The Strategic Value of Competency Models

Introduction

The need for competency models presented for the value to business and organizations. A competency model allows for the development of employees and the building of organizational capacity. Competency-based performance management is different than a traditional performance management system as it is not a system that is time-driven but event-driven that is based on real-time performance rather than the annual performances of employees. In addition, traditional legacy performance systems are not necessarily tools that are useful for engaging in collaboration, coaching, and monitoring a team's performance of a collective and a team member's collaborative contributions.

Businesses in today's work environments need systems of performance management that provide ongoing monitoring of employees' behaviors and encourages employee behaviors that are in alignment. Performance management systems must immediately work with entities that collaborate with employees in alignment and are not aligned with business desires. This chapter discusses the need for better performance and how competency models support that need. The discussion addresses the critical component of a model that must always be factored in. People through the model deliver products and services in performance or effectiveness. The following discussion will address how people and people in teams interplay in the strategy of a business. Plan for which adds value to the company and the businesses' efforts to achieve its desired results. The chapter addresses cost and consideration for costing of competency modeling with a business. A competency-based approach is a commitment that is cost-driven, but also leaders facilitate and support. Finally, the discussion to follow will address the significant questions asked and answered throughout the book, leading to why there is a business need for acquiring and implementing a businesses’ competency-based approach.

Discussed in this book already the popularity of competency models. Competencies have been extremely popular since the concept created by McClelland in the 1970s, regarding competency in the United States as behavioral skills and abilities of a person for which are distinguishable from superior performance to less than exceptional performance in the workplace. Their use by organizations and individuals has been positive, trending since the 2000s. The works of Schippmann et al. has help popularized them and with understanding which uses them and why. Schippman et al. have identified their differences from job analysis and position descriptions common by the organization when communicating work tasks and activities. Schippamn et al. has provided greater insight about competency as used by individuals and its relation to work performance.

Prahalad and Hamel (1990) were the first scholars to articulate core competency as a strategic tool to be utilized by the organization, and that is possession of the organization to direct the work as opposed to individual skills. Prahalad and Hamel's (1990) identification, articulation, and research on core competencies as being relatable to an organization's strategic directions popularized the concept of core competencies and core competency modeling. These authors' works primarily focused on the framework of competency models as being suitable for business outcomes. Their efforts spent little attention on the distinction of competency models. The implementations of competency models in business with these author's previous work. Prahalad and Hamel (1990) speak to the ongoing growth, understanding, and value of competency as a concept and framing core competencies for business outcomes and organizational effectiveness. A competency model is a specific framework of collecting identified skills and knowledge required for a job or family of jobs (Schippman et al. 2000; Schippman, 2010; Campion et al., 2011: Chouhan & Srivastava, 2014). Competency models are not exclusive for defining performance successes; they are widely used as the preferred performance management method by those best-in-class organizations (Lopes, 2016; Korenková et al., 2019). The competency model has become a widely used tool for businesses to define and assess behaviors within an organization that organizational executives would like to see demonstrated by employees. Competencies are those behaviors of employees for which have a positive association with the business achieving its desired outcomes.