Why are competencies critical while evaluating performance?

A workforce’s capability and competence determine the organization’s growth. Therefore, to stay ahead of the competition, assessing your employees’ performance from time to time and filling the skill and knowledge gap with training and development efforts is an absolute today. The question is, are you getting it right?

Competency-based performance evaluation is becoming increasingly popular with human resources and L&D leadership teams. Before we move to analyze if that’s the right strategy for you, let us understand what “competencies” are. 

Competencies are integrated knowledge, skills, judgment, and other attributes that employees need to perform effectively. Competencies provide a common framework for coordinating, identifying, and nurturing talent in an organization. They essentially help define the assessment and evaluation criteria on factors critical to the success of a job.

How do competencies help performance evaluation?

Competency-based reviews provide an in-depth and comprehensive understanding of the characteristics that are essential for aligning employees’ individual performance with the business goals. Businesses utilize this information to make critical decisions ranging from conducting an efficient hiring process to personalizing training and development programs for current employees. The informed strategies help the organization make strategic business choices, shape its goals and directions, and support employees’ professional growth.

Integrating the competency model with performance reviews allows employers to effectively evaluate employees on those competencies that are critical to the organization.

How do competency-based evaluations help personnel performance enhancement?

Consider this example. Businesses do a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis to examine their place in the market against their competitors. This analysis helps you ascertain your overall competitive position in the industry. The same kind of analysis goes for your employees during their performance evaluation. Once their job-specific competencies are defined, employers evaluate their performance against those competencies. 

Competency-based performance evaluation enables employers to discover the employees’ strengths in relation to their job scope, understand their weaknesses in their job roles, and take the necessary action to bridge that gap. This is usually accomplished by implementing special training and development programs to utilize the opportunities to turn threats into strengths so that they can perform better and build job-specific critical competencies to raise the overall performance bar.

How does competency-based evaluation help business outcomes?

A thorough competency-based mapping improves the ability to forecast job success and implement appropriate measures to boost performance. It is an effective technique to recognize your employees’ capabilities while encouraging them to take charge of their professional development, thus, increasing job satisfaction and retention.

With the markets expanding, competency-based performance evaluations are posited to become even more prevalent, helping organizations succeed in their respective industries by hiring the right talent and upskilling their existing workforce.