Developing competence in retailing: strategic advantages

Journalof Retailingand ConsumerServices,Vol.5, No. 4, pp. 235-244, 1998

© 1998ElsevierScienceLtd. All rightsreserved Printed in Great Britain 0969-6989/98 $19.00 + 0.00

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Case study Developing competence in retailing: strategic advantages John Davison, Sally Messenger and Christoph Williams Department of Management Studies, University of Surrey, Guildford, Surrey GU2 5XH, UK

Since the late 1980s, the UK Government has invested significant levels of funding in the development of national competence-based qualifications in an attempt to improve skill levels and therefore international competitiveness. The paper provides an overview of the progress which has been made by the UK retailing industry and presents the implementation experiences of five major retail companies. The paper concludes with an analysis of the strategic implications. © 1998 Elsevier Science Ltd. All rights reserved Keywords: retail training and education, retail competences, NVQs for the retail industry

Tile purpose of this paper is to review the development of competence-based assessment systems in the U K retail industry and to highlight the strategic implications for the retail industry. The first part of the paper outlines the background to the competence movement in the U K and describes in particular the development of National Vocational Qualifications (ix VQs). In the second part of the paper the emphasis is on the UK retail industry and its role in developing competencebased programmes. This leads to the presentation of findings from five UK re~:ail case studies of companies which have experienced the implementation of NVQs. The paper identifies a focus on occupational competence as providing a temporary competitive advantage, but suggests that in order to sustain a continued competitive edge, retailers should focus on developing management capability. The outcome of this will be the continued development of their manager,;' potential. The discussion concludes with an analysis of the strategic implicatic.ns of the competence movement for the retail industry and points to the fu~:ure.

Strategic implications Briefly, the strategic implications of competence-based education and training (CBET) can be summarized as follows:

(1) Internal succession planning, ensuring the continued application of competences developed within the organization, so that staff and management are able to deliver competitive advantage. (2) Within the increasingly competitive retail sector, customer focus has again been elevated to the status of a key competitive differentiator. Core organizational competences (e.g. customer focus) are interdependent upon and reflected in the occupational competence statements used by staff to direct their everyday activities. Competence statements, being explicit in their nature, ensure the underlying competitive differentiators are applied consistently across all organizational levels. Hence the strategic ideology of senior managers may be consistently communicated to and implemented on the shopfloor. (3) Evidence presented in this paper suggests companies tailor generic retail competences to fit in with their organizational culture and context. This adaptation is required to make the statements acceptable, understandable and consistent with the organization's goals so that competitive differentiation can be attained. (4) By providing a focus for discussion, competence statements allow employees to question and understand their

(5)

meaning, hence converting information into knowledge and creating a knowledge-based culture. A focus on occupational competence can in the short-term result in a competitive advantage by ensuring all employees perform at a minimum acceptable, threshold level of performance. However, as this approach is implemented on an industry-wide basis, this competitive advantage will be eroded. However, by also concentrating on the personal competences of employees to develop management capability, continued competitive advantage can be maintained.

The competence approach Although currently in vogue, competencebased assessment programmes have been used in industry and academia for some time. For example, in the 1960s behavioural objectives were used in the US as a systematic approach to course design and student/teacher performance (Hevey, 1994). It is, however, only in more recent years that a national attempt has been made to identify the competence requirements of the different industry sectors in the UK. Whilst the primary purpose of this initiative has been to develop a coherent vocational qualifications system which should lead to an improvement in the 235

J. Davison et al. competitiveness of the UK, the approach also has applicability at both the organizational and the individual level.

Competence for strategic advantage As can be seen from the above, competences have a role to play in the broader management of a business. They may also be used to: • drive a corporate restructuring programme; • support cultural change; • improve productivity, quality and overall business performance. The identification of key competences can contribute to the management of human resources, as they can assist in the: • identification of organizational training needs; • development of a framework for training design and delivery; • specification of job profiles and descriptions; • development of succession plans; • design of performance-linked pay schemes; • motivation of employees; • building of teams. At the individual level competences can help to: • identify strengths and weaknesses and highlight training needs; • provide career progression routes; • increase job satisfaction, motivation and confidence. Despite the widespread use of competences, there is still much debate concerning the conceptualization of the approach. For the purposes of this article, it is necessary to make a broad distinction between personal and occupational competence. Personal competence concerns the identification of characteristics (or orientations) that differentiate, for example, effective retail managers from less effective retail managers. This approach is concerned with the latent or potential capability of individuals to act in their role as managers. In contrast, occupational competence concentrates on measuring the actual performance of managers (i.e. what managers actually do rather than what they can do) in order to be effective. Occupational .competence "relates to the functions associated with an occupation" and "uses competence-based standards 236

to describe the characteristics of the functions, and so is independent of the individual" (Debling and Hallmark, 1989, p. 9). However, the demonstration of the output behaviours described by the standards may sometimes be used to infer management competence, i.e. that the individual is able to perform at an acceptable level in a management position. Arguably, occupational and personal competence are inseparable, as competent performance in a specific occupational area may require particular individual characteristics. Further, perhaps it is the combination of personal and occupational competence that contributes to management capability, whereby the individual is able to perform and develop to a higher level of competence than that required by their current job role.

