key competencies included in Group 1 are more significant for trading companies than competencies in Group 2 and Group 3. Group 1: a) ability to communicate, b) ability to solve problems, c) ability to work independently, d) ability to cooperate, e) willingness to learn. Group 2: a) flexibility, b) ability to find and select information, c) ability to work under pressure. Group 3: a) creative thinking, b) ability to be assertive. C. Correlation between individual key competencies To determine the dependence between two key competencies, Spearman’s correlation coefficient was calculated, where the achieved values are -1<rs<1. In the case of analysed key competencies, this coefficient achieves only positive values (see Table 3). All correlations thus show an upward character (statistically significant correlations are at the level of the p-value > 0.05). The most mutually correlated competencies are the “ability to work independently” and the “ability to solve problems”. Also “creative thinking” and the “ability Key competencies ab. to communicate ab. to solve problems flexibility ability to cooperate ab. to work independently ab. to wok under pressure creative thinking willingnes s to learn ability to be assertive ab. to find and select info ability to communicate 1.00 0 1.00 1.00 0 0 0 0 0 ability to solve problems 1.00 0 1.00 1.00 0 0 1.00 0 0 flexibility 0 0 0 0 0.95 0 0 0 0.91 ability to cooperate 1.00 1.00 0 0001.0000 ability to work independently 1.00 1.00 0 0 0 0 0.98 0 0 ability to work under pressure 0 0 0.95 0 0 00 00.89 creative thinking 0 0 0 0 0 0 00.860 willingness to learn 0 1.00 0 1.00 0.98 0 0 01.00 ability to be assertive 0 0 0 0 0 0 0.86 0 0 ab. to find and select information 0 0 0.91 0 0 0.89 0 1.00 0 Source: Application and own processing Table 2. Post-hoc analysis for Kruskal-Wallis test results Radim Dušek 71 to be assertive” show significant mutual correlation. This means that when a trading company is looking for a very independent worker for a specific position, based on the identified correlations, an innate ability to solve problems and flexibility is probably required as well. It can also be assumed that in the case of a specific position focused mainly on teamwork, a person with communicative skills and the ability to solve problems, find and select information is preferred. An interesting finding is that if a company is looking for a creative graduate with business higher education, an innate ability to act assertively is likely to be required. D. Proposed generic competency model and its possible application On the basis of the data analysis results, a generic competency model of a university graduate of business degree was created in accordance with the requirements of medium-sized trading companies operating in the Czech Republic for their entry-level positions suitable for the aforementioned graduates. This competency model determines a set of key competencies a competent graduate should have to be a desirable potential employee for trading companies in terms of the positions suitable for business graduates and to pass the selection process. The significance of each key competency is directly proportional to its position in the graphical representation of the model (see Figure 1). This means that the competencies listed in the lowest levels within the model are more significant than the competencies given above. To determine the priority key competencies, which subsequently became individual components of the model, the statistical tests mentioned above were used. To determine the significance of specific competencies, the Friedman test and Kruskal-Wallis test with Post-hoc analysis were used. The dependency determination between individual key competencies was based on the values of Spearman’s correlation coefficient for individual pairs of key competencies within the model (mutual dependencies are expressed by an arrow). The proposed competency model consists of two components: • Complex graphical representation of the model (see Figure 1) • Table containing more detailed characteristics of a competent graduate’s required/desired behaviour in terms of the individual key competencies. This was created on the basis of merging and subsequent generalization of desired characteristics of ideal behaviour for each competency, most frequently mentioned by the respondents, i.e. HR managers responsible for the recruitment process (see Table 4). Key competencies ab. to communicate ab. to solve problems flexibility ability to cooperate ab. to work independently ab. to wok under pressure creative thinking willingness to learn ability to be assertive ab. to find and select info ability to communicate 1.00 0.28 0.23 0.40 0.15 0.24 0.18 0.33 0.25 0.27 ability to solve problems 0.28 1.00 0.35 0.43 0.53 0.40 0.31 0.24 0.28 0.38 flexibility 0.23 0.35 1.00 0.33 0.43 0.41 0.36 0.35 0.37 0.34 ability to cooperate 0.40 0.43 0.33 1.00 0.31 0.27 0.32 0.32 0.31 0.23 ability to work independently 0.15 0.53 0.43 0.31 1.00 0.35 0.26 0.34 0.20 0.29 ability to work under pressure 0.24 0.40 0.41 0.27 0.35 1.00 0.44 0.30 0.36 0.24 creative thinking 0.18 0.31 0.36 0.32 0.26 0.44 1.00 0.24 0.47 0.29 willingness to learn 0.33 0.24 0.35 0.32 0.34 0.30 0.24 1.00 0.31 0.35 ability to be assertive 0.25 0.28 0.37 0.31 0.20 0.36 0.47 0.31 1.00 0.27 ab. to find and select information 0.27 0.38 0.34 0.23 0.29 0.24 0.29 0.35 0.27 1.00 Source: Application and own processing Table 3 . V alues of Spearman’s correlation coefficient for each pair of competencies GLOBAL BUSINESS & FINANCE REVIEW, Volume. 26 Issue. 4 (DECEMBER 2021), 65-76 72 In the process of developing the model, emphasis was put on its generality, mainly to ensure its easier transferability and subsequent applicability for diverse positions a business graduate may occupy in trading companies. Meeting these basic requirements of employers is a certain prerequisite for a graduate’s smooth entry into labour market and professional life. According to the results of this study, HR managers and recruiters, especially in small trading companies, can take a competency-based approach into account when hiring workers for entry-level positions. In contrast to their traditional counterpart, organizations can make the recruitment process more transparent with competencybased human resource management and as a result, select the right workers for the right positions more easily. Source: Application and own processing Figure 1. Proposed generic competency model of competent graduate for positions in trading companies Key competency Desired observed behaviour of graduate 1ability to work independently effective performance of assigned tasks ability to find information independently and make decisions based on the information obtained ability of self-management planning being proactive ability to assume responsibility for the results of own work 2ability to communicate effective communication with superiors, subordinates, and colleagues, as well as with customers ability to describe facts clearly, concisely, and intelligibly ability to present facts to a group of listeners effective telephone communication with customers ability to make listeners interested, ability to argue and negotiate 3ability to solve problems ability to implement effective activities timely ability to defend own decisions ability to find arguments in support of specific activities ability to assume responsibility ability to be a leader if necessary 4ability to cooperate active participation in team work, ability to accept tasks ability to work towards a common predefined goal in cooperation with co-workers willingness to pass over knowledge and skills respect for co-workers providing feedback ability to comply with deadlines and the set rules of cooperation 5willingness to learn acquisition of new knowledge and skills without problems ability to learn from own mistakes and failures persistence, stamina positive attitude to changes focus on own systematic personal development 6ability to find and select information ability to obtain necessary information purposefully and efficiently from various resources ability to find a core message and distinguish between important and unimportant information ability to apply the information obtained in practice and in context, ability to pass them over Source: Application and own processing. Table 4. Characteristics of competent graduate’s required behaviour in the context of individual key competencies according to HR managers in trading companies