Competency model

Learn what a competency model is. Discover its benefits

and examples. Learn seven best practices for developing
an effective model for your organization.
What is a competency model?
A competency model is a guideline developed by a Human Resource
department that sets out the specific skills, knowledge and behavioral
requirements that enable an employee to perform their job successfully.

Competency models define what performance success should look like within
the organization for each individual job. The model is applied to recruitment
practices, talent management, training and performance assessment.
What is the difference between a job description and a
competency model?
A job description and a competency model sound almost alike because they
both seem to describe what an employee is required to do in the job. What is
the difference?

The difference is that a job description is a general summary of the skills

required for a job, whereas a competency model provides specific behaviors
that an employee must do on the job in order to be successful.
What are the benefits of using a competency model?
Greater performance success has been attributed to organizations with
thoroughly defined competency models. In a competency survey by the
Society for Human Resource Management (SHRM), 93% of 500 C-suite
executives claimed that competency models were important to their
organization’s performance success.

Here are some of the ways that implementing the

competency model benefits organizations:
 Sets a concrete direction for workforce performance that aligns with
organizational goals and strategies.

 Enables HR to have a concrete understanding of all employee abilities

and skills.

 Enables HR and Training to more accurately identify learning &

development (L&D) needs.

 Allows employees to take ownership of the skills and behaviors

required of them in their roles.

 Empowers organizations to keep track of what skills employees have

so that strategy and planning can work towards that future skills may
be needed.

 Provides a consistent and fair system of measurement for performance

evaluation.

The types of competencies that make up the model

There is no standard list of competencies for any given job. The type of
competency that feeds into a competency model depends on the specific
needs of the job. For example, the competencies listed for a restaurant
waiter will differ drastically from the needs of an accountant.

Competencies can be broken down into helpful categories to better

understand the type of information that might be included, such as:

1. Core competencies
Core competencies include the baseline skills required by the organization
for all employees; these are the basic things that employees must fulfill. This
will vary from company to company, as it depends on the values, philosophy
and goals of each organization, but can include basic requirements like
communication skills or teamwork. Most jobs require a basic element of
being able to work with other people to some degree.

The goals of the organization are reflected in broad competencies that reflect
the strength and uniqueness of the organization. For a company that
specializes in international parcel delivery, the core competency would be
logistics. Drilling down to an employee’s job within this type of organization,
a core competency for an employee could be on-time delivery of customer
parcels.

2. Functional competencies
Functional competencies are job-specific skills and behaviors that are unique
for each role. For example, a competency for a restaurant waiter may be the
ability to effectively handle customer complaints, where a competency for an
accountant may be the ability to analyze a specific type of financial data in
order to prepare reports.

Functional competencies should describe what behaviors or skills need to be

performed in order for the employee to be a top-performer in their position.

3. Leadership competencies
Leadership competencies are often used for supervisory and management
related roles, although can be applied to any job position that requires an
employee to lead others. They include leadership skills and behaviors like
decision-making abilities.

How are competency models used?

Competency models are used for a variety of HR practices, including:

Recruitment – Fully developed competency models are often used for the
development of job postings. When they are well-defined and clear,
organizations have a better chance of finding more closely matched
candidates.

Talent/Performance management – Defining what success should look

like within the organization boils down to the performance of the workforce; a
competency model can define what performance success should look like for
each role within an organization. This benchmark helps HR to connect the
function of each job with organizational goals and also ensure that the talent
of employees is developed.

Performance appraisal – Competency models provide the framework

needed to properly assess employees during a performance review; both the
employee and employer have a clearly defined list of behaviors and skills to
work from.

What is an example of a competency?

The format of a competency model for any given job will be different
depending on the specific organization and profession. There is no
standardization or required structure. Often, organizations will have their
own unique templated format for competency models.

The Society for Human Resource Management (SHRM) offers a best practice
in the formulation of competencies by breaking down what information
should ideally be included in a specific competency:

Best Practice:

 Title – Name of the competency

 Definition – Overall definition of the competency

 Sub-competencies – General baseline skills and behaviors required

 Behaviors – Behaviours that reflect the highest level of proficiency

 Proficiency Standards – Skill standards that reflect job-specific

requirements and reflect four stages of career development (early,
mid-level, senior, executive)

Competency example:

 Title: Develop customer relationships

 Definition: As part of the Sales process, the ability to create a lasting

relationship with customers via interactions is integral to the role.

 Sub-competencies: Ability to communicate effectively with

customers

 Behaviors: Emotional intelligence

  Proficiency Standards: Identify customer concerns and present
methods for addressing concerns.

How to develop effective competency models

1. Determine what kind of process works for your organization

The research and development involved in creating well-defined

competencies for a position can be lengthy; it takes time to understand what
is needed for each position. Due to today’s fast-paced and ever-changing
business environment, it could be beneficial for some organizations to have a
shorter and more intensive method of development. Competency models
that are also designed as flexible can likewise accommodate future changes.

2. Research available competency information

Developing competencies requires more than vague statements about what

the job position will entail. As well, the functional competencies need to
reflect what “great” performance should be, not just the baseline skills
for “acceptable” performance.

Previously developed competencies for similar roles should be identified and

used as a guideline, as well as related role documentation, background
information and organizational core competencies.

3. Interview relevant business units and executives

Interviews with relevant stakeholders provide the insight needed for the
role’s required competencies. Executives can provide the key organizational
core competencies needed for the role that reflect both the values,
philosophy and goals of the organization. Managers and high-performers
from relevant business departments can be interviewed to find out the key
skills and behaviors that are necessary and successful for those roles. When
interviewing, the focus should be on what skills and behaviors make for a
top-performing employee in that role.

4. Establish the core competencies

The core competencies should reflect the baseline behaviors and skills
required by the organization. How should employees act and contribute as
part of the organization so that they can integrate into the company’s work
culture and philosophy? Utilize the research and interview content from
executives and relevant organizational stakeholders.
5. Establish job-specific competencies

Job-specific competencies should reflect the unique role skills and behaviors
as outlined by departmental managers and top-performers at the research
stage. What did these individuals need to know and do to perform well in
their role?

6. Establish leadership competencies, where needed

When management-related competencies need to be drafted, it should be

assumed that the individuals are already familiar with the core competencies
set out by the organization. The focus should be on unique leadership
attributes and skills. These can be determined by the executive and senior
management level at the research stage.

7. Finalize the competency list

Organize the findings, but avoid being unrealistic with narrowing down
competencies. If the list is too far-fetched, it could hinder recruitment
initiatives and scare away potential applicants. If the list is too vague or not
specific-enough, it could result in an influx of candidates that are not
perfectly suited to the position; it will also not help employees to achieve
organizational goals.

Validate the competency list with all stakeholders involved in the process,
including executives and management. Signing off on competencies is
important to ensure that that all levels of the organization’s needs are being
met.