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Competency Based Human Resource Management: Concepts, Tools,

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 Volume-03 ISSN: 2455-3085 (Online)
Issue-05 RESEARCH REVIEW International Journal of Multidisciplinary
May-2018 www.rrjournals.com [UGC Listed Journal]

Competency Based Human Resource Management: Concepts, Tools, Techniques,

and Models: A Review
*
Ramgopal K. Ratnawat

Director, ITM-SIA Business School, Mumbai (India)

ARTICLE DETAILS ABSTRACT

Article History
Published Online: 11 May 2018
Keywords
Competency, Competency mapping,
Competency based management
*
Corresponding Author
Email: rratnawat9463[at]gmail.com
The concept of competency based human resource management has gained significant
momentum in last couple of decades especially since McClleland (1973) defined
competencies as a critical differentiator for performance. Competency mapping as a part of
competency-based management has thus attracted the attention of researchers and
practitioners alike. The researcher through this article takes a review of relevant literature to
describe how competency mapping has been applied in managing different human resource
functions. The synthesis of knowledge gathered through this review is expected to provide a
comprehensive account of the evolution of the concept and a review of relevant theories,
models, and processes stimulating further research.

1. Background intelligence” insisted on rethinking about the selection tests

Research by Daniel Goleman and Rick Boyatzis has
reinforced and emphasized the use of competency as a
predictor of superior performance. It is in use to recruit, select,
and manage personnel with outstanding performance since
early 1970s.
The genesis of the word „competency‟ goes back to the
year 1953 when McClleland recognized a human trait called
competence responsible for good performance. Robert White
(1959) and later Signe Spencer (1993), Ulrich(1995) ,
McLagan(1996), and Boyatzis (1996), further developed the
concept of competencies for survival and sustained competitive
advantage for the organizations.
„Intelligence‟ was considered as criteria for selection for
admission to different schools and colleges on the premise that
good scorers in intelligence tests would result into good
performance in schools and colleges as well. McNemar (1964)
cited in McClleland (1973) insisted that this only validates the
admission tests, citing the existence of as many as 4096 validity
coefficients in the manual of differential aptitude tests of
psychological corporation. But McClleland (1973), based on his
scrutiny of the work of McNemar (1964), argued that the validity
coefficients were predictors of only school grades as they
included the tests items which were like grade examinations
and were not a guarantee for good performance in life. Earlier,
Taylor, Smith and Ghiselin (1963) had also found that better
grades in schools had no correlation with good performance in
the jobs later in life. Thorndike and Hagen (1959); Holland and
Richards (1965), and Elton and Shevel (1969) too found no
strong correlation between good scores at scholastic tests and
performance in life. McClleland (1973) contended that if only
high scorers in tests were given entry to the schools, it defeated
the very purpose of education to improve the performance of
those who are weak; else it would be like coaching the players
who are already good.
With the above background, McClleland (1973), in his
seminal paper titled as “Testing for competencies rather than
based on competence derived from the analysis of successful
life outcomes, criterion sampling and assessment of
communication skills. This is how the research in competence,
and competency started.
2. Aim
To carefully review the available literature in the field of
competency-based management to identify key concepts,
theories, and models as applicable to different aspects of
human resource management with an aim of furthering the
knowledge in this field. However, the guiding questions for this
literature review are as follows:
A. What is competency?
B. What is competency based human resource
management, how is it different from traditional Human
resource management?
C. What are the different models of competency-based
management or competency models
D. How is competency-based management applied to
different aspects of human resource management?
3. Method
After review of definitions of „competency‟ the concept of
competency-based management is delineated and compared
with traditional approach to human resource management, it is
then studied and described how competency-based
management is applicable to different aspects of human
resource management.
4. Introduction
It is difficult for the organizations to remain competitive in
this global economy (Berge et al,2002). The contribution of
employees in organizational performance plays a significant
role.in helping them remain competitive. The organizations
employ appropriate strategies to hire, and promote people, and
strive to improve their employees‟ performance by variety of
means and measures. Volumes of research and plethora of

