The importance of being competent at competency management

Effective competency or skills management, which includes cultivating and managing organisational and job-specific competencies, can drive greater success for your organisation and your employees. Well-defined competencies can help foster a strong corporate culture, build a more aligned workforce and establish key competitive differentiators. They also help make sure you have consistent performance standards for employees, which can help with employee engagement and retention.

According to Bersin & Associates, competency management is “a set of practices that identify and optimise the skills and competencies required to deliver on the business strategy. Competency management provides the foundational data to support strategic talent management processes, including workforce planning; sourcing, recruitment and selection; career planning and development; and, performance management.”

A closer look at competencies

Competencies are also called: behaviours, skills, values, performance dimensions or performance standards. Where goals or objectives describe "what" you want an employee to accomplish, competencies describe "how" you want them accomplished.

The benefits of and reasons for having a competency-based system in place are many. For example, establishing a solid competency model or framework, can help organisations to:

• Assess employees more objectively by  leveraging job-specific competency data
• Improve employee performance through more objective, fairer feedback
• Expand individuals’ abilities through skill assessment and development plans
• Develop career-planning programs and provide employees with information that can help them self-direct their careers
• Analyse organisational risk and bench strength, and use findings to develop succession plans
• Improve sourcing and recruiting by defining which competencies are required for open positions
• Make more objective hiring decisions by using behaviour-based skill descriptors to develop questions for interviewing
• Develop competency-based position descriptions
• Attract new employees and increase retention rates by matching skills to assignments

A high-level guide to creating a competency framework

There are two main types of competencies are core (organisational) and job-specific (functional). Core competencies apply to everyone in your organisation, but apply to different jobs in different ways and to different degrees. They define what makes your company competitive and successful. Job-specific competencies identify the abilities that are required for success and high performance in a particular job.

You create a competency framework or model for your organisation and for each position by identifying the key abilities required to improve performance and achieve success.

When choosing core competencies, identify the abilities that embody your culture, are required for success or leadership in your industry, support your organisation's strategic goals and set your organisation apart from the competition. Ideally, you should define four to six competencies. Some examples include innovation, creativity, quality and technical expertise.

Next, for each competency, create:

• a short description
• examples of the behaviour to provide clarity
• descriptions of the levels of mastery
• suggested learning activities to help develop increased mastery

Once you've identified your core competencies, you can repeat the exercise for each role or area in the organisation.

A critical step in creating a framework is to communicate your competencies to all employees. You can: make a competency handbook available to all employees, post the list and definitions of your competencies on your intranet, include competencies in your employee handbook, and discuss them in your employee newsletter.