Article
6 min read
Author
Lorelei Trisca
Published
May 21, 2024
Last Update
June 20, 2024
Table of Contents
1. Prepare the groundwork: Develop your competency framework
2. Design the performance appraisal process
3. Select competency review tools
4. Communicate the change to your organization
5. Train managers and employees
6. Run a pilot test before full implementation
7. Kick off the first competency-based appraisal cycle
8. Follow up with employees on competency and performance results and plan for improvement
9. Analyze data at a team/department/organization level
10. Review and refine the system if necessary
11. Monitor and evaluate performance
Competency-based performance review questions + Free appraisal form
Competency-based performance appraisal examples
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Are your performance reviews failing to contribute to employee development? It may be time to give competency-based performance appraisals a chance.
Effectively rolling out a competency-based appraisal process requires thorough preparation, clear communication, comprehensive training, and continuous improvement.
By following the steps in this guide, you can ensure a smooth implementation of your new system, alignment with business objectives, and employee personal development and performance improvement.
Additionally, our evaluation questions and template, review examples, and tips will help you every step of the way.
Identify the specific skills, behaviors, and attributes employees need to achieve these goals.
The main questions to answer at this stage are:
This preparatory step will require collaboration between human resources, team leadership, and your organization's executive team.
Define specific competencies for all departments or roles in your organization.
You should aim for a combination of technical and soft skills:
One way to approach this task is to start with job descriptions for each role and map competencies to tasks. However, you should ensure that they are updated and reflect current roles.
You can use our competency mapping template to simplify this task.
Once you have identified all relevant competencies for your organization, it’s time to develop clear and cohesive definitions for each.
For example, define written communication as “the ability to convey ideas, information, and messages effectively through written language. It includes clarity, coherence, conciseness, and correctness in written documents, emails, reports, and other forms of written communication.”
Finally, identify specific behaviors and actions that demonstrate each competency in practice.
Clearly outline the behaviors and skills associated with each level to provide clarity to employees and evaluators.
For example, a basic mastery of written communication would imply writing simple and clear messages with basic grammar and spelling accuracy. In contrast, an expert would set standards for written communication across the organization, ensure consistency and quality in all written materials, and develop guidelines for effective written communication practices.
This final step ensures reviewers have clear benchmarks and objective and measurable evaluation criteria.
If you need to automate this step, AI-based solutions like Deel Engage can help ensure you never start from an empty state when creating comprehensive competency models.
Check our complete guide to creating comprehensive competency models for more in-depth guidance, tips, and examples.
You can also use one of these templates:
The key question to consider at this step is: How will we evaluate employee competencies?
Pick the method(s) for evaluating competencies. Choose between self-assessments, peer reviews, and manager evaluations. Alternatively, mix multiple evaluation methods for a more holistic understanding of each employee.
Next, decide on qualitative versus quantitative evaluations or a mix of the two.
Quantitative reviews with rating scales make analyzing and comparing results within and across teams easier. Create rating scales that are consistent, easy to understand, and accurately reflect different levels of competency. Ensure the evaluation criteria are objective, relevant, and applicable to each role.
You can also use quantitative competency reviews as a data source for your skills gap analyses.
Conversely, qualitative reviews collect more nuanced information about each employee, allowing more space for suggesting improvements and sharing constructive feedback.
Now, it’s time to create your competency appraisal forms. These should be user-friendly and aligned with the competency framework.
Tip: Add a few instructions to the reviewers and examples of evaluating and providing feedback on competencies.
The key questions to ask:
You can run a competency-based performance review with one-on-one discussions, mainstream tools like Google Docs or Forms, or a specialized HR tech solution. Either way, you should:
Create and regularly update a database of competencies and match them with roles
Define levels and behavioral indicators for every single competency
Prepare assessment questionnaires
Document the process and train relevant stakeholders
Write, store, and share feedback (from peers, managers, etc.)
Make the training and professional development resources available
Design competency development plans as follow-ups to the reviews
With the assistance of HR software, you can streamline all the processes above.
