What are Competencies?

The word competence has several meanings. In everyday language, it is usually understood to mean some kind of technical knowledge or experience. One tends to say – a competent person, therefore, experienced and qualified, one who knows what he/she is doing.

Whereas, in business and organizational management, the term competencies is understood to mean the aggregate of skills, attitudes and knowledge, and a person’s ability to apply it in achieving the goals of a business/company/organization.

Both meanings are important. People can be knowledgeable, but come into conflict with others, or be slow in making decisions, despite the fact that they have experience. In the business context, competencies are always associated with a result, they are not just “nice to have”!

In organizational management, it is relevant to talk about competencies in these cases:

Implementing company values.

Competencies very clearly state the kind of actions that help to fulfil and implement company values.

The business environment is currently changing very rapidly and there are many new challenges - companies have to be ready for them at all levels. Competencies models are also consequently changing. If competencies such as planning, orientation on results, or analytical thinking were previously important, now concepts like critical thinking, the ability to adapt to changes, and empathy, are entering a company’s lexicon of competencies. This is connected with speed, the overloaded information space, and the rapid development of technology and other global processes.

Good practice means that values and competencies models are reviewed at least once every 2-3 years, changes evaluated, and additions and corrections made. It would be strange, as well as wrong, to use one and the same competencies model for 10 years if the surrounding environment and demands have changed – companies have to change and keep up too!

Annual personnel appraisal and personal development.

Accurately defined competencies can be of great benefit to managers in observing and evaluating employee achievements on an everyday basis and are, therefore, often included in the work performance appraisal process.

A correctly prepared and communicated competencies model clearly tells the employee the kind of behaviour and activity that the company expects of them – whereas, for the manager it is a good guidebook that helps in providing feedback and developing employee development plans.

Evaluating competencies in a selection process.

The decision on whether a competencies model is used in the employee selection process is usually made by the personnel director. It is up to this person whether employees will be taken on, based only on technical requirements or whether competencies that are essential for the company are also taken into account.

There is often discussion about everything and nothing in the selection process, but if the interview is structured and purposefully focused on appraising an applicant's competencies, we obtain very important information about the employee’s personality and behaviour. This helps us gain a better understanding of what we can expect from the person, how they will adapt into our company culture, and what the foreseeable risks and perspectives are.

Development of competencies.

This is a focused investment on what is needed to achieve a business result with powerful ethical foundations.

It is also a very powerful motivational tool. If people can see that there is an investment in them and that they are cared for, they feel more involved and are more loyal. Competencies development is most definitely one of the most important instruments for holding onto employees!

Olga Dzene - Leadership Development Expert