A study of competency model for sales managers in Vietnamese commercial banks

mese commercial banks. CHAPTER 2: THEORETICAL BACKGROUND FOR SALES MANAGER’S COMPETENCY MODEL 2.1. Overview of competency model 2.1.1. Definition of competency Literature review of the competency development is grouped into three distinct approaches: (a) educational, (b) psychological, and (c) business context (Markus et al. 2005; Shippmann et al., 2000). The concept of competency based on a business approach is focused on the ability to learn and improve through training and development so that competencies need to be observed. The definition that has been accepted by numerous scholars: “A competency is a cluster of related knowledge, skills, and attitudes that affects a major part of one’s job (a role or responsibility), that correlates with performance on the job, that can measure against well-accepted standards, and that can be improved via training and development” (Parry, 1998, p.59). 2.1.2. Definition of competency model Competency model reflects the full competence that an individual needs to perform a job. The competency model focuses on behavior rather than personal characteristics and traits, because personal characteristics and traits are difficult to observe and measure accurately (Dubois et al., 2004). Competency model is a set of competencies that include the key behaviors required for excellent performance in a particular role. Therefore, the study chooses the definition of competency model is “The competency model is a set of all competencies required from employees of a given organisation that are grouped into appropriate sets for individual jobs or organisational roles” (Sienkiewicz, 2004, p.7). 2.1.3. Categories of competency model The single-job approach: The first competency models were developed for single jobs and are the most common approach to competency modeling. Developing a single-job competency model starts with an identified critical job that line management or an HR professional sees as needing better selected or developed incumbents. The "one-size-fits-all" approach: HR professionals who are seeking a broad, quick, and consistent impact for competency technology often adopt a "one-size-fits-all" competency model, by defining one set of competencies for a broad range of jobs (e.g., all managerial jobs). A multiple-job approach: This method creates multiple models depending on jobs and levels. This method is used when all the jobs do not have anything in common. To go ahead with creating models that are of use, the organization has to be more specific on the potential uses of the model. The time is ripe for a multiple-job approach to building competency models. 2.1.4. The roles of the competency model Linking competency models to organizational goals and objectives Firstly, the competency model helps to link the goals, missions and visions of the organization with the requirements of the individual's work. Second, the competency model helps organizations build a competitive advantage by building core competencies. Thirdly, the competency model helps to connect organizational activities with corporate culture has been and is intended to shape and help businesses adapt to the change process. Fourthly, the competency model helps improve the management process of the human resource management system in enterprises. Linking competency models to human resource management activities Selection: competency models have been used by many organizations to identify suitable candidates at the recruitment stage. The purpose is to establish the “behavior” needed in a particular job and the extent to which these are possessed by different candidates. Training and development: competency models help focus on training related behaviors and skills, ensures the cohesion between training and development, and helps manage training activities most effectively. Performance appraisal/management: competency models help solve the problems of performance evaluation, ensures consistency in the evaluation criteria, what needs to be achieved and does not need to be achieved, collects relevant information. The competency framework also helps managers to observe behavior and characteristics related to performance. Succession personal planning: The competency models allow identifying the required competencies to implement the organization's strategic success now and in the future. Therefore the organization can develop a personal plan, a collective competence development plan and an appropriate plan for the development of potential candidates in the future. Compensation management: The competency models support payment based on competencies (skills, knowledge, attitudes, etc.). Establishing compensation for demonstrated competencies, that is, both what is accomplished and how it is accomplished, provides fairness and equity and distinguishes between superior and average performance. 2.2. Theory of sales manager’s competency model 2.2.1. Definition and roles of sales managers Definition of sales managers According to Le Bon (2016) sales managers greatly influence organizations’ sales performance through their supervision of the sales force that interacts directly with customers and drives revenues. Roles of sales managers • Strategic planning: sales managers are responsible for setting goals, formulating implementation strategies, and achieving or exceeding the plan targets set by the departments and companies. • Organizing the sales force: sales managers need to ensure that the sales personnel are allocated exactly the position appropriate to their competencies and importantly protect customers with the benefits they are enjoying. • Recruiting and hiring: To create a talent pipeline, sales managers need to be effective and skilled in the art of recruiting and hiring new salespeople. Hiring a new person should be done with the thought of building the bench for the future. • Training and development: Sales manager needs to identify areas of development in which each salesperson may need to obtain mastery so that the salesperson can be effective. Training needs to be continually reinforced by the sales manager to the salesperson. Identifying skills or lack thereof is the responsibility of the sales manager. • Motivation and leadership: Sales managers need to be able to rally their teams to create enthusiasm and excitement. The enthusiasm can decrease easily from some salespeople as they try to close sales and are not successful. In addition, managers need to ensure that the vision of the organization has been accepted and is being acted upon by all salespeople on their team. • Performance evaluation: Sales managers should give regular consistent feedback and coaching to their salespeople. Sales managers conduct performance evaluations consistently throughout the year. Feedback given and received throughout the year should match the year-end result. 