Towards a national competence-based vocational education and training system The development of competence-based education and training (CBET) in the UK was prompted by the Government's white paper: 'A New Training Initiative A Programme for Action' (Department of Employment, 1981), followed by a series of further white papers, all of which signalled a stronger training policy for the UK (Department of Employment and Department of Education and Science, 1984, 1985). The Government's review of vocational qualifications in the mideighties identified the need for a coherent, hierarchical system of vocational qualifications and provided the groundwork for the introduction of a national framework of qualifications (Department of Employment and Department of Education and Science, 1986). This resulted in the setting-up of an accrediting body referred to as the National Council for Vocational Qualifications (NCVQ). This has overall responsibility for the provision of vocational qualifications and the associated quality assurance mechanisms. In order to establish the NVQs the Department of Employment funded the creation of approximately 200 Industry Lead Bodies (representing the views of employers, trade unions and professional bodies) which are responsible for defining the occupational standards for their industry sector. NCVQ prescribed the structure of the new competence-based qualifications and the method of analysis. This resulted in the identification of "units" and "ele-

ments" of competence that describe the functions of an occupation. In addition "performance criteria" are used for assessment purposes, whilst range statements provide an indication as to the different contexts and situations where the competence might be demonstrated. Finally, an indication of the essential underpinning knowledge required is provided. The reader is referred to Figure 1 for an example. Once identified, the standards provide the outcomes against which individual performance may be assessed. The philosophy of NVQs is that assessment is based on the outcomes of performance (ideally in the work place) and that they are not tied to time serving or modes of learning. In addition to direct assessment of performance on the job, a variety of other techniques may be used to assess knowledge and understanding. These include written and oral tests and may encompass the compilation of portfolios of evidence, projects and presentations. Individuals may also apply for the accreditation of prior learning, l Under this scheme, if candidates provide the appropriate evidence they can be awarded NVQ units on the basis of their existing competence and prior achievements. Although useful, this approach has been criticized for being too time-consuming. However, it does enable individuals to gain credit for their self-development activities at work without interrupting their careers. Upon development, the standards are 'packaged' into qualifications at particular levels. This involves the selection of an awarding body (e.g. City and Guilds, RSA or BTEC) by the Lead Body to develop an assessment system and establish quality assurance systems. It is worth noting that there are many different types of relationships between awarding and Lead Bodies. The awarding body is responsible for submitting the proposed qualification to NCVQ for accreditation. NVQs currently cover approximately 80% of occupations (Employment News, 1994). The Government's Industry Training and Education Targets state that 50% of the workforce should have achieved an NVQ level 3 (or equivalent) by the year 2000. The Government intends to review the content and structure of the most

The accreditation of prior learning (APL) or the accreditation of prior experiential learning AP(E)L may be interpreted as being broadly equivalent to the recognition of prior learning (RPL).

Developing competence in retailing ::::::K ~

R~::

Manage and organise resources to meet custorner expectations.

Carry out training to enable individuals to perform their work to the expected standards.

[~ E ~

a) b) c) d) e) 0

~:::

needs.Reviewtraining provided against individual and organisationaI

Relevant records are complete and accurate. Individual training needs and organisation's training plans are compared to training provided within the review period. Shortfalls in training provided and training expected are identified and the reasons for any discrepancies are established. Staff are consulted to check on the effectiveness of the training provided. Suggestions for improvements in the training provided are made to the appropriate personnel clearly and concisely. Improvement plans are based on accurate and reliable information.

Review period: organisational policy; agreed for a specific reason. Training provided: induction; product specific; task specific; skill development; management development. Type of training: formal education; training; informal education/training.

Training resources and materials available. Records available. Sources of information. Figure 1

Level 4 retail comptences

prevalent NVQs and their Scottish equivalents (SVQs) by April 1996.

The development of management competence A series of influential publications during the mid-eighties (e.g. Mangham and Silver, 1986; Handy, 1987; Constable and McCormick, 1987) provided a review and evaluation of the provision and need for management education and development in the UK. These and other reports outlined how the UK lagged behind its competitors with regards to the provision of formal management training and development.

Against this background in 1988 the Management Charter Initiative (MCI) was established as a Lead Body and began developing generic management standards. The MC1 model covers both occupational and personal competence. The former is addressed by functional standards that outline the "role expectations of managerial occupations in outcome terms" (Edmonds and Teh, 1990, p. 6). These are generic standards in the sense that they are intended to be applicable in any management role, regardless of the industry sector. For each competency there are four levels of performance that correspond to super-

visory, junior, middle and senior management positions. Adjacent to this model lies the MCI Personal Competence model. "Personal Competence is a term used for those things that people can do that are transferable and critical to effective and outstanding performance in diverse settings" (Parker, 1992, p. 5). It is this component of management competence that attempts to explain individual differences in management performance. There are four clusters of personal competence (e.g. using intellect to optimize results), each of which has several underlying dimensions (e.g. identifying and applying 237

J. Davison et al. concepts). For each dimension of competence, associated behaviours are identified (e.g. produce own ideas or theories from experience and practice) for use in assessment and development purposes. Underpinning these personal competences are the individual's attributes, traits, abilities, skills, knowledge and understanding. The theoretical model underlying the MCI approach is depicted in Figure 2.

