1.1 What Is the People CMM?
The People Capability Maturity Model® (People CMM®) is a roadmap for implementing workforce practices that continuously improve the capability of an organization’s workforce.
Since an organization cannot implement all of the best workforce practices in an afternoon, the
People CMM introduces them in stages. Each progressive level of the People CMM produces a unique transformation in the organization’s culture by equipping it with more powerful practices for attracting, developing, organizing, motivating, and retaining its workforce. Thus, the People
CMM establishes an integrated system of workforce practices that matures through increasing alignment with the organization’s business objectives, performance, and changing needs.
The People CMM was first published in 1995 [Curtis 95], and has successfully guided workforce improvement programs in companies such as Boeing, Ericsson, Lockheed Martin, Novo Nordisk
IT A/S, and Tata Consultancy Services [Vu 01, Martín-Vivaldi 99, Miller 00, Curtis 00, Keeni
00]. Although the People CMM has been designed primarily for application in knowledgeintense organizations, with appropriate tailoring it can be applied in almost any organizational setting. The People CMM’s primary objective is to improve the capability of the workforce. Workforce capability can be defined as the level of knowledge, skills, and process abilities available for performing an organization’s business activities. Workforce capability indicates an organization’s: ❏ readiness for performing its critical business activities,
❏ likely results from performing these business activities, and
❏ potential for benefiting from investments in process improvement or advanced technology. In order to measure and improve capability, the workforce in most organizations must be divided into its constituent workforce competencies. Each workforce competency represents a unique integration of knowledge, skills, and process abilities acquired through specialized education or work experience. Strategically, an organization wants to design its workforce to include the various workforce competencies required to perform the business activities underlying its core competency [Prahalad 90]. Each of these workforce competencies can be characterized by its capability—the profile of knowledge, skills, and process abilities available to the organization in that domain.
The People CMM describes an evolutionary improvement path from ad hoc, inconsistently performed workforce practices, to a mature infrastructure of practices for continuously elevating workforce capability. The philosophy implicit the People CMM can be summarized in ten principles. 1. In mature organizations, workforce capability is directly related to business performance.
2. Workforce capability is a competitive issue and a source of strategic advantage.
3. Workforce capability must be defined in relation to the organization’s strategic business objectives. 4. Knowledge-intense work shifts the focus from job elements to workforce competencies.
5. Capability can be measured and improved at multiple levels, including individuals, workgroups, workforce competencies, and the organization.
6. An organization should invest in improving the capability of those workforce competencies that are critical to its core competency as a business.
7. Operational management is responsible for the capability of the workforce.
8. The improvement of workforce capability can be pursued as a process composed from proven practices and procedures.
9. The organization is responsible for providing improvement opportunities, while individuals are responsible for taking advantage of them.
10. Since technologies and organizational forms evolve rapidly, organizations must continually evolve their workforce practices and develop new workforce competencies.
Since the People CMM is an evolutionary framework, it guides organizations in selecting highpriority improvement actions based on the current maturity of their workforce practices. The benefit of the People CMM is in narrowing the scope of improvement activities to those vital few practices that provide the next foundational layer for developing an organization’s workforce. By concentrating on a focused set of practices and working aggressively to install them, organizations can steadily improve their workforce and make lasting gains in their performance and competitiveness.
The People CMM has proven popular because it allows organizations to characterize the maturity of their workforce practices against a benchmark being used by other organizations.
Many workforce benchmarks focus on employee attitudes and satisfaction rather than workforce practices. Although attitudes and satisfaction are important predictors of outcomes such as turnover, they do not always provide the guidance necessary for identifying which practices should be improved next. In contrast, the staged framework of the People CMM helps organizations prioritize for their improvement actions. In addition, since the People CMM treats workforce development as an organizational process, improved workforce practices are easier to integrate with other process improvement activities.
1.2 Why Do We Need a People CMM?
Forty years ago people feared that technology would reduce the need for educated workers, leaving large segments of the population unemployed. The opposite occurred. In fact, the demand for educated workers exceeds the supply. In the knowledge economy, companies are competing in two markets, one for its products and services and one for the talent required to develop and deliver them. With current low unemployment, the talent market is all the more competitive. The Process Maturity Framework
Recruiting and retention are now as important as production and distribution in the corporate business strategies of knowledge-intense companies. Although most companies understand the importance of attracting and retaining talent, many lack a coherent approach to achieving their talent goals. Further, most lack a vision of how to integrate a system of practices to achieve their workforce objectives.
The practices required to attract, develop, and retain outstanding talent have been understood for decades. In his acclaimed book, The Human Equation, Jeffrey Pfeffer of the Stanford Graduate
School of Business identified seven principles of workforce management that distinguished companies exhibiting the largest percentage stock market returns over the past quarter century
[Pfeffer 98]. These principles included:
1. employment security,
2. selective hiring of new personnel,
3. self-managed teams and decentralization of decision making,
4. comparatively high compensation contingent on organizational performance,
5. extensive training,
6. reduced status distinctions and barriers, and
7. extensive sharing of financial and performance information.
These principles characterize organizations that no longer expect employees to merely execute orders, but rather to act as independent centers of intelligent action coordinated toward a common purpose. Deep technical and business knowledge is required to make rapid decisions that are not only correct, but are also consistent with decisions made by colleagues. Recruiting for outstanding technical talent is critical, but it is not enough since business knowledge can only be developed within an organization. Thus, the development and coordination of a modern workforce requires an integrated set of practices that address attracting, developing, organizing, motivating, and retaining outstanding individuals.
The benefit of better workforce practices has been demonstrated empirically in numerous studies
[Becker 98, Huselid 95, Mavrinac 95, Labor 93, Kling 95, Appleby 00, Delaney 96]. Those organizations employing an integrated human resources strategy represent a significantly higher proportion of world-class companies [Abbleby 00]. In some cases, even mere reputation signals regarding an organization’s human resources practices have been positively associated with increases in share prices [Hannon 96].
