DEVELOPING A COMPETENCE MODEL TO IMPROVE EMERGING BUSINESS BANKING MANAGER�S SUPERIOR PERFORMANCE

Nina Sekartini Prikasih¹, Aurik Gustomo²

Bandung Institute of Technology

[email protected]¹, [email protected]²

Abstract:

The stability of Indonesia's financial system in 2022 is quite good, as can be seen from the increase in high credit growth to accelerate the recovery of SMEs by increasing access and supporting the portion of productive financing through the Bank ON's Emerging Business (EmB) division. Unfortunately, the achievement of the EmB Area 3 Division is low. This is due to the low productivity of the sales force. This research aims to identify competency gap analysis and create a general competency model for EmB Managers. This research is a qualitative approach using semi-structured interviews and observation. The results of the identification analysis by comparing EmB Managers between superior and average performance show that there are fourteen competencies gaps with different dimensions and levels. Business solutions are described with a competency causal flow model approach. In addition, the stages of the Leader Activity Guide (LEAGUE) method are made, which consist of the roles and activities of the manager to be carried out. Finally, an implementation plan for the development of a competency model for EmB Managers is created to ensure business solutions work properly with consideration of justification from the relevant parties involved.

Keywords: Competency, Performance, Manager, Leader, Bank

Abstrak:

Stabilitas sistem keuangan Indonesia pada tahun 2022 cukup baik terlihat dari peningkatan pertumbuhan kredit yang tinggi untuk mempercepat pemulihan UKM dengan peningkatan akses dan dukungan porsi pembiayaan produktif melalui divisi Emerging Business (EmB) Bank ON. Sayangnya, pencapaian Divisi EmB Area 3 tergolong rendah. Hal ini dikarenakan rendahnya produktivitas tenaga penjualan. Tujuan penelitian ini untuk mengidentifikasi analisis kompetensi kesenjangan dan membuat model kompetensi umum untuk Manajer EmB. Penelitian ini menggunakan metode kualitatif dengan pendekatan wawancara semi-struktur dan observasi. Hasil identifikasi an�lisis dengan membandingkan Manajer EmB performa unggul dengan performa rata-rata diperoleh terdapat empat belas kompetensi yang terdapat kesenjangan kompetensi dengan dimensi dan level yang berbeda. Solusi bisnis dijelaskan dengan pendekatan model aliran kausal kompetensi. Selain itu, dibuat tahapan metode Panduan Aktivitas Pemimpin (LEAGUE) yang terdiri dari peran dan aktivitas manajer yang akan dilakukan. Terakhir, rencana implementasi untuk pengembangan model kompetensi bagi EmB Manajer dibuat untuk memastikan solusi bisnis berjalan dengan semestinya dengan pertimbangan justifikasi dari pihak-pihak terkait yang terlibat.

Kata kunci: Kompetensi, Kinerja, Manajer, Pemimpin, Bank

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Corresponding: Nina Sekartini Prikasih

E-mail: [email protected]

INTRODUCTION

The stability of Indonesia's financial system in 2022 is quite good amidst the slowdown in post-COVID-19 global economic recovery. This is partly due to the increased banking intermediation, driven by increasingly improved perceptions of banking risk. In Semester I 2022, bank credit growth reached 10.66% (yoy), which occurred in most economic sectors and segments, especially the corporate and Micro, Small, and Medium Enterprises (MSMEs) segments, which grew by 17.33% (yoy) (Bank Indonesia, 2022).

One of the concrete steps to support the development of SMEs in Indonesia is done through the Emerging Business (EmB) Division, which accommodates the needs of SMEs related to financing business development with various disbursement and payment schemes. The primary indicator for assessing the achievement of the Emerging business is the achievement of New Booking Loans. Achievement Region 5, in the Emerging Business division of Bank ON, is low compared to other regions in Indonesia. To find out more about the possible causes related to the problem and find the root cause, we used the 'Five why' type and found the root cause, namely the low managerial competence of the EMB Manager Area 1.

This research has three questions, 1) what causes the difference in target achievement among EmB Managers? 2) What competency models are needed to produce superior performance? 3) What methods and activities are most suitable for developing these competencies? For objective, this research will identify a gap competency analysis between EmB Manager's superior performance and average performance, a generic competency model for EmB Manager, and develop a program to improve EmB Manager Competence.

