Competencies: What they are and why they matter

What is a competency?

The word competency is tossed about very liberally and means different things to different people. For an organization, a competency can be defined as the technical capability that differentiates that organization from the competition. On an individual level, a competency can be defined as a group of related knowledge, skills and abilities that influence job performance.

Why Competencies Matter?

Companies are increasingly focusing on leveraging human capital as a competitive advantage. To achieve business success, organizations expect their employees to perform at higher levels, to be more customer-responsive, process-oriented, involved in shared leadership and contributing knowledge that adds value to an organization’s capabilities.

Human Resource (HR) professionals are now charged with addressing these evolving needs by developing and sustaining methods to:

  • Predict superior performing talent
  • Align individual and team behavior with organization vision and strategy
  • Integrate performance development systems
  • Provide “just in time” learning and development opportunities
  • Build and retain intellectual capital

To accomplish this, organizations must be able to identify and define required employee competencies across recruitment, selection, assessment, development, and appraisal processes. “Before selecting and defining competencies, an organization needs to pause for an introspective review. Linking competencies to the organization’s purpose, goals and values is key to positively affecting the organization’s direction and bottom line,” states Michael Lovett; HRD Strategies.

Organizations that know and understand its core competencies and capabilities can use them to attain a strategic advantage. There will be a diverse cross section of organizational competencies that are necessary for fulfilling its mission. These core organizational competencies create a context and culture for what and how the organization expects to operate. Together, the mission, vision, values, culture and core competencies set the tone of the organization.

To learn best practices in selecting and defining individual and organizational competencies at your organization, contact HRD Strategies.

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