2.2.2. Definition of sales manager competency model The role of sales manager is becoming more and more important in businesses, the required competencies for this position are necessary. According to Cron and DeCarlo (2009), competency model of sales managers is defined as sets of knowledge, skills, behaviors, and attitudes that a person needs to be effective in a wide range of industries and various types of organizations. 2.2.3. A sales manager competency model structure The competency model structure will include the following: - Competency cluster: consists of competencies with identical or similar characteristics and attributes. - Competency: a name for each specific competency. - Definition of competency: a general description of what competency is, explaining the most basic concept of competence. - Competence levels: Competence level is the required level of competence so that personnel can fulfill their roles and functions and meet competence requirements to get the job done. 2.2.4. Method of building a sales manager competency model Approaches to a sales manager competency modeling Based on the pros and cons assessments of the approaches to a competency modeling, the study chooses borrowed-and-tailored approach (Rothwell and Lindholm, 1999). The borrowed-and-tailored approach lets the organization leverage a borrowed model, but tailors it to the specific culture, skills, and abilities necessary for each position, or the most critical positions. Occupation specific competency models are good start for this approach (Rothwell & Lindholm, 1999). This method will be effective for researches when it adopt existing model to new context at Vietnamese commercial banks. Besides, the author also chooses the research- based approach (Briscoe & Hall, 1999). Because this will be an appropriate approach to build and suggest the new competency model that can be applied by Vietnamese commercial banks for sales managers. Tools to build a sales manager competency model Based on theoretical and practical research, the author finds suitable tools to build the sales manager competency model in commercial banks in Vietnam including: (1) Focus group interviews (2) Survey questionnaire (3) Behavioral interviews (BEIs) (4) Job description (5) List of available competencies and competency dictionary (6) SPSS software The process of a sales manager competency modeling The process of developing a sales manager competency model is based on the process of Draganidis and Mentzas (2006) including 9 steps: Step 1: Establish a project team in charge of developing competency model Step 2: Develop standard performance data and select a sample for the survey Step 3: Develop a tentative list of competencies Step 4: Define competencies and levels of competency Step 5: Draft competency model Step 6: Cross-check the competency model outline Step 7: Adjust the model Step 8: Assess and approve the competency model Step 9: Complete the competency model 2.3. Study the impact of the competence on managerial effectiveness 2.3.1. Managerial effectiveness concept In this study self-perceived managerial effectiveness is defined as the degree to which a manager perceives that he or she fulfills or exceeds work role expectations (Spreitzer, 1995). In other words, managerial effectiveness is the extent to which managers feel that they achieve the output and goal requirements associated with their positions in conformity to their organizations’ expectations. 2.3.2. The impact of competency on managerial effectiveness In order to verify the effectiveness of the competency model, it is necessary to verify the competence components of the competency model. The first study to lay the groundwork for examining the impact of competency on management performance is documented in Boyatzis (1982), proving that individual competence is an indispensable factor that managers can get the job done. The empirical studies of Cockerill (1989), Finn (1993) and Renu (2015) have confirmed the existence of impacting competency on managerial effectiveness (based on at individual level). CHAPTER 3: RESEARCH METHODS 3.1. Qualitative research methods Qualitative research methods are used with the purpose of ensuring the science and relevance of concepts, constituent factors and scales of variables in the research of competency model. Qualitative research helps explain the research results assessing the impact between the competencies and managerial effectiveness of sales managers at commercial banks in Vietnam. Qualitative research methods include desk- research, expert interviews and in-depth interviews. 3.2. Quantitative research methods 3.2.1. Quantitative research: building a sales manager competency model - Data collection methods: + To test the appropriateness of competency list, the study conducted a questionnaire with a structured design consisting of 2 parts: Part 1 asked for the characteristics of the object (about gender, age, educational level and workplace); part 2 asked for rating the importance of competencies with the 20 questions. The scale used in the survey is a 5-level Likert scale: 1- Strongly Disagreeà 5- Strongly Agree. + To determine the competency standard level, the questionnaire was designed with 2 parts: part 1 asked for the evaluation of the required standard level of sales managers including 13 questions, part 2 asked for the characteristics of the object (about gender, age, educational level and workplace) The scale used in the survey is a 5-level scale: 1- Primary levelà 5- Expert level. - Data processing method: descriptive statistics, Cronbach Alpha, EFA. - Select the survey location and sample: The author has selected the research location at 11 commercial banks operating in 2 provinces/ cities including Ha Noi and Quang Ninh with134 samples to determine the official competency list of competency model in sales managers. 