International competence development Similar developments have taken place in Australia. In 1992 the National Framework for the Recognition of Training Agreement was signed by the federal and state governments, showing their commitment to a coherent, national vocational education and training system (Horrocks, 1993). Horrocks also outlines how a number of Australian initiatives (e.g. Dusseldorp Skills Forum, Sydney and The Australian Committee on Training Curriculum) have used the MCI's generic management standards with some success. The National Training Board has since been set up with responsibility for establishing the Australian Standards Framework (Wolf, 1995).

The US has also reverted to the use of competence, with the establishment of the National Skills Standards Board. Discussions are also taking place concerning the comparability of vocational qualifications in the European Union (Hevey and Smith, 1993). Clearly, the competence-based approach to education and training is perceived as providing a robust conceptual framework within which the dual objectives of better aligning the outcomes of education with the needs of industry and the re-skilling of the workforce may be addressed.

Employment trends in the UK retail sector The UK retail industry is often characterized as having high levels of concentration, particularly in the food sector, and is a mature market in which profit margins are deemed to be high in relation to those found in, for example, mainland Europe and the USA. As Table 1 indicates, concentration in terms of sales volume by major retailers is not particularly high in relation to other EU countries. However, the UK market is dominated by multiple retailers and, on average, has larger stores. This is evidenced

Table 1 Market concentrations in European food retailing

Country

% of market accounted for by five largest food retailers (by turnover)

Denmark France Germany Italy Netherlands UK

61 72 67 20 53 39

Source: Europa, 1993.

in Table 2 which shows that, comparatively, the UK has fewer outlets than many other EU countries. The hegemony of multiple retailers in countries such as the UK should enable national governments to more easily achieve higher levels of take-up for national competence-based training initiatives. Thus the multiple retailers in the UK have been the main focus of Government-funded initiatives. The retail sector has for some time been a major employer within the UK. With the exception of the recessionary years of 1991 and 1992 the retail labour force has been growing in both absolute and

COMPONENTS OF PERFORMANCE LEADING TO COMPETENCE IN THE WORKPLACE INPUTS

PROCESS

OUTCOMES

ilii!ii~iiiliiiiiiiii~E~E~i~!i!ilii!i;i:if:

i: ili~viRONNIENT/iii:I

PERSONAL COMPETENCES

Z t~

O

Figure 2 The personal competence model and how it relates to the management standards

238

Developing competence hl retailing Table 2

ment, training and development functions to become more strategically and tactically aware in order to enable the organization to be more responsive to the changing needs of the market. In many companies the increasingly competitive market-place led to the need to reduce overheads and unnecessary reporting relationships. This resulted in many retailers 'delayering' to produce 'flatter' organizational structures which were to enable the business to be more responsive to market dynamics. The changing business environment also led to the development of a more flexible workforce in many retailers. For example, that this period coincided with economic recession made it relatively easy for retailers to introduce multi-tasking, to increase the proportion of part-time staff and introduce more flexible contracts. The recession brought about a slow-down in labour turnover, one result of which was the introduction of a team-based approach to previously autocratic management structures. Employees are now more likely to experience multi-skilling and job enrichment and are expected to be more responsible for their self-development. All of this, allied to the increasing incorporation of information technology and more accurate and expedient management information systems, has led to significant change in the pattern of development, structure and competence required of the retail labour force.

Retail store densities in EU

Country

N u m b e r of persons per store (1984)

Denmark France Germany Italy Netherlands UK

101 83 148 55 91 165

Source: Panorama of EC Industry, 1993.

relative terms (Table 3). Within this underlying rise, however, there has been a s:Egnificant shift to part-time working. Retail employment in the UK is increasingly dominated by female parttime employees, despite the fact that the absolute and relative numbers of male part-time employees has risen markedly of late. The advent in recent years of zero hours contracts in the UK retail sector is a further clear sign of structural changes in retail employment. The characteristics of the retail workforce have traditionally militated against the development of retailer training programmes which went over and above purely occupational training for nonmanagerial or supervisory staff. Given tile prevalence of part-time female employees and high levels of staff turnover within the sector, many companies found it either difficult to reach the entire workforce with training programmes, or simply found the time and effort to train at anything other than a basic level too costly. Thus the advent of competencebased training programmes aimed at a largely part-time and often itinerant workforce may initially have been viewed in somewhat jaundiced terms by UK retailers. However during the late 1980s and early 1990s the UK retailing industry was subject to a number of fundamental cl':anges. Economic recession in conjunction with the arrival of a number of foreign-in-origin retailers (largely, but not exclusively, operating discount/off-price formats) ushered in a new competitive era. This called for retail companies' recruit-

