Competency Management

Organizations have made extensive use of competency models in recent years, which have been widely accepted. One reason is that competency models can help to clarify differences between outstanding and average performers- an increasingly important issue in a fiercely competitive global business environment. A second reason is that competency models are superior to work-based approaches, which rely on descriptions of work activities only, in pinpointing what people need to be succesful. Increasingly, knowledge is only part of what is needed to be a successful performer. Also needed are appropriate attitudes and motivation, which are not well examined in traditional job descriptions or traditional performance appraisals.

Competency management, which argues that an organisation can increase its productivity and create a sustainable organisation by developing competencies that span business activities and by engaging in competence leveraging, is one of the more recent attempts by theorists and practitoners alike to answer the questions that have puzzled managers for centuries: How can we increase productivity?, How can we improve organisational performance? How can we best position ourselves to sustain our performance in an increasingly competetive environment? These are not easy questions to answer and the weaknesses of previous models of management-rational theory, behavioral theory, pure systems theory, culture theory, and some of the economics-based strategic models-have created a gap that the competence perspective may help bridge-at least, fort the field of strategic management.

The reason for the growing importance of the intangible factors has been attributed to many factors including

• Increasing importance of Information and Communication Technology
• The increased speed of innovation and shorter cycle times
• The increased production of knowledge and knowledge artifacts and the increased accessibility of the former
• Changes from a sellers to a buyers’ market.

This word competence was first linked to a human trait in 1959. Using that work as a starting point, David McClelland first focused attention on competencies in 1973. McClelland noticed that standardized intelligence tests were not good predictors of job success, and he wondered why. Competencies as understood today stemmed from his initial questioning about reasoons why standardized intelligence tests did not predict job success. 

Although the term job competency has different meanings, it can be understood tomean “an underlying characteristic of an employee motive, trait, skill, aspect of one’s self-image, socialrole, or a body of which results in effective and/or superior performance in a job. A comtetency model is result is the process of competency identification. Competency assesment is the process of comparing an individual to an existing competency model, and that can be done by many means-including full-circle, multi-rater assessment.

HR is dependent on competency and spesific skills in the following 5 key areas.

• Strategic Contribution: Connecting firms to their markets and quickly aligning employee behaviors with organizational needs.
• Business Knowledge: Knowing how businesses are run and translating this into action.
• Personal Credibility: Demonstrating measurable value; being partof executive team.
• HR Delivery: Providing efficient and effective service to customers in the areas of staffing, performance management, development, and evaluation.
• HR Tecnology: Using technology and web-based means to deliver value to customers.

Competency-based pay or skill-basedpay which is tied to employees’knowledge and abilities rather than to their job pers e. Typically, the pay level at which a person ishired matches that person’s current level of skills; as the employee acquires new skills, the pay level goes up. Competency-based pay is a compensation plan that rewards employees for their demonstrated expertise. While core competencies may be unique to each company, oneservice firm identified the following:

• Team Centered: Builds productive working relationships at levels within and outside the organization.
• Results-Driven: Is focused on achieving key objectives.
• Client-Dedicate: Works as a partner with internal and external clients.
• Innovative: Generates and implements new ideas, products, services, andsolutions to problems.
• Fast Cycle: Displays a bias for action and decisiveness.

Core competency is a collection of competencies that crosses divisional boundaries, is widespread within corporation, and is something that the corporation can do exceedingly well. For example, new product development is a core competency if it is goes beyond one division.

Core competence is an activity that is performed more successfully by a corporation than by its competitors and that is in demand by the market. Specifically, the competence of a corporation is a comination of resources that are superior in competition under the whole strategy of the corporation. In other words, it refers to the ability of all sections in corporation to share and use its resources. Core competenceis a type of secretive/confidential skills, knowledge and techniques which have superiority over specific points of the value chain.corporation core competence defines as kind of capacity tocombine many individual techniques-but not fiscal properties- into one.

Effective strategic management tool, the strategic matrix, is estabilished in order to asist firms to re-examine their competetive position. Four strategic cells are formed accordingly

• Anchoring (core competences with low gap): The appropriate strategy fort his cell is, therefore, one of anchoring, since it has the core competences in place and the key success factors of the industry under control.
• Narrowing (core competences with high gap): The appropriate stategy forthis cell is, teherefore, one of narrowing, which calls fort he company to review the gap and to try to gain an understanding of the reason(s) why the gap exists, and then to pursue efforts to move towards the anchoring cell.
• Following-up (non-core competences with low gap): All the company has to do isobserve the benchmarking firms closely and ensure that the gap remains as it is.
• Catching-up (non-core competences with high gap): The needs in this cell need tobe improved upon by means benchmarking so that distinctive capabilities can also be developed. The capabilities subsequently developed are expected tohelp the company to achieve a competitive edge.
• Three strategies ways to growth and to developing new competencies
• Competencies are created internally: Internal growth besad on existing competencies
• Competencies are acquired: External growth aimed at extending the competence base

New resources and competencies are created through cooperation: The co-operation covers creation, and then, the internalisation of the new competencies, bilateral dependency.