3.2.2. Quantitative research: Empirical verification of the sales manager competency model 3.2.2.1. A research model and hypothesis • Research model 1: The impact of management competencies on managerial effectiveness The research hypotheses are formulated: H1: Work planning and execution have a positive relationship with managerial effectiveness H2: Group management has a positive relationship with managerial effectiveness H3: Problem solving is positively related to managerial effectiveness H4: Sensitive to business circumstances with a positive relationship with managerial effectiveness Research model 2: The impact of technical competencies on managerial effectiveness The research hypotheses are formulated: H5: Job-specific knowledge and professional skills have a positive relationship with managerial effectiveness H6: Business environment and industries knowledge has a positive relationship with managerial effectiveness H7: Achievement Orientation has a positive relationship with managerial effectiveness H8: Customer orientation has a positive relationship with managerial effectiveness • Research model 3: The impact of self-management competencies on managerial effectiveness The research hypotheses are formulated: H9: Integrity has a positive relationship with managerial effectiveness H10: Innovation and creativity have a positive relationship with managerial effectiveness H11: Stress management has a positive relationship with managerial effectiveness H12: Time management has a positive relationship with managerial effectiveness H13: Continuous learning has a positive relationship with managerial effectiveness 3.2.2.2. Selection and design of scales • Scale of management competencies The scale of management competencies was inherited from the scale of Murale and Preetha (2011), Favia (2010), Busch (2012), Do (2016) and Tran (2009). The number of management competencies scales is 18 scales, including Work planning and execution (5 scales), Group management (4 scales), Problem solving (4 scales), Sensitive to business circumstances (5 scales). • Scale of technical competencies The scale of technical competencies was inherited from the scales of Favia (2010), Busch (2012), Herbison (2013), Manasi (2014), Pham (2015), Do (2016). The number of technical competencies scales is 14 scales including Job-specific knowledge and professional skills (4 scales), Business environment and industries knowledge (3 scales), Achievement Orientation (3 scales), Customer orientation (4 scales) • The scale of self-management competencies The scale of self-management competencies was inherited from the scale of Leslie (2002), Favia (2010), Herbison (2013), Do (2016). The number of self-management competencies is 14 scales, including Integrity (4 scales), Innovation and Creativity (4 scales), Stress Management (3 scales), Time management (4 scales), Continuous learning (3 scales). • Scale of managerial effectiveness The scale of managerial effectiveness was inherited by Leslie (2002) and Deeter-Schmelz et. al (2002). The number of managerial effectiveness scales includes 5 scales: (1) Employee motivation, (2) Ability cooperating with colleagues and subordinates, (3) Ability to train and develop team, (4) Initiative ability in work and (5) Achievement orientation. 3.2.2.3. Methods of collecting and processing data - Data collection methods: The author conducted primary data collection through the survey questionnaire. The survey questionnaire is designed with 2 parts: part 1 examined independent variables (competencies) and dependent variables (managerial effectiveness), part 2 asks for information on characteristics of respondents (such as gender, age, educational level, and workplace). Part 1 of the survey questionnaire had a total of 51 questions, which are allocated as follows: for the management competencies (18 questions), technical competencies (14 questions), self- management competencies (14 questions), and managerial effectiveness (5 questions). Variables used with 5-level Likert scale (ascending): 1: Strongly disagree; 2: Not really agree, 3: Strongly agree, 4: Agree, 5: Strongly agree. - Data processing methods: Cronbach Alpha coefficient was used to test the reliability value and EFA test was used to test the convergence. The impact between competencies and managerial effectiveness was conducted through regression analysis. 3.2.2.4. Selecting sample In order to test the impact between competencies and managerial effectiveness, the author has chosen branches at 20 Vietnamese commercial banks located in three major cities provinces including Hanoi and Quang Ninh and Ho Chi Minh with a sample size of 360. CHAPTER 4: RESULTS OF COMPETENCY MODEL FOR SALES MANAGERS OF VIETNAMESE COMMERCIAL BANKS 4.1. The proposed competency model for sales managers of Vietnamese commercial banks From the results of pre-testing competency lists, it shows that the competency model of sales managers in Vietnamese commercial banks include 13 competencies and are divided into 3 groups including (i) Management competencies, (ii) Technical competencies and iii) Self-management competencies with full name, definition, level of competency standards and behavior indicators. 