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As an organization, you must invest time and effort in understanding what makes employees good at their jobs. This is where competency assessments come in—to determine how well someone can do their work.
First off, you’ll need to know the difference between skills and competencies.
Skills are specific things people learn to do, like typing fast or using particular software.
Competencies are broader; they include skills, knowledge, and behaviors that help someone succeed in their role.
For example, good communication is a competency that might involve skills like writing clearly and listening well.
Software for competency assessments also makes this process easier and more accurate. These tools can track employees' competencies and indicate where they might need more training.
Studies show that companies using regular competency assessments see better results. For example, organizations that focus on continuous feedback and development have 31% lower turnover rates compared to those using traditional methods.
Also, 85% of employees feel more engaged at work when managers hold weekly check-ins with their team members.
Let us expand on this narrative and explore ways to assess competencies that will help your employees do their best work.
» What is Competency?
Competency is the unique combination of skills, knowledge, and behaviors that enables a person to perform a specific role effectively. It goes beyond what someone knows or can do—it’s about how they apply their abilities in real-world situations.
For example, leadership competency might involve not just delegating tasks but inspiring and guiding a team toward a shared goal. Competencies reflect an individual’s capacity to adapt, solve problems, and consistently achieve desired outcomes.
› Key Characteristics of Competency
Below, we’ll explore the different features or characteristics of the competency and discuss how your organization can leverage them.
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1) Specific to the Role
Competencies are customized to the requirements of a specific job or function, ensuring relevance to the organization’s goals.
2) Observable and Measurable
Competencies manifest in actions, making them tangible and assessable through performance evaluations or assessments.
3) Combination of Skills and Behaviors
When we think of competencies, we mean a perfect blend of technical skills, soft skills, and the mindset needed to perform tasks effectively.
4) Context-Driven
It all boils down to knowing how competency is applied, which often depends on the environment or situation. For example, leading a team during a crisis is different from leading a team during a routine project.
5) Focused on Outcomes
More often, employees' competencies are directly linked to achieving specific objectives, emphasizing results rather than mere effort.
6) Developable Over Time
Consistent training and experience can enhance employees' competencies, which is why continuous learning is necessary.
7) Aligned with Organizational Goals
Competencies should support the strategic vision of the company, ensuring employees contribute effectively to its success.
8) Influenced by Personal Attributes
Characteristics like emotional intelligence, adaptability, and resilience play a significant role in competency development.
» What is the Difference Between Skills and Competencies?
Skills are specific abilities or expertise that individuals acquire through learning or practice. At the same time, competencies represent a broader integration of skills, knowledge, and behaviors required to perform effectively in a role. Think of skills as the building blocks and competencies as the complete structure.
Now, let us understand the difference between skills and competencies with the help of an example.
Typing at 80 words per minute is a skill. Still, communication competency involves not only typing fast but also crafting clear and concise messages, understanding the audience, and using appropriate tone and language.
Skills are straightforward and task-specific, like operating a forklift. Competencies, on the other hand, are a blend of skills and behaviors. For instance, operational competency would include operating the forklift safely, managing inventory, and coordinating with team members.
Better still, let's dive into the difference between skill vs. Competency with the help of a table.
Key Differentiator | Skills | Competencies |
| Definition | Specific abilities acquired through learning or practice | A combination of skills, knowledge, and behaviors applied to achieve specific outcomes |
| Scope | Narrow and task-focused | Broad and role-focused, encompassing multiple skills |
| Application | Often limited to technical or procedural tasks | Applied in varied, complex, and situational contexts |
| Measurement | It is easier to measure with objective tests (e.g., typing speed) | It is more complex to assess, often involving observation, feedback, and situational judgment |
| Development | Developed through specific training programs or practice | Built over time through experience, training, and exposure to real-world challenges |
| Example | Coding in Python, operating machinery, or drafting reports | Leadership, problem-solving, or effective communication combine skills like coding or writing with behaviors like collaboration |
» What is Competency Assessment?
Now that you know what competency is, it is also essential to make a competency assessment. In general, such assessment requires adopting a structured process to evaluate an individual’s ability to perform specific tasks effectively.
It examines not only what an employee knows (skills) but also how they apply that knowledge in their role (competency). By identifying strengths and gaps, this assessment ensures that employees align with organizational needs and receive targeted development opportunities.
Tools like competency assessment software streamline the process, offering precise insights and data-driven solutions.
› How to Effectively Make Competency Assessment?
You’ll need to conduct the competency assessment to unlock your workforce’s potential, drive better performance, and maintain a competitive edge.
Below, we’re laying out some of the key action items for your HR team that can lay the foundation to run a competency assessment within the organization.
1) Define Competency Frameworks
To establish a solid foundation, create a competency framework that aligns with organizational goals and individual roles. This framework should include:
- Identifying Core and Role-Specific Competencies: Separate the competencies every employee should have (e.g., teamwork) from those unique to a job (e.g., programming for a developer).
- Engaging Key Stakeholders: Collaborate with department heads and team leaders to define relevant competencies.
- Performing Documentation and Standardizing Actions: Ensure the framework is documented in an easily accessible format, such as competency matrices or charts.
2) Use Role-Specific Assessments
Customize your assessment tools and methods to each role’s unique demands, for which you’ll have to take the following steps —
- Conducting a Job Analysis: Break down the responsibilities of each role to identify critical competencies.
- Run Custom Design Assessments: Create tools such as situational judgment tests or work simulations to evaluate competencies relevant to the job.
- Avoiding Generic Tools: Generic assessments can dilute accuracy. Instead, focus on tools that reflect the role's specific challenges.