Your system is ready, so it’s time to bring your organization on board with the change.
The key question to ask here is: How do we ensure that all stakeholders have clear expectations of what they need to do and when?
Start with a communication plan outlining the new appraisal system's purpose, benefits, and implementation timeline.
Tip: Use multiple channels, such as emails, meetings, intranet, and newsletters, to ensure the message reaches everyone. Also, ensure that your executives advocate for the new system.
Create avenues for employees to ask questions and provide feedback throughout the rollout process. This feedback will come in handy at the end of the review cycle when it’s time to evaluate the effectiveness of this new appraisal system.
As with any other organizational change, you might encounter resistance, confusion, and doubts from leaders and employees.
Offer managers, supervisors, and other evaluators training on assessing and evaluating competencies effectively. This training should include guidance on using the appraisal system, interpreting competency levels, providing feedback, conducting performance discussions, and planning for competence development.
Don’t forget about your employees, either. Train employees on the competency framework, the appraisal process, and how to engage in self-assessments.
Offer resources such as guides, FAQs, and example scenarios to help employees and managers understand the new system.
It’s time to roll out the competency-based appraisal system. Before a global rollout, start with a pilot test for one department to identify any issues or areas for improvement. Based on the pilot feedback, make necessary adjustments to the process, forms, and tools.
All your preparation has led to this step: kicking off the first competency-based evaluation cycle. Gather performance data through the chosen appraisal methods and tools. Invite reviewers to assess each employee's performance against the defined competencies and behavioral indicators.
Check in regularly on the implementation process and address any issues promptly. Be ready to answer questions and share relevant resources for stakeholders who need help navigating the new process.
Get actionable tips on writing performance reviews for your workers. For extra inspiration, check out 40+ performance feedback examples for all levels of performance.
The key questions to ask:
This step will largely depend on your performance management process. However, a good rule of thumb is for managers to reserve one-on-one time with their teams to share the results of their appraisals and plan for the future.
A performance review meeting is the perfect setting for sharing constructive feedback based on the appraisal results. It is also ideal for discussing accomplishments, challenges, strengths, and areas for improvement.
Incorporating growth conversations in your performance management cycles will encourage your staff to learn and grow continuously in their roles and progress along their career paths.
The key questions to ask are:
Each appraisal cycle clarifies which skills, knowledge, and characteristics your company may lack.
Identify and prioritize competency gaps that might prevent your organization from achieving its goals or those that will keep your organization future-proof.
For example, your competency-based reviews highlight a lack of leadership skills in your organization, as most employees have a mid-seniority level. You could recruit experienced leaders to cover competency gaps or devise a leadership training program enabling internal career progression and succession planning.
Design your competency development process to satisfy the training needs you previously identified. Match training topics to the competencies that are lacking or identified as unsatisfactory. Adapt development methods to each employee's learning style.
Competency development might require an employee to pursue professional certification or enroll in a graduate program. It could also involve social training methods like peer learning, coaching, mentoring, and job rotations.
Developing competencies doesn't comprise training only—although it's a significant part of the process. It also includes practicing the newly learned competencies or the competencies selected for improvement.
Once the review cycle is complete and employees and managers have discussed their next steps, it’s time to assess the new appraisal system.
The key questions to ask:
Collect feedback from employees and managers on the effectiveness of the appraisal system.
Refine the competency framework, appraisal methods, and processes based on the feedback and analysis to improve the system and ensure its ongoing relevance and effectiveness.
For example, was the new process too time-consuming? If so, the competency framework may contain too many competencies. Did the evaluators struggle to assess competencies? You may need to offer more examples.
Continuously monitor and evaluate the performance of the competency-based appraisal system.
Track key metrics such as completion rates, satisfaction levels, and changes in employee performance over time.
Use this data to assess the impact of the system and make data-driven decisions for future enhancements.
Read our guide on how to set up a competency-based performance management system in your organization.
Review questions to assess competencies aren't "one size fits all."
First, develop questions tailored to your company's competency model. Then, adapt each competency-based performance review question to the employee and their role.
