Economics/Business

Management by Competencies/organizational competencies/Areas/models

Competency management allows HR to create strategies for employee development. Something that improves the company’s results and increases its competitiveness. In this article we will provide information about Management by Competencies

If you want your HR to play a more decisive role in the success of the organization, you must want to know how this management takes place, right? We prepared this post precisely to explain everything you need to know about it.

What is competency management

Competency management is a methodology that leads HR to analyze and identify competencies in employees to help them leverage their strengths and correct their weaknesses .

In other words, we are talking about people management that is based on the development of knowledge, skills and attitudes of the company’s employees.

In fact, this trio of characteristics is called CHA and is considered fundamental for the successful application of the methodology.

People management by competencies is sought after by organizations that understand that human capital can be the main asset of a business .

Thus, they understand that guiding the development of professionals is a strategic decision capable of generating positive impacts and results for the business.

Main objectives of this management methodology

Understanding what competency management is is easier when you also know what the objectives of this methodology are.

Thus, the main proposal is to promote the development of employees so that the company can obtain the maximum return from the hired professionals.

With that in mind, does it make sense to you that competency management is commonly associated with performance management practices? So it is.

When following this path, HR will need to find ways to help professionals develop individual and collective skills. The focus should be on improving the performance of each individual and the teams.

Management by competences versus management by performance

To complete the definition of competency management, it is worth explaining its difference from performance management.

Without having to delve too much into this clarification, we can say that performance management focuses on results .

Everything revolves around the evaluation of the goals achieved, which makes the professionals who perform better stand out and be rewarded in some way for this.

On the other hand, competency management focuses on people or, to use a term that we have already highlighted, on the organization’s human capital.

Thus, instead of focusing on goals, HR’s work is focused on training and development programs for professionals, aiming at a gain in the medium and long term.

What are organizational competencies

Now that you know the main objective of competency management, it is only fair to clarify what these competencies are.

For that, let’s start with the basics and go through the different types of skills that an HR should know. Check out!

what are competencies

Remember CHA? Well then. Competencies are knowledge, skills and attitudes that make a professional the right choice to occupy a position in the company.

By “right choice” we mean the professional who will be able to fulfill his role with quality and add value, generating a competitive advantage for the company.

There is no single definition for competencies, but we can build on the following ideas:

  • knowledge : set of theoretical knowledge that a person acquires from formal or informal studies;
  • skill : it is the person’s ability to put into practice their theoretical knowledge, that is, to apply them;
  • Attitude : refers to the set of behaviors of each person.

With a better understanding of CHA, do you already understand why you should bet on development and management by competences?

One answer worth mentioning is sheer necessity. Even the most skilled of professionals may need guidance to enhance strengths and correct weaknesses.

In general, not every employee arrives 100% ready to perform their duties. That’s why the creation of people development and training programs is already part of the HR routine .

In competency management, based on the analysis performed, HR is able to determine which are the most important competencies to be developed in each case.

Knowing all this, let’s go to some competence concepts that we still need to present.

technical skills

Technical competences are a combination of the knowledge that the professional acquired through study and the skills acquired through training, workshops, professional courses and more.

We can define them as the basic competences for the exercise of a certain activity or function .

Technical skills can be elementary, basic, fundamental, solid and deep knowledge.

Something that varies from one professional to another ― and, therefore, requires individual attention from HR in its analysis.

It is common for these competencies to be listed within five groups:

  • academic education;
  • complementary courses;
  • languages;
  • computer program skills;
  • general knowledge.

Of course, these groups are weighted differently in each situation, based on the role to be performed and the needs of the company.

Behavioral skills

The technical skills we just talked about can be called hard skills . For a long time they were the focus of recruiters and organizations.

Over time, however, companies have come to better understand the value of soft skills , which can also be known as soft skills .

We are therefore talking about the attitudes and behaviors that lead an employee to put their knowledge into practice and add value to their work.