Welbourne and Andrews examined 136 non-financial organizations that first offered their stock
(i.e., made their initial public offerings) on the U.S. stock market in 1988 [Welbourne 96]. They looked at the value that these firms placed on their employees, and determined that human resource value is indeed positively and significantly related to firm survival. The average survival probability for all organizations in the study was 0.70. Those organizations that placed a high level of value on their employees had a 0.79 probability of survival compared to a survival probability of only 0.60 of those firms who placed less value on their employees. When considering employee compensation and rewards, an organization that had high levels of employee value and employee compensation and rewards increased its survival probability to
0.92, while firms that scored low on both measures lowered their chance of organizational survival to 0.34. Thus, workforce practices were shown to have a significant effect on the survival of these firms.
Analysis of several different samples throughout the 1990s show strong support for a very positive relationship between high performance workforce practices and organization’s financial performance [Becker 98]. This research shows that a one standard deviation improvement of a firm’s workforce practices resulted in approximately a 20 percent increase in shareholder value and a significant reduction in voluntary departure rates. A study of workforce practices in almost
1000 firms across all major industries showed that “a one standard deviation increase in use of such practices is associated with … a 7.05 percent decrease in turnover [i.e., employeee departure rate] and, on a per employee basis, $27,044 more in sales and $18,641 and $3,814 more in market value and profitability, respectively” [Huselid 95, US dollars]. Companies with the best workforce practices have been shown to outperform other firms in growth of profits, sales, earnings, and dividends [Hansen 89, Kravetz 88].
These practices are usually considered integral to a total quality management (TQM) program, and are included as criteria in quality models such as the Malcolm Baldrige National Quality
Award (MBNQA) [Baldrige 01] or the European Foundation for Quality Management (EFQM®)
Excellence Model [EFQM 99]. Research into the MBNQA has indicated that the inclusion of human resource management is critical in the cause-and-effect chain starting with strategic planning [Wilson 00]. This research has shown that the strategic planning factor in the MBNQA influences human resource management, which in turn influences process management, which directly influences both financial results and customer satisfaction. Thus, human resource management is an indirect link to these key external performance measures.
Over the last several decades, business books and the trade press have flooded managers with workforce practices each demonstrated to produce benefits in at least some applications. These practices include competency-modeling, 360º performance reviews, Web-enabled learning, knowledge management, team-building, cool space, participatory decision making, incentive based pay, mentoring, meeting management, and empowered work. Many of these practices have been actively applied for over a decade. Nevertheless, many organizations have moved slowly on improving their workforce practices.
If these practices have been well known for a decade or more, why have so many organizations failed to implement them? The fundamental impediments have been a lack of management commitment, and a piecemeal, unintegrated approach to adoption. Consequently, the People
CMM was designed to integrate workforce practices into a system and involve management early in their deployment. The People CMM presents the development of a capable workforce as a process with well-understood practices that can be implemented in stages as the organization matures. 1.3 What Is the Process Maturity Framework?
The original concept for a process maturity framework was developed by Watts Humphrey and his colleagues at IBM® in the early 1980s. In his 27 years at IBM, Humphrey noticed that the quality of a software product was directly related to the quality of the process used to develop it.
Having observed the success of total quality management in other parts of industry, Humphrey wanted to install a Shewart-Deming improvement cycle (Plan-Do-Check-Act) into a software organization as a way to continually improve its development processes.
However, organizations had been installing advanced software technologies for a decade using methods akin to the Shewart-Deming cycle without much success. Humphrey realized that the
Shewart-Deming cycle must be installed in stages to systematically remove impediments to continuous improvement. Humphrey’s unique insight was that organizations had to eliminate implementation problems in a specific order if they were to create an environment that supported continuous improvement guided by Deming’s principles.
The staged structure that underlies the maturity framework was first elaborated by Crosby in
Quality is Free [Crosby 79]. Crosby’s quality management maturity grid describes five evolutionary stages in adopting quality practices in an organization. This framework was adapted to the software process by Ron Radice and his colleagues working under the direction of
Humphrey at IBM [Radice 85]. Crosby’s original formulation was that the adoption of any new practice by an organization would occur in five stages: the organization would become aware of the new practice, learn more about it, try it in a pilot implementation, deploy it across the organization, and achieve mastery in its use.
The original formulation of the maturity framework in IBM [Radice 85] adopted Crosby’s approach of evolving each process through these five stages. However, Humphrey realized organizations were not succeeding in long-term adoption of improved software development practices when they applied this maturity framework to individual practices or technologies.
Humphrey identified serious impediments to long-term adoption that had to be eliminated if improved practices were to thrive in an organization. Since many of these problems were deeply ingrained in an organization’s culture, Humphrey realized that he had to formulate an approach that addressed the organization, not just its individual processes.
Humphrey wanted software organizations to continually improve their software development processes and he wanted these improvements to be based on statistical information about how each critical process was performing. However, he had observed that improved software development practices did not survive unless an organization’s behavior changed to support them. Consequently, he designed the process maturity framework to enable an organization to achieve a state of continuous process improvement in five stages. Because of this staging, the process maturity framework is more than a process standard comprising a list of best practices.
Rather, it integrates improved practices into a staged model that guides an organization through a series of cultural transformations, each of which supports the deployment of more sophisticated and mature development processes.
At the first level of maturity, the Initial Level, an organization has no consistent way of performing its work. Since most work processes are ad hoc, they are constantly reinvented on each project, and frequently appear chaotic. Without well-understood ways of conducting their work, managers have no reliable basis for estimating the effort required to complete a project. In a rush to overly aggressive deadlines, the project staff begin cutting corners on sound engineering practices and making mistakes that are not detected until it is much more time consuming and costly to remove them. As a result, projects lose control of their schedule, costs, and product quality. Since work is chronically over-committed in low maturity organizations, their results depend largely on the skills of exceptional individuals and on excessive overtime.
Executives in these organizations often hail their people as their most important asset, belying the fact that immature organizations have few assets or processes that add value to the efforts of their people.
