What are competencies?

Are you an HR professional facing these challenges:

• Identifying the key skills and traits that define success in the roles you’re hiring for
• Accurately evaluating candidate abilities during the recruitment process
• Offering impactful feedback for employee training and development

These challenges can lead to hiring the wrong people, stifling organizational growth, and ultimately impacting your company’s bottom line.

The solution? Using competencies to improve HR practices and outcomes. 

What Are Competencies?

Competencies are observable and measurable knowledge, skills, behaviours, attitudes, and experiences essential for success in a particular role.

These 5 components are described as below:

1. Knowledge

Knowledge is what a person knows about a particular subject or field, which can be gained through education, training, or practical experience. 

For example, a software developer needs knowledge of programming languages and software engineering principles.

2. Skills

Skills are the practical abilities that enable someone to perform tasks effectively in their job. These include:

• Technical or hard skills, such as the ability to use specific tools or software
• Soft skills like effective communication and problem-solving

Skills are often developed through hands-on experience and can be enhanced through practice and training.

3. Behaviours

These are the actions or reactions of an individual in response to their environment, often observable and measurable. 

Behaviours in a competency framework are important as they demonstrate how knowledge and skills are applied in real-world scenarios. 

For example, how a manager handles conflict within their team showcases their interpersonal and leadership behaviours.

4. Attitudes

Attitudes are how someone feels and thinks about their job and the workplace. For example, how enthusiastic, committed, and motivated someone is at work. Positive attitude can improve workplace morale and productivity.

5. Experiences

Experiences are the background and events that have contributed to a person’s development and learning over time. This could include past jobs, projects worked on, or challenges faced. 

All these experiences help a person get better at handling similar situations in the future and make them more skilled and adaptable at what they do.

Difference Between Competencies and Skills

People often use the terms “skills” and “competencies” interchangeably, but there are important distinctions between the two.

Hung Lee, editor of a leading HR newsletter Recruiting Brainfood, explains the difference between skills, traits, and competencies as below: 

• Skills 

Skills are directly related to specific tasks and are knowledge-based, which means people can learn, train, and improve on them over time.

• Traits

Traits, on the other hand, are inherent qualities that cannot be learned; they are simply part of who you are. But traits may give you the propensity to excel at certain types of skills. 

• Competencies

Competency, Lee says, is a nebulous combination of skills and traits. 

More importantly, competency is historical and looks at what you have done in the past using some combination of skills and traits.

This is why competency-based interviewing is about trying to find evidence that you have done something before.

For example:

Why Are Competencies Important in HR?

Since competencies set the standard for success for each role, they play a crucial role in identifying, nurturing, and measuring employees against these expectations. 

Later in this article, you’ll learn exactly how to use competencies across the employee lifecycle – from hiring and training to performance management and retention. 

By integrating competencies at every stage, HR leaders can: 

• Hire the right talent
• Develop competencies that are essential for success
• Clarify expectations around performance
• Improve employee engagement and retention
• Build a strong pipeline for future leadership roles

Types of Competencies in the Workplace

There are 5 main types of competencies. Each type plays a unique role in shaping employee performance and organizational growth. 

Check out the table below for their definitions and examples:

But to work with competencies in a structured way, you need to develop competency models.

Read more about competencies here.

35 Core Competencies Examples

35 Performance Review Competencies Examples in 2024

67 Lominger Competencies

What are Competency Models

Competency models help make competencies less vague, and more concrete. 

It’s because you don’t just identify the competencies but also explain what each competency looks like in action across different roles and levels in your organization. 

A competency framework includes the following 3 things:

1. Key competencies

Identifying key competencies for each role is one of the hardest parts of building a competency model. 

We’ll discuss how to actually figure out the key competencies in a later section of this blog post. 

2. Proficiency levels

Each competency needs to have different levels of mastery, for example:

• Basic
• Proficient
• Expert

It helps assess how well someone demonstrates a particular competency. 

3. Behavioural indicators

These describe specific actions and behaviours that show how someone should put those competencies into practice.

They provide observable benchmarks for evaluating how someone performs the job.

