Competency models are quite widely used in organisational settings as they provide a strong foundation for employee performance appraisals, development and leadership training initiatives, and promotion and succession decisions. Competencies are broadly defined as a set of skills or abilities that are associated with effective leadership and job performance. They refer to a set of behaviors that are essential in the delivery of desired results, or as behavioral capabilities that are important for the performance of responsibilities essential for the role or job. They also involve generic bodies of knowledge, motives, traits, social roles and skills that are related to an effective job performance.
Competency modeling approaches are divided into three broad categories:
• Educational Approach
• Psychological Approach
• Business Approach
The Educational Approach
The Educational Approach draws a connection between competencies and credentials. According to the approach, accumulation of skills and achievement of standards can be used to demonstrate the competence of an individual.
The Business Approach
The Business Approach focuses on generalizing individual or job-specific competencies to build organizational level of competencies. Under the business approach, competencies are geared towards the achievement of all organization goals and strategies.
The Psychological Approach
The definition of competencies according to the psychological approach states that competencies are sets of motives and personality traits that closely resemble knowledge, skill sets, and abilities. Team work, mission focus, planning, and influencing are a few competencies that are articulated. This approach is the most widely adopted competency approach among researchers and business organizations as it has a certain predictive value in terms of workplace behavior and job performance of the employees.
Competency Models Versus Job Analysis
The similarities between competencies and KSAOs (Knowledge, skill sets, abilities and other characteristics) have created some form of doubts and confusion among researchers and practitioners. Competency models provide information on skill sets of individuals and their abilities at a particular job level. Competencies are more broadly applicable and provide descriptions of individual level skill sets. These models also focus on the process of how the work gets done rather than on what it gets done. Thus, competencies serve as a helpful guide for training initiatives that are designed to highlight skill sets and abilities of employees. KSAO’s, on the other hand, accentuate differences across occupational groups and jobs. They entail a thorough job analysis as they are highly job specific.
Effective Design and Execution
Generally, 8 to 16 competencies that are clustered by the type of job comprise competency models. Each competency is clearly defined and anchored by many example behaviors that distinguish the competency. Examples of competencies that are commonly used and reflect the domain of job performances include, but are not limited to, support and interaction, presentation, analysis and interpretation, execution and organization. Variations of these competencies are repeated in organizational competency models across organisations and industries. Such competency models help employees identify the skills and abilities that are required by the organization for long term success.
Creation of Competency Models
The process of creating competency models involves the identification of the competencies or the combination of knowledge, skills, abilities and traits that enable employees to perform effectively on the job in a particular organisation. There are a number of ways to develop an organizational competency model such as selecting an out-of-the-box model, or even employing consultants to develop a highly customized model that fits the organizational structure perfectly. These Approaches, however attractive, might not be specific enough to match the culture of the organisation and make an impact. However, developing a customized competency model ensures that the competencies selected to be included in the model are aligned with the values and performance expectations of the organisation.
The following approaches have been deemed as critical in the competency model process:
• Using existing job relevant materials such as job descriptions and organizational derivatives such as strategic objectives to inform the selection of the appropriate competencies
• Working closely with the senior managers of the organization to develop competency models to ensure support
• Demonstrating the link between business outcomes and competencies
• Implementing the new competency model to solicit the buy-in across the organization
• Integrating existing training, development and performance management practices
• Re-evaluating competency models on a regular basis to ensure that the competencies are relevant to individuals and jobs across the organizations.
Competency models must be aligned with relevant business outcomes. Stated below, are the steps that can be taken to make the process of building competency models business focused from beginning to end:
• Collecting data from multiple perspectives
Many times, HR leaders and consultants rely on interviews with current employees holding a role of interest as the cornerstone of their competency modeling process. This shortsighted strategy does not provide the depth of information needed to identify the critical competencies for particular jobs. Collection of data helps maximize the depth of information obtained, and enhances the relevance of the resulting competency model.
• Integration of data
Integrating data from multiple perspectives is essential. The data must be analyzed separately before placing it together to create a strong competency model and understand how the job needs to be done.
• Building focus on a specific goal
Focusing on a specific goal or set of goals reinforces the alignment between the process of competency modelling and other organisational needs, and also helps create a sense of urgency.
• Using a sorting exercise with key state holders
Once the KSAO‘s have been collected from the multiple data points, compiling key subject matter experts for sorting exercise is advised. The sorting exercise increases the buying for the process and enhances the relevance of the resting competency model.
The ultimate goal of an organisation must be to produce a competency model that:
• Is aligned to the business
• Has senior-level involvement
• Is finalised by focusing on business needs and abilities
• Is the driving force of critical business outcomes
Business strategies need to be the foundation of the role of HR leaders. Organisational capabilities provide a foundation to guide the strategy building process, helping to ensure that the final strategy is linked to the organisational capabilities, with competencies playing the role of an execution channel between the two 
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