Is Yours A Competence-Based Managed HR?

So much has been written about competence-based management. I conducted a Google search on
the word competence and the search returned about 52,600,000 hits in (0.38 seconds)! There
are also over 16,326 books on Amazon written on this subject in various book categories.
The concept of competence has been around for centuries and can be traced back to the medieval
guilds in which apprentices learned skills by working with a master and were awarded
credentials when they reached the standards of workmanship associated with and set by the
trade. While competencies are not new to most organizations, what is new is their increased
application across varied human resource functions. For those of us who have been following
developments in the field of HRM, we have come to know that if HR is driven around
competency based management, the contribution it can make towards business success is always
very huge.
Competency can be applied to a wide range of areas in human resource management including
employee selection, succession planning, performance management, development and career
pathing, compensations, and integrated information systems.
One of the most challenging tasks most organizations face is placing the right people in the right
jobs. A wrong move on companys part can mean lost productivity for their company, high
turnover, lower worker morale, bloated training bills, and too often , trouble-some lawsuits
brought by disgruntled ex-employees.
From a layman definition; competence is the ability to do something successfully or efficiently.
Words like capability, ability, capacity, proficiency, accomplishment, adeptness, adroitness,
knowledge, expertise, expertness, skill, skilfulness, prowess, mastery are usually used by some
people to represent the word "competence".
According to UNIDO (2002), Competency is a set of skills, related knowledge and attributes
that allow an individual to successfully perform a task or an activity within a specific function or
job.
Lyle Spencer and Signe Spencer, one of the early researchers on competency define competence
as an underlying characteristic of an individual that is casually related to criterion-referenced
effective and/or superior performance in a job or situation.
Underlying characteristics here means that competency is a fairly deep and enduring part of a
persons personality and can predict behavior in a wide variety of situations and job tasks.
Casually related means that a competency causes or predicts behavior and performance
Criterion-referenced means that the competency usually predicts who does something well or
poorly, as measured on a specific criterion or standard.

By these definitions, it is surmise to say that competencies demonstrate the following key
features:

They describe the skills, knowledge, abilities, motivations or other traits required in the
job

They are required for effective or successful performance of the job or task

They are defined in terms of observable behaviors, and therefore can be assessed or
measured.

In other words, for your organization to achieve its mission, it must have the right people with
the right Skills (Technical &Non-Technical), Knowledge and Ability (Competencies).
Competencies provide a means of translating organizational goals and objectives into behaviours
that employees must display for the achievement of the organizations goals.
A 2001 research reveals the following facts about competence management and these have
reinforced the acceptance of competence based talent management in organizations for positive
results and improved productivity.
Better employee competency/job matching results in:

63% reduction in turnover due to increased employee satisfaction due to greater clarity
about performance expectations Spencer, 2001

19% improvement in employee performance Spencer, 2001

5% increase in sales and profits due to Competency-Based training programs Spencer,

2001

Improved leadership capacity

Companies with highest rated leadership development programs, compared to those with weak
programs experienced:

600% increase in overall business impact

640% improvement in their leadership bench strength

480% improvement in leader engagement and retention

When competencies are used as part of an overall talent management strategy, they can translate
the organizations strategic vision into specific employee behaviors which will have a direct
impact on the overall business results. When you use competencies, you are giving your

employees a roadmap that shows them how their behaviors or actions can contribute to the
strategic vision and goals of the organization.
Advantages of competency based management
1.

Competence based management can help you translate your organizations vision and
goals into expected employee behavior

2. It can help you improve hiring decisions

3. Can help you to identify gap between present skill sets and future skill requirements
4. Can help you to identify areas for employee development that are directly linked to
desired organization objectives
5. Can help you shorten the learning curve, as the new recruits demonstrate high potential,
etc
6. Can help you increase employee satisfaction leading to reduced turnover rate
7. Can help you increase employee productivity and operating effectiveness
An accurate and unbiased approach to predicting job performance and success of your
organization is to design your organization around competency based management. The future of
this fast growing field will move beyond the workplace and be applied more broadly to societal
concerns.
What are your thoughts on Competency-based management?