To better understand this, Heather Burright, founder and CEO of Skill Masters Market, explains how even the same competency of “communication” would have different associated behaviours for different roles:

For example, proficiency for a support role might involve:

• Actively listening
• Asking clarifying questions
• Demonstrating understanding

But communication for an executive leader goes beyond that. Besides the above behaviours, they also need to be:

• Strategic communicators
• Influencing stakeholders
• Advocating for the organization’s mission with impact

In this way, the competency model allows you to define success in each role as you see fit – customised for your unique organizational goals and strategies.

Steps to Develop and Implement a Competency Model

While creating a competency model takes a lot of time, the long-term benefits are worth the effort. Think of it as a strategic change initiative – one that creates a high-performing environment, and empowers you, your team, and your organization.

Step 1: Identify the Right Competencies 

To identify the competencies for your organization, you need to do extensive research – both internally within your company, and externally in your industry. 

1. Conduct External Research

The best competency models aren’t built in a vacuum. Peeking at what’s happening outside your company walls can be a game-changer. 

Here are four key ways to conduct external research, according to learning, leadership, and DEI strategist Heather Burright: 

i. Industry Trends

What are the hot topics and emerging skills in your industry? Is data analysis becoming a must-have? Are there new software applications everyone’s buzzing about? Understanding these trends ensures your competency model is forward-thinking and prepares your team for what’s to come.

ii. The Future of Work

Where is the overall work landscape headed? Are there specific skills or mindsets that will be increasingly valuable?

For example, as more people work from home, there’s a greater focus on competencies like digital literacy, communication, problem-solving, and time management.

With the rise of automation, critical thinking and problem-solving might become even more important.

iii. Off-the-Shelf Models

Explore existing competency models from industry leaders or professional organizations. What skills and behaviours do they emphasise? Are there some general themes that might apply to your company as well?

iv. Success Stories

Look at how other organizations have implemented competency models. What were their goals? How did they identify their core competencies? What lessons can you learn from their experiences?

2. Research Internal Documents

While external trends offer valuable insights, the real treasure lies within your own organization. Burright suggests diving deeper into your company’s DNA by exploring these 5 key documents:

i. Strategic Plan

Your organization’s strategic plan is a roadmap to the future. What are the key priorities outlined there? The skills and behaviours needed to achieve those goals are likely core competencies for your team.

ii. Core Values

Take a close look at your documented core values. What behaviours and characteristics are fundamental to your company culture? How can you translate those values into actionable competencies?

iii. Job Descriptions

Analyse job descriptions across different departments. What are the recurring themes in terms of skills and qualifications? These shared themes often point toward core competencies relevant to multiple roles within your organization.

iv. Performance Reviews

What skills and behaviours are currently assessed in performance evaluations? Are there recurring areas of emphasis? These insights can help identify competencies that align with existing performance management practices.

v. Existing Competency Models

If your organization has a previous competency model, don’t disregard it! Analyse its strengths and weaknesses. What worked well? What could be improved? 

3. Interview internal stakeholders

Here’s the exciting part: getting real-life insights from your team! 

By interviewing staff at all levels, you gain a richer understanding of your organization’s inner workings. 

These insights form a strong foundation for your competencies, ensuring it reflect the reality of your team’s work and aspirations.

Here are some key questions to explore during interviews and focus groups:

• Imagine you’re coaching a new employee in your role. What key skills and behaviours would you emphasise for their success? 
• Imagine your ideal team member five years from now. What skills and mindsets would they possess to excel in their roles? 
• If you could wave a magic wand and improve one aspect of your work process, what would it be? What skill or knowledge would be most helpful in achieving that improvement? 
• What advice would you give to someone in your role who is aiming for a promotion in the near future?

Remember, developing a competency model is a collaborative effort, and involving staff in the research process also helps in achieving strong buy-in. 

When employees feel their voices are heard, it increases their trust and commitment to the project. When they feel involved in shaping the model, they’re more likely to embrace it and see its value in their daily work.

Step 2: Establish Multiple Levels of Proficiency

Consider how many levels you want in your competency model. Fewer levels (3-4) are simpler but lack detail. More levels (5-7) offer a nuanced picture but risk complexity. 

The ideal number of levels strikes a balance between providing enough detail for meaningful development and remaining clear and actionable.