A fundamental premise underlying the process maturity framework is that a practice cannot be improved if it cannot be repeated. In an organization’s least mature state, proven practices are repeated only sporadically. The most common impediment to repeatability is a committed delivery date that the software staff can not meet regardless of how sophisticated their skills or technology. Other particularly wicked impediments are uncontrolled requirements changes that devastate the original planning. The first step in helping an organization improve its maturity is focused on helping organizations remove the impediments that keep them from repeating successful software development practices.
At the second level of maturity, organizations must establish a foundation on which they can deploy common processes across the organization. Before being able to successfully implement many advanced practices, management must first establish a stable environment in which to perform professional work. They must ensure that people are not constantly rushing about pellmell, cutting corners, making mistakes from hasty work, and fighting the fires that characterize over-committed organizations. Until basic management control is established over daily work, no organization-wide practices have any chance of being deployed successfully since no one has the time to master them. The primary objective of a level 2 environment is to enable people to repeat practices they have used successfully in the past. To enable this repeatability, managers must get control of commitments and baselines. The effort to establish a repeatable capability is the effort to establish basic management practices locally within each unit or project. Only when this management discipline is established will the organization have a foundation on which it can deploy common processes.
At the third level of maturity, the organization identifies its best practices and integrates them into a common process. Once people are able to perform their work at the Repeatable Level using practices they have found to work, the organization has the ability to identify which practices work best in its unique environment. These practices are documented and integrated into a common process that is then trained to the entire organization. Measures of the critical practices in this process are defined and collected into repository for analysis. When the organization defines a standard process for performing its business activities, it has laid the foundation for a professional culture. Most organizations report the emergence of a common culture as they achieve Level 3. This culture is based on common professional practices and common beliefs about the effectiveness of these practices.
At the fourth level of maturity, the organization begins managing its processes through the data that describes its performance. The performance of the organization’s critical processes is characterized statistically so that the historical performance of the process can be used to predict and manage its future performance. The premise underlying this quantitative management is that if a well-understood process is repeated you should get essentially the same result. If the result obtained deviates significantly from the organization’s experience, the cause needs to be determined and corrective action taken if necessary. Since business processes are now managed by numbers rather than just by milestones, the organization can take corrective action much earlier. When the organization’s processes are managed quantitatively, its performance becomes much more predictable. When the organization can characterize the performance of its processes quantitatively, it has profound knowledge that can be used to improve them.
At the fifth and highest level of maturity, the organization uses its profound, quantitative knowledge to make continuous improvements in its processes. Based on its data, the organization can identify which processes can most benefit from improvement actions. These improvements can involve actions ranging from adjustments to processes to the deployment of new technologies. In addition, the organization uses its data to identify its most persistent defects. The root causes of these defects in are analyzed and actions are taken to eliminate their occurrence in the future. Change management becomes a standard organizational process and process improvement becomes perpetual throughout the organization. Since the organization has competent people performing trusted processes, it empowers people throughout the organization to attempt continuous improvements to their work processes and to propose organizational changes for those improvements that would appear to have the broadest benefits.
In the abstract, the maturity framework builds an environment in which:
❏ practices can be repeated,
❏ best practices can be rapidly transferred across groups,
❏ variations in performing best practices are reduced, and
❏ practices are continuously improved to enhance their capability.
The process maturity framework assumes that each practice has a risk to its successful adoption that is directly related to the maturity of the organization’s existing base of practices. One important premise of the model is that sophisticated practices should not be attempted until the foundation of practices required to support them has been implemented. Thus, the practices at each level of maturity prepare the organization for adopting practices at the next level. This staging of process maturity levels is unique in the organizational change literature and provides much of the framework’s power for improving organizations.
1.4 How Did the Process Maturity Framework Spread?
The U.S. Department of Defense (DoD) is the world’s largest software customer, spending over
$30 billion per year on software during the 1980s. At that time, software projects constantly seemed to be in crisis mode and were frequently responsible for large delays and overruns in defense systems. To address this software crisis on a national scale, the DoD funded the development of the Software Engineering Institute (SEI), a federally-funded research and development center (FFRDC), at Carnegie Mellon University in Pittsburgh, PA. Humphrey brought his process maturity concepts to the SEI in 1986, where he founded its Software Process
Program. Shortly after arriving, he received a request from the U.S. Air Force to develop a method for assessing the capability of its software contractors. With assistance from Mitre, the
SEI elaborated the process maturity framework [Humphrey 88] and developed a questionnaire
[Humphrey 87] to aid in appraising the maturity of a software organization’s development practices. The first complete formulation of the process maturity framework underlying the
CMM was presented in Managing the Software Process [Humphrey 89].
Through software process assessments, workshops, and extensive review, the SEI evolved
Humphrey’s process maturity framework into the Capability Maturity Model® for Software
(SW-CMM®) [Paulk 95]. Version 1 of the Capability Maturity Model for Software was released after extensive national review in August 1991, and Version 1.1 [Paulk 93a, 93b] was released in
January 1993. A more recent version that integrates CMM-based approaches for improving both software and systems engineering processes, CMM Integration (CMMISM) [CMMI 00] was released in late 2000.
In the early 1990s, the DoD began using the maturity framework for evaluating the capability of software contractors. By 1994, the U.S. Air Force had determined that mature organizations met their contractual commitments more reliably [Flowe 94]. Although aerospace contractors were adopting the CMM out of competitive necessity, commercial industry also began adopting the
CMM in the early 1990s. Numerous case studies have been reported by companies such as
Boeing, Ericsson, Lockheed Martin, Motorola, Tata Consultancy Services, Telcordia
Technologies, and Texas Instruments, demonstrating that improvements guided by the CMM improved productivity and quality results [Vu 01, Mobrin 97, Major 98, Pitterman 00, Keeni 00,
Herbsleb 94]. Research studies have also consistently shown similar results regarding improved productivity, increased quality, and reductions in cycle time [Herbsleb 94, Flowe 94, Krishnan
00, Harter 00].