Table 3

Education and training in the retail sector Historically, retailers are more likely (than other employers) to provide training in order to achieve competitive differentiation, usually through government-sponsored training schemes. Traditionally retail training has primarily taken place on the job and informally, and has tended to focus on managers rather than other shop floor staff. Training courses and qualifications have tended to be company-based and accredited, resulting in a proliferation of bespoken retail training courses and

qualifications. For example, a survey undertaken by the FE unit of the NRTC in 1988 found that, from a sample base of 50 companies, there were 50 different retail related qualifications on offer (Toyle et aL, 1993). However, there has been a tendency for retailers to informally recognize the training programmes of other major retailers. Equally, potential employees (particularly graduates) are influenced "more by corporate image and marketing activity than by the hard facts of job specifications" (Widdet, 1995). The high levels of staff turnover (Toyle etal., 1993) associated with the retail sector provides a disincentive for staff training and development beyond operational imperatives. This concentra-tion on 'threshold' level operational competence led to a situation whereby retail companies lacked management staff possessing sufficient cognitive abilities to drive the business forward. Further~ the recruitment of graduates from nonretail degree programmes led to managers having a stereotyped and idealized conceptualization of the retail environment. This lack of holistic insight into the industry often resulted in poor management performance, further contributing to staff turnover. Due to the nature of retailing prior to the 1980s, the need for retail-specific courses at the undergraduate level wax not recognized. Whilst many of the skills, knowledge and abilities required for effective employee performance were (and still are) generic and transferable, the retail environment itself has undergone significant changes. For example, increased competition, the introduction of informa~ tion technology and structural changes require today's managers to be more aware of their environment and to respond proactively and flexibly to the forces impinging upon it. This has prompted the introduction of specific retail management degree programmes in the UK (e.g. University of Surrey, 1989). These were jointly designed (and in some cases pump-primed by industry) to provide graduates with both general transferable skills and retail-specific knowledge and

Employees in UK retail and distribution

%

1987

1988

1989

•990

1991

1992

1993

1994>

Of total UK employed Part-time to all retail employees Female employees to all retail employees Female part-time to female retail employees

10.1 NA 63.5 60.2

10.l NA 63.8 59.4

10.2 43.1 63.9 60.0

10.4 45,9 62.4 60.7

10.0 48.6 62.8 63.1

9.8 47.7 62.3 63.0

10.7 49. t 62.0 64.1

11.2 52.0 62.1 66.9

Source: Employment Gazettes, 1988-1995.

239

J. Davison et al. understanding to meet the recruitment needs of the retail sector. Recent years have also witnessed the consolidation of in-company training programmes into fast-track courses, e.g. graduate and commercial management training programmes. These programmes often expose new recruits to store-level and head office functions before they have to decide upon their first specialized appointment. At the end of the 1980s the retail industry formed a Lead Body to develop national standards which would form the basis of retail NVQs. The Distributive Occupational Standards Council (DOSC) has been one of the most successful in terms of the number of people who are working towards or have gained an NVQ. By the end of March 1995, nearly 125 000 individuals were registered to follow a level one or two award. For the level three NVQ, just under 1600 people were registered and for level four the number was 100. It should be noted that because a candidate registers for an NVQ it does not automatically mean they will obtain it. With regard to the actual certificates awarded by the Autumn of 1994 (NVQ Monitor) nearly 16 000 level one certificates had been awarded and just under 25 000 level two certificates. At level three the number was five and at level four the number was one.

Research methodology and key findings In this part of the paper the focus is on the research methodology adopted to gather data on the implementation of NVQs in the retail industry and presentation of the key findings. The five companies that were included in the research (see Table 4) were selected because between them they accounted for almost one-fifth of the entire U K retail workforce, had approached the implementation of NVQs differently

Table 4

and had a commitment to staff training and development. The data were gathered from five in-depth interviews with senior managers responsible for training and education in their respective companies. Each interview lasted between 60 and 90 minutes and was divided into three parts. The first set of questions focused on the background to the interviewees involvement in the delivery of NVQs; the second part of the interview was concerned with the preparations that were undertaken and the final path sort to gather feedback on the experiences of delivering the competence-based qualifications. It should be noted that the five interviews were conducted as part of a much wider research project that encompasses the experiences of not only implementers but also developers and includes two other service industries. The findings presented in this paper reflect a snapshot of the feelings and opinions of policy makers in five major retail companies with experience of NVQ implementation projects.

Key findings The motivation to offer NVQs An important step on the way to understanding the experiences of the five interviewees in their attempts to implement NVQs was identifying the reason for their initial interest. For four of the companies the catalyst was government funding. By recruiting young people on to a Youth Training Scheme (YTS) and ensuring that they gained level 1 and 2 NVQs in retailing, the companies concerned received what has become known as "output funding". As one interviewee stated: "It was almost a question of NVQs coming in through the back door." For the fifth company, BhS, the reason was different. At the same time as the

NVQ concept was being developed in the U K by the National Council for Vocational Qualifications, BhS was experiencing financial difficulties resulting in a major organizational change programme. For BhS NVQs offered a new opportunity to link competence to pay scales: NVQs seemed to be the right thing for us at the time. It helped with our change process.., we wanted awards based on skills and not on years of experience as it had been in the past where length of service seemed to dictate how much you were paid as opposed to paying for performance. The biggest change for us was that people were having to prove they were able to do the job. When asked to focus on the difference between the new competence-based qualifications and previous national awards the comments centred on the fact that NVQs could be gained in the workplace thus removing the need for employees to attend a college course.

