Competencies demonstrate the ability of an individual to do a current and/or future job well.
The term first appeared in 1959 in an article by R.W. White as a tool for managing performance. Now over 50 years old, we may well wonder if the concept is still useful in managing and motivating performance. Especially now with software tools available to manage and implement competencies, we maintain that competency management can be more critical than ever for the success of an organization.
Competency-based management depends upon strong connections between business planning and human resources planning. Once the organization’s overall strategic plan is in place, human resources and the business can help to identify the core competencies required to fulfill that short and long-term vision. This includes isolating the specific on-the-job skills, abilities, knowledge, behaviors and motivations necessary to achieve the desired results.
Once finalized with the business, the list should be applied to five main phases of human resource management.
- Branding, Recruiting, Interviewing, and Hiring. Hiring staff should be well acquainted with the competencies required so they can recruit for and select talent according to those behaviors. Anyone interviewing, too, needs to be aware of and test for desired behavioral traits.
- Learning and Development. New employees as well as experienced employees should be exposed to multiple learning and development opportunities that assess, develop, foster, and measure the identified behaviors at various levels of proficiency and stages of a career.
- Performance Management. Managers should be well versed in core competencies that are highly valued and give feedback through ongoing coaching to support while encouraging the desired behaviors and providing uncomfortable consequences for those who do not fit.
- Compensation and Rewards. All remuneration and reward systems should also be based on the behaviors identified as fundamental to the organization’s success. By compensating those who exhibit the desired behaviors, others will be encouraged to follow.
- Succession Planning. Promotions and succession planning should rely upon performance and core competence proficiency to create alignment.
The stronger the links from one phase of the operation to another, the more embedded the competencies will become in the organization. This is not to say, however, that the list is cast in stone. On the contrary, it is important that the list shift as the needs of the organization change. As requirements change, so should competencies adapt over time.
Competency-based management also depends upon the ability to analyze gaps in competencies and then to structure a program to close the gaps. With proper application, productivity can be significantly enhanced as the skills needed are put into use.
Competency-based management is a strategic tool for success because it links organizational strategic planning to job execution.