This history of productivity and quality improvement in software has been riddled with silver bullets. Complex, advanced technologies were usually implemented in a big bang that often proved too large for the organization to absorb. The SW-CMM achieved widespread adoption because it broke the cycle of silver bullets and big bangs. At each stage of its evolutionary improvement path, the SW-CMM implemented an integrated collection of management and development practices that the organization was prepared to adopt. Each level of maturity established a new foundation of practices on which more sophisticated practices could be implemented in later stages. More importantly, each level shifted the organization’s culture one step further away from its initial frenzied state toward an environment of professionalism and continuous improvement.
Today, the SW-CMM is widely used for guiding software process improvement programs both in the U.S. and abroad. Although originally adopted by aerospace firms, the SW-CMM is now used in commercial software and information systems organizations. After reviewing improvement results from 14 companies, the SEI found that software process improvement programs guided by the CMM achieved an average return on investment of $5.70 saved for every $1 invested on SW-CMM-based improvement [Herbsleb 94].
The success of the SW-CMM generated an interest in applying maturity principles to other activities within an organization. The SEI has coordinated the development of a CMMI framework for guiding the joint improvement of both software and systems engineering processes [CMMI 00]. The process maturity framework has also been applied successfully for maturing the practices used by those who acquire software systems. As use of the SW-CMM began to spread in the early 1990s, software organizations began requesting similar guidance for improving their workforce practices.
1.5 Why Did the People CMM Emerge in the Software Industry?
The process maturity framework was designed for application to practices that contribute directly to the business performance of an organization, that is, to the organization’s capability for providing high-quality products and services. Since the capability of an organization’s workforce is critical to its performance, the practices for managing and developing them are excellent candidates for improvement using the maturity framework. Thus, the People CMM has been designed to increase the capability of the workforce, just as the SW-CMM increased the capability of the organization’s software development processes.
Knowledge is the raw material of software development. Although software tools can help record and manage knowledge, they do not create and apply it. Perhaps no industry in history has been as knowledge intense as software development, an industry whose only product is proceduralized knowledge. Not surprisingly, the level of talent on a software project is often the strongest predictor of its results [Boehm 81], and personnel shortfalls are one of the most severe project risks [Boehm 87]. Performance ranges among professional software engineers routinely exceed 20 to 1 [Curtis 81, Sackman 68, Valett 89]. Although the presence of an extraordinary individual on a project can have dramatic impact, there are not enough “wizards” to staff more than a handful of the projects in most organizations [Curtis 88].
Much of a professional software developer’s time is spent learning through such activities as reading manuals, discussing design issues with colleagues, building prototypes to test ideas, and attending organized learning experiences such as seminars and conferences. The pace of technical change and the depth of knowledge required to implement complex systems require extensive investment in personal learning. Increasing the capability of software developers is necessary to:
❏ meet growing demand for software while faced with a talent shortage,
❏ master the accelerating pace of change in technology, programming languages, and business applications, and
❏ increase the reliability of software systems, especially in life-critical and business-critical applications. A serious shortage of software professionals, which grew dramatically during the 1990s, seriously exacerbates these problems. Initially, the availability of offshore software talent to support outsourcing of software development or to apply themselves as visiting workers quelled the perceived talent crisis. However, by the late 1990s, turnover rates among software companies in countries such as India had risen to as much as 30% annually as these companies began competing for increasingly scarce talent within their borders [Ember 01]. The shortage became even more pronounced when considering the needs for available talent with skills in the latest technologies. The shortage of software talent has created a constellation of problems, including:
❏ high turnover,
❏ loss of critical system knowledge,
❏ escalating salaries and benefits,
❏ staffing shortfalls,
❏ increased workloads, overtime, and stress,
❏ increasing product and service costs, and
❏ unfinished work.
Until the talent shortage of the 1990s, the software industry largely ignored workforce issues.
Rather, continual cost and schedule overruns on projects and critical system failures dominated the attention of software executives. Attempts to fix the “software crisis” with better technology yielded disappointing results through the 1970s and 1980s. By the mid-1980s, the software industry realized that its primary problem was a lack of discipline, both in project management and in software development practices. Since the beginning of the 1990s, the SW-CMM has guided many software organizations in improving their management and development processes.
Even during the early stages of adopting the SW-CMM, the software community realized the process maturity framework constituted a unique approach to organizational development that could be applied in areas other than software development.
From the very beginning, many organizations found, while assessing their software development practices, that they also suffered serious shortcomings in workforce management. These workforce-related problems included inadequate training, inaccurate performance feedback, crowding, lack of career opportunities, and noncompetitive compensation. Many software organizations discovered that improvements to their development practices required significant changes in the way they managed people, changes that were not fully accounted for in the SWCMM.
Most improvement programs were focused on process or technology, not people. In response to requests from many software organizations, the SEI initiated a project to produce a model for improving workforce practices guided by the principles underlying the CMM.
2.1 Organizational Maturity
The People CMM is an organizational change model. It s designed on the premise that improved workforce practices will not survive unless an organization’s behavior changes to support them.
The People CMM provides a roadmap for transforming an organization by steadily improving its workforce practices. As do all Capability Maturity Models, the People CMM consists of five maturity levels, or evolutionary stages, through which an organization’s workforce practices and processes evolve. At each maturity level, a new system of practices is overlaid on those implemented at earlier levels. Each overlay of practices raises the level of sophistication through which the organization develops its workforce. Within this environment individuals experience greater opportunity to develop their career potential and are more motivated to align their performance with the objectives of the organization.
From the perspective of the People CMM, an organization’s maturity is derived from the workforce practices routinely performed inside it, and the extent to which these practices have been integrated into an institutionalized process for improving workforce capability. In a mature organization, responsible individuals perform repeatable workforce practices as ordinary and expected requirements of their positions. The more mature an organization, the greater its capability for attracting, developing, and retaining the talent it needs to execute its business.
The People CMM is a process-based model which assumes that workforce practices are standard organizational processes that can be continuously improved through the same methods that have been used to improve other business processes. The People CMM is constructed from workforce practices and process improvement techniques that have proven effective through application in many organizations. The only unique characteristic of the People CMM is its staged framework for introducing and steadily improving successful workforce practices.