Initial reactions Initial reactions have an important role to play in the long-term future of any major change programme. For the five interviewees the introduction of competencebased qualifications into their companies yielded different responses ranging from positive to negative. The two organizations demonstrating a positive reaction actually had different viewpoints. BhS welcomed the development of NVQs because they represented the establishment of national standards which had not previously existed. Sainsbury's were equally enthusiastic about the prospect of the NVQs and the role they play in setting standards and improving the profit margins of the business. The company also felt it had a responsibility to support a national programme: The reason why we are more into NVQs

and why we will not do an internal programme is because it is a public

Case study companies profile

BhS

John Lewis Partnership

Tesco

J. Sainsbury

Safeway

Main merchandise category Rank in UK retailing (by turnover) Sales (£ millions)

Clothing 17c 749

Food 2 10 900

Food 1 12 065

Food 4 6218

Stores Sales per sq fi (£) Employees Sales per employee (£)

137 3.43 a 15 022 958

Department Stores and Food 9 2067 22 Department stores 97 Supermarkets 8.18 b 55 600 715

519 17.00 111 459 140 842

535 18.53 124 841 148 252

FT/PT staff/full-time equivalents

NA

FT 40 200 PT 15 400

FTE 68 552

~

378 12.86 56 125 !10 788 F I E 41 154 FT 21 594 PT 37 725

Notes: ~1992; bDepartment stores only, 1992; CStorehouse group.

240

79 949

Developingcompetenceh~retailing statement, it is social responsibility,it is helping other people . . . and because the principle behind it is very good and we want to educate and qualify the workforce as much as possible we will probably stay with NVQs. Two of the companies could be described z~s sitting in the middle of the positive/ negative spectrum. One interviewee admitted to feeling overwhelmed by the detail of the new qualifications whilst still fully e,mbracin g the new approach, and another confessed to being very cynical initially. Whilst her view has since improved she has a softer approach: I do not positivelyencourage people to go through the NVQ scheme but I do encouragethem to gain some knowledge and increase their awareness of the initiative. For one organization the initial experience could be classified as negative: It just appeared to be very poorly thought through and rushed and nobody really knew what they were doing or why they were doing it. I was a victim of NVQs rather than a champion. I was a personnel manager up in the North East and I was being forced to train these people on a system that nobody has actually explained to me. "]'he key difference between this last i~terviewee's experience and that of the other four interviewees is that his initial reaction to NVQs was based directly on operational experience of attempting to i;nplement the NVQs at a very early stage in the life of the initiative.

Extent of implementation The five companies have each taken a different approach to the implementation cf the competence-based NVQs and experienced varying degrees of success. For example, Sainsbury's has offered levels 1 and 2 as part of the YTS and opened up access to their more mature f,all-time staff. They were planning to offer the qualification to all employees at the beginning of 1995. Whilst they are involved in the level 3 award, this is embedded in their trainee management programme. This is one model of how companies are integrating national standards of competence with their own assessment programmes. With regard to f~Jture targets, the company anticipates that from this year onwards 5000 staff will achieve a level 2 qualification; 250 individuals will gain a level 3 and a pilot is currently being undertaken to integrate the level 4 standards with the in-house management development programme. Tesco has been very successful in

implementing the new qualifications at levels 1, 2 and 3. Having taken part in the first pilot project in 1989, when they ambitiously registered 250 youth trainees and experienced "a really painful process", the company feel they learnt a lot of lessons from this ordeal. The interviewee had positively been "selling" vocational awards within the company and had begun her implementation plan by involving senior managers, developing guidelines for each store, producing a video and allocating a budget for each region which was drawn from Training and Enterprise Councils (TECs). The company has set a target of 10 000 staff to have either achieved or be working towards an NVQ by the end of 1995. This amounts to 10 per cent of the workforce. The John Lewis Partnership has concentrated on level 2 and has offered all staff the opportunity to embark on the programme, although success is mainly apparent in one particular store. The interviewee attributed this success to good project management skills and the fact that the programme was piloted carefully using department managers who would "make it work". The store manager responsible for this success story has since moved and the same level of enthusiasm for NVQs is not now evident. The interviewee was cautious about introducing levels 3 and 4 into the organization. There was a feeling that departmental managers would not have the time to assess level 3. Overall the interviewee expressed the following opinion about the company's involvement in NVQs: I would love to think we could create a development scheme around all the different NVQ levels- it looks wonderful in principle. In practice it may well be that we follow the content but whether we accredit it or make it our own scheme I suggest we will do the latter. The only benefit that candidates would lose would be the NVQ. Safeway, at the time of the research, we~ not offering NVQs to their staff, although they had been involved previously through the youth scheme. When the company decided to withdraw from YT it ended its relationship with NVQs. Since then there has been a review of the position and the company decided to run a pilot programme in six of its London stores involving approximately 60 staff. The pilot project was carefully planned to identify the characteristics of a good candidate and assessor and to determine the simplest and most cost-effective route of introducing NVQs, as well as revealing the benefits

