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Competencies Demystified

By HRSG Team on January, 21 2022

Myths, Realities, and Key Definitions


Competencies have been part of the HR toolkit for more than 50 years, but misinformation and confusion still surround these powerful talent management tools.


Since they were first developed in the 1970s, competencies have become the gold standard in talent management. Today, competency-based management (CBM) is the leading approach to attracting, engaging, and developing talent.


Yet for many HR professionals, competencies can still seem a little mysterious. As a result, competencies may be kept in a file somewhere instead of being used to manage the organization's valuable talent.


In this blog post, we'll demystify competencies to help you understand them more clearly and prepare to use them more effectively. You'll learn:


  • A simplified definition for competencies
  • 3 persistent myths about competencies
  • essential competency features


SECTION 1: A Simplified Definition of Competencies


One of the most mystifying things about competencies is the way they are defined. There is no universally agreed-upon definition for competencies, which can make it understandably difficult for HR professionals to grasp what they are.


Depending on the source you consult, you may discover that competencies are made up of characteristics, skills, attributes, behaviors, abilities, knowledge, specifications, motivations, merit, experiences—or varying combinations of those things. For example, SHRM defines competencies as "a cluster of highly interrelated attributes, including knowledge, skills, and abilities (KSAs) that give rise to the behaviors needed to perform a given job effectively."


At HRSG, we try to simplify the definition with this basic formula: knowledge + skills + abilities = competencies:


  • An employee demonstrates knowledge through a practical understanding of the concepts or models involved in performing a job requirement.
  • An employee demonstrates skill by applying that knowledge through training or experiences.
  • An employee demonstrates ability by applying natural proficiencies that may not have required studying, training, or experience.


When you add these dimensions together, you have the ingredients required for a competency. A competency describes the knowledge, skills, and abilities required to perform a job requirement successfully. Most importantly, competencies describe these dimensions in terms of observable behaviors so that employees, managers, and HR teams can all agree on what success looks like on the job.


SECTION 2: 3 Persistent Myths About Competencies


Although competencies have been around for decades, there are still a few myths about them that persist to this day. These inaccuracies and misunderstandings are not just confusing, they're damaging, because they can discourage HR professionals from adopting competencies in the first place or cause them to choose the wrong type of competency content.


Here are three of the biggest myths about competencies.


Myth #1: Competencies only work for large enterprises


Before competencies became widely available, organizations needed to invest considerable time and resources into developing competencies from scratch, usually with the help of a costly, specialist consultancy. As a result, only the largest firms were in a position to create and deploy them.


However, as competencies became a more widely adopted talent management approach, consultancies began to make competency content available on a licensing model. Today, competency content can be licensed at a price point that makes it affordable to companies of any size—including those with 200 employees or less.


Myth #2: Competencies are complicated and hard to use


Over the years, competencies have developed an unfair reputation for being hard to use. This is because to get the greatest benefit from competencies, organizations need to develop a competency framework to ensure that competencies are implemented consistently and purposefully across the organization. These frameworks connect related groups of jobs to enable employees to set career goals and explore career paths by comparing their competencies with those of their current and potential future roles.


But the complexity of competency implementation has gradually shifted from reality to myth as technology has evolved to automate and standardize the development of these frameworks. Today, HR professionals can implement technologies successfully in a fraction of the time it would have taken ten years ago, enabling even a "team of one" to select and deploy competencies across the organization.


Myth #3: Competencies are the same as skills


This is one of the most persistent misperceptions about competencies, and it has only grown stronger in recent years, fueled by the free competency content that's become easy to find online. This free content often consists of a competency statement ("conflict resolution," for example) accompanied by a list of skill requirements ("staying centered," "listening empathetically," etc.).


However, the free competency content available online has little in common with the validated, multi-level competencies that can drive an organization's entire talent lifecycle. As we saw in the previous section of this blog post, competencies include not just skills but knowledge and abilities. Competencies are also structured very differently than skill statements, a topic we'll explore in the next section.


SECTION 3: 3 Essential Competency Features


As the popularity of competencies continues to grow, free competency content has also become more widely available. Unfortunately, this free content bears little resemblance to the competencies that are used to drive organizational success. In some cases, these competencies consist of a title and a one-line description—hardly enough to support talent assessment, development, and utilization in any meaningful way.


To effectively drive talent management, competencies need to be:

Validated. Competencies need to reflect the realities of the workplace. This means that they must be developed and refined by industrial organizational psychologists in collaboration with a representative workforce and validated against a real-world work environment.


Observable. The greatest value that competencies deliver—and a key differentiator between competencies and other approaches—is their ability to translate on-the-job success into observable behaviors. A competency should include detailed statements that capture not only WHAT top performers do, but HOW they do it.


Multi-level. The best and most actionable competencies include progressive levels of proficiency. (HRSG’s competencies generally capture five levels of proficiency, from basic to advanced performance.) This structure not only provides more detail and accuracy, but it also enables HR professionals, managers, and workers to visualize the steps they need to take to gain greater proficiency in specific areas.


Competency Tool Kit