Understanding Organizational Structures for Job Competencies

Before you can assign jobs and job competencies to the hierarchical levels in the organizational structure, you must define the organizational structure that you will use to track competency information. Although you can use the financials organizational structure to track competency information, we recommend that you create a separate structure. You can also create new business units for job competencies so that you are not using the business units that the organization uses for financial reporting purposes. By maintaining the competency organizational structure and business units separately from the financials structure, the human resources department can revise the competency structure without affecting the structure that the accounting department uses to make financial decisions. Likewise, when the accounting department needs to revise the financials organization structure, the competency structure is not affected.

When you define a separate organizational structure for job competencies, you can either create a new structure or copy and modify an existing structure, such as the financials structure. In most cases, copying an existing structure is probably more efficient; however, if the existing structures are very different from the one that you intend to create, you might decide to create a new organizational structure.

You can create organizational structures to take advantage of the concept of inheritance. Inheritance is the process of attaching job competencies to high levels in the organizational structure so that they also apply to the subordinate levels. Inheritance means that, when you attach a competency to a business unit that is at a high level in the organizational structure, that competency applies to the jobs in that business unit, as well as to all of the jobs that are in subordinate, lower-level business units. You can take further advantage of inheritance by assigning competencies at the company or job-group level.

To help you explore a variety of scenarios, you might create several draft versions of the organizational structure. When you decide which draft you want to use, you can activate that draft and define it as the default organizational structure. When an organizational structure becomes obsolete, you can update date-effective information to indicate that it is no longer the current structure.