Next, choose a levelling framework based on your specific needs and the context of your organization. Consider factors like:

• Organizational Culture: Does your company culture value innovation and proactive behaviour, or a more structured and process-oriented approach?
• Target Audience: Who will be using the competency model? Managers, HR professionals, or individual employees?

There are several different levelling frameworks to choose from:

1. Behaviour-Based Levels:

This 3-level framework focuses on the observable behaviours associated with each competency. It defines different levels of proficiency, such as:

• Basic: Demonstrates some core competency behaviours with guidance.
• Competent: Consistently applies all key competency behaviours effectively.
• Expert: Exceeds expectations by innovating and mentoring others in applying the competency.

This framework is clear and easy to understand, making it a popular choice.

2. Impact-Based Levels:

This framework emphasises the impact an employee’s performance has on the organization. 

• Foundational: The competency is demonstrated, but with minimal impact on outcomes.
• Contributive: Competency application leads to consistent and expected results.
• Proactive: The employee actively uses the competency to improve processes or achieve superior results.
• Transformational: The employee leverages the competency to drive significant innovation and positive change.

This approach highlights the desired business outcomes associated with each competency level.

3. Knowledge and Skill-Based Levels:

This framework focuses on the knowledge, skills, and abilities (KSAs) required for each competency. 

• Basic Knowledge: Fundamental understanding of the competency.
• Applied Skills: Ability to apply competency in basic work situations.
• Advanced Skills: Proficiency in using the competency across different situations.
• Expert Knowledge: Deep understanding of the competency and its nuances.

This framework emphasises the technical knowledge and skills needed to excel at different levels.

Step 3: Define Behaviours Associated with Each Competency 

Now that you have the competencies and different proficiency levels mapped out, you need to show how someone with a competency would actually act on the job.

Here’s how to go about defining the behaviours associated with each competency:

• Choose a competency

Start with a key competency you value in your company or  a role, like “problem-solving.”

• Brainstorm behaviours

Think about the actions someone with excellent problem-solving skills would take at different levels of proficiency. 

For instance, a beginner might identify potential issues, while a more experienced problem-solver might analyse root causes and propose solutions. An expert might even anticipate problems and develop preventative measures.

3. Include negative behaviours (Optional)

To make the competencies even more clear and easy to understand, you may add examples of negative behaviours that show a lack of competency. 

Contrasting positive and negative behaviours makes the expectations more concrete and clarifies what falls short.

For example: Let’s take the competency “Communication” and the proficiency level “Basic”.

• Positive Behaviours: Actively listens by making eye contact and asking clarifying questions. Uses clear and concise language tailored to the audience.
• Negative Behaviours: Dominates conversations and interrupts others. Uses jargon or overly technical language that the audience might not understand. Fails to listen attentively and misses key points.

4. Refine and add details

Make sure your behaviours are specific and observable. 

Instead of “good decision-making”, aim for “gathers all relevant data before making choices for routine tasks” or “considers different perspectives and potential risks when evaluating complex situations.”

Step 4: Roll Out the Competency Model

Now that the creation of the model is complete, it is time to introduce it to the employees:

1. Get Your Team Onboard

Build a team of “champions” from different departments to explain the model and answer questions.

2. Spread the Word Clearly

Use multiple channels (email, intranet, meetings) to explain the model’s purpose and benefits.

Offer training sessions and resources (guides, FAQs) for easy understanding.

3. Pilot First

Before a full launch, test the model with a few departments to gather feedback and make adjustments.

4. Official Rollout

For the most efficient launch, consider a phased approach with targeted communication through different meetings, depending on the audience: 

Step 5: Integrate Competencies Throughout the Employee Lifecycle 

Now comes the exciting part – actually embedding competencies in your day-to-day HR processes. 

1. Recruitment and Hiring

By outlining the essential behaviours needed for a role, you can craft interview questions that assess those behaviours fairly and accurately. This ensures you hire individuals with the skills and mindset to thrive in your company culture.

2. Onboarding and Development

Onboarding can feel overwhelming for new hires. Competencies can act as a roadmap, providing them with clear expectations of what success looks like in their role.