Any Capability Maturity Model® derived from Humphrey’s original maturity framework integrates principles from three domains: the targeted domain of processes, total quality management practices, and organizational change. First, the CMM was designed to help an
People Capability Maturity Model – Version 2
C
rganization adopt best practices in a targeted domain. The CMM for Software targeted software engineering processes, while the People CMM targets workforce management processes.
Second, processes in the targeted domain are continuously improved to become more effective and predictable using Total Quality Management concepts pioneered by Deming, Juran, Crosby, and others. Third, the CMM constitutes a unique approach to organizational development that introduces these practices in stages (maturity levels) to create a succession of changes in the organization’s culture.
Changing an organization’s culture through staged improvements to its operating processes is a unique approach to organizational development. These cultural changes provide much of the
CMM’s power for implementing lasting improvements and distinguish it from other quality and process improvement standards. Although many process standards can transform an organization’s culture, few include a roadmap for implementation. Consequently, organizations often fail to implement the standard effectively because they attempt to implement too much too soon and do not lay the right initial foundation of practices.
The culture of an organization is reflected in the shared values and resulting patterns of behavior that characterize interactions among its members. Successful improvement programs guided by the People CMM change the fundamental attributes of its culture—its practices and behaviors.
As an organization adopts the practices that satisfy the goals of the People CMM’s process areas, it establishes the shared patterns of behavior that underlie a culture of professionalism dedicated to continuous improvement. Not surprisingly, most organizations report dramatic cultural changes as they progress through the People CMM’s maturity levels.
2.2 Maturity Levels in the People CMM
A capability maturity model (CMM®) is constructed from the essential practices of one or more domains of organizational process. The People CMM concerns the domain of workforce management and development. A CMM describes an evolutionary improvement path from an ad hoc, immature process to a disciplined, mature process with improved quality and effectiveness.
Capability Maturity
Model (CMM)
A Capability Maturity Model (CMM) is anevolutionary roadmap for implementing the vital practices from one or more domains oforganizational process.
All CMMs are constructed with five levels of maturity. A maturity level is an evolutionary plateau at which one of more domains of the organization’s processes have been transformed to achieve a new level of organizational capability. Thus, an organization achieves a new level of maturity when a system of practices has been established or transformed to provide capabilities and results the organization did not have at the previous level. The method of transformation is different at each level, and requires capabilities established at earlier levels. Consequently, each maturity level provides a foundation of practices on which practices at subsequent maturity levels can be built. In order to be a true CMM, the maturity framework underlying a model must use the principles established in Humphrey’s maturity framework for transforming the organization at each level.
Maturity Level
A maturity level represents a new level of organizationalcapability created by the transformation of one or moredomains of an organization’s processes.
The People CMM applies the principles underlying Humphrey’s maturity framework to the domain of workforce practices. Each of the People CMM’s five maturity levels represents a different level of organizational capability for managing and developing the workforce. Each maturity level provides a layer in the foundation for continuous improvement and equips the organization with increasingly powerful tools for developing the capability of its workforce. The nature of the transformation imposed on the organization’s workforce practices to achieve each level of maturity is depicted in Figure 2.1.

2.3 Behavioral Characteristics of Maturity Levels
The People CMM stages the implementation of increasingly sophisticated workforce practices across these maturity levels. With the exception of the Initial Level, each maturity level is characterized by a set of interrelated practices in critical areas of workforce management. When institutionalized and performed with appropriate regularity, these workforce practices create new capabilities within the organization for managing and developing its workforce.
2.3.1 The Initial LevelMaturity Level 1
Organizations at the Initial Level of maturity usually have difficulty retaining talented individuals. Even though many low maturity organizations complain about a talent shortage, the inconsistency of their actions belies whether they actually believe it [Rothman 01]. Low maturity organizations are poorly equipped to respond to talent shortages with anything other than slogans and exhortations. Despite the importance of talent, workforce practices in low maturity organizations are often ad hoc and inconsistent. In some areas, the organization has not defined workforce practices, and, in other areas, it has not trained responsible individuals to perform the practices that exist. Organizations at the Initial Level typically exhibit four characteristics:
1. Inconsistency in performing practices,
2. Displacement of responsibility,
3. Ritualistic practices, and
4. An emotionally detached workforce.
Generally managers and supervisors in low maturity organizations are ill prepared to perform their workforce responsibilities. Their management training is sparse and, when provided, tends to covers only those workforce practices with the greatest legal sensitivity. The organization may typically provide forms for guiding workforce activities such as performance appraisals or position requisitions. However, too often little guidance or training is offered for conducting the activities supported by these forms. Consequently, managers are left to their own devices in most areas of workforce management.
Low maturity organizations implicitly assume that management skill is either innate or is acquired by observing other managers. However, if managers are inconsistent in managing their people, nascent managers will be learning from inconsistent role models. Management capability should ultimately be defined as a competency just as other critical skill sets are required by the organization. However, in launching People CMM-based improvements, managers must be held accountable for performing basic workforce practices even though their personal methods for performing them may differ.
Since low maturity organizations rarely clarify the responsibilities of managers, inconsistencies are to be expected. Consequently, how people are treated depends largely on personal orientation, previous experience, and the individual “people skills” of their manager, supervisor, or team leader. While some managers perform their workforce responsibilities diligently, others perform some workforce activities with little forethought and ignore other responsibilities altogether. Studies have consistently shown that one of the major causes for voluntary turnover is related to individual’s relationships with their manager or supervisor.
Managers in low maturity organizations rarely share a common vision about the fundamental responsibilities of management. They perceive management to be about producing results, not about producing people who produce results. Although managers in low maturity organizations accept responsibility for the performance of their unit, many do so without understanding how to manage the collective performance of those in the unit. In particular, they often lack skill and place little emphasis in evaluating and improving the capability and performance of those who report to them.
