Taking Your HR to the Bank

Competency Models

Human resources are involved in every stage of an employee’s career: recruiting, selecting, training, evaluating, developing, promoting, etc. These functions are often treated as though they have nothing to do with one another. The truth of the matter is that these functions are closely related. A company that does not do one of them well (e.g., selection) will find it very difficult to do the others well (e.g., promoting from within).

A competency model links these different HR functions together through core competencies. These are the knowledge, skills, abilities, and personal characteristics necessary for performance for the entire organization. This model then serves as the basis for all HR functions. This ensures that people are being evaluated on the same things whether they are a job candidate, an incumbent, or a promotion candidate.

Competency models produce returns by linking all HR functions together and by eliminating redundancy across departments or geographic locations. Some organizations have seen the following returns from competency models:

A forestry products company implemented competency models in its new mills. These new sites are up to 30% more productive than the old sites, have improved cycle time, and run with fewer employees.
An electronics manufacturing firm implemented a competency model that reduced turnover by 20%, accelerated job candidate selection by 30%, and save the organization $800,000 by promoting 8 executives internally over hiring new executives.
A Fortune 100 organization used a CMI validated competency model to eliminate dozens of different HR programs across its global lines of business and develop a management talent pool cutting across the entire organization.

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