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Why Do Companies Focus on Competency Models to Develop Their Employees?

-  By Donna Hamlin, Ph.D.

Competencies are the combination of skills, knowledge, behaviors and traits required for superior individual and organizational performance now and in the future. Competencies are the factors that differentiate outstanding performance from average performance. For example, innovation, teamwork and customer focus are some of the applicable competencies for an organization facing market challenges.

Competencies are not the same as core values but relate to values. Core values are what we believe in. They are the principles which guide our actions and decisions. It is every employee’s responsibility to know and understand the core values of the company. Along with a company’s business strategy, the core values provide a foundation for the development of competencies which must reflect and reinforce values and support for strategic intent.

Competencies are also different from job descriptions. Job descriptions cover the “what” of a job, including scope, accountabilities, experience and educational requirements. On the other hand, competencies cover the “how” of a job – skills, knowledge, behaviors and personal traits.

The human resources development technique using competencies, now known as Competency Modeling, was developed in the 1960s by the U.S. Department of the Navy to help senior officers better understand why some submarine commanders performed better than others. Despite similar education backgrounds and work experiences, commanders showed different abilities to handle crisis situations. The Navy determined other less visible differentiators influences the ability of officers to perform. The study showed there was a significant correlation between the behaviors of commanders and those who showed the highest-performance ratings.

These differentiating behaviors became known as “competencies” and were seen as the difference between average and outstanding performance. With this in mind, the Navy then used these specific behaviors as predictors of future performance as well as criteria for selection, training, coaching and development of commanders. Further research during the last 40 years shows, when competencies become the core of human resource development, companies better manage the pace of change.

Competency Modeling helps companies define needed skills, knowledge and behaviors which help people develop faster, in a more targeted way, consistent with the changing needs of the business. Competencies help articulate and reinforce the organization’s vision, clarify expectations, align individual development and training with business strategy, enhance individual motivation and improve business results. Many companies now define their competencies on two basic levels: 1) leadership and managerial behaviors, based on values, which apply company-wide, and 2) specific areas of skills and knowledge critical for roles within each function of the business. These development tools become the sound foundation for professional and leadership development, meaningful executive and professional coaching, strategic human resource planning and skillful team development.

When everyone is clear about these criteria for success, both you and the company win.

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