Many managers in low maturity organizations consider workforce activities to be administrivia—something less than the real work of managers. As a consequence of this attitude, workforce activities such as performance appraisals and job candidate interviews are often performed hastily without adequate preparation. Responsibility for other workforce practices such as recruiting for open positions and identifying training needs are displaced to Human
Resources or other staff groups. This displacement reflects a refusal to accept personal responsibility for the capability of the unit or the people in it. These actions are characteristic of managers who have not been properly prepared for their responsibilities in managing people.
If an organization does not establish clear policies for managing its workforce, it should not be surprised when some managers hold attitudes more characteristic of an era when unskilled workers were considered interchangeable. Although these attitudes are counterproductive in knowledge intense organizations, many managers have come from educational environments where they focused intently on developing their own skills and were not rewarded for developing the skills of others. From the perspective of the People CMM, individuals own responsibility for developing their knowledge and skills. However, management owns responsibility for ensuring that the people in a unit have the skills required to perform their work and for providing opportunities to develop these skills.
In immature organizations, many workforce practices are performed with little or no analysis of their impact. Recruiting campaigns, classroom training, and bonuses are among the many practices that are performed more as a ritual of organizational life than as processes that have been designed to achieve specific and measurable results. In the worst case, the failure to evaluate workforce practices ensures the failure to detect occasions when their impact is counterproductive to their intended effect. Consequently, ritualism can be as damaging to organizational effectiveness as inconsistency.
When an organization fails to proactively develop its workforce, career-oriented people pursue their own agendas. Mediocre performance and high turnover are typical when organizations provide few financial or career incentives for individuals to align themselves with the organization’s business objectives. Loyalty declines when individuals do not perceive the organization to be a vehicle by which they will achieve their career aspirations. In these circumstances individuals perceive the organization as an opportunity for developing specific skills that, once developed, will be used to pursue career opportunities elsewhere.
Constant churn in the workforce diminishes its capability. Although some turnover, or voluntary attrition, may be necessary or even beneficial, high turnover limits the level of skill available in the workforce, limiting an organization’s ability to improve its performance. Improvement programs guided by the People CMM are most often initiated when an organization faces a talent shortage exacerbated by an inability to attract or retain talented individuals. The first step in changing this state of affairs is to get managers to take responsibility for the capability and development of those who report to them.
2.3.2 The Managed LevelMaturity Level 2
The workforce practices implemented at the Managed Level focus on activities at the unit level.
The first step toward improving the capability of the workforce is to get managers to take workforce activities as high priority responsibilities of their job. They must accept personal responsibility for the performance and development of those who perform the unit’s work. The practices implemented at Maturity Level 2 focus a manager’s attention on unit-level issues such as staffing, coordinating commitments, providing resources, managing performance, developing skills, and making compensation decisions. Building a solid foundation of workforce practices within each unit provides the bedrock on which more sophisticated workforce practices can be implemented at higher levels of maturity.
An important reason for initially concentrating on practices at the unit level is founded on the frequent failure of organization-wide improvement programs. These programs often fail because they were thrust on an unprepared management team. That is, managers were struggling with problems that were not addressed by organizational changes. They often lacked the experience and skill needed to implement sophisticated practices. Consequently, Maturity Level 2 focuses on establishing basic practices within units that address immediate problems and prepare managers for implementing more sophisticated practices at higher levels. It is difficult to implement organization-wide practices if managers are not performing the basic workforce practices required to manage their units.
Focusing at the unit level first also establishes a foundation in managing performance that can be enhanced with more sophisticated practices at higher levels. If people are unable to perform their assigned work, sophisticated workforce practices will be of little benefit to individuals or the organization. In a Maturity Level 2 organization, managers are vigilant for any problems that hinder performance in their units. Frequent problems that keep people from performing effectively in low-maturity organizations include:
❑ Work overload
❑ Environmental distractions
❑ Unclear performance objectives or feedback
❑ Lack of relevant knowledge, or skill
❑ Poor communication
❑ Low morale
The effort to ensure that workforce practices are performed in each unit begins when executive management commits the organization to continuously improve the knowledge, skills, motivation, and performance of its workforce. Executive management manifests these commitments in policies and provides the resources needed to support unit-level implementation of basic workforce practices. Executive management reinforces this commitment by performing basic workforce practices with their immediate reports and by subsequently holding all managers accountable for the performance of workforce practices within their respective units.
Through policies and accountability, executive management communicates that managers are to accept personal responsibility for ensuring that workforce practices are implemented effectively within their units. Individuals responsible for performing workforce practices are expected to develop repeatable methods for activities such as interviewing job candidates or providing performance feedback. Although managers or groups may differ in how they perform workforce activities, those working within a unit are able to develop consistent expectations about how they will be treated. In addition, the regularity with which practices are performed in each unit, regardless of the method or style, is the first step in creating greater consistency across the organization. In applying the People CMM it is important to distinguish between management and managers.
There are responsibilities that need to be managed and there are people called managers, but there is no required one-to-one mapping between them. Although we will often refer to
“managers” in describing responsibilities for workforce practices at Maturity Level 2, these practices could be performed by team leaders, human resources specialists, trainers, peers, or others depending on how responsibilities are allocated within the organization. At any level of maturity, some, perhaps many, workforce practices may be performed by individuals or groups who are not “managers”. As the organization matures beyond Maturity Level 2, an increasing number of workforce practices will be performed by someone other than a manager.
As an organization achieves Maturity Level 2, units become stable environments for performing work. Units are able to balance their commitments with available resources. They can manage their skill needs, both through acquiring people with needed skills and through developing the skills of those already in the unit. Managers are focused on managing individual performance and coordinating individual contributions into effective unit performance. At Maturity Level 2, an organization’s capability for performing work is best characterized by the capability of units to meet commitments. This capability is achieved by ensuring that people have the skills needed to perform their assigned work and that performance is regularly discussed to identify actions that can improve it.
One of the first benefits organizations experience when they implement improvements guided by the People CMM is a reduction in voluntary turnover. At Maturity Level 2, the People CMM addresses one of the most frequent causes of turnoverpoor relations with their boss. When people begin to see a more rational work environment emerge in their unit, their motivation to stay with the organization is enhanced. As their development needs are addressed, they begin to see the organization as a vehicle through which they can achieve their career objectives.
