What is a competency

A competency is a specific set of skills, knowledge, abilities, and behaviors an employee must possess to perform tasks and roles effectively in an organization. Competencies are observable and measurable, related to the workplace or academic environment, and critical for a successful career.

Competencies can be technical, behavioral, or managerial and are often used to assess and develop employee performance. The HR department and senior executives collectively decide and define the competencies required for each organizational role.

What are the components of a competency?

• Knowledge: The information and understanding required to perform a job effectively, including theoretical knowledge and practical insights—for example, an engineer’s understanding of material science

• Skills: The specific abilities to perform tasks effectively, often developed through training and experience—for example, a nurse’s ability to administer medication accurately

• Abilities: Innate talents and learned capabilities enabling an individual to perform tasks—for example, a teacher’s ability to engage students and facilitate learning

• Behaviors: The actions and attitudes that an individual exhibits in the workplace, which impact their performance and interactions with others—for example, a customer service agent’s patience and friendliness when dealing with difficult customers

Levels of mastery

Competencies typically come with defined levels of mastery, indicating the proficiency expected at different stages of an employee's career. These levels help in assessing current capabilities and identifying areas for development.

For example, a six-level framework would use the following scale:

1. Beginner

2. Developing

3. Competent

4. Proficient

5. Advanced

6. Expert

Alternatively, a three-level framework can be:

1. Entry-level

2. Mid-level

3. Senior

Competency example

Workforce planning is a key competency for a staffing manager. Let’s define it.

Definition: Workforce planning is the strategic process of analyzing current workforce capabilities, forecasting future workforce needs, and developing strategies to close the gap between the two.

Behavioural indicators

• Collaborates with stakeholders to understand the organization’s strategic objectives and workforce implications

• Utilizes data-driven insights to make informed decisions and recommendations on workforce planning initiatives

• Regularly reviews and adjusts workforce plans to account for changing business needs and market conditions

Levels of mastery

Entry-level:

• Demonstrates a basic understanding of workforce planning concepts

• Contributes to the collection and analysis of workforce data

• Supports talent acquisition and development initiatives under the guidance of more experienced team members

Mid-level:

• Independently conducts workforce planning analysis

• Identifies trends and gaps, and makes recommendations to address workforce needs

• Leads talent acquisition and development initiatives and collaborates with cross-functional teams to implement workforce planning strategies

Senior:

• Oversees the organization’s workforce planning efforts

• Ensures alignment with strategic objectives and industry best practices

• Develops and implements organization-wide talent acquisition, development, and retention strategies to support workforce planning goals.

What are the types of competencies?

There are multiple ways to categorize competencies. The first type of classification focuses on the nature of the skill or behavior. It categorizes competencies based on their general characteristics and application:

• Behavioral competence: Interpersonal skills and behaviors that contribute to effective teamwork and communication—for example, a manager’s ability to mediate conflicts within their team

• Managerial competence: Leadership and management skills required to guide teams, make decisions, and achieve organizational goals—for example, a director’s strategic planning and decision-making capabilities

• Conceptual competence: Strategic thinking and problem-solving skills that enable individuals to understand complex situations and develop solutions—for example, an executive’s ability to analyze market trends and develop a long-term business strategy

• Technical competence: Job-specific skills and technical expertise needed to perform job duties effectively—for example, an IT specialist’s ability to troubleshoot network issues

The second type of classification focuses on the role and level within the organization. It categorizes competencies based on where they apply within the organizational structure and the type of role:

• Core competencies: Fundamental interpersonal skills and behaviors (like communication and teamwork) that all employees in a company should possess

• Functional competencies: Job-specific skills required for specific roles or departments (such as copywriting for marketing and negotiation for sales)

• Technical competencies: Specialized technical skills necessary for performing specific tasks within a job role (SEO for marketing, CMS for sales)

• Leadership and managerial competencies: Leadership and strategic thinking skills needed for managerial and executive positions (strategic planning, change management, team management)

Additional resources:

• Competency Framework Template with core, functional, and technical competencies

• Leadership Competency Framework Template with leadership-specific competencies

What are the five core competencies?

The following are five common core competencies many companies add to their frameworks:

• Communication: The ability to convey information and ideas effectively, both verbally and in writing, and to listen actively to others

• Problem-solving: The ability to analyze problems, identify root causes, and generate creative, practical, and effective solutions

• Teamwork and collaboration: The ability to work effectively with others, contribute to group decision-making, share knowledge and expertise, and resolve conflicts constructively

• Adaptability: The capacity to adjust to new situations, embrace change, and learn from experiences

• Emotional intelligence: The ability to recognize, understand, and manage one’s own emotions and those of others

How do competencies differ from skills?

While skills are specific learned abilities that can be measured and assessed, competencies encompass a broader combination of skills, knowledge, abilities, and behaviors.

For example, a skill might be proficiency in a particular software. In contrast, a competency would include the technical skill and the ability to apply it effectively in various contexts, collaborate with others, and adapt to changes.

In short, competency = knowledge + skills + behaviors + abilities.

What are performance competencies?

Performance competencies are the specific skills, behaviors, and attributes that contribute to effective job performance. They are measurable and observable characteristics employees need to achieve high performance in a role.

Performance competencies include a mix of technical skills, interpersonal abilities, and behavioral traits aligning with organizational goals and job requirements.

Performance competencies can be further divided into:

• Technical skills: The ability to use specific tools or software required for the job

• Interpersonal abilities: Effective communication, teamwork, and conflict resolution skills

• Behavioral traits: Reliability, adaptability, and initiative

Performance competencies help:

• Set clear performance expectations

• Provide targeted training

• Conduct fair performance evaluations

Additional resource: How to Create a Comprehensive Competency Model From Scratch

What are the 5 Cs of competency?