Just as an example, we have a list of behavioral skills that are already highly valued. Are they:

  • leadership ability;
  • team work;
  • adaptability;
  • creativity;
  • Communication;
  • negotiation ability.

Also, to complement, we also have a list of the main soft skills for the post-pandemic market . Check it out:

organizational skills

Last but not least, we shifted focus to the organization itself.

Organizational competencies are the set of knowledge, skills and attitudes that allow the company to stand out in the market .

These competencies can be basic or essential. The basic ones translate into those that are necessary for the functioning of the organization. The essential ones are those that work as a competitive differential.

Still, it must be clear to you that organizational competencies impact the performance of the company as a whole.

Areas where competency management applies

Competency management is very useful for the development of professionals, as we have highlighted, but not only.

Next, you will better understand in which areas your HR can apply this type of management.

Recruitment and selection process

Finding new professionals to compose the company’s staff is one of HR’s best-known roles.

There are different ways to make this process more strategic and one of them is to opt for competency-based recruitment and selection .

The idea is to make the company more productive by hiring people whose skills meet the demands of the position and who help form more complete teams.

To this end, HR must:

  • mapping the skills a professional needs to fill a vacancy;
  • describe the vacancy based on expected skills;
  • create filters to analyze CVs;
  • conduct tests to identify and verify the competencies of each candidate;
  • provide good feedback regarding the competencies of the interviewees.

The idea is for the company to find the professionals it needs and, at the same time, help those not chosen to understand what skills they lacked.

Performance evaluation

Although, as we have shown, there are significant differences between management by competence and management by performance, an evaluation of employees is still possible.

In fact, this competency-based performance evaluation is important for HR to know how to direct training with each professional or team.

For that, it is necessary:

  • determine competence goals necessary for a position, defining technical and behavioral activities that the professional must fulfill;
  • formulate evaluation criteria;
  • prioritize development to improve skills;
  • monitor, document and provide feedback.

It is therefore possible to set goals . However, bearing in mind that the objective is professional development, it is possible to have longer deadlines and a dynamic that favors a gradual evolution. Management by Competencies

People training and development

Taking the hook from what we said, competency management also helps HR know how to train or work on the development of professionals.

For that, the path goes through:

  • identify missing competencies that need to be improved or supplied;
  • define the best training and development program ;
  • evaluate the effectiveness of the program given to employees;
  • define indicators to monitor the results.

It is interesting to point out that, based on training and development by competencies, HR can prepare employees to occupy management positions.

Thus, it can make room for internal recruitment aiming at more strategic functions, avoiding an external search that can be more challenging.

Plan for jobs and wages

Having a good job and salary plan is an important differentiator for companies.

This is because the plan is a valuable tool for employee engagement and motivation .

The idea is to use competency management to guide the preparation of this plan. In this way, HR can:

  • define the technical and behavioral requirements for each position;
  • choose the criteria for a promotion to take place;
  • define rewards or benefits per competency.

As a consequence, the search for competence development can be even more proactive on the part of employees. Management by Competencies

Main competency management models

Based on what we have just seen, it should already be clear to you that competency management is comprehensive.

To show this even better, in addition to the application areas, we are going to list the main models or the main ways that competency management can be used.

In all of them, the process involves identifying gaps in skills and then defining how to apply this type of management to resolve the situation. Check it out!

Basic qualification for work

It is expected that, with the process of recruitment and selection by competencies, the company will already find the professionals who are best prepared for their functions.

The point is that, even when this happens, it may be necessary to apply training and invest in good onboarding to ensure a good cultural fit .

Furthermore, when onboarding a new employee, HR always expects the alignment with the team to be as appropriate as possible. Betting on competency management helps to ensure the achievement of this objective.

It is possible to guide the development of skills and behaviors , in addition to promoting the approximation of employees by aligning teams by competencies. Management by Competencies

Job specific qualification

In general, the specific qualification aims at the development of skills or behaviors that are more characteristic of a certain function.

