Organizations use a variety of approaches to determine the skill areas on which to focus their learning and development resources. In some cases, business leaders will take an intuitive approach and use their experience and understanding of the workforce to articulate where deficiencies exist.

Data-driven companies opt for a more strategic and scientific process by identifying the key competencies underlying impactful job performance, assessing current proficiency compared to the demands of the business and using the results to specify where training can provide the greatest value. An important question is how to determine which competencies drive business results. Competency modeling can help answer that question.

Competency Modeling

Competency modeling is an approach in which job experts, often incumbents, managers and executives, methodically and iteratively hone in on the hard and soft skills that differentiate high performers from those who are less effective on the job, that link directly to the organization’s strategic goals and that reflect the values of the company. This approach takes advantage of the diversity of perspectives represented by employees at different levels of the organization, who have seen colleagues succeed and others fail in their roles.

Best practice suggests that competency modeling is conducted in a four-step process:

  1. It starts with a review of the company’s broad strategic objectives along with existing competency models, job analysis results, position descriptions and other documents to identify the competencies that the organization has previously identified as critical. Often, leaders and managers are interviewed to gain deeper insight into the jobs.
  2. Then, a cross-functional team consisting of representatives from relevant functions meets under the leadership of an experienced HR professional. Starting with existing materials, team members first brainstorm and then further specify the competencies critical at various levels of the company. For each competency, the team creates benchmarks that define outstanding, average and unacceptable performance.
  3. These competencies are refined and validated either by a second team, whose members were not involved in the initial process, or by collecting feedback from a larger set of incumbents and managers using a survey. Validation ratings that ask about the criticality of each competency and the appropriateness of each benchmark help to ensure that the final product is highly relevant and has strong legal defensibility.
  4. A final review and approval by top leadership is important for acceptance and buy-in of the final competency model.

Identifying Competency Gaps

Once the company has completed the competency modeling process to identify the key areas underlying success, the next step is to determine where deficiencies may exist and to focus training efforts on those competencies. During the assessment, organizations can consider:

  • Business results and other hard data, such as those collected in customer feedback surveys
  • Assessments that provide developmental indicators focused on the competencies
  • Performance reviews that address the achievement of business goals and allow for manager ratings on the competencies
  • Interviews with leaders, managers and employees on the competency areas they view as strengths and as opportunities across the organization

Once the team identifies these gaps, L&D, in partnership with subject matter experts from across the business, can create and deliver training to mitigate those deficiencies.

Competency Models as a Foundation for HR Tools and Practices

Competency models are not only highly effective for determining areas in which to focus training efforts, but they also serve as an impactful foundation for a range of human resources activities. For example, leading companies will use competency models to:

  • Communicate success factors across levels to employees
  • Recruit, assess and hire based on what it really takes to succeed in the company
  • Provide feedback to incumbents as part of performance assessment
  • Conduct career development, succession planning and talent review meetings centered on documented skills differentiators
  • Drive organizational change efforts to ensure that the workforce is skilled and prepared to meet current and future business demands

Although following a scientific and comprehensive competency modeling process takes time and resources, it results in a common model that the organization can use to identify key training opportunities and tie together all HR tools and practices that are part of the employee life cycle.

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