of being involved in the initiative. Whilst the pilot was successful the company was not sure what future action it would be taking, mainly because they were about to embark on a total review of the organization. There was, however, a feeling that NVQs had something to offer: "NVQs could be very beneficial to the business but only for certain groups of people." Having entered the NVQ system at a very early stage, very positively, BhS has now withdrawn from offering the new qualifications. Their involvement had been at levels 1 and 2, although they had never been entirely happy about the content of the level 1 award. The problem BhS encountered was that it decided to judge its managers on the number of staff they put through the NVQ programme and as a result the system became numbers driven and this had a ripple effect on the amount of administration required and the associated costs and time involved. The company became concerned about the finance required to maintain the system compared with the benefits it felt it was deriving. BhS had considered offering levels 3 and 4 at one stage and conducted a pilot project at an early stage. The m~Lin problem they experienced was the collection of evidence at the higher levels. For Bhs there have been two major consequences of their involvement in NVQs. Firstly, in the future they do not intend to be at the forefront of a new initiative - they would prefer to follow other companies once the problems have been resolved. Secondly, whilst they have since developed their own in-house open learning programme they are including reference to the NVQ standards. In essence the company has: "taken the best bits of NVQ and developed our own programme."

Emerging differences Once the companies had started implementing the new awards they began to identify more differences with systems which had previously been in existence. For example, Sainsbury's saw a real benefit in using the workplace to undertake assessments and integrating these into the day-to-day work of the store. For Tescos the main difference was seen to be the flexibility that the competence-based qualifications offered and in particular the removal of time-serving. The interviewee commented on the implications of NVQs for trainers, noting that they are no longer required to deliver courses. Instead they have moved to the 241

J. Davison et al. role of influencer, facilitator and supporter.

Resource requirements Any new system usually requires extra resources to launch and operate. Four of the interviewees commented on the particular preparations which had to be undertaken to operate the NVQ system. One interviewee commented on the difficulties encountered in gaining government funds which were available for youth training. Two interviewees mentioned the time that the NVQ system demanded and the resources required to develop support materials, register candidates, train assessors, undertake assessments and maintain an administration system.

Benefits and dis-benefits of competence-based qualifications In considering the pros and cons of the new system it was decided to focus on three key players in the system: the individual candidate, the company and the assessor. The assessor is the person who has responsibility for monitoring the progress of the candidate and observing the standard of their performance. When identifying the advantages of the NVQ process for the individual a number of points were made by the interviewees. Firstly, there was a general feeling that gaining an NVQ had made a "difference" to the individuals concerned. This "difference" was linked to the qualification being nationally recognized and representing the acquisition of skills and knowledge - a form of status. This benefit was seen to be particulary beneficial for the more mature staff. On the negative side, one interviewee recognized that to gain all the units in an NVQ required experience in a range of activities and that it was not

always possible for companies to provide this breadth of exposure. It was also noted that individuals had to "drive it" for themselves, in other words they had to be self-motivated to ensure they completed all their assessments (particularly for level 3 NVQs). Another interviewee felt that the qualifications had developed an image of being for young trainees and that this had created an internal marketing challenge. At the company level NVQs were considered to offer a number of benefits. Chief amongst these was the belief that staff performance improves: "Individuals will do a better job because they feel valued and more enthusiastic." Other interviewees referred to guaranteeing consistent standards of competence and improving the quality of work. Safeway perceived the company benefits to include staff retention, greater productivity and increased staff flexibility which would contribute to the move towards multiskilling in the organization. When reviewing disadvantages of the system at the company level three of the interviewees mentioned the costs involved in implementation. Cost was defined in terms of both time and direct costs, such as awarding body registration fees for the candidates. Four of the interviewees focused on the bureaucracy involved and, whilst the relationship with the awarding bodies was generally seen to be improving, there was a feeling that they had been inflexible in the early days. Two of the companies questioned the value of the NVQ compared with their own in-house training programmes and one organization was concerned that the NVQs represented a lowering of standards across the companies implementing the NVQS.

Table 5 Competency development for business performance Competence

Executives

Strategic thinking Change leadership Relationship management Flexibility Change implementation Interpersonal understanding Empowering Team facilitation "Portability~' (mobility) Flexibility Information seeking, motivation and ability to learn Achievement motivation Work motivation under time pressure "Collaborativenes~ ' Customer service orientation

,/ ~/ ~/

Source: Spencer (1990). 242

Managers

Staff

~/ ~/ ,/ ~/ ,/ ,/ ,/ v/ ~/ ,/ ,/ ~/

Within the NVQ system the assessor has a critical role to play in terms of maintaining standards. It appears that the assessors either view their role as important and an integral part of their job or they see it as extra work. The attitude the individual took depended partly on how the role was presented to them and partly on their own experiences. One interviewee was of the opinion that the act of assessing had not been recognized enough in the past.