Nowadays, business performance measurement is an important trend that organizations must carry out. This is driven by globalization, technological developments, customer satisfaction, and regulation and compliance with standards (Mathis, Jackson, Valentine, & Meglich, 2016). The success of business implementation is usually measured by performance management. An organization performing well is successfully attaining its objectives (Otley, 2001). Furthermore, business performance can also be defined as a specific result obtained in management, economics, and marketing, which prints the characteristics of the organization's competitiveness, efficiency, and effectiveness as well as its procedural and structural components (Verboncu & Purcaru, 2009). Organizational performance can be expressed by a balanced set of parameters that describe the result and the process of achieving the result. Armstrong (2000) describes several approaches to measuring organizational performance, namely Balance scorecard, the European Foundation for Quality Management (EFQM) model, Economic Value Added (EVA) and Other economic measures of value, and Traditional financial ratios.

Another performance is about employee (individual) performance. Employee performance is considered as one of the most important factors in organizational relations. This term is the result of an employee's efforts to perform work according to their assigned responsibilities and evaluated qualitatively and quantitatively (Weber, 2008). Although individual performance differs from group and organizational performance. However, several studies have shown that individual performance can contribute to organizational performance outcomes (Parker & Turner, 2002).

Competencies are broadly used across organizations that are inherent in the human resource management function. The theory of competency was first generalized by (Boyatzis, 1991). He defines competence as the capacity within an individual that leads to behavior that meets job demands and brings the desired results. Competence relationship with performance is relevant, close, critical, and accurate (Roderer & Roebers, 2014). This means that if we want to improve our performance, we should have competencies following the work assignments.

Our focus study is on managerial competencies. Managerial competencies are defined as traits associated with superior performance of an individual, evaluated based on specific behaviors and particular actions (Boyatzis, 1991). Spencer and Spencer (1993) stated that managerial competencies express the intention to have certain specific effects. It is the intention to develop, to lead others, to increase teamwork and cooperation which is very important for managers. Meanwhile, Bucur (2013) argued that managerial competencies are not only used as measures of performance, but are studied and analyzed to significantly improve performance. It is very important as lack of necessary management skills can undermine competition and manager's efforts to secure projects (Roderer & Roebers, 2014). Furthermore, people who lack managerial skills can have difficulty solving problems, resolving team conflicts, using technology, communicating with stakeholders, or making important decisions (Boyatzis, 1991).

Furthermore, Spencer and Spencer (1993) develop generic competency models to identify and describe the competency of what an organization is doing to be successful.� In addition, there needs to be an agreement of opinion regarding the best and most appropriate way of developing managerial competencies (Bakanauskienė & Bartnikaitė, 2006). There is no such agreement because the concept of competency is neither static nor universal, as it is directly related to contextual managerial roles (Wulandari, 2018). However, if examined further, managerial competence depends on the situation, such as the industrial sector, company, position, time, and level. For example, first-level and middle-level managers have different qualities, of course, with different performance characteristics. So we have to validate the findings. Finally, a process of identifying manager competencies is needed that is sensitive to the context and business functions being carried out (Wulandari, 2018).

RESEARCH METHODOLOGY

We use descriptive studies to find out more about answering the questions and research objectives. There is an emphasis on studying a problem or issue to explain the relationship between variables (Saunders et al., 2007). This research will explain the relationship between managers' general competency profile model and the factors that lead to success. Then this research adopts a case study strategy in examining the organization of EmB Area 3 in detail. Descriptive studies are studies that establish causal relationships between variables. The research methodology based on time horizons is a cross-sectional study. It is based on certain phenomena and only at certain times. Furthermore, to reduce the possibility of getting wrong answers, research attention will be emphasized on the validity of the data collected.

Mono-method uses qualitative data collection using semi-structured interviews and observation, which are analyzed qualitatively to get an overview of the business issues encountered in the research. Semi-structured interviews were conducted with a fourth of respondents. Selected respondents are given and know the list of questions. The questions understand perceptions about the competency requirements of an EmB manager. Also, there is secondary data from corporate documents and annual reports for supporting information. Since the case studies are where the company works alone, we can provide open access to data that allows us to gain insight into the mechanics of the business and operations being carried out.

The data analysis method for developing a generic competency model for EmB Managers is carried out by identifying competencies and analyzing the competency gap obtained from competency comparisons based on Spencer and Spencer (1993) owned by EmB Managers between superior performance and average performance with the help of the NVivo14 tool (Figure 1). To develop business solutions, develop generic competency models to determine essential competencies by interpreting frequency indicators. However, because this research is entirely qualitative, so self-judgment applies.

