TRUST AND COMPETENCY: AN ORGANIZATIONAL PERFORMANCE PERSPECTIVE

Abstract

An organization can increase its performance by the optimal use of its resources (human, capital, material, technological) in relation to organizational goals. Even if the goals are set for the organization itself, ultimately these are achieved through the human resources available, in other words the organization depends on the knowledge, skills, abilities and other characteristics of its human resources for achieving its goals. Properly motivated human resources equipped with the right competencies, which are aligned with organizational goals have a decisive effect on the organization S performance. Furthermore, one of the main factors that lead to the achievement of an organizational goal is social cooperation, a characteristic that attests to the capacity to work together. The main driver for this ability is trust, an essential element of social cohesion. Studies (Zand, 1972; Salamon & Robinson, 2008; Searie et al., 2011; Whitney, 1994; Kramer & Tyler, 1996, Davis & Landa, 1999) show trust has both direct and indirect relationship on organizational performance. From this premise, this paper is providing a bird S eye view on the concepts of trust and competency and their impact on organizational performance as the central theme.

Headnote

An organization can increase its performance by the optimal use of its resources (human, capital, material, technological) in relation to organizational goals. Even if the goals are set for the organization itself, ultimately these are achieved through the human resources available, in other words the organization depends on the knowledge, skills, abilities and other characteristics of its human resources for achieving its goals. Properly motivated human resources equipped with the right competencies, which are aligned with organizational goals have a decisive effect on the organization S performance. Furthermore, one of the main factors that lead to the achievement of an organizational goal is social cooperation, a characteristic that attests to the capacity to work together. The main driver for this ability is trust, an essential element of social cohesion. Studies (Zand, 1972; Salamon & Robinson, 2008; Searie et al., 2011; Whitney, 1994; Kramer & Tyler, 1996, Davis & Landa, 1999) show trust has both direct and indirect relationship on organizational performance. From this premise, this paper is providing a bird S eye view on the concepts of trust and competency and their impact on organizational performance as the central theme.

Key words: Trust, Organizational performance; competencies; skills; defense organizations.

1.INTRODUCTION

The COVID-19 epidemic has had and continues to have a significant influence on our society and economies. The recent start of the conflict in Ukraine did not help, raising the level of uncertainty and making the road to recovery considerably longer. Organizations around the world had to find creative ways to cope with the new ways of working caused by restrictions and lockdowns. From an organizational standpoint, the management of human resources will be different and will most likely not revert to pre-pandemic standards. This new environment comprising both external and internal factors heavily influencing the actual output of any organization, gave managers and leaders a tough time in changing the way they worked within their organizations. Few organizations managed to issue guidance on how to manage the situation so managers had to rapidly adapt as circumstances changed, including teams which worked remotely. Many faced a massive task with motivating people to perform while they were dealing with the challenges of working from home while taking care of the children because kinder gardens and schools were closed or even coping with serious illness or deaths within their families. In a survey across more than 10 industries, undertaken by Qualtrics and SAP (March-April 2020), 75% of people felt more socially isolated, 67% of people reported higher stress levels, 57% handled greater anxiety, and 53% felt more emotionally exhausted. Shockingly, nearly 40% said their organization had not even asked them how they had been doing since the pandemic started (R. Smith, 2020).

The management consulting firm Gallup identified pragmatic elements within the COVID-19 strategies and policies from the HRMs of 100 of the world's largest organizations, revealing, in the context of humans going through life about 30 percent rationally and 70 percent emotionally, that the feelings most employees sought were trust, compassion, stability and hope (P. Berg, 2020). With organizational performance constantly being in the spotlight in recent decades and human resources questioning how the pandemic and recent conflict will affect their jobs, building trust by not being an erratic leader and prioritizing employee and customer safety will have a decisive effect on critical areas that conform the organization's purpose and contribute to the intended outcomes. Inherently, the goal of the paper is to explore the salience of trust and human resources competencies by providing a brief overview on how they can influence organizational performance.

2.organizational performance MANAGEMENT AS A DRIVER AND ENABLER OF HUMAN RESOURCE PERFORMANCE MANAGEMENT

Nowadays the concept of performance is prevalent in almost all spheres of human activity. Although performance is a subjective perception of reality, thus explaining the multitude of reflections on the concept and its measuring instruments (Whooley, 1996, Rolstadas, 1998, Neely, 2002), most definitions of the term underline the idea of outcome, goal achievement, quality and less the aspects of efficiency and effectiveness (Lebas, 1995; Lorino, 1997).

