Competency Management: Why and how to implement it for your business

Posted by Sinny Fan on March 24th, 2019

Competency management is becoming more and more important. Because companies have to become more innovative and focus on quality awareness in regards to their products and services. These products and services have to be flexible and must adapt to new customer needs. It is becoming more clear that the quality of staff members is the main source of innovation and quality within an organization.

In addition, the phases in the life cycle of products and thus of companies (pioneering phase, growth, consolidation, and phasing-out) are becoming increasingly rapid. Each phase has its own characteristics and needs. It is therefore very important to gather the right people, the right competencies, for each stage.

There is also a trend in the field of employees. They have become more empowered and picky. To attract good employees and to bind them to the company, the image of the company has become crucial. Potential employees attach great importance to the attention that the company pays to the growth and development potential of its employees (employability).

So there is an increased need to deploy employees in an optimal and flexible way. The HR department expects to have a more intensive and integrated HR policy. Competency management is an important and useful tool to achieve this.

But what is competency management?

Competency management is the logical next step in the continuous search of companies and organizations for performance improvements. And this in an increasingly rapidly changing environment. In a previous movement, companies had focused mainly on improving internal processes, in particular by streamlining them (engineering and re-engineering), informing the processes and by quality and quantity models (TQM, TQM, ISO, EFQM etc. However, in recent years it has been shown that these improvements have forgotten an important link, especially regarding the employees.  

The internal processes may be improved, but how do employees deal with them and how can these new processes improve their own performance and thus the performance of the company? Competency management ensures that the optimization of the organization is combined with the optimization of human potential. In Addition, it is an HR tool that meets the demand for an integrated approach to maximize the employability of human resources. The Classic HR instruments, starting from function classifications, are too static and descriptive to address the more strategic, forward-looking and flexible implementation of HR policy.

Types of competences

Central to competency management is, of course, the notion of competence. The distinction is usually made between individual and organizational core competencies. An individual competency is a set of knowledge, skills and attitudes and personal characteristics that can ensure that a person can be successful. In other words: What a person must know, can, want and be to perform its (current or future) function successfully.

Organizational competency means the knowledge, skills and attitudes and personal characteristics that are of strategic importance for the organization. In other words: What makes the company unique, successful and what will make our company unique, successful in the future. What knowledge, skills, attitudes and personal characteristics will we need in the future?

The New Competency Management describes these competencies by means of clearly perceptible and therefore measurable descriptions. This also makes it clear to everyone what exactly is expected, what knowledge, skills and attitudes are important to perform a function successfully. This also makes it clear to everyone how they will be evaluated. Training and training needs are Also clear. The power of competency management lies in the direct relationship between the development of the organization and the competencies and the development possibilities and/or need of the individual employees.

The competency model

The Ultimate goal of competency management is that the company develops its own model, bearing in mind the company's strategy and individuality. The literature, including the Internet, has already described many theoretical competency models that can serve as a basis for the company's own model. It is Important that the model is clear to all, that all functions and all necessary competencies can be described and that it makes differences between functions clear. To create a proprietary competency model, we use a reference frame based on some of the features that are present in each function:

• In each function one deals with information;

• In each function there is more or less a decision-making power, responsibility;

• Each function has interaction with other people;

• In each function, one must have self-regulation of oneself to a certain degree

• In each (but only for managerial) function there is a certain degree of leadership.

A few practical tips

The Road to the successful introduction of competency management is littered with pitfalls. The following tips can help you:

• Entering competency management is a strategic decision of the management. It is therefore important that it remains behind the project and that employees notice and experience it;

• Competency management takes time. It is a strategic decision, a change process. The organization and the employees need time to become just that innovation, to accept it and to learn to use it. In order to keep the introduction of this new system underway, the company must ensure that employees can take the necessary time available for them;

• Entering competency management requires a lot of communication. The purpose and relevance of the introduction of competency management must be clear for the employees involved. In Addition, the notion of competency for all the employees involved must be clear and filled in the same way by everyone;

• Competency management is proprietary. The goal is to develop a tailor-made model of the company. A theoretical model can serve as a basis for this, but this model needs to be adapted to the specific needs of the company. The worked-out behavioral indicators must Also be written to the company and everyone must recognize and accept them;

• The model must remain manageable. Limit the number of competencies per job (5 to 10). Determining the choice of competencies are the characteristics of the competency matrix to be built: it must be fully (all competencies and all functions) and yet differentiated (to clarify differences between functions);

• Competency management is dynamic. Changing competences depending on the needs of the company. It is therefore important to evaluate and adapt the model and its implementation at regular intervals;

• Competencies describe successful behavior. Pay a lot of attention to the quality of the behavior indicators, because they form the basis, the carrying capacity of the whole model.  Describe them in direct observable and/or measurable behavior;

• One last tip: to expedite the acceptance process it is advisable to use the competency model at the start only for selection & recruitment and for training and development. Once the model is accepted by the employees and used in the daily operation of the company, it can be thought to develop a competency-oriented remuneration system.