2.3.3 The Defined LevelMaturity Level 3
Organizations at the Repeatable Level find that, although they are performing basic workforce practices, there is inconsistency in how these practices are performed across units and little synergy across the organization. The organization misses opportunities to standardize workforce practices because the common knowledge and skills needed for conducting its business activities have not been identified. At Maturity Level 2, units are identifying critical skills to determine qualifications for open positions, evaluate training needs, and provide performance feedback.
However, there is no requirement at Maturity Level 2 for identifying common attributes among these skills across units or for determining the practices that are most effective in developing them. Once a foundation of basic workforce practices has been established in the units, the next step is for the organization to develop an organization-wide infrastructure atop these practices that ties the capability of the workforce to strategic business objectives. The primary objective of the
Defined Level is to help an organization gain a competitive advantage from developing the various competencies that must be combined in its workforce to accomplish its business activities. These workforce competencies represent critical pillars supporting the strategic business plan, since their absence poses a severe risk to strategic business objectives. In tying workforce competencies to current and future business objectives, the improved workforce practices implemented at Maturity Level 3 become critical enablers of business strategy.
The concept of workforce competencies implemented in the People CMM differs from the concept of “core competency” popularized by Prahalad and Hamel [Prahalad 90]. Core competency refers to an organization’s combination of technology and production skills that create its products and services and provide its competitive advantage in the marketplace. In the
People CMM, workforce competencies reside one level of abstraction below an organization’s core competency, as shown in Figure 2.2. Each workforce competency represents a distinct integration of the knowledge, skills, and process abilities required to perform some of the business activities contributing to an organization’s core competency. The range of workforce competencies an organization must integrate depends on the breadth and type of business activities composing its core competency. Therefore, these workforce competencies are a strategic underpinning of the organization’s core competency.

Core competencies
Workforce competencie
Knowledge, skills, and process abilities
Figure 2.2.  Hierarchy of Competency Abstractions
By defining process abilities as a component of a workforce competency, the People CMM becomes linked with the process frameworks established in other CMMs and with other processbased methods, such as business process reengineering. A process ability is demonstrated by performing the competency-based processes appropriate for someone at an individual’s level of development in the workforce competency. To define the process abilities incorporated in each workforce competency, the organization defines the competency-based processes that an individual in each workforce competency would be expected to perform in accomplishing their committed work. Within a workforce competency, a competency-based process defines how individuals apply their knowledge, perform their skills, and apply their process abilities within the context of the organization’s defined work processes.
At Maturity Level 3, the organization builds an organization-wide framework of workforce competencies that establishes the architecture of the organization’s workforce. Each workforce competency is an element of the workforce architecture, and dependencies among competencybased processes describe how these architectural elements interact. Thus, the architecture of the workforce must become an element of the strategic business plan. Workforce practices become mechanisms through which this architecture is continually realigned with changes in business objectives. The architecture of the organization’s workforce must evolve as business conditions and technologies change.
Since workforce competencies are strategic, the organization must develop strategic workforce plans for ensuring the required capability in each of its current or anticipated workforce competencies. These plans identify the actions to be taken in acquiring and developing the level of talent needed in each workforce competency. The People CMM makes no assumption about whether the organization sustains these workforce competencies internally or acquires them through partnerships, alliances, independent contracting, or outsourcing.
The aggregated level of knowledge, skills, and process abilities available within a competency community determines an organization’s capability in that workforce competency. The members of the organization’s workforce who share common knowledge, skills, and process abilities of a particular workforce competency constitute a competency community. The capability of an organization’s business processes is, in part, determined by the extent to which competency communities can translate their collective knowledge, skills, and process abilities into work performance. Maturity Level 3 establishes the infrastructure for defining measures of capability, in preparation for capability being quantitatively managed at Maturity Level 4.
At the Defined Level, the organization adapts its workforce practices to its business needs by focusing them on motivating and enabling development in its workforce competencies. Once workforce competencies are defined, training and development practices can be more systematically focused on developing the knowledge, skills, and process abilities that compose them. Further, the existing experience in the workforce can be organized to accelerate the development of workforce competencies in those with less skill and experience. Graduated career opportunities are defined around increasing levels of capability in workforce competencies. The graduated career opportunities motivate and guide individual development.
The organization’s staffing, performance management, compensation, and other workforce practices are adapted to motivate and support development in workforce competencies.
When the processes to be performed by each workforce competency are defined, the organization has a new foundation for developing workgroups. Competency-based processes form a basis for defining workgroup roles and operating processes. Rather than just relying on the interpersonal coordination skills developed at Maturity Level 2, workgroups can now organize themselves by tailoring and applying standard competency-based processes. The ability to use defined processes simplifies coordination within the workgroup, since it no longer rests solely on the interpersonal skills of group members to figure out how to manage their mutual dependencies. Competent professionals demand a level of autonomy in performing their work. To best utilize competent professionals, the organization must create an environment that involves people in decisions about their business activities. Decision-making processes are adjusted to maximize the level of competency applied to decisions, while shortening the time required to make them.
Individuals and workgroups should be provided with the business and performance information needed to make competent decisions. A participatory culture enables an organization to gain maximum benefit from the capability of its workforce competencies while establishing the environment necessary for empowering workgroups.
A common organizational culture typically develops as the organization achieves the Defined
Level. This culture is best described as one of professionalism, since it is built from common understanding of the knowledge and skills that need to be developed to achieve superior levels of performance and a definition of the competency-based processes that such individuals perform.
Since these workforce competencies are strategic to the business, the organization reinforces their importance by developing and rewarding them. As a result, the entire workforce begins sharing responsibility for developing increasing levels of capability in the organization’s workforce competencies. The workforce practices implemented at Maturity Level 2 are now standardized and adapted to encourage and reward growth in the organization’s workforce competencies. 2.3.4 The Predictable LevelMaturity Level 4
An organization at the Defined Level has established an organizational framework for developing its workforce. At the Predictable Level, the organization manages and exploits the capability created by its framework of workforce competencies. The organization is now able to manage its capability and performance quantitatively. The organization is able to predict its capability for performing work because it can quantify the capability of its workforce and of the competency-based processes they use in performing their assignments.