Figure 1 A gap competency analysis for EmB Manager.

RESULT

There are two respondents from EmB Manager�s superior performance (R6A3 and R5A2). The Achievement and Orientation show the highest number of references and essential competency. The behavior of setting challenging goals that exceed performance standards, as evidenced by an achievement percentage of 173%, there is an achievement impact on his subordinates, where three out of four are included in the KPI elite club (KPI assessment of at least four for twelve consecutive months) in 2022. Thus providing a competency assessment of the degree of innovation in the form of new things for the work unit.

Furthermore, EmB Managers with superior performance have a role strength in the competence to lead the group in communicating a compelling vision (Figure 2). EmB Manager with superior performance seems to know already how to handle his team well, as can be seen from her statement that leader must know how to treat team member,

"So indeed, EmB Manager must arrange each personnel according to their advantages and disadvantages, we must have different strategies to deal with each team member." (R6A3, interview, June 5^th, 2023)

Keep in mind that reference counts do not reflect the relative frequency of performance. In other words, competence with the highest number of references does not mean that it is important to have it.

Figure 2 Competency and behaviour competency level of EmB Managers with Superior Performance.

The EmB Manager with average performance (R6A2 and R5A1) also have Achievement and Orientation as an essential competency. However, they can�t achieve excellence standards. This is due to the involvement of a few team members. The lack of experience also affected the competence of organizational awareness from EmB managers with average performance.

�Managing people is very difficult, especially when we have no vision with us, especially to the point of resistance, as I am experiencing, because we become challenged to carry out the role of manager.� (R5A1, Interview, Jun 5^th 2023)

They have a limited understanding of its formal structure, not yet understanding things that are informal or the organization's culture. So that the job requires cooperation with other units, such as reviewers, and there is less interaction that can result in performance not being achieved (Figure 3).

Figure 3 Competency and behaviour competency level of EmB Managers with Average Performance.

�������������� There is a competency gap between superior performance and average performance in fourteen of the sixteen competencies. Two competencies have no gaps, namely conceptual thinking and analytical thinking competencies, so these two competencies have met the performance standards and goals set by the company. As for the competency gaps, there are different scale levels for each EmB manager. Although according to Spencer and Spencer (1993), a higher level of behavioral scale does not necessarily contribute to better performance. A case example is competency behavior in building work relationships in the closeness dimension of building work relationships. EmB Managers with average performance have a higher scale than superior performance (Table 1).

Table 1 A Summary of gap competency analysis.

Competency	Gap Competency
Impact and Influence (IMP) A. Action taken to influence other B. Breadth of influence, understanding, or network	● Anticipates the effect of an action ● appeals to the interest and level of the team
Achievement Orientation (ACH) A. Intensity and Completeness achievement - motivated action B. Achievement Impact C. Degree of Innovation	● Result standard orientation ● Concern for improvement  ● Achievement impact
Teamwork and Cooperation (TW) A. Intensity of Fostering Teamwork B. Size of team involved C. Amount of Effort or Initiative to Foster Teamwork	● Motivating team ● Team management and facilitation ● Amount of effort
Analytical Thinking (AT) A. Complexity of analysis B. Size of problem addressed	There is no gap competency
Initiative (INT) A. Time dimension B. Self-motivation, amount of discretionary effort	● Strategic future orientation ● Seizing opportunities ● Action and decisiveness ● Being proactive
Developing Others (DEV) A. Intensity of developmental orientation and completeness of developmental action B. Number and rank of people developed or directed	● Expresses positive expectations of the team ● Gives directions or demonstrations and detailed instructions
Self-Confidence (SCF) A. Self-Assurance B. Dealing with Failure	● Presents self in a forceful ● States confidence in the judgment and ability ● States the position clearly and confidently in conflicts with superiors and team
Interpersonal Understanding (IU) A. Depth of understanding others B. Listening and responding to others	● Understanding the causes of team�s underlying attitudes, behavior patterns, and problems ● In B dimension, Average performance have better behavioral level
Directiveness (DIR) A. Intensity of Directiveness B. Number and Rank of People Developed or Directed	● Demands high performance and quality ● Sets standards  ● Confronts others openly and directly about performance problems
Information Seeking (INF)	Pressing for exact information and perspective
Team Leadership (TL) A. Strength of the Leadership Role B. Size of Team Involved C. Amount of Effort or Initiative to Foster Teamwork	● Intensity and completeness of the leadership role ● Inspiring and energizing team through compelling vision and leadership ● Amount of effort to foster team
Conceptual Thinking (CT) A. Complexity and Originality of Concepts B. Size of Problem Addressed	There is no gap competency
Organizational Awareness (OA) A. Depth of Understanding of Organization B. Breadth of Influence, Understanding, or Network	● The depth of understanding of organization ● Recognizes and uses the corporate culture
Relationship Building (RB) A. Closeness of Relationship Built B. Breadth of Influence, Understanding, or Network	In A�s dimension, Average performance have better behavioral level
Technical Expertise (EXP) A. Depth of Knowledge B. Breadth of Managerial Expertise C. Acquisition of Expertise D. Distribution of Expertise	● Work experience ● Acts to keep skills and knowledge current
Concern for Order and Quality (CO)	Monitoring and checking work and information to increase order and quality of data