3. Training and Development

Competencies can be used to design targeted training programs that address both current and future needs. Think of them as a skills map, showing what’s required for the current role and what might be needed for future opportunities. 

4. Clear Expectations and Performance Management

Performance reviews can sometimes feel subjective. Competencies provide a consistent, objective framework for feedback and evaluations. This takes the guesswork out of the equation, allowing managers to communicate expectations and performance metrics clearly. 

5. Succession Planning

Competencies are key players in succession planning. By mapping the competencies required for critical roles, you can identify potential talent gaps and proactively develop your internal talent pool. 

This ensures you have a pipeline of qualified employees ready to step up when needed, fostering growth for both individuals and the organization.

6. Employee Engagement

When employees understand the competencies they need to develop, they feel empowered to take control of their careers. This transparency boosts engagement and satisfaction, leading to a more dedicated workforce. 

7. Rewards and Recognition

Recognition and rewards are powerful motivators. By linking rewards to the competencies you value, you can reinforce desired behaviours and encourage employees to consistently demonstrate the skills and attitudes that contribute to success. 

This goes beyond just financial rewards; public recognition, additional responsibilities, or opportunities for professional development can also be highly motivating.

Step 5: Measuring Competencies in Employees

Integrating competencies throughout the employee lifecycle is a powerful strategy, but its effectiveness hinges on having a strong system for measuring them. 

There’s no one-size-fits-all approach to measuring competencies. The best methods depend on the specific competency and the stage of the employee lifecycle. 

Here are some common tools:

1. Behavioural Interviews

Ask questions that probe for past experiences that demonstrate the desired behaviours.

2. Performance Reviews

Use competency-based rubrics to assess performance against specific criteria.

3. 360-Degree Feedback

Gather feedback from colleagues, supervisors, and even clients to gain a well-rounded perspective.

4. Skills Assessments

Utilise standardised tests to measure specific technical skills.

5. Work Samples

Evaluate the quality of work completed to assess practical application of knowledge and skills.

Next-Gen Competency Management with Peoplebox

I understand that developing and implementing competencies might seem overwhelming, especially in large companies with multiple departments and hundreds of employees.

Organizations have traditionally relied on clunky Excel sheets to manage competencies. Indeed, it can be:

• Very time-consuming
• Difficult to scale
• Challenging to fully utilise

But now in 2025, we have dynamic tools that help you build competency framework that suits your employees and business.

Step 6: Regularly Evaluate and Update the Model as Needed

A competency model shouldn’t be a stagnant document. Just like the organization and the workplace itself evolve, your competency model needs to keep pace.

Here’s how to make sure your model remains relevant and effective:

1. Schedule Regular Reviews

Establish a regular review cycle for your competency model. This could be annually or biannually, depending on the rate of change within your organization and industry.

2. Gather Feedback from Stakeholders

Don’t go it alone! Involve key stakeholders in the evaluation process. 

This could include HR professionals, hiring managers, and even employees themselves. Gather feedback on the model’s clarity, effectiveness in guiding behaviour, and alignment with current needs.

3. Benchmark Against Industry Standards

Look beyond your own organization. Compare your competency model to industry standards and best practices. This can help identify areas where your model might be lacking or could be strengthened.

4. Analyse Data from Measurement Efforts

Remember the data collected when measuring individual competencies (performance reviews, skills assessments etc.)? 

By analysing this data from individual competency assessments, you can see how well the model is actually functioning in practice.

For example, if a large number of employees struggle with a particular competency, it might be a sign that this competency is over-emphasised in the model. It could be too complex, not clearly defined, or simply not as critical for success in certain roles as originally thought. 

The data might also show overlaps, where multiple competencies seem to be describing the same thing. This might indicate redundancy in the model, which can be confusing for both employees and managers.

5. Adapt and Update

Based on the feedback and data you gather, make necessary adjustments to your competency model. 

This might involve:

• Adding or removing competencies
• Merging or splitting competencies
• Changing proficiency levels
• Revising definitions and behaviours

Conclusion

Competencies are more than just a fancy HR term. They’re a strategic tool that can empower your organization to thrive in today’s dynamic workplace. Ready to build a winning competency framework? Visit Peoplebox to learn more.