Lessons learnt and the future As a result of their experiences in implementing NVQs, two of the interviewees made the comment that they would like to see a situation developing where their own in-house programmes could be accredited, thus allowing companies to customize the 'standards'. This was linked to the view that one interviewee expressed concerning the duplication of effort and "re-inventing of the wheel". If this continued the company would consider withdrawing from the system. Two interviewees requested more flexibility in the structure of the NVQs. With regard to reviewing the experience to date, only one company had conducted a formal evaluation, For two interviewees evaluation seemed to equate with justification for joining the system. Overall there seemed to be a general shying away from evaluation. In considering lessons learnt, two of the interviewees commented on the benefits of exerting caution before embarking on a new initiative and the value of operating a pilot programme. In looking to the future the companies were not planning any radical changes. For BhS, the organization which has withdrawn from the system, the intention is to keep informed - but at a distance. For Tescos the challenge was seen to be keeping the momentum going. In this section of the paper an attempt has been made to present the varying experiences of five major U K retailers who have been involved in the implementation of competence-based qualifications over the past few years since a government initiative was launched. In the final part of the paper the strategic implications of the competence approach for the retail industry will be explored.

Strategic implications for the retail industry The developments whichhave taken place in the U K retail industry since the late

Developing competence in retailing 1980s have led to a demand for staff, managers and executives to assume increasing workloads, shoulder more responsibility for results and adapt a more flexible approach to meeting the needs of the business. Given that people are the most important resource in any organization, developing competence is the natural route through which retailers can move their business forward. In order to develop occupational competence an analysis is required of the skills, knowledge and attitudes necessary for successful performance in a given role. q-he identification of competences can be undertaken at the national, organizational and individual level. In the UK retail irLdustry competence analysis has been implemented at all three levels, but in this ay:ticle the emphasis has been on reviewirg the establishment of a national competence initiative in which the retail industry has been at the forefront. The strategic implications of competencebased assessment programmes are far reaching, as was outlined in the first section. For example, the approach can be used to develop human resources, and to improve quality, productivity and subsequently company performance. It should be noted, however, that improving individual competence can also be seen by some less forward looking organizations as a negati,,e rather than a positive step. This is because at the company level there may be a reluctance to develop staff for fear of losing them to competitors. Many retail ccmpanies have for some time made use of the competence approach to communicate arid reinforce their business strategy and culture. There has, however, in the past been a tendency to focus on organizational needs and ignore the individual's development needs. The introduction of a national system of competence-based NVQs has been an a t t e m p t to address the issue of organizational versus individual needs. For the employees the recognition that a national qualification offers can increase confidence and motivation, leading to irr,proved job performance. Whilst a competence-based assessment system lends itself to a wide variety of benefits, the research findings suggests that the introducticn of a national system needs careful management. Strategic advantage can be attained and maintained through the development of competence of all staff not just senior and middle managers. Maintaining competitiveness by maximizing sales and profitability is the strategic aim of most

Table 6 Sample targets for NVQ uptake

Working population covered by NVQs (%) Young people at NVQ level 2 (%) Young people at NVQ level 3 (%) Employed workforce at NVQ level 3 (%)

Present

Target

86 63 40 40

NA 80 by 1997 50 by 2000 50 by 2000

Source: National Advisory Council for Education and Training Targets (NACETT).

retailers. For most companies business strategy has to be realized through effective implementation, usually at shop floor level. Indeed, the staff-customer interface is vital in the implementation of the retailer's marketing strategy. The high rates of staff and management turnover associated with the sector erode both profitability and competitiveness. Staff turnover costs the retailer not just in terms of the administrative and training costs associated with taking on new employees, but also in terms of the productivity loss, lost sales opportunities and administrative errors occasioned through continually training new employees. Whilst using competence models can lead to numerous strategic advantages, the five companies included in the research did not approach the introduction of NVQs from this starting point. In the main, industry became aware of NVQs via operation of the Governmentfunded Youth Training Scheme. The two strategic implications of this are, firstly, that the motivation to offer the national competence-based programmes was primarily finance-driven. In other words, companies did not necessarily consider their needs before joining the system. Secondly, because of the direct link with YTS, the initiative was introduced via the training departments and was not therefore part of an overall strategic plan for the business at that stage. Having said this, the new qualifications are considered to be a vehicle for improving the image of the retail industry because they are based on national standards. In reviewing the extent to which the NVQs have been implemented in the five companies it is clear that the greatest activity so far has been at levels 1 and 2 and this has mainly been connected with YTS as mentioned above. There is a general caution about involvement in the implementation of levels 3 and 4, although there is some evidence of growing activity at these levels. This is in part due to the fact that most retail companies have in the past concentrated on developing their own in-house supervisory and manage-

