A competency model is a way of organizing all of the elements that contribute to productivity, engagement, and retention for a specific role – or even for an entire company. HR people talk endlessly about skills, but at the end of the day, you need to accurately align those skills with business goals to achieve true success at work.

What Is a Competency Model?

First, let’s define “competency.” Competency in the workplace is a combination of knowledge, skills, abilities, and other individual characteristics (known as “KSAO”) that enable an employee to be successful, or an organization to compete.

A competency model is a tool used by HR to:

• Figure out if an employee’s KSAO is a match for their current or future role
• Analyze the performance of a team, department, or company to either understand why they are succeeding or discover areas for improvement

Naturally, employees come with part of their KSAO already set. This includes their personality, beliefs, motivation, experience, and education. Once employed, their KSAO evolves as the worker gains more knowledge of the job, learns skills to increase proficiency, and becomes a veteran who can be relied upon for expertise. For this reason, competency changes over time. 

It’s the same story for companies, which learn more about the best way to do business as they mature. In addition, adaptation and progress are always needed to survive in the marketplace, so the evolution of organizational KSAOs also happens.

Competency models can be based on a template, but many organizations create their own. This is because each company has a different set of roles as well as different ideas about the skills and abilities that are important for success.

What Can You Analyze with a Competency Model?

Models can be built for any function that has a human element. Common applications include performance assessment, employee recruitment, and career management programs. On a macro level, competency models are applied in four areas: 

Organizations 

In keeping with ideas like organizational culture, most companies have a specific way of doing business. These methods are often related to a set of skills and attitudes that both develop over time and are added over the short term as the organization updates its strategy. Models are used to determine these competencies, check to what level employees have them, and track their development over time. 

Functions

Most roles in a company are connected with a certain function. Programmers need to know certain languages, while bookkeepers must have good organizational and time management skills. Competency models, in this respect, are similar to a skills gap analysis by showing the details of every position and how each employee fits.  

Jobs

Of course, success at a job goes beyond skills. Personality and motivation are also critical factors. For example, a person with a high level of agreeableness and conscientiousness is probably a good match for a customer service position, while analytical and introverted people often do well at data-oriented jobs. Competency frameworks list these traits for respective roles. 

Leaders

It’s often the leaders within a company that are holding it together, and they need a special set of abilities. A competency model can be based on the traits of the most successful leaders in an organization as a template for similar skills and personalities. 

The Evolution of Competency Models

Competency models are often not “one and done”. An interesting aspect of competency models is that they both describe the status quo of an organization and set the stage for improvement. Once a company has built its first model (assuming it does not adopt an existing one – see below), it applies the results to a particular use case.

But not every model is perfect. Just as we frequently experience a turnover in the most relevant soft skills, so are businesses changing the competencies that lead to their success. Even major organizations periodically revise their competency model to reflect lessons learned in its application, like the International Coaching Federation, which built its first model in 1998 and updates it constantly.

In short, HR teams need to overhaul their competency models on occasion to ensure that they are accurate. For large organizations, this should be done annually. However, if the company forms a new strategy or encounters a major challenge, it’s a smart idea to design a competency model for that specific situation. 

Competency Model vs. Skills Gap Analysis

A skills gap analysis is a process where HR:

• Identifies which skills are totally missing from an organization. This might be the case, for instance, when a new technology is being adopted and/or the company wants to take a different strategic direction.
• Assesses existing workplace skills and divides them into areas where there is a sufficient level of ability and where skills are weak.

When discussing the knowledge, skills, and abilities that are the target of a competency modelling process, it is easy to get confused, particularly when discussing soft skills. Is leadership a competency, or a skill? In other words, why should you develop a competency model if you are already conducting skills gap analyses?

Well, competency models can be used to look at an entire organization. In this sense, they function at a higher level than a skills gap analysis, which assesses individual employees. Here are some of the elements that competency modelling can add to your knowledge of your organization and its workers:

Personality

Some HR teams test job candidates for personality, but these assessments should be based on competencies related to specific roles. It is sometimes difficult to link success in a role to a certain personality, but modelling can give you a general idea of what is optimal.

Macro Analysis

A skills gap analysis can give you information about individual employees. In contrast, competency models present a larger picture. It can help you to complete the statement “Our marketing team is great at…”. The model is a good way to achieve an overview and make changes to groups.

Capabilities

Related to this is the idea of “capabilities”. If you were to define the relationship between skills, competencies, and capabilities, you might say that skills are focused on individuals, competencies on teams, and capabilities on the entire business. When you define what your company does, you are talking about its capability, which is a collection of its competencies.  