2.1. Path to managing organizational performance

The online Britannica Dictionary defines performance as "how well someone or something functions, works, etc.; how well someone or something performs"", showing that the term is used to characterize results in certain fields. This might create some confusions of the concept when used alongside the term organization, thus creating the confusion that organizational performance is equivalent to productivity, efficiency, effectiveness, profitability, etc. Didier Noyé believes that performance consists in "achieving the goals that were given to you in conjunction of enterprise directions"", or simpler put, organizational performance means measuring the actual output against its intended outputs. From this perspective, managing the organizational performance consists in identifying the strategical axes, rendering them into precise objectives, organizing and mobilizing available resources for obtaining those objectives.

In this context, it is important to underline that organizations are different, based on a number of factors related to both organizational goal and the instruments and strategies selected to achieve it. These factors which determine the structure, goals and activities of the organization can be grouped into:

- External factors (those which are not under the control of the organization but have an effect on the performance);

- Internal factors (those which are under the control of the organization);

- Individual choice factors (those individual or group choices that have an impact on the performance of the organization).

Since all of these factors play a major role in shaping an organization's performance, using a methodology where interaction of these factors is tracked and measured in multiple dimensions becomes essential. Using a combination of measures aimed at responding to changes triggered by external factors, aligning available resources and organizational structure while providing focus across the organization can lead to getting outcomes such effectiveness, efficiency, satisfaction or producing organizational performance.

Properly aligning the internal factors that influence the organizational performance, factors over which management and human resources have a certain degree of control, with the organizational goal will define the overall level of performance.

In conclusion, performance management is the use of relevant information on organizational factors to make a positive change in organizational culture, systems and processes, by setting performance goals, allocating and prioritizing resources, adaptation of objectives and sharing results in pursuit of the organizational goal.

2.2.Human resources influence on organizational performance

The Burke-Litwin Model (Burke & Litwin, 1992) provides a framework that argues that all factors should be integrated to a greater or lesser degree, and demonstrates how these factors should be linked causally to achieve a change in performance. Therefore, a change in one will ultimately affect all other factors.

The model (Fig. 2) revolves around twelve organizational factors or dimensions:

1. External environment

2. Mission and strategy

3. Leadership

4. Organizational culture

5. Structure

6. Management practices

7. Systems

8. Work unit climate

9. Task and individual skills

10. Individual needs and values

11. Motivation

12. Individual and organizational performance

The management of an organization can extensively alter the organization's structure, human resources policies and management practices, the use of its resources, and leadership style to incite changes in performance and can influence to a lesser degree the organizational culture and climate, the motivated conduct and teamwork.

It appears that the internal factors revolve around the Human Resources Management, because the effective use of human resources is of primary importance to the organization's long-term success. Because human resources are the organization and human resources run the processes that accomplish the organizational goal, in the context of all internal and external factors being connected, affecting or interacting with each other, it becomes a necessity that these must be harmoniously managed.

It turns out to be the duty and responsibility of the Human Resources Management (HRM) to obtain both internal and external information and feed it to decision makers leading to achieving the organizational objectives. In a more detailed explanation, we can support that HRM transforms organizational vision, values and missions into system policies and practices in accordance with organizational values by ensuring that people with the required competencies and levels of motivation are available and also by contributing to an organizational environment which stimulates performance, while continuously adjusting to external environment.

з.skills and competency in performance management

Similar to the issue stated above regarding the definition of the term performance, there are no certain commonly accepted meaning in practice for the terms of skills and competency, the terms being used in a way that would suggest they refer to the same thing. While these terms are certainly related, there are important differences of which we should be aware of.

3.1.Untangling definitions

Skills can be considered as specific abilities that an individual possesses. Skills define specific activities that can be learned through training or by experience, and range widely in terms of complexity, at varying levels of expertise, sometimes based on years of experience and appointment to a certain role within an organization. Identifying the skills an employee possesses enables a manager to determine if the specific training and experience has prepared that employee for a specific type of a job within the organization. Basically, skills are used in a specific setting in order to reach a predefined desired result, or simpler put, skills are a series of procedural steps used to complete a task on the job. That means skills can be referred to as "the whať component of completing a task.