The “Cs” of competency typically refer to the various aspects or dimensions defining effective performance in a given role. These dimensions can help structure and assess competencies more comprehensively.

The specific “Cs” can vary depending on the competency framework, but common ones include:

Character

Character refers to an individual’s ethical and moral qualities that influence their behavior and decision-making. It involves acting morally soundly and ethically, even when faced with challenges.

An example of strong character is an employee who always follows company policies and treats colleagues with respect.

Commitment

Commitment refers to an individual’s dedication and loyalty to their job and organization. It includes working to achieve organizational goals and persistently striving for improvement.

For example, a project manager who stays late to ensure they meet project deadlines shows high levels of commitment.

Competence

Competence encompasses the skills, knowledge, and abilities required to perform job duties effectively. It includes both technical and soft skills relevant to the role.

For example, a software developer proficient in multiple programming languages and problem-solving techniques exhibits competence.

Collaboration

Collaboration involves working well with others, including team members, colleagues from different departments, and external partners. It requires effective teamwork and cooperative problem-solving.

For example, a marketing professional who works closely with the sales team to develop cohesive strategies exemplifies collaboration.

Communication

Communication entails the clear and effective exchange of information. It includes verbal and written communication skills, active listening, and the ability to give and receive feedback.

For example, a customer service representative who clearly explains product features to customers and listens to their concerns demonstrates strong communication skills.

How can competencies be measured?

You can assess competencies through various methods:

• Self-assessments: Employees evaluate their competencies against predefined criteria

• Manager evaluations: Supervisors assess employees based on observed behaviors and outcomes

• 360-degree feedback: Feedback is gathered from peers, subordinates, and supervisors to provide a comprehensive view

• Competency-based performance reviews: Regular reviews that incorporate competency assessments into overall performance evaluations

• Competency-based interviews: Structured interviews assessing specific competencies through situational questions

How do you integrate competencies into various HR processes?

By understanding and applying competency frameworks, HR specialists can enhance recruitment, performance management, and employee development processes, ultimately driving organizational success.

Performance management

Integrating competencies into performance management involves:

• Setting expectations: Communicate the competencies required for each role and the expected proficiency levels

• Performance reviews: Align performance evaluations with the competency framework to ensure consistent and objective assessments—use competency ratings to provide clear feedback on strengths and areas for improvement

• Feedback and development: Provide feedback based on competency assessments and create development plans to address competency gaps

• Recognition and rewards: Recognize and reward employees who demonstrate high competency levels

For example, during annual reviews, employees are evaluated against competencies such as teamwork, leadership, and technical skills. Set specific goals for employees to improve in these areas over the next review period.

Complimentary resource: The complete guide to creating a competency-based performance management system.

Learning and development

Integrating competencies into learning and development involves:

• Training programs: Design training programs that target the development of specific competencies identified as critical for the organization

• Competency-based development plans: Create individualized development plans based on competency assessments to address skill gaps and career aspirations

• E-learning modules: Develop e-learning content focusing on key competencies, allowing employees to learn at their own pace

• Job rotation: Use job rotation and cross-training to expose employees to different roles and develop a broader range of competencies

• Continuous learning: Encourage a culture of continuous learning and development to keep competencies up to date

For example, if project management competency is crucial, offer training programs and workshops focused on project planning, risk management, and team leadership. Use competency assessments to tailor these programs to individual needs.

Free resources:

• Individual Employee Training Plan Template

• Skills Gap Analysis Template

Career development and succession planning

Competencies are the building blocks for competency frameworks, which enable:

• Career pathing: Define career paths based on the competencies required for progression to each level and use them as the benchmark against which to assess workers

• Succession planning: Identify high-potential employees based on their competency profiles and prepare them for future leadership roles through targeted development activities

For example, map sales employees’ career paths, showing how developing competencies like negotiation, customer relationship management, and strategic thinking can lead to advancement. Use this map to guide their development plans and identify future leaders.

Free resources:

• 9 Box Grid Template

• Career Discussion Template

Workforce planning

Since competencies enable more effective evaluations and development initiatives, they support organizational workforce planning:

• Skills inventory: Maintain a skills inventory based on competencies to understand the current capabilities of the workforce and identify future needs

• Strategic planning: Align workforce planning with the organization’s strategic goals by focusing on developing the competencies needed to achieve these goals

For example, create a skills inventory that includes competencies like digital literacy, leadership, and customer service. Use this inventory to plan for future hiring needs and development programs.

Recruitment and selection

Integrating competencies into recruitment and selection involves:

• Job descriptions: Include core, functional, and technical competencies required for each role in the job descriptions to help attract candidates with the right skills and behaviors

• Interview questions: Develop competency-based interview questions to assess candidates’ abilities in critical areas

• Assessment tools: Use assessments and tests designed to measure specific competencies relevant to the role

For example, for a customer service position, include competencies like communication, problem-solving, and empathy in the job description. Develop interview questions that probe these areas and use role-playing scenarios to assess these competencies during interviews.

Free resources: Explore our collection of job description templates. Discover templates for roles such as Technical Product Manager, CFO, and CEO.

Manage competencies effectively with Deel HR

Implementing a well-designed competency model is crucial for building a skilled workforce and achieving long-term organizational success.

Engage, a modue of Deel HR, helps you establish clear expectations and a path forward for everyone in your organization using competency models and career frameworks. You will get:

• Competency-based career progression frameworks: Retain your workforce with clear information on career growth and progression in your organization

• Competency-based performance assessments: Evaluate your team member’s performance on a competency level to identify skill gaps and growth opportunities

• Competency-based training: Access hundreds of learning resources through Engage to provide workers with role-specific training materials

Talk to our experts about creating a custom competency model for your organization.