Use Cases and Goals

With the additional information supplied by a competency analysis, HR departments can examine various organizational factors with the goal of understanding and improving them. Here are some illustrative use cases that are relevant to a competency analysis initiative: 

Performance Management

High performance management seeks to build a company’s activities and output in ways that maximize efficiency. This process is the result of “a constant cycle of activity, evaluation, and improvement”, where competency analysis can play a vital role.

A common starting point for such an initiative is to define job responsibilities. This should both describe what employees and teams are meant to do, and set out benchmarks for acceptable and/or high performance.

This step is helpful in:

• Finding redundancies between tasks
• Analyzing what KSAOs are the most relevant
• Establishing objective performance standards that employees can aim for

Continuous Employee Feedback

AKA continuous performance evaluation, this style of feedback goes hand-in-hand with performance management and its focus on a cyclical approach. So, once you establish the latter, you can use its standards to deliver effective feedback.  

But will the added detail of a competency model overload an employee with too many demands? According to McKinsey, almost ¾ of surveyed employees feel that goal-based performance review systems are critical for motivation. They prefer those that feature consistency, clear benchmarks, and simplicity.

The information supplied by competency modelling is ideal for clarifying goals and providing additional factors for employees to improve – perhaps through L&D programs – as ways of working towards promotion.

Career Development

Tracking the various KSAOs that are related to successful employees helps HR to design better career paths for different roles. What educational and professional backgrounds do upwardly-mobile employee share? Is there something common within their personality traits? Which skills do they use most often? Using competency analysis enables an organization to deliver highly refined learning and development programs. These are based not just on the skills that an employee lacks, but also the abilities that are critical for success. 

Company Culture

What kind of organizational culture do you have? According to Forbes, many leaders have a different impression of their culture compared to rank and file employees. This means that HR might be caught between two different points of view when trying to both understand and improve culture. 

A competency model allows HR to clear up such misconceptions. During the research phase, HR staffers get to study what’s actually happening on the shop floor and at the executive level. The value of competency modelling in this situation is that it examines big picture issues that enable you to make general statements about culture and formulate changes on a similarly high level. In addition, the personality of top leaders often influences company culture. With KSAOs including this factor, a competency model is an ideal tool for adapting organizational culture.

How Do You Create a Competency Model?

There are many ways of building a model; it all depends on the goals. Let’s take a high-level look at guidelines from the US Department of Labor, which supplies both templates and DIY setups. One of their frameworks is meant to analyze employee workplace functionality. This model assumes that competency can be assessed on three levels:

• Foundational: education, personality
• Industry-related: general characteristics and those specific to the industrial sector
• Occupational: managerial, technical, and knowledge skills

In comparison, SHRM has a different model that is used to predict the success of an HR professional. It lists nine competencies, such as business acumen, communication, and ethics. 

Although there is a considerable variety of elements for each framework, they all tend to have the following characteristics:

• Name of a specific competency, such as leadership
• Descriptions of activities, skills, and behavior – in this example, those associated with leadership, such as communication skills, empathy, and critical thinking
• Layout in a visual form

There are actually dozens of competency models from some of the top names in the human resources and general business industries including the Association for Talent Development, Gallup’s Clifton Strengths, and the Academy to Innovate HR. In turn, each of these are aimed at different types of competencies, namely, talent development, workplace skills, and professional HR productivity (respectively).

Managing Competency Models

Once the goal has been determined, the framework is developed through a number of steps:

Research – Start by looking through general templates, industry-specific models, and perhaps a consultant’s advice to understand best practices, layouts, and application processes.

Construction – Through interviews with stakeholders, and by examining HR records and job profiles, list the competencies connected to the goal. For example, if you are building a framework around a sales position, detail the related KSAO. 

Application – HR begins collecting information about the entity that is being assessed, and how much it meets competency standards. Information can be gathered through meetings, surveys, and by reporting on key performance indicators related to each competency factor. 

Results – Chances are that employees and organizations will not meet every standard. At that point, it’s up to HR and management to implement whatever steps are needed to improve. This could include employee development programs, a change management initiative, or a new leadership strategy.  

Show HR Competency with Growthspace

One of the attributes of a great HR department is the ability to provide L&D courses for specific skills and employees. But for large organizations, that’s a tall order.

Growthspace is the answer for companies with complex development needs and a long list of vital competencies. With Growthspace, companies can build talents ranging from technical skills to empathetic leadership, and everything in between. Just as importantly, Growthspace is scalable and automates the entire L&D experience for both employees and HR practitioners.