Competency is a broader concept, a bundle of various skills, abilities, knowledge, motivations and attributes (Fig. 3) It could be said that competencies incorporate skills into observable behaviors exercised in order to effectively perform de duties of a specific job. Being behaviorallybased ensures an assessment mechanism through measurable behavior. So, competency can be referred to as "the how" component of completing a task.

In conclusion, you can hone one's skills through courses or through experience but a combination of skills, knowledge, abilities and behavior will produce measurable results.

3.2.How organizations use competencies

There are several ways that any organization can effectively use defined to achieve its goal.

Since we already established that to successfully complete a task an employee needs to demonstrate the right combination of skills, knowledge and abilities, we can affirm that human resource managers are provided with valuable tools that can be used at every step of an employee career - from candidate to promotion, through development.

Using competencies within organizations are important for illustrating both how an employee accomplishes its responsibilities in addition to what a person accomplishes, for enhancing employee contribution with the goal of ensuring organizational performance.

The effects of using competencies within organizations are graphically depicted bellow:

Some of the ways that an organization could use competencies are:

- HR Planning: adding competencies to job description helps unification of position description across the organization, while focusing on measurable results;

-Recruitment: linking interview questions to position competencies enables sourcing candidates who possess the competencies that cannot be developed through organizational training;

- Appraisals: using specific behavioral examples enables managers to realize how performance looks like at different levels of proficiency, while the employee can link directly the results with achievement of organizational goals;

- Career progression: having competencies mapped for each position within the organization guarantees transparency on which specific combination of skills, knowledge and abilities and at what level are needed for a certain position; it also enables closing competency gaps through tailored training.

"Research strongly indicates that organizations most successful at employing competencies allocate the greater part of their assets towards aligning competency standards with strategy and integrating them into day-to-day practices" (Mufti et al., 2011). The statement underlines the need for a comprehensive management, meaning that competencies that impact organizational performance must be incorporated within talent management, performance management, career development, promotion and succession planning. The challenge becomes more obvious the bigger the organization is and the more rapidly the operating environment changes.

Even so, benefits like ensuring consistency, delivering results, building an organizational culture, empowering employees outmatch the challenges, therefore "organizations need to seize the opportunity to improve internal continuous learning so as to improve the skills, attitude and behavior of employee towards the discharge of their individual tasks to be able to attain high performance potentialitý" (Osei & Ackah, 2015). Therefore, managing the human resource's performance is the ultimate need of the organization.

In a nutshell, regardless of the size or type of the organization, using competencies can be considered an investment since it will enable higher organizational performance with the ultimate purpose of reaching the organizational goal.

3.3.Organizational trust, management trust and organizational performance

In the introduction we mentioned that the increased uncertainty nowadays and people's personal concerns about future created an increasing need for trust.

As the aforementioned terms like skill and competency, trust is also a confusing one, many misunderstandings and ambiguities revolving around what it entails. "Trust is generally defined as the trustor S willingness to be vulnerable to another person (the trustee) based on positive expectations of the trustee" (Colquitt, Scott & LePine, 2007). From an organizational perspective, trust could be defined as the "willingness of an individual or group to be vulnerable to the actions of others based on the expectation that they will perform a particular important action, irrespective of the ability to monitor or control the performance"" (Mayer, Davis & Schooman, 1995). Both definitions point out two components of trust, a rational and an emotional one, and the fact that trust stretches beyond control, based on some existing norms or bonds.

Trust becomes more relevant when considering relationships, because organizations are built on (Reynolds, 1997) "four sets of relationships:

- vertical relationships between managers and staff;

- lateral relationships within and between teams and departments;

- relationships with suppliers and other business partners;

- relationship with customers".

Basically, there are three types of conducting a relationship, based on hope, based on power and based on trust. In the first type of conducting a relationship, people are doing things without any outside control or restrictions, hoping for a favorable outcome. In the second one, things are quite the opposite, things are done because there is fear of the consequences. Luckily, in the third way of conducting a relationship, things are done because people want to, not because they hope it will do them good in the end or because they have to. One thing to remember is that in a trust relationship the emphasis is on accountability, not on control.

As an organization is defined as a "social system that consists of the patterned activities of a number of individuals'" (Katz & Kahn, 1978), it becomes of outmost importance to maintain a positive relationship between its members.