The main thing to note is that the EmB Manager's work is about the performance of achieving the set targets compared to the impact on the team or other people, so the competencies included in the achievement and action cluster are essential, such as achievement orientation competencies, concern for order and quality, and information seeking. So we have to look for the right level of behavior from each competency.

To find the generic competency model for EmB managers, we carry out a weighting which is a weight of the importance of each competency that distinguishes superior performance from average performance. The indicators used in the assessment are based on the presence of negative impacts from lack of competence, the essence of the benefits of using competence in work, and future job requirements, adjusted for predicted changes in the work environment and the company's strategic direction (Roderer & Roebers, 2014). In addition, the indicators used are based on the number of references to the results of the interview interpretation. So the 'weighting' is done based on the numbering sequence starting from what is considered the most critical (Table 2).

Table 2 A competency model for EmB Manager.

No.	Competency	Level
1	Achievement Orientation (ACH)	ACH A.5, B.3, C.0
2	Impact and Influence (IMP)	IMP A.4, B.2
3	Team Leadership (TL)	TL A.6, B.1, C.3
4	Teamwork and Cooperation (TW)	TW A.6, B.1, C.3
5	Concern for Order and Quality (CO)	CO 5
6	Self-Confidence (SCF)	SCF A.5, B.0
7	Technical Expertise (EXP)	EXP A.4, B.2, C.2, D.2
8	Directiveness (DIR)	DIR A.5, B.2
9	Initiative (INT)	INT A.4, B.2
10	Interpersonal Understanding (IU)	IU A.4, B.4
11	Information Seeking (INF)	INF 4
12	Developing Others (DEV)	DEV A.3, B.2
13	Organizational Awareness (OA)	OA A.4, B.2
14	Relationship Building (RB)	RB A.4, B.2
15	Analytical Thinking (AT)	AT A.4, B.2
16	Conceptual Thinking (CT)	CT A.4, B.2

DISCUSSION

Suppose a comparison is made between the generic competency model for managers being developed with the model of Spencer and Spencer (1993) and (Wulandari, 2018). In that case, there is a difference in the "weighting" of necessary competency sequences required by top-performing managers (Table 3). This can be explained because of four things: data collection and method analysis. The Spencer and Spencer (1993) model was created using the McClelland/McBer Job Competence Assessment (JCA) method, which uses primary data from a panel of experts. While (Wulandari, 2018) highlighted the competence of mid-level managers in the banking industry in Indonesia using questionnaires and semi-structured interviews. Using purposive sampling, these competencies are then ranked by looking at the aggregate mean of the frequency of use and the level of importance and retrieval. This study used a semi-structured interview and observation method.

Second, the difference in the dimensions of the object of research. Dimensions consist of level, function, and environment or industry. Spencer and Spencer (1993) use a broader/general dimension level, while (Wulandari, 2018) specifically for middle-level managers in the banking industry. This research is more specific to the middle manager level, the sales function (emerging business segment), and the banking industry.

The third is the interpretation of the competency ranking frequency indicators that are considered necessary. Spencer and Spencer (1993) used an analysis of all the indicators from all the relevant models added together, and the percentage of the total was used to calculate the frequency. Richer models, from which more detail is available, have more general behavioral indicators and receive relatively more weight than sparse models. This weighting seems appropriate because we have more confidence in the accuracy of model readings rich in examples and descriptions. In addition, in combination with professional judgment. (Wulandari, 2018) made an assessment based on the level of importance and frequency of use. This study uses an assessment based on actual conditions in the industry.

