Competency Modeling: Overview, Benefits, & Impact on the Organization

What is Competency Modeling?

Competency model refers to collections of knowledge, skills, abilities, and other characteristics (KSAOs).

According to SHRM, “a competency model refers to a collection of competencies that are needed for effective job performance. The individual KSAOs or combinations of KSAOs are the competencies, and the set of competencies is typically referred to as the competency model.” 

Competency models are used to align individual behavior to organizational goals and objectives and guide the development of employees. The goal of the competency modeling process is to gain clarity and consensus around the leadership expectations for a specific role. It can be used for talent acquisition and recruitment, learning and development, and performance management. A competency model focuses on what you need to achieve your business strategy and touches upon all of your people processes. A competency model can help employees by balancing “What” is achieved with “How” it is achieved. For example, you can meet your sales goals, the “what”, in many ways. The acceptable ways of achieving those goals, the “how”, reflects the culture and the expectations of the organization. One can achieve their sales goal by being a pushy order-taker, or by being a consultative partner.

What are the Benefits of Competency Modeling?

Although it often gets a bad rap, there are numerous benefits of competency modeling. These benefits are not just for a company, but also for the organization’s employees. By having a common language, it helps organizations meet their business and talent objectives, it gives clarity around the whole organization, and provides information on how employees should be compensated and how to best develop employees. Competencies are valuable to individual contributors as they want to know what skills and competencies will help them get to the next level. Organizations can promote their employees by using the competencies to establish promotion criteria.

Competency Modeling and Leadership Development

For leaders themselves, competency modeling helps provide clarity for all people processes. The goal of the competency modeling process is to gain clarity and consensus around the leadership expectations for a specific role or job level. In the leadership context, competency modeling can help with workforce planning and redeployment, recruitment and hiring, leadership training and development, performance management, as well as succession planning. Companies with embedded competency models are more likely to report: a unified theory of leadership, a leadership pipeline of leaders who know the expectations, and a strong leadership brand, both internally and externally.

When clients reach out to engage us for Leadership and Development training programs, our first question is: “On what and why?” Knowing what skills and competencies are important to an organization is an important part of the conversation. The challenge for organizations is that building a library of competencies can be time consuming. Companies can use a research-based competency library as a foundation. Using off-the-shelf competencies and models is often cost effective and could be a good starting point for an organization who can then customize them. But if clients don’t have competencies in place, we can help them build a library or revisit their existing competencies. It’s important to link the training that is provided to competencies, so it has teeth. People want to understand the purpose and importance of the training, and how it will help them be better leaders as it relates to the organization’s expectations.

Competency Models and Human Resources (HR)

Competency models can serve as a roadmap for Human Resources. Competency modeling can be used for job analysis and design, along with developing job descriptions and performance standards that clearly outline the competencies required for a particular job. Competency models are a useful tool in making sure that an organization hires, trains, evaluates, compensates, and promotes employees based on the same attributes and skills. Competency models ensure that employees have the right skills, knowledge, and behaviors to perform their jobs effectively. In addition, they can be used in upskilling and developing training programs for employees.

In conclusion, there is value in creating and communicating competency models and embedding them into an organization. Organizations outperform their competitors when organizational competencies are in place for employees and the business has a valid competency model versus those who do not have a competency-based approach. Competencies form the foundation for all strategic talent initiatives, such as workforce planning, recruiting, career development, learning, performance management, rewards, and succession management. Competencies link to all people processes and the more processes the model is linked to, the more impact you will see and a better Return on Investment (ROI) for an organization.

We have more than 40 years of experience working with clients across the employee lifecycle. Interested in learning how Keystone Partners can help with leadership development and career management-related needs? Contact us today to find out how we can help your organization realize the full potential of your people.

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