Thus, we are no longer talking about what is basic for a person to be a professional in the company.

We talk about what it takes to play a good role in relation to your specific assignments.

Developing people

The key to competency management is people development. The idea is to assist professionals in their improvement as an individual and as part of the company.

What is behind this is the strategy to better prepare the organization’s employees for their trajectory, aiming at their growth in the internal hierarchy .

The workers themselves gain from this, in addition, of course, to the company. For this to work, however, HR needs to be clear about the skills it needs and define how to prepare employees.

leadership development

And speaking of people and their professional growth, we emphasize competency management as a tool to form new leaders .

HR needs to keep in mind what leadership profile the company needs and assess what employees lack in order to be able to meet this demand.

Based on this, you must define plans to better qualify those who already occupy leadership positions or who can succeed the current leaders. Management by Competencies

How competency management works in practice

We continue to talk about how competency management works in practice. In other words, we are going to present what your HR needs to do to apply this type of management.

Basically, there are four steps or four processes. Look:

  1. identify which technical and behavioral skills — as well as which organizational skills — need to be developed;
  2. recognize what competencies employees and the company already have;
  3. define strategies to reduce or eliminate gaps , that is, to promote the development of the necessary skills;
  4. monitor the results and promote process adjustments, if necessary.

Now, let’s better understand what’s behind these steps.

Identification of missing and existing skills

Identifying or mapping competencies allows HR to determine what the company lacks and what the company already has.

Of course, this is not a random process. To be effective, HR must first define what the organization needs to achieve its strategic objectives.

Thus, you will know what to analyze in employees and what type of skills to develop, thinking about each position and each team.

To make this identification, HR can:

  • to carry out a documental research and/or an objective research (the one made with questionnaires) to better know the staff;
  • practice observation to assess the dynamics of professionals and teams, identify their gaps and potential, in addition to assessing the organizational climate ;
  • analyze all the information obtained and transform it into useful data for decision-making in the use of competency management;
  • prepare a description of each position with a list of expected competencies to guide the development of employees.

Once this part of the process is completed, HR will be able to assess which competencies to develop with each professional or team.

Still, you can define whether the best path is this development or hiring a new professional who already has the most appropriate profile.

Definition and application of development strategies

After choosing which path to take, HR must prepare to guide competence development.

It is worth remembering, the objective here is to expand the CHA, that is, knowledge, skills and attitudes of employees based on the demands of the organization.

A strategic and intelligent assessment is essential. HR may choose to help a professional develop a competency that they already have but need to improve.

It can also guide the development of an entirely new competence. In any case, it must act for the personal growth of each employee and, of course, of the organization itself.

For this to be possible, a necessary step is to analyze the level of competence:

  • basic : one in which the employee has a notion of how to perform his/her role, but needs to deepen his/her knowledge and skills;
  • medium : one in which the worker can perform his/her function alone, but encounters difficulties and tends to need help to solve problems;
  • advanced : one in which the employee has full mastery of his role and can handle problems without assistance.

Being clear about this is important for HR to plan training and development actions properly.

It is always good to remember that there are resources being used throughout this process, so it is essential to plan it well to apply it successfully.

Results monitoring and adjustments

Competency management can be an ongoing activity in your company. Thus, it is important that HR manages to monitor its strategies from the identification of competencies to their development.

The sector needs to know if it is succeeding in identifying the competencies that the company needs, in aligning these with the potentials and profiles of the employees and in defining their training.

Furthermore, HR must verify that the development actually took place and that the employees acquired the expected competencies.

Anything that does not have the desired effect needs to be reviewed and corrected. We emphasize, however, that the problem is not always in a faulty management by competences.

Sometimes, what the company really demands are new hires. Therefore, HR must keep its focus, but have an open mind to see the scenario more broadly.

