Why are so many organizations choosing to adopt competency-based HR systems?
Other than the enhanced level of detail and objectivity that competencies provide, there are a number of key benefits that motivate organizations to use competency-based practices:
- BUILDING ORGANIZATIONAL CULTURE. While job-specific competencies identify the behaviors that ensure success for each individual employee, core competencies can be used to identify the shared behaviors that drive organizational success. Identifying core competencies for the organization helps to articulate, reinforce, and communicate the behaviors that give the organization its core competitive advantage.
- EMPOWERING EMPLOYEES. Because they provide an objective basis for evaluating performance, competencies support a more collaborative approach to performance management and career development. In addition, competencies use a common language to describe every job in the organization, which encourages employees to take charge of their careers, direct their own personal development and explore their potential not only within their current role but in future lateral or vertical roles.
- ENHANCING DEFENSIBILITY. By bringing greater objectivity to processes such as hiring, assessment, performance management, and promotion, competencies help organizations ensure the defensibility of their HR practices, providing a greater degree of protection from internal and external criticism or legal action.
- ENSURING CONSISTENCY. Competencies form the basis of every activity across the talent-management life cycle, including hiring, development, and succession planning. With a consistent language in place to describe requirements at the micro (job) and macro (organizational) level, HR professionals can achieve greater consistency, co-ordination, and integration of all HR activities.
- DELIVERING RESULTS. Results-focused organizations with clear objectives are drawn to competencies because the research shows that they produce a measurable impact in the workplace. A meta-analysis of competency-based talent management practices recorded a median 63% reduction in turnover, 19% improvement in employee performance, and 12.5% increase in sales and profits.
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