1. Integrity (Level 3) 2. Innovation and Creativity (Level 3) 3. Stress Management (Level 4) 4. Time management (Level 4) 5. Continuous learning (Level 4) 1. Integrity (Level 3) 2. Innovation and Creativity (Level 3) 3. Stress Management (Level 4) 4. Time management (Level 4) 5. Continuous learning (Level 4) 1. Integrity (Level 3) 2. Innovation and Creativity (Level 3) 3. Stress Management (Level 4) 4. Time management (Level 4) 5. Continuous learning (Level 4) 1. Integrity (Level 3) 2. Innovation and Creativity (Level 3) 3. Stress Management (Level 4) 4. Time management (Level 4) 5. Continuous learning (Level 4) 4.2. Testing the impact of the competencies on managerial effectiveness 4.2.1. Testing the impact of management competencies on managerial effectiveness The hypothesis test results of the research model 1 showed that 4 research hypotheses were approved. In particular, Group management (QL2) is the most important competency affecting the managerial effectiveness of sales managers in commercial banks. This is explained by group management that helps individuals in the group learn faster because they are exchanged information, experiences, processes from other members and managers (Eliasa, 2014); thereby helping to develop a cohesive, effective sales team. The ability to be Sensitive to business circumstances (QL4) and Problem-solving (QL3) are the next two forces that have the most influence on managerial effectiveness. The Problem-solving (QL3) will be very important, when the sales managers identify, understand and find ways to solve the problems that customers are facing. Work planning and execution (QL1) helps set up processes, develop and implement business programs for the team as well as evaluate and control whether the program is achieved or not (Johnston & Marshall, 2006). 4.2.2. Testing the impact of technical competencies on managerial effectiveness Results of research model 2 show that all 4 hypotheses were accepted. In particular, Business environment and industries knowledge (CM2) has the strongest influence on managerial effectiveness, because this competency will help managers to capture and solve problems, get more accurate and comprehensive solutions to support subordinates when they face obstacles at work (Hysong, 2008). Job-specific knowledge and professional skills (CM1) has the second highest impact on managerial effectiveness. Because when having good professional knowledge, sales managers can advise customers and help customers make appropriate products/services. Achievement Orientation (CM3) and Customer orientation (CM4) both affect managerial effectiveness. By setting goals and actively seeking ways and solutions to achieve goals, individuals and departmental business results can be achieved (Boles et al., 2001). In addition, the ability to proactively meet customer requirements and maintain customer relationships will timely support customers as needed. 4.2.3. Testing the impact of Self-management competencies on managerial effectiveness The results of research model 3 show that all 5 research hypotheses were supported. In particular, Continuous learning (BT5) has the strongest impact on managerial efficiency. Proactively looking for learning opportunities, proactively preparing a career path for themselves is a very necessary ability to help improve the results in the work of sales managers. Stress management (BT3) is necessary to improve on managerial effectiveness by knowing how to arrange a reasonable time to complete the work on schedule without wasting effort and time. The space will help this position get the job done on time. The nature of business activities in the banking industry is built on trust and honesty, so Integrity (BT1) is an indispensable competency. This competency helps sales managers comply with the organization's general principles and standards, adhere to professional ethics and be willing to take responsibility for their own actions and mistakes, thereby helping to make decisions be effective in the long term (Mullins, 2013). In the present era, with the change in technology and customer needs, Innovation and creativity (BT2) in the work helps create smart financial services, differentiated and superior products to meet the needs of each customer segment. Therefore, innovation and creativity are essential and have a positive impact on the effectiveness of the work of sales managers. CHAPTER 5: ORIENTATIONS AND SOLUTIONS FOR APPLICATION OF SALES MANAGER COMPETENCY MODEL IN HUMAN MANAGEMENT ACTIVITIES AT VIETNAMESE COMMERCIAL BANKS 5.1. Solutions to develop and implement a sales manager competency model Conditions for developing and implementing a sales manager competency - Connection to a common goal - Commitment from leadership - Focus on the core competencies - Participation of parties - Availability of resources Roadmap for developing a sales manager competency model 1. Objectives of applying competency model 2. Standardize titles 3. Structure of capacity 4. The length of competency model 5. Structure of competency model 6. Test of competency model Roadmap for implementing the sales manager competency model 1. Full information on the implementation plan of the competency model 2. Building connection between the results of competency model and its application on human resource management system 3. Require stakeholders to participate in the planning, development and implementation of the competency model 4. Developing incentive policies associated with the assessment results based on competency model 5. Support the resources needed to implement competency model 5.2. The solution of applying the sales managers competency model in human resource management activities at commercial banks in Vietnam 5.2.1. Solution of applying competency model in recruiting sales managers • Conditions for applying the competence model in recruiting sales managers - The vacancy is important to the organization, requires complex new competencies, and requires candidates to own key competencies to complete the assigned tasks and responsibilities. - Managers must commit to investing in the resources needed to apply the competency-based recruitment tool. • The roadmap for recruiting sales managers based on the competency model - Implementation schedule (11 steps) - Competency-based interview (STAR) + Form to assess the necessary capabilities for sales managers candidates + Behavioral interview skills (BEIs) + Worth a sample interview about the competencies of sales managers 5.2.2. Solution to apply competency model in training and developing sales managers • Conditions for applying competency model in training and developing sales managers - Linking training objectives with the organization's development strategy - Banks mu