Impacts and benefits on companies

By now, you may be wondering why adopt competency management. After all, it’s not such a simple process and you need to know what your company has to gain.

Next, we will present some of the main benefits. Points that your HR can consider, including to argue with top management about this strategy. Let’s go to them! Management by Competencies

1. It favors the climate of collaboration

Competency management impacts employees, their way of seeing themselves as professionals and of seeing their colleagues.

As they understand the importance of self-improvement, they also become more open to collaborating with the evolution of others and the team as a whole.

Therefore, we can say that this type of management favors the creation of a more collaborative environment .

Something that also tends to be positive for interpersonal relationships and for achieving results.

2. Encourages professional development

When the company opts for competency management, it creates conditions for employees to find ways to develop within the organization itself .

Thus, employees do not feel that they need to seek knowledge and experience outside the company.

Something that can still encourage them to stay in the job instead of looking for another one that favors their growth.

3. Promotes the appreciation of human capital

There is no management by competences without valuing human capitalBy encouraging the development of employees , the company sends the message that it values ​​its professionals. 

An employer would hardly invest resources in promoting training if it did not care about the improvement of professionals.

Therefore, this management model makes each employee feel more important and belonging to the organization.

4. Increases productivity

Employees who feel valued and more empowered to perform their roles are more productive. It’s easy to understand this relationship, don’t you think?

Competency management makes professionals fulfill their roles with as little difficulty as possible.

Thus, being more productive, they are able to spend less time and maintain quality in deliveries.

5. Favors the achievement of goals

With everything we have so far, we can conclude that competency management leads a company to have employees that are better prepared to achieve goals.

This favors not only the personal satisfaction of professionals but also the strategic growth of a business.

6. Reduces employee turnover

Collaboration climate, professionals developing in the company, feeling more valued and products and being able to conquer new goals. What do you think is the result of all this?

Let’s highlight the reduction in employee turnover , or turnover , as one of them. In short, competency management promotes a reality that makes employees want to stay in the organization.

The main challenges of competency management

As we indicated earlier, competency management is not such a simple process and your HR needs to know the main challenges.

The idea is certainly not to get discouraged, but to prepare you to minimize errors and achieve the best possible result with this strategy. Follow up!

Mistake in identifying competencies

Part of the competency management process is to identify what the company has and, above all, what gaps need to be developed.

Mistakes can occur at this stage, but HR should try to avoid them as much as possible, because the entire strategy depends on correctly identifying the competencies needed by the organization .

Otherwise, when you reach the end of the process and measure the results, HR will realize that nothing went very well, at the risk of not even understanding why.

So, keep in mind that HR needs reliable data and needs to keep its planning aligned with the business strategy.

Choosing inappropriate training

Remember when we mentioned skills“>soft skills to talk about behavioral skills?

These skills or abilities are increasingly important in the market, so we are going to use them as an example here.

Negotiation is a very interesting skill, but it may not be the most useful if the employee doesn’t deal with suppliers or customers, for example.

So, it can be a waste of resources to focus on training to develop negotiators if that’s not exactly what your company needs. It’s not worth doing just because it’s on the list of important soft skills .

In other wordsHR needs to opt for training that focuses on developing useful skills for the organization , considering that the objective is to get rid of gaps .

The lack of focus, in addition to resulting in waste, does not generate results. Something that only tends to make HR waste time and even credibility in front of top management.

Ignore the need for selection processes

A good HR person knows why it’s worth trying to recruit internally or develop employees instead of just looking for new people on the market.

When the company already has good professionals, aligned with its culture , it can earn more if it prepares them for new roles.

Time is saved when the recruitment and selection process , as well as onboarding , is not necessary.

However, as much as competency management helps your company guide the professional development of employees, ignoring the need for new hires is a mistake.

If the employee most highly rated for a new position has many gaps , it may be more valid for the company to look for a professional with fewer gaps in the market.

The idea is to save resources and make management by competences always strategic.

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