Use these appraisal questions as a starting point for customizing your competency-based performance evaluation form. For some questions, we included variances for self-evaluations, manager (downward), and peer feedback.
Self: How effectively have you applied your technical skills to meet your job responsibilities? Please provide an example.
Manager: How effectively has the employee applied their technical skills to meet their job responsibilities? Please provide an example. (You can also add a rating scale here)
Peer: On a scale of 1-10, how would you rate the employee's technical skills in their job responsibilities? Please provide an example.
Self: How have you contributed to the team's overall performance? Can you provide an instance where your collaboration led to a successful outcome?
Manager/Peer: How has the employee contributed to the team's overall performance?
Self: Describe a situation where you had to adapt to a change in your work environment. How did you handle it, and what was the outcome?
Manager/Peer: Describe a situation in which the employee had to adapt to a change in their work environment. How did they handle it, and what was the outcome?
Self: How have you demonstrated communication skills with internal and external stakeholders? Please give a specific example.
Manager: What are the top three strengths of the employee in addressing internal and external stakeholders?
Peer: How has the employee demonstrated strong communication skills with internal and external stakeholders? Please give a specific example.
Self: How have you demonstrated your ability to think critically and strategically in your role? Please provide a specific example.
Manager/Peer: Using the options "Below expectations," "Meets expectations," or "Exceeds expectations," how would you rate the employee's ability to think critically and strategically in their role? Please provide a specific example.
Self: Can you provide an example of when you had to manage competing priorities and how you ensured the timely completion of tasks?
Manager: Can you provide an example of when the employee had to manage competing priorities and how they ensured the timely completion of tasks.
Self: Tell us about an instance when you took the initiative to identify and solve a problem at work. What was the situation, and what steps did you take?
Manager: Can you share an instance where the employee had to provide constructive feedback to a coworker? How did they approach this situation, and what was the outcome?
Manager: How has the employee demonstrated leadership within their role or as part of a team? Please provide a specific example.
This article wouldn't be complete without showing you what competency-based performance review examples look like.
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With Deel Engage, your staff will grow professionally, and the business will reach its goals. Two strong reasons to book your demo today!
Investing in our employees and their development is critical for us. We use Deel Engage’s smart tech to give employees a transparent outlook on their career progression, run bi-yearly feedback reviews, and train people globally.
—Barbara Imm,
Director of People and Culture, roadsurfer
According to competency mapping expert Seema Sanghi, a competency entails five elements:
Competency employee comments are specific feedback statements from managers or peers that highlight an employee's proficiency or areas for improvement in a particular competency.
Here are three examples of competency employee comments:
Jane consistently demonstrates exceptional collaboration skills, actively participating in team discussions and supporting her colleagues. Her ability to mediate conflicts and maintain a positive work environment has been crucial to our team's success.
Mark excels at clearly presenting complex ideas. His presentations are always well-organized and engaging, making it easy for the audience to understand and retain the information shared.
Susan could improve her written communication skills, particularly in crafting concise emails. By improving her writing and proofreading abilities, Susan can avoid misunderstandings and ensure she communicates essential information effectively.
Competency-based assessment focuses on specific skills or competencies required for a job role. It involves clearly defined competencies relevant to the role, observable behaviors or actions used to assess proficiency in each competency and a comprehensive evaluation of an employee's performance.
Core competencies in a performance review refer to the essential employee skills, behaviors, and attributes required for effective job performance. These competencies may vary depending on the nature of the role but often include skills such as communication, problem-solving, teamwork, and adaptability. Core competencies are the foundation for evaluating an employee's performance and determining their strengths, areas for improvement, and overall contribution to the organization.
A competency assessment focuses specifically on evaluating an individual's proficiency in key skills or competencies relevant to their role. It assesses the extent to which an employee demonstrates specific behaviors or actions associated with each competency. In contrast, a performance appraisal is a broader evaluation of an employee's overall job performance, which may include factors such as productivity, quality of work, adherence to deadlines, and attainment of performance goals.
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