Competency Management

What is competency management?

Competency management is the practice of identifying the key skills necessary for an employee to reach target performance in their specific role, and then developing and optimizing those skills to best align with the business strategy of an organization.

When looking at the meaning of competency management, it is first helpful to look at competencies themselves.

Competencies are also known as skills, values or behaviors, and represent the ‘how this should be accomplished’ rather than the ‘what is the objective’ of a goal.

Having clearly defined competencies allows employees to know exactly what is expected of them and how they should accomplish their tasks. Examples of competencies are integrity, customer focus, safety or technical ability and more.

The competency management definition also covers the core competencies of the organization itself.

Every organization should have a competency framework, which consists of a set of four to six core competencies. This serves to strengthen and illustrate the core culture of the organization, while highlighting differences from competitors.

When taking an in-depth look at what is competency management, management teams should create a list of seven to ten competencies for each role within the organization.

These competencies will create the competency model that will inform the employee what is expected of them in their job, and allow them to achieve their performance targets more easily.

Why is competency management important

The importance of competency management is increasing each year.

Organizations are facing ever greater challenges to retain highly skilled employees in a competitive market while improving performance and developing leadership talent from within.

Competency management can help with those issues, among others.

Benefits to competency management

  • Competency management can identify which skills a person needs to perform well in order to succeed in their specific role.
  • This ability to identify which skills are necessary for a job means that HR can better identify the candidates that will succeed in the role.
  • Employee onboarding and training is made easier, as there is a structure in place. Employees who receive clear, defined instructions of their job parameters will do better in their roles.
  • Productivity is improved by the ability to evaluate skills, identify which ones an employee is lacking, and providing the necessary training. 
  • Errors and other issues will be decreased as a result of this improved training.
  • Employee retention is improved, employees who feel that their leadership team is investing in them are more likely to stay in their job, keeping their valuable skills and knowledge within the organization.
  • Better understanding of what skills are necessary for the organization to grow and succeed in the future, as well as the ability to select or train for these skills in new and current employees.
  • Leaders can be created from within. Leadership opportunities are important to employees, and building a skilled, loyal leadership team through effective competency management will engage employees and turn them into long-term assets.

Identifying the core competencies of a role creates a stronger employee.

Understanding and clearly communicating the values and skills that are required to succeed in that role will allow the employee to spend their time more productively, mastering the required skills, rather than trying to understand what is expected of them.

A strong culture of competency management will allow for a company to develop both employee and organizational competency, adding value to the company as a whole.

Increasingly, this type of management will make a difference in recruiting and keeping the most talented employees.

Learn how to build a competency model for your organization.