3) Incorporate Multiple Methods
Next, think about different ways to diversify your evaluation approach to avail a well-rounded picture of competencies. For this, you’ll have the HR teams take the following actions.
- Self-Assessments: Allow employees to reflect on their competencies, providing valuable self-insight.
- Managerial Reviews: Supervisors can provide observations based on day-to-day performance.
- Peer Feedback: Colleagues’ perspectives can highlight interpersonal and team-oriented competencies.
- Behavioral Interviews: Structured interviews that explore past experiences can reveal how competencies have been applied in real-world scenarios.
4) Leverage Technology
You’ll undoubtedly need the necessary tools to streamline and enhance the competency assessments. When it comes to leveraging technology, think of the below steps as a must-perform step.
- Adopting Competency Assessment Software: Choose platforms that offer features such as customizable competency models, automated evaluations, and insightful analytics.
- Integrate Tools with HR Systems: Ensure your competency assessment tools work seamlessly with HR management software to centralize data.
- Using AI for Predictive Insights: Leverage AI tools to identify patterns in assessments and predict future performance trends.
5) Focus on Continuous Feedback
There also needs to be some transition from annual reviews to an ongoing competency evaluation process. This is where you’ll make continuous feedback a norm within the organization.
For executing the same, you’ll need to implement —
- Regular Check-ins: Encourage managers to discuss competencies during monthly or quarterly one-on-ones.
- Real-Time Feedback: Use tools or platforms where feedback can be given immediately after observing behaviors or actions.
- Performance Journals: Encourage employees to maintain logs of achievements and learnings to track their progress.
6) Set Clear Benchmarks
Establish measurable standards for each competency to ensure consistency and clarity. Such setting of precise benchmarks will require —
- Defining Proficiency Levels: Create a scale (e.g., beginner, intermediate, expert) for each competency, with examples for each level.
- Linking to Key Performance Indicators (KPIs): Tie benchmarks to measurable outcomes to ensure they’re meaningful and actionable.
- Training the Assessors: Provide training to managers or HR professionals to ensure they can assess against these benchmarks objectively.
7) Connect Assessments to Training
Use assessment results to guide professional development and close skill gaps by taking the following actions.
- Developing Personalized Learning Plans: Tailor training programs based on individual assessment outcomes.
- Offering Micro-Learning Modules: Provide short, focused training sessions to address specific gaps.
- Monitoring Progress Post-Training: Reassess competencies after training to evaluate the effectiveness and track improvement.
8) Engage Employees in the Process
Competency assessment doesn't work in silos, and therefore, you’ll have to make employees active participants in their competency development. For this, you can implement the following.
- Involve Them in Goal-Setting: Let employees co-create their competency development goals for better alignment and motivation.
- Provide Transparent Feedback: Share assessment results with clear explanations and actionable advice.
- Recognize Growth: Celebrate small wins and milestones to encourage continuous improvement.
» What is Competency Assessment Software?
Competency assessment software like Competency Manager serves as a digital tool for evaluating, measuring, and tracking employees. It usually involves gauging employees’ skills, knowledge, and behaviors against defined competencies for their roles.
It is helpful in streamlining the process that helps identify strengths, gaps, and developmental needs.
With it, businesses can get actionable insights for workforce planning and employee growth. Also, you can integrate the workforce management software with competency tools to have a comprehensive outlook on efficiency.
HR teams, managers, and organizations can use a blend of such tools to make sure that the employees align with the company’s goals. Also, the focus should be on improving their performance through targeted interventions.
Below, we’ll check out different ways how you can use the competency assessment software.
› Skill Gap Analysis
Identify areas where employees need improvement and align training programs to bridge those gaps.
› Performance Evaluation
Assess employees’ competencies in real-time and during performance reviews to ensure they meet role expectations.
› Training Needs Identification
Pinpoint specific training needs based on competency gaps for personalized development plans.
› Workforce Planning
Build a competency map to allocate employees effectively for current and future projects.
› Succession Planning
Recognize high-potential employees and prepare them for leadership roles by assessing their readiness.
» What Does Competency Assessment Software Do?
Competency assessment software is needed because traditional methods of evaluating employee skills and performance are often time-consuming, inconsistent, and prone to bias.
It's software that facilitates a structured and objective measurement and tracking of employee competencies, making it easier to identify strengths, gaps, and training needs.
Below are some of the significant tasks that this software can perform.
- Tracks Competency Levels: Maps employees’ current skills and competencies against required benchmarks.
- Customizable Assessments: Offers tailored evaluation forms for different roles, ensuring relevant assessments for each position.
- Real-Time Reporting and Analytics: Provides actionable insights with dashboards and analytics for quick decision-making.
- Integrates with HR Systems: Seamlessly connects with existing HR platforms to consolidate employee data.
- Supports Multi-Source Feedback: This tool collects input from managers, peers, and self-assessments to provide a 360-degree feedback of competencies.
- Automates Processes: Reduces manual effort by automating evaluations, feedback collection, and report generation.
- Enables Strategic Decision-Making: Empowers organizations to make informed decisions about promotions, project assignments, and talent acquisition.
» Conclusion
Competency assessments involve evaluations of employees to make sure that they thrive in their current work. Begin by understanding the difference between skills and competencies, as you can then identify what your employees know and apply their knowledge and behaviors to achieve meaningful outcomes.
Pair it with competency assessment software to streamline your employees’ work. These tools help organizations uncover skill gaps, plan for workforce needs, and foster continuous development, all of which are necessary for staying competitive in a highly competitive business environment.
Invest in defining competency frameworks, leverage the necessary tools for competency assessment, and also equip employees with the right technology to perform their roles. Ultimately, this leads to a more capable, engaged, and high-performing workforce that drives business success.
