## Understanding Competency Management

This chapter provides an overview of competency management.

### Competency Management

Competency management is a method of categorizing and tracking the qualifications that employees possess that make them competent to perform their job duties. These qualifications, such as C programming skills, CPA license, and fluency in French, are called competencies. You can use competency management to identify both employee competencies (the competencies that employees or applicants possess or attain) and job competencies (the competencies that are required to perform a specific job within the organization). You might want to track competencies for employees, but not for jobs. However, if you want to track competencies for jobs, you must also track competencies for employees.

Competency management features enable organizations to identify and track both individual competencies and competencies that are required to perform a specific job within the organization.

Benefits of competency management include:

- Competency based job descriptions provide clear, detailed expectations for employees and can illustrate the way in which each employee fits into the whole organization.

- Categorizing and quantifying competencies enable you to create a searchable database that you can use to locate employees who possess specific competencies that are required for a job.

- Job requirements are consistent within organizational levels.

- Competency based performance appraisals enable you to assess the level of an employee performance compared to the job requirements, perform a gap analysis, and develop training plans and career paths.

- Employees can update competency information using self service programs.

- You can use job competency information to create job postings in eRecruit.

Important! When you enter and review information for competency management, use the menu options, not the fast path, to access the forms. Accessing forms from the fast path might produce unexpected results.

Advantages of Competency Management

Employees use their competencies to help the organization achieve its goals and objectives. By linking the competencies of an organization with employee jobs, you can determine how employees can best help the organization meet its goals and objectives, thereby giving employees competency based job descriptions that provide clear, detailed expectations and illustrate the ways in which each employee fits into the whole organization.

Some types of competencies, such as education and training, are relatively simple to track and quantify, while more intangible skills, such as negotiation skills or knowledge of pricing strategies, are more difficult to quantify. Categorizing and quantifying competencies enables you to create a searchable database that you can use to locate employees who possess specific competencies, thereby enabling you to efficiently reallocate employees in response to market or organizational changes. Such reallocation can help the organization reduce operating costs and make employees more productive.

Effectively managing competencies can also help the organization train and retain competent employees. The organization benefits by having more productive employees and less employee turnover, which results in a lower operating cost. Employees benefit by having a set of goals and expectations to do their job and improve in their careers. The challenge for human resource representatives is to align and link the goals and objectives of the corporation with the valuable human assets within the organization.

Core Competencies

Core competencies are competencies that help employees meet the high-level goals and objectives of the organization. All of the employees in the organization should be proficient in these core competencies. You can track core competencies only if you are tracking competencies for both jobs and employees.

Inherited Competencies

To simplify the tracking of job competencies, you can attach individual competencies to each level in the organizational structure, and then attach jobs to those levels. Inheritance is the process of attaching job competencies to high levels in the organizational structure so that they also apply to the subordinate levels. Inheritance means that, when you attach a competency to a business unit that is at a high level in the organizational structure, that competency applies to the jobs in that business unit, as well as to all of the jobs that are in subordinate, lower-level business units. You can further take advantage of inheritance by assigning competencies at the company or job-group level. For example, you might define Commitment to Quality as a core competency and attach it to the company level of the organizational structure so that all of the jobs in the company will inherit that competency. For jobs that are at lower levels of the organizational structure, you can attach additional, more specific competencies and override the inherited competencies, if necessary.

Employees are expected to be proficient in the competencies required for their jobs, as well as in any inherited competencies. Advantages of inherited competencies include:

- You can reduce data entry tasks by defining and attaching a competency in one place only.

- When you change a competency, you make changes in one place and all jobs that inherit that competency automatically inherit the changes.

- You can attach one competency to many jobs.

Gap Analysis

Competency management gives employees and managers a clear, quantifiable measurement of the current and future needs of the organization and the abilities of the employees. When you track both employee competencies and job competencies, you can easily identify discrepancies between the competencies that an employee possesses and the competencies that are required for the employee current job, or for a job to which the employee aspires. The process of identifying and analyzing such discrepancies is called gap analysis. Employees and managers can use self service applications to review gap analysis information. They can also use gap analysis to review career paths for employees who want to examine the possible career opportunities within the organization. Managers and human resources representatives can use gap analysis for succession planning.