ment training programmes. There is also some indication that access to the new qualifications is being restricted to certain members of staff, almost as a form of reward for loyal service. Such a restriction is not in harmony with the national objective of increasing competence levels and has serious implications within companies for staffrelations and company performance. It is important to note that the implementation models being used vary. For example, some companies choose to find a way of bringing together the national standards and their own in-house programmes - a process often referred to as embedding. Where difficulties have been experienced in operating NVQs, companies are indicating that they may move away from the national system but save the principles of the competence approach and develop their own in-house model. One of the companies included in the research has taken this step. This possible move away from offering NVQs was also being considered where a company felt that they would prefer to work from company rather than national standards. A recurring theme centred on the added value that a national qualification provided, where company training programmes were ah'eady informally nationally recognized within the industry. The companies, however, were not showing any signs of rejecting the competence approach, but they were showing a preference for operating their own bespoken systems. This trend has been identified in a recent study of 200 firms by the Coverdale Organisation (Sparrow and Hall, 1995).

The future After eight years of development and implementation, the greatest uptake to date of NVQs has been at levels 1 and 2. The Government is now focusing on the development and implementation of higher level NVQs and is exploring the links these may have with higher education. This raises many issues, One of these relates to the determinalion of the role of 243

J. Davison et al.

knowledge and understanding and their assessment. Hence higher level NVQs may break the mould of typical NVQ assessment, as greater emphasis is placed upon the underlying knowledge and skill components of competence. Early discussions are pointing towards the emergence of a different model which is likely to take more account of personal competence. The Government white paper 'Education and Training in the 21st Century' (1991) has led to the introduction of a further qualification mode known as General National Vocational Qualifications (GNVQs). GNVQs are distinct from NVQs in that they concern broad occupational areas (e.g. distribution or leisure and tourism) rather than particular occupational roles. The qualities listed below provide an example of the types of competence areas that companies in the 1990s might expect from their executives, managers and staff: A company that ensures its employees are occupationally competent (at both operational and management levels) should attain a competitive advantage. However, by also addressing the components of the personal competence model, individuals should develop with the potential to perform beyond the threshold level specified by the occupational standards. These individuals might be referred to as demonstrating management capability. They possess and develop "skills and competences which will enable them to solve new problems, to anticipate change, to adjust rapidly to change and to manage the process of their employees learning"

244

Employment Department Group (1994) Employment News Feb issue Hevey, D and Smith, P (1993) 'Towards a European qualificationsarea: the UK perspective' Background paper prepared for the European Forum on Vocational Training, Vocational Qualifications Centre, Open University, Milton Keynes Handy, C (1987) The Making of British Acknowledgements Managers National Economic Development Office, Pitman, London The authors would like to thank the various retail companies that have assisted Hevey, D (1994) 'What is competence?' Occasional paper Open University, Milton them in the process of data collection for Keynes this paper. Horrocks, R (1993) 'A case for developing generic management standards in Australia' The Practising Manager Oct issue, 18-23 References Howell, F (1994) 'Action learning and action research in management education and Constable, J and McCormick, R (1987) The development, a case study' The Learning Making of British Managers British Institute Organisation 1(2) 15 22 of Management, Corby Mangham, I and Silver, M (1986) Management Debling, G and Hallmark, A (1989) 'IdentificaTraining." Context and Practice University of tion and assessment of underpinning Bath knowledge and understanding in the context NVQ Monitor (1994) NCVQ Autumn London of the UK Government's standards programme' In Knowledge and Competence: Parker, L (1992) 'Personal competence developing a model for general use' Current Issues in Trainingand Education eds Competence and Assessment 17 5 7 H Black and A Wolf Employment Department: Training Agency, London Personnel Today (1994) Reed Business PublicaDepartment of Employment (1981) A New tions, London Training Initiative: A Programmefor Action Sparrow, S and Hall, L (1995) 'Best behaviour' Cmnd 8455 HMSO, London Training- A PersonnelToday Magazine June Department of Employment and Department issue, page 8 of Education and Science (1984) Training Spencer Jr L M, McClelland, D C and Spencer, for Jobs Cmnd 9135 HMSO, London (1990) Competency Assessment Methods: Department of Employment and Department History and State of the Art Hay/McBer of Education and Science (1985) Education Research Press and Trainingfor Young People Cmnd 9482 Toyle, J, Spilsbury, M and Davies, C (1993) HMSO, London 'Employment, work and training in the UK Department of Employment and Department retail sector' Institute of Manpower Studies of Education and Science (1986) Working Report 238, London Together. Education and Training Cmnd Widdet, S (1995) 'The graduate view' Retail 9823 HMSO, London Week 26 May Edmonds, T and Teh, M (1990) 'Personal competence: where does it fit in?' Competence Wolf, A (ed) (1995) Competence-BasedAssessment Open University Press, Buckingham and Assessment 13 6-8

(Howell, 1994). Developing staff that are able to respond pro-actively in a turbulent market-place and manage structural re-engineering will be fundamental in securing their companies' futures.