The framework of workforce competencies enables the organization to better exploit the capabilities of its workforce. There are at least three ways in which this framework can be exploited. First, when competent people perform their assignments using proven competencybased processes, management trusts the results they produce. This trust enables the organization to preserve the results of performing competency-based processes and develop them as organizational assets to be reused by others. In essence, people trust the asset because they trust the methods through which it was produced. When these assets are created and used effectively, learning spreads more rapidly through the organization and productivity rises when reuse replaces redevelopment.
Second, this trust also gives managers the confidence they need to empower workgroups.
Managers will transfer responsibility and authority for committed work into workgroups only if they believe the members of the workgroup are competent to perform the work and use processes that have been proven effective. When the organization achieves Maturity Level 3, the conditions required for empowermentcompetent people, effective processes, and a participatory environmentare established. In achieving Maturity Level 4, management senses less risk in empowering workgroups and is willing to delegate increasingly greater levels of authority for managing day-to-day operations and for performing some of their own workforce practices. Increasingly free of managing operational details, managers at Maturity Level 4 are able to turn their attention to more strategic issues.
Third, when members of each workforce competency community have mastered their competency-based processes, the organization is able to integrate different competency-based processes into a single multidisciplinary process. At Maturity Level 3, individuals performing different competency based processes manage their mutual dependencies by defining points of coordination. However, their competency-based work is performed largely in isolation of each other’s competency-based processes. However, when competency-based processes have been institutionalized, the organization can begin integrating different competency-based processes into a multidisciplinary process that better integrates the work of several workforce competencies. An example would be the integration of software and hardware design processes into a single product design process where the different competency-based processes are interwoven at every point where they share a potential dependency. Such multidisciplinary processes have proven to accelerate business results.
In addition to exploiting the possibilities enabled by the competency framework, the organization begins to manage its capability quantitatively. Within each unit or workgroup, the performance of competency-based processes most critical for accomplishing business objectives is measured.
These measures are used to establish process performance baselines that can be used for managing competency-based processes and assessing the need for corrective action. The creation and use of these baselines and associated measures is similar to methods underlying Six Sigma programs. Although Six Sigma techniques can be used at any level of maturity, the full sophistication of a Six Sigma approach is best enabled at Maturity Level 4. Members of a competency community have immediate data for evaluating their performance and deciding on the need for corrective actions. The immediate availability of process performance data also contributes to the rationale for empowering workgroups to manage their business activities.
The organization uses the data generated by competency-based processes to establish process capability baselines for its critical competency-based processes. These baselines can be used for planning, for targeting improvements, and for predicting the organization’s capacity for work.
The organization evaluates the impact of workforce practices and activities on the capability of competency-based processes and takes corrective action when necessary. process capability baselines and associated analyses are used as inputs for workforce planning.
The combined availability of workforce capability baselines and process capability baselines for competency-based processes enables both unit and organizational performance to become more predictable. These data allow management to make more accurate predictions about future performance and better decisions about tradeoffs involving workforce capability or process performance issues. The quantitative management capabilities implemented at Maturity Level 4 provide management with better input for strategic decisions, while encouraging delegation of operational details to those at lower organizational levels.
2.3.5 The Optimizing LevelMaturity Level 5
At the Optimizing Level, the entire organization is focused on continual improvement. These improvements are made to the capability of individuals and workgroups, to the performance of competency-based processes, and to workforce practices and activities. The organization uses the results of the quantitative management activities established at Maturity Level 4 to guide improvements at Maturity Level 5. Maturity Level 5 organizations treat change management as an ordinary business process to be performed in an orderly way on a regular basis.
Although several individuals may be performing identical competency-based processes, they frequently exhibit individual differences in the methods and work styles they use to perform their assignments. At Maturity Level 5, individuals are encouraged to make continuous improvements to their personal work processes by analyzing their work and making needed process enhancements. Similarly, workgroups are composed of individuals who each have personalized work processes. To improve the capability of the workgroup, these personal work processes must be integrated into an effective operating procedure for the workgroup. Improvements at the individual level should be integrated into improvements in the workgroup’s operating process.
Mentors and coaches can be provided to guide improvements at both the individual and
People Capability Maturity Model – Version 2 27
Overview of the People CMM workgroup levels. Simultaneously, the organization continually seeks methods for improving the capability of its competency-based processes.
Although individuals and workgroups continually improve their performance, the organization must be vigilant to ensure that performance at all levels remains aligned with organizational objectives. Thus, individual performance needs to be aligned with the performance objectives of the workgroup and unit. Units need to ensure their performance is aligned with the objectives of the organization. At Maturity Level 5, the process performance data collected across the organization is evaluated to detect instances of misalignment. Further, the impact of workforce practices and activities is evaluated to ensure they are encouraging rather than discouraging alignment. Corrective action is taken to realign performance objectives and results when necessary. Inputs for potential improvements to workforce practices come from many sources. They can come from lessons learned in making improvements to the workforce activities within a unit, from suggestions by the workforce, or from the results of quantitative management activities.
The organization continually evaluates the latest developments in workforce practices and technologies to identify those with the potential to contribute to the organization’s improvement objectives. Data on the effectiveness of workforce practices that emerged from quantitative management activities are used to analyze potential performance improvements from innovative workforce practices or proposed changes to existing practices. Innovative practices that demonstrate the greatest potential for improvement are identified and evaluated in trial applications. If they prove effective, they are deployed throughout the organization.
The workforce capability of Maturity Level 5 organizations is continually improving. This improvement occurs through both incremental advances in existing workforce practices and adoption of innovative practices and technologies that may have a dramatic impact. The culture created in an organization routinely working at the Optimizing Level is one in which everyone strives to improve their own capability, and contributes to improvements in the performance of their workgroup, unit, and the organization. Workforce practices are honed to support a culture of performance excellence.