Without a competency model, a company’s approach to developing and managing people often remains intuitive. Each manager forms their own view of what successful performance means for their team. Over time, this can create imbalances between departments, lead to misunderstanding, and result in missed opportunities for both people and the organization.
A competency model gives the company a shared language for people management—from recruitment and development to promotion decisions. For recruitment specialists, the model provides a basis for defining selection criteria, attracting candidates with the right profile, and improving communication between hiring managers and HR. Managers can develop their people deliberately in the competencies that matter to the company. When promotion decisions are made, the model helps assess whether a person has the potential to succeed at a higher level and supports the choice of the strongest candidate. It also plays a role in managing organizational culture: translating company values into competencies and behaviors makes it possible to influence people’s behavior intentionally toward the desired culture.
A competency model also gives people clarity about what is expected of them. Each person can assess: Can I be successful in this company and happy at the same time? Do I have the required competencies? Can I develop them? Do I want to?
A competency model creates the conditions for much stronger alignment between what the organization seeks in a person and what that person seeks in an organization.
Suppose your company is considering creating and implementing a competency model. To support the decision, we will walk through both the development process and the practical considerations involved in implementation.
Creating a competency model
- Define the purpose of the competency model.
If the model will be used to manage organizational culture, its development should focus on the company’s values. The competencies—and the behaviors through which they are expressed—are then built from those values.
If the model will be used for selection, the focus should be on competencies that are difficult to develop, allowing the company to identify candidates who already possess them.
If every person in the company, regardless of position, is expected to demonstrate certain competencies, the organization can develop a universal competency model that supports selection, development, and culture management at the same time.
The purpose establishes the framework and criteria the final model must meet. It shapes both the development process and the competencies included. A model created for culture management, for example, may prove insufficient if it is later used for selection because it may omit competencies that are essential for a particular role, weakening the quality of hiring decisions.
2. Define the level at which the model will apply. Competency models are most often created for:
a specific role, such as team leader, manager, or CEO
the entire organization, with everyone—from assistants to the CEO—expected to demonstrate the relevant behaviors. The European institutions, for example, use a set of 7+1 competencies that applies to every employee across Europe
a particular function, such as sales or customer support
3. Gather information about the competencies and groups of behaviors that are critical to succeed in the role. For this example, assume that we are developing a role-specific model.
- Identify the strongest performers in the role and interview them with two areas of focus. First, discuss critical situations from their work and ask them to describe the behaviors that enabled them to handle those situations effectively. Second, ask which competencies and behaviors they believe make them successful in the role.
- Interview the managers of the strongest performers. In addition to critical situations and role-specific competencies, explore the broader context: the business challenges and how they affect the role for which the model is being developed. When major changes in the business or operating environment are expected, identify the behaviors that will be needed under the new conditions.
- Review existing company documents, including job descriptions, role profiles, and any other relevant information about the target group.
4. Analyze the information.
This is a complex process involving different content-analysis techniques. Quantitative approaches may examine, for example, how often a behavior is identified as critical. Qualitative analysis may consider why management regards a particular competency as essential for addressing a specific business challenge.
5. Create the first version of the model.
In a well-designed and clearly documented model, each competency includes several behaviors. These behaviors should:
- be defined briefly and clearly so that they are easy to understand and interpreted consistently
- address only one theme. When a behavior contains several subthemes, assessment becomes more difficult and ambiguous
- be observable in a real business environment so that they can be assessed and developed
- appear under only one competency. Repeating the same behavior across competencies makes assessment more difficult and can produce unrealistic results
Our final models usually contain five to seven competencies, although the first version may include as many as 15.
6. Gather feedback and finalize the model.
The goal is to collect feedback from the target group and their managers, rank the competencies by importance, and identify the five to seven that are genuinely critical to success in the role. The result is a finalized model containing the key competencies and their associated behaviors.
Good practices for implementing competency models
1. Analyze the impact of the competency model. Implementing the model will inevitably change existing organizational practices. To make the transition as smooth as possible, conduct an initial analysis of:
- which processes will change and how
- which people will be affected
- which organizational practices will change and in what way
- which resources will be required to implement the model
- what communication will be needed and for which audiences
- how long implementation will take
- how indirectly related processes will be affected
It is good practice to conduct this analysis before the organization has even made the final decision to introduce a competency model.
2. Plan the stages of implementation.
To make implementation as smooth as possible, plan:
- how the creation process, objectives, and benefits of the model will be communicated
- how the people who will use the model will be involved, including the target group, management, and HR
Involving both the people who will use the model to assess performance and the people whose role it describes is critical to acceptance. Ideally, the initial information comes from these groups through interviews or focus groups, and they later participate in surveys, workshops, and meetings to validate the model.
- which difficulties may arise during implementation and what can be done to make the change easier and address people’s concerns
- what training users of the model will need and how it will be provided
3. Pilot the model and refine the related processes.
The best test of a competency model is to put it into practice. To support a smooth rollout and ensure that the model is both high quality and useful, the first year can be treated as a pilot. All users are encouraged to examine it critically and provide feedback on what works and what does not. The model is then refined before becoming a stable part of the company’s processes.
Finally, the perennial question: Should we use an existing model or build our own from the ground up?
Existing models
Many ready-made competency models have been developed using different methodologies. SHL’s Universal Competency Framework,* for example, is a library of 20 competencies that can cover almost any position, role, or organization. A company can select the competencies it considers most relevant.
The advantages of existing competency models include:
+ They are comprehensive: almost every business situation is described through behaviors and fully developed competencies
+ They save time and resources
+ They are suitable for fast-growing organizations because they require fewer resources and can be adapted quickly
Their disadvantages include:
– People are not involved in creating the model, making resistance during implementation more likely
– The language used may feel remote from the company’s own language
– The model may not include key behaviors that are specific to the company
Models developed specifically for the company
The advantages of customized models include:
+ They are more usable because the competencies are aligned with the company’s specific objectives
+ They include behaviors specific to the company and the role
+ They use the company’s own language and terminology, making them easier for people to understand and apply
+ The target group is involved from the beginning, making the model easier to accept and implement
+ During development, the people involved align their understanding of the competencies required by the company and the role
Their disadvantages include:
– They require significant time and resources from the organization
– Their quality depends heavily on the expertise of the people who develop them
The choice between the two approaches depends on the organization’s stage of development, the time and resources it is prepared to invest, and the expected benefits of implementing the model. The process is demanding, but the investment is worthwhile.
* Ninety Nine is the exclusive representative of SHL in Bulgaria.
