The History of Competency Modeling

To understand the value of the SHRM Competency Model, a brief overview of the history of competency modeling will help set the context for the development of the SHRM model and provide you with a greater understanding of the model's value to you as an HR practitioner and to the HR profession.

What are competencies, and what are competency models?

In a foundational review of competency models, Jeffery S. Shippmann and his colleagues, as delineated by the Society for Industrial and Organizational Psychology (SIOP) taskforce on competency modeling and explored further by Michael Campion and his colleagues, noted a great deal of variability in how competencies are defined, often depending on the professional field of interest and the context of the discussion. When conducting research on the HR profession, SHRM defines a competency as a collection of knowledge, skills, abilities, and other characteristics (KSAOs) that contribute to individual and organizational performance.

A competency model is a set of related competencies linked together that describe the requisite attributes (that is, KSAOs) for successful job performance in a given domain, such as human resources. Competency models include a set of specific behavioral statements that define the competencies and describe what the job-related behavior for each competency looks like. Competencies can be either technical (or functional, capturing the "what" of the job that is being performed) or they can be behavioral (capturing the "how" you perform your job successfully). Both types of competencies, technical and behavioral, should be included in any one competency model (see Figure 1.1). Well-developed and easily implemented competency models typically have no more than 8 to 15 competencies, capturing both the technical skills and behavioral attributes that are needed for successful job performance.

Where did the practice of using competency models come from?

The practice of competency modeling was not developed by a single individual or at a specific point in time. Instead, the practice and our current conceptualization of competencies and competency models have evolved slowly over the past 40 years. The work of David McClelland is often viewed as the origin of the current competency movement. McClelland, in an attempt to understand academic achievement testing, presented competencies as an alternative to the then-prevalent approach that focused on traits and intelligence. Subsequent research by Richard E. Boyatzis focused on the "characteristics" of more than 2,000 managers, which were arranged into a management competency model.

The practice of competency modeling also grew from the use of assessment centers, as a method of assessing employee performance and potential to identify managerial-level employees who are ready for promotion or to determine specific training needs. Assessment centers function on the basic idea that a broad set of job-related KSAOs (called "dimensions") are required across similar jobs.

Competency models rest on the assumption that a broad set of job-related competencies can be used to understand and assess employee performance across a variety of jobs and organizations. For example, the competencies necessary for successful performance as an HR generalist in one organization may also be necessary for successful performance as an HR manager in another organization.

The practice of competency modeling gained widespread popularity after the introduction of core competencies in 1990 by C. K. Prahalad and Gary Hamel. They defined "core competencies" as those needed by an organization to operate successfully. Although these thought leaders focused on competencies at the organizational level, which are different from individual employee competencies, they emphasized that an organization's employees are the building blocks that give rise to the organizational-level competencies and thus should be the focus of change initiatives. In other words, an organization's ability to operate successfully and achieve strategic objectives is an outcome of individual employee competencies. Today, HR departments focus on selecting for and training on individual-level competencies to support the attainment of desired business outcomes.

How Competencies Influence Business Outcomes

When we speak about competencies influencing business outcomes, we are talking about both "hard" and "soft" outcomes. Hard outcomes are concrete and quantitative, such as job performance, profit and loss, or turnover; soft outcomes are qualitative and less tangible, for example, the satisfaction and engagement of employees or the reputation of the organization. Because competencies provide reinforcement of the link between organizational goals and workplace behavior, we need to consider these outcomes from two angles: the organization and the individual.

We all crave work that keeps us interested — or "engaged" — in our tasks (a soft outcome at the individual level). The desire to be engaged is innate in almost all of us — especially on the job. When we find ourselves engaged in our job tasks, we are likely to see a spike in our productivity (a hard outcome at the individual level), which may affect pay or benefits. A surge in productivity at the individual level typically translates into cost-effectiveness for the organization (a hard outcome at the organization level). We can then translate the hard outcome of cost-effectiveness into balancing the organization's scorecard and ensuring that the productivity is aligned with the mission and vision of the organization (a soft outcome at the organization level). By informing employees that the organization is on track, the individuals on the team are more likely to experience a flow of self-esteem, perpetuating the cycle of positive business outcomes.

How can an organization come to know the mediators of these outcomes? What are the drivers? Competencies help us answer these questions (see Figure 1.2).

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