Today, organizations are facing a myriad of challenges; high employee turnover rates, shortage of skilled resources, technological changes, and the ever increasing pressure of global competition. In this kind of business environment, how does an organization remain competitive and expand its business? The successful organizations recognize that its ability to produce results depends primarily on one element – its employees. Just as individuals have their set of expectations from an organization, organizations too expect certain competencies from their employees. Competencies are a combination of knowledge, skills, abilities, attitudes, and behaviors. For an individual, competencies include the following:
- Technical skills
- Personal qualities
- Observable behavior
Competency development is thus the process of continuously enhancing competencies of individuals to enable them to better perform their role. The objectives of introducing and applying competency development are as follows:
- Bridging the gap between desired and current performance levels of its employees.
- Identifying and developing talent and enabling employees to bring more value to the company by becoming more proficient in the performance of their current responsibilities.
- Increase employee loyalty indirectly as employees feel they are being nurtured and groomed.
The competency development process will help employees become more knowledgeable, proficient and professional in the performance of their current responsibilities. It also gives them upward mobility and facilitates their career growth.
In the organizational and business context, competency required for a particular job depends on many factors. The factors include:
- Social culture
- Nature of business
- Business environment
- Organizational culture
- Work environment
- Organizational structure
- Duties and responsibilities
- Nature of processes and assigned activities
- Attitude and motives of colleague’s superiors and subordinates
Competencies are used in many HR activities as below.
Competencies can be used to construct a template for use in recruitment and selection. Information on the level of a competency required for effective performance would be used to determine the competency levels that new hires should possess. Depending upon the accepted definition, competency data may take the form of behaviors, skills, abilities and other characteristics that have been associated with effective performance.
2. Training and Development
Knowing the competency profile for a position allows individuals to compare their own competencies to those required by the position or the career path. Training or development plans should focus on those competencies needing improvement. Additionally, education and development curricula would be linked to improving competency levels to the needed levels needed for effective performance.
3. Career and succession planning
Assessing employees’ readiness or potential to take on new challenges and determining a job fit can be based on matching the competency profile of an individual to the set of competencies required for excellence within a profession. Individuals would know the competencies required for a particular position and therefore would have an opportunity to decide if they have the potential to pursue that position.
4. Rewards and Recognition
Competency based pay is compensation for individual characteristics for skills and competencies over and above the pay a job or organizational role itself commands. Individual characteristics that merit higher pay may come in the form of competencies (experience, initiative, loyalty and memory portability).
5. Performance Management System
Competencies are critical behaviors demonstrated on the job and, as such, are often included as part of performance management. Performance management is about achieving results in a manner that is consistent with organizational expectations and desired behaviors. Competencies provide expectations for “how” the job is performed, not just “what” gets done. Assessing competencies as a part of performance management is an important means of assisting employees in understanding performance expectations and enhancing competencies on-the-job. Most departments have their own performance management systems. Competencies may play an important role in these systems.