Lastly is the order of competence. The three authors have a sequence of competencies that are different. If you look at it, this research is particular for the dimensions with the middle level, the sales function (emerging business), and the banking industry. So if viewed based on precision, this research is more precise than the two models.

Table 3 The Comparison of competency model of manager.

Spencer and Spencer (1993)	Wulandari et al. (2017, 2018)	This research
Impact and Influence	Analytical Thinking	Achievement Orientation
Achievement Orientation	Developing Others	Impact and Influence
Teamwork and Cooperation	Impact and Influence	Team Leadership
Analytical Thinking	Team Leadership	Teamwork and Cooperation
Initiative	Expertise	Concern for Order and Quality
Developing Others	Teamwork and Cooperation	Self-Confidence
Self-Confidence	Achievement Orientation	Expertise
Interpersonal Understanding	Conceptual Thinking	Directiveness
Directiveness	Initiative	Initiative
Information Seeking	Self-Confidence	Interpersonal Understanding
Team Leadership	Directiveness	Information Seeking
Conceptual Thinking	Organizational Awareness	Developing Others
Organizational Awareness (Base requirement)	Relationship Building	Organizational Awarenes
Relationship Building (Base requirement)	Interpersonal Understanding	Relationship Building
Expertise/Special Knowledge	Information Seeking	Analytical Thinking
		Conceptual Thinking

Which competency model is more appropriate for a manager? Spencer and Spencer (1993) provide important notes on the competency model that the competency scale is different for each job, and even some scale levels may need to be revised. In addition, a higher scale level is not necessarily better. (Wulandari, 2018) added that competency identification is context-sensitive because it is not fixed and should relate to organizational needs. In addition, there is a need to examine additional managerial competencies, such as integrity, caring, communication, and professionalism, to match the relevance of future needs. There is a relation that can be drawn that the determination of the competency model of superior performing managers must be based on the needs of the organization. In the context of this research, the competency model developed has been adapted to the needs of the organization, namely increasing the level of performance achievement by developing the competencies possessed by EmB managers.

In addition, the most important thing is how to produce business solutions and implementation plans in order to develop managers with superior performance. The process of building this competency must be carried out every day by an EmB Manager. As a guide, a list of activities is compiled based on the EmB Manager's Role in relation to the competencies that will be trained through the implementation of these activities. The EmB Manager role at Bank ON broadly has three main roles, namely Business Performance Review and Strategy, Supervisory, and Risk Prevention (Figure 2). As a person who has the duty to carry out Business Performance Review and Strategy, the EmB Manager is responsible for his team in conducting Morning Briefing, Sales Activity, and team performance review. Meanwhile, as a supervisory duty bearer, the EmB Manager is responsible for his team in terms of People Development, People Management, and Communication. And lastly, as the bearer of the Risk Prevention task, he is responsible for his team regarding risk management and risk mitigation within the team.

Figure 4 Leader's role and activity for EmB Manager solution.

CONCLUSION

Competency identification has been carried out by taking a sample of EmB Managers with superior and average performance. There are fourteen competencies owned by each manager and managed to identify competency gaps based on intensity or completion of action, impact size, complexity, effort, and unique dimensions. A generic competency model for EMB managers was successfully developed by weighing each competency based on the level of importance of each competency. The indicators used are based on the presence of negative impacts from lack of competency, the essence of the benefits of using competence in work, and future job requirements, adjusted to the predicted changes in the work environment and the direction of the company's strategy. In addition, the indicators used are based on the number of references to the results of the interpretation of the interviews carried out. Therefore, the 'weighting' is done based on the numbering sequence starting from what is considered the most important. The competencies development will not be effective if it is only done through training. Therefore, the conscious competence learning model will be used to overcome the gap competencies of EmB Managers at Bank ON. In addition, there is a program called the LEAGUE, which consists of the role of the EmB manager and his activities.

For further research, by collecting data through interviews and observation, interviewers and observers need experience and be able to receive feedback to obtain good data and analysis. Then validate a competency model to train EmB Managers who use those competencies and see if EmB Managers actually perform better in the future or are subject to "predictive validity." Finally, the development of business solutions utilizing gamification and role-play methods can be an alternative to creating EmB Managers with superior performance.

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