Performance vs. Skills Based Job Descriptions

October 31, 2017

So you recently had a position on your team open up and you are looking for the “perfect” candidate. You know you are seeking an accounting or finance professional with skills x, y and z. You jot them down in an email and ship them off to HR. After reviewing what feels like the 100th resume, you begin to get nervous that although the candidates presented have the right skill set, they ultimately may not be a good fit for your organization based upon their past experience.
We work with clients daily who face this same dilemma. Even worse… they realize 2 months into their search, they are failing to attract the types of professionals they are honestly seeking. To save time, money, and overall aggravation, we’d like to back up and discuss the first step of your search: composing a job description.
Choosing the Right ‘Type’ of Job Description for Your Search
The first step of writing a great job description is deciding which type of job description to use: “skills-based” or “performance-based”. What exactly is the difference?

Skills-Based Job Descriptions

A skills-based job description focuses on a desired set of—you guessed it–skills for the job. It might include a specific degree, character traits and certifications held. For example, if you were hiring a new accountant you might include some of the following:

BA/BS in Accounting or Finance preferred
3 years of accounting experience
Strong proficiency in Excel

This is the most common type of job description and has been standard over the years when searching for new hires at most businesses. It ensures that people who possess these preferred skills and traits will be in the vast majority of résumés received.

Performance-Based Job Descriptions

A performance-based job description focuses on outlining the expected results and end goal of a position. Performance-based job descriptions help identify what is wanted out of a position and ensures that clear expectations for this role are established at the forefront so that the person hired can surely “close the deal” based off their prior experience. Here are some details that might be included for the same accounting position in a performance-based description:

Successfully manage multiple projects simultaneously coordinating communication across departments and levels within the organization to ensure improved efficiency and return
Assess, Plan, and Implement processes to reduce costs associated with the operations of the company’s several production facilities
Reduce average month-end close timeline from 30 days to 10 days

Using this type changes the conversation from what you can do on paper to what have you done already? Ultimately “you’re judging each candidate not based on [the technical skills they have on paper] they have, but rather what they do with what they have [or their ability to effectively execute similar initiatives in the past given set resources].”

The Good and the Bad

Now that we’ve clarified them individually, the question becomes, which description is best for our company? As with most decisions, there are advantages and disadvantages to utilizing each job description As a result, knowing when to use each is key.
Going the traditional route of a composing a skills-based description can benefit companies in multiple ways. Typically companies have a “wish list” outlining the desired skills their new recruit should have to complement the team and the company. So based on the objective skills defined on paper, skills-based job descriptions:

Ensure the desired level of education is completed and certifications have been achieved
Help identify candidates with specific technical skills that might be otherwise difficult to find

On the negative side, just because a person might be Type A on paper and Valedictorian of their graduating class, does not mean a perfect execution of job duties. “A list of skills…and personality traits is not a job description. It’s a person description. And just because a person has all of the skills and abilities listed, it doesn’t mean the person is both competent and motivated to do the work required.”
The performance-based description thinks ‘outside of the box’ lending itself to the outcome of the job. It looks beyond a list of specifications and instead assures that the candidate can demonstrate competency regardless of skill set. It can actually open up the hiring field to many more applicants that would not necessarily have been found otherwise.
The disadvantage is that some companies may require certain criteria in writing for new hires. A college degree is mandatory for certain jobs even if the person shows competency. Additionally, the person who appears right for the position based on performance, may lack a skill set that was initially thought needed. It is then up to the hiring manager to decide what is deemed acceptable at that point.

Putting Each to Use

The next time you compose a job description, decide first which type of description should be included based upon your company’s needs. In order to do this, asking yourself the following questions:

Are you hiring an entry or staff-level accounting/finance professional?
Is there a skill set you are unwilling to compromise over?

If the answer is “yes,” going the traditional route is probably your best option. This will guarantee finding someone who meets your explicit explicit qualifications.
However, if you can answer “no” to either of these questions, trying the alternative of a performance-based posting might be a great asset to your search. Performance-based job descriptions are commonly utilized to identify senior professionals whose primary focus is the application of technical knowledge and the ability to successfully implement projects to improve a company’s overall financial return.

Summing It Up

Finding qualified candidates who make great additions is crucial to ensuring overall retention and it begins with the composition of a great job description. The traditional route of writing a skills-based job description guarantees that desired skills and traits will be brought in with the résumés. However, this does not ensure the person will be able to produce the desired results. The alternative performance-based job descriptions generally produce professionals who can truly generate the desired results, but the skill set may come in a different form.
There are a couple questions that you, as the hiring manager can ask yourself when choosing which job description to use. For example: Is there a skill set you are unwilling to compromise over? Are you hiring an entry or staff-level accounting/finance professional? These are the types of questions that can help the hiring manager identify what they are really looking for.
Whether an employer decides on a traditional job description, or an alternative performance-based posting, it is essential that the company knows not only what it wants, but what it needs. The way an employer frames it’s job listings can be an essential step in hiring the right candidate for the position.

REFERENCES
[1] https://www.inc.com/lou-adler/performance-based-job-descriptions.html
[2] https://www.inc.com/lou-adler/performance-based-job-descriptions.html