There are numerous studies proving the significant effects trust has for organizations and their human resources, "both direct and indirect benefits, such as improved performance, enhanced pro-social behaviors, reduced costs. A direct relationship has been identified between trust and organizational effectiveness, efficiency and performance. Trust has been found to improve organizational performance indirectly by fostering desirable work-related behaviors and creating a more conductive climate for cooperative organizational performance. In addition, trust has been linked to enhanced knowledge sharing and innovation, discretionary behaviors, higher motivation and positive attitudes. [...] Thus trust has been connected to positive human behaviors in the workplace that support the achievement of the organization's goals'" (Searle & Skinner, loll). Therefore, trust has to become a building block in the culture of organization.

Most studies on trust found a strong relationship between organizational trust and management trust, with a noticeable pattern of managers, leaders laying the foundations of organizational trust. It has been observed that employees that trust the management register a higher organizational commitment, which in turn causes them to spend more time and energy completing their tasks on time and at the appropriate levels of requirements, sometimes even engaging in actions that contribute towards achieving the organizational goal, even if it is not their specified role to engage in those activities. Management trust evolves to organizational trust through the generalization of the employees' actions associated with the favorable perceptions of the employee towards the management.

Despite the correlation between management trust and organizational trust, the reciprocity is different, since "factors such as structure, human resources policies and procedures, and organizational culture would affect employees ' perceptions of trust." (Paliszkiewicz et al., 2014). This statement leads to the conclusion that lack of trust in the organization results in the impairment of the entire system.

Trust is supported by four principles: competency, transparency, reliability and impartiality. Managing these principles will lead to an extensive control of the organizational factors, as shown in the Burke-Litwin model, creating a joint effort to achieve, and even surpass organizational goals.

4.TRUST, COMPETENCY AND PERFORMANCE MANAGEMENT IN DEFENSE ORGANIZATIONS

The changes in the international security enabled by the end of the Cold War shed a new light on how to ensure security in an unstable and multipolar world. Defense organizations started adapting its structures, following downsizing, modernization and increased political oversight. This wide approach led to new challenges for the defense sector, including "the need to do more with fewer resources, the increasing expectations of the stakeholders, a rapidly changing international environment, advances in technology, and the changing expectations'" [1] placed upon an increasingly diverse organization.

4.1.Performance measurement and performance management in defense organizations

There are several ways in increasing organizational performance, based on how extensively the organizational dimensions of the Burke-Litwin model are manipulated, but basically it means finding ways to align the organization's operations with its strategic direction.

It became of increasing importance for defense senior managers to demonstrate that balancing defense capabilities within tight budgetary boundaries has a benefit translated in security terms. The need for transparency in the management of military means, ways and ends, in the context of continuous change of the security environment, increased the importance of performance measurement systems.

Many defense organizations have thus introduced performance measurement systems to support top decision making, but the lack of a comprehensive approach led to failure for some. Most issues revolved around the lack of a performance framework focused of security needs, difficulties in measuring progress in key areas and limited use of performance measurements to support top decisions. Some of the systems in use focus on supporting the reporting of defense performance to stakeholder and less on providing relevant information for decision making.

A performance management survey conducted by the Research Task Group approved by the NATO Research & Technology Board, involving 12 NATO Allies and partners concluded that "nations with higher levels of military ambition do not use their performance measurement systems for reporting only, but also use the information that comes from these systems for proactive performance management44. The survey also proposed a Defense Performance Management Framework (DPMF) for strategic-level defense performance management, depicting high-level defense performance categories and possible performance measures for these, using as a benchmark relatively mature performance systems used by participating nations.

In conclusion, the transition from a compliance-based to a performance-based system by developing, implementing and using a system that characterizes the overall strategy of a defense organization, understanding and making use of the performance measures and national strategic objectives, is challenging and time consuming.

4.2.Competencies and performance management in defense organizations

Performance management systems rely on competencies of the human resource, since they measure the performance of employees while continuously aligning the available resources, system policies and management practices with the priorities dictated by the organizational goal.

The complexity and hierarchical nature of a defense organization, the diversity and distributed nature of the human resource, and the fact that higher level direction is given from above in military organizations (centralized control and decentralized execution) puts an additional pressure on meeting the requirement of being cost-efficient and effective in peacetime, but able to transform with minimum organization to meet a crisis situation.

NATO attempted to develop a common language by categorizing competencies based on occupational areas and provide a framework for use by allied nation, using the current NATO Occupational Area Codes. Non-standardized data across the nations, poor data quality and lack of normalization in data increased the difficulty of the task and led to a categorization of skills and experience levels required in order to be assigned to a specific job or to be promoted. The report concluded "that skill categories and experience levels are required for having the right personnel at the right place at the right Т1ме"[2].

The nature of defense organizations puts emphasis on competencies focused on creating the conditions for successful outcomes. As stated in the previous chapter, competencies requirement varies depending on position and organization. Nonetheless, a set of crucial competencies need to be established and identified, regardless of the roles, positions and levels that exist in an organization. Moreover, these competencies should be organized in categories relevant for the organization. For example, US Army developed a framework that enables assessing, capturing, recognizing, and translating critical military competencies that others can understand and apply to support readiness, talent management and transition to Soldier for life [3]. Similar competencies frameworks are present at the level of the US Air Force, US Navy, US Coast Guard or even US DoD. This underlines a comprehensive approach on linking the organizational goal and direction down to individual competencies. In exchange, this approach eases the way to achieving the organizational goal in a transparent way, while providing stability and trust.

Clearly the desired competencies evolve as a response to external factors influencing a nation's security concerns. The Romanian Military Strategy 2021 introduces as an objective the development of core competencies through the military educational and training system. This is an indicator for creating the premises for organizational performance by increasing competence and competitiveness.

The process of adopting clear performance indicators under the name of competencies in a military system is a long-term and difficult endeavor, but even more necessary in the fast-paced changing security environment and future trends.

4.3.Trust in defense organizations

There seems to be a lack of understanding of the factors that influence trust, and the mechanism that underpin organizational trust in a military context, even with trust being a fundamental enabler of military operations (Stouffer, 2008), a strategic advantage to military performance (Steele, 2013). Starting the strategic level, there is a void regarding guidance on how to address the requirements of trust within and between organizations. Only relatively recent studies begin to investigate implications of organizational trust and its implications and applicability to the defense organizations.

An Army White Paper - The Profession of Arms identifies trust as "clearly the most important attribute we seek for the Army", underlining that the aspiration of the Army Profession is to develop individuals who trust in one another and in the organizations' ability to serve the Nation, while caring for its people.

A similar approach on trust can be found in the Norwegian Armed Forces Joint Operational Doctrine, where trust is the core of all relations in a military context, and may be considered as the prerequisite for effective samhandling (cooperation). Trust is considered essential for effective decentralization, dealing with unplanned events, making the most of competencies, and targeted initiatives and drives, and is described as the main foundation of the Norwegian Army leadership philosophy: Mission command. Mission command highlights leadership through common attitudes and common approach, rather than management through compliance and strict control.

Unfortunately, it becomes pretty obvious that trust is emphasized in military literature mainly in discussions of military leadership, centered on interpersonal relations, as opposed to organizational relations, aside from its multidimensional nature. Even so, it is important to understand the increasing importance of trust in defense organizations and the clear relationship with organizational performance.

5.CONCLUSIONS

Managing a 21st century organization was already complex, given the rapid pace of change and technological advancements. With the pandemic and recent conflict in Ukraine this has accelerated. For organizations to cope with present challenges and respond to future ones, a number of adjustments on factors that affect organizational performance are needed. These include strategies and measures to develop leadership and management capacity in order to better align individual with organizational goals.

Organizations will greatly benefit if they invest in developing a performance management system based on competencies. The imperatives of speed, stakeholders' expectations and competition must be managed on a constant basis. A well designed and implemented system could clearly emphasize organizational priorities and values, could focus recruiting efforts, could acts as a career progressing tool, could assist in developing job satisfaction while providing data to establish a base of competence and track organizational development. This paper underlined that these outcomes would be rendered possible in the context of trust, which would support such an organizational endeavor.

In defense organizations the approach is rather difficult with limited research being available on trust progression within military organizations and the challenge of incorporating national strategies. In some more mature military organizations that already use a competency-based framework alongside a performance management system it is determined that leadership characteristics shape the culture of trust in organizations and trust can lead to organizational performance. Thus, trust is helping to streamline and more effectively accomplish any given mission. By identifying the external, internal and individual factors it is possible to develop and implement specific strategies in different areas of a defense organization.

Footnote

endnotes

[1] Multiple, Performance Management in Defence Organisations, NATO Science and Technology Organization, January 2020;

[2] Multiple, NATO Human Resources (Manpower) Management, NATO Research and Technology Organization, February 2012;

[3] Soldier for Life is the Army's program to earn trust by providing resources and opportunities for Soldiers, veterans and families who are in transition.

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