© RRIJM 2015, All Rights Reserved 119 | P a g e

 Volume-03, Issue-05, May-2018
experience of practitioners suggest that it is the attitude and
behaviour of the employees that plays a crucial role in their
superior performance rather than only technical skills. The
challenge before the managers is to know the attitude and
behaviour of the people at the time of selection or even while
working in the organizations. Competency based management
as an approach has been successful in not only identifying the
good attitude and behaviour resulting into achieving good
performance but measuring it as well, as it is said that
measuring performance results into improving performance.
To understand competency based human resource
management, it is imperative to first understand what
competency is.
There are variety of views about what exactly is meant by
„competence‟ and „competency‟. Some of the important
definitions of „competency‟ are being analysed below:
Oxford English Dictionary define competency as „the ability
to perform some task‟ while it mentions that competency is
synonymous to competence. The origin of the concept of
competency in the literature is in seminal work of McClelland
(1973) in which while studying the usefulness of IQ tests, he
argued that these tests at best be useful for admissions to
school where the wards would be subjected to similar kind of
assessment. The IQ tests cannot be good predictor of
performance of people in their future work life. Hence the
candidates should be tested for competency rather than
Intelligence to know their potential to perform good in work life.
He defined competency as a personal trait or set of habits that
leads to more effective or superior job performance. In other
words, an ―ability that adds clear economic value to the efforts
of a person on the job. Klemp (1980), in the context of
education, defined competency as a characteristic of an
individual that underlies effective work performance. Boyatzis
(1982, 2007), based on the contingency theory of performance,
defined Competency as an underlying characteristic of an
individual that is casually related to superior performance in a
job. Hornby and Thomas (1989) defined Competency as the
ability to perform effectively the functions associated with
management in a work situation while Jacobs (1989), in the
context of managerial role, defined Competency as an
observable skill or ability to complete a managerial task
successfully. Spencer and Spencer (1993) defined
Competencies as skills & abilities-things you can do -acquired
© RRIJM 2015, All Rights Reserved
RESEARCH REVIEW International Journal of Multidisciplinary
through work experience, life experience, study, or training.
They did not mention anything of attitude and behaviour. Page
and Wilson (1994), based on a comprehensive review of 337
citations including almost everything what has been said about
competency earlier, defined Competencies as “the skills,
abilities, and personal characteristics required by an “effective”
or “good manager”. This definition includes both; the directly
observable and testable competencies, such as knowledge and
skills, and the less assessable competencies related to personal
characteristics or personal competencies. As mentioned above,
researchers and practitioners have interchangeably used
Competency and Competence alike. Gilbert (1996) defined
competence as the state of being competent, refers to having
the ability to consistently produce the results (the worthy
outcomes of behaviour) that are required for the most efficient
and effective achievement of the larger organizational goals.
This definition is in line with the definition of competency given
in most of the dictionaries. It does not specify the visible and
invisible aspects of competency as such. Dubois (1998),
defined Competencies as those characteristics- knowledge,
skills, mindsets, thought patterns, and like-that, when used
either singularly or in various combinations, result in successful
performance‖. Evarts (1998), defined competency as an
underlying characteristic of a manager which causally relates to
his/her superior performance in the job. Woodall and Winstanley
(1998), expanding the scope of competency, defined it as the
skills, knowledge and understanding, qualities and attributes,
sets of values, beliefs and attitudes which lead to effective
managerial performance in a given context, situation or role.
Despite so many definitions, the meaning and definition of
the term competency is still a subject to debate (Shippman et
al., 2000). However, we take the definition of Competency as
the underlying characteristics of individuals comprising of their
knowledge, skills, attitudes, and behaviour based on their
beliefs and values, resulting into superior job performance.
Competencies are used for a wide range of functions like
selection, retention, and development to organizational planning
(Rodriguez et al., 2002
Most of the definitions of competency referred above
mention the underlying characteristics of individuals being a part
of competencies. Obviously, these underlying characteristics
are not visible. What is visible is the knowledge and skills as
depicted in the Iceberg model of competency as shown below:
120 | Page
 Volume-03, Issue-05, May-2018 RESEARCH REVIEW International Journal of Multidisciplinary

The Iceberg Model of competencies: Jacobs (1989), classified competencies as Soft

Competencies, and Hard Competencies. He stated that the
An iceberg has ninety percent of its volume beneath the analytical and organization competencies are considered as
water surface and ten percent above it. Similarly, most of the hard competencies whereas creativity, interpersonal, and
components of a competency like attitude, personal traits, behavioral skills are soft competencies. Both these types of
thinking styles, self-image, organizational fit etc are behavioural competencies are essential for effective job performance. Since
and hidden or beneath the surface. it is difficult to differentiate the soft and hard competencies
(Woodruffe, 1993), this concept has been criticised. This
5. Competencies are context specific classification of competencies however is still popular despite its
criticism.
The concept of competency remains as the ability in terms
of knowledge and skills used to perform the job according to
Some researchers classified competencies as generic and
personality characteristics, values, attitude, and behaviour of
job specific competencies competencies (Stuart & Lindsay,
the candidate. However, the competencies cannot be a
1997; Thompson, Stuart, & Lindsay, 1997; Viitla, 2005). Earlier,
universal. The competencies for personal effectiveness include
Dulewicz (1989) listed generic competencies for middle
initiative, self-confidence, and cognitive capabilities (Boyatzis
management which he named as “supra competencies”. The
R., 1982) (Man & Lau, 2000) while managing self, working in
competencies also vary with the hierarchical level at which the
team and managing personal growth are considered as work
employees or managers are working. It is supported by the
place related competencies (Leslie, 2009), (Gholipur,
assertion that the managers must perform different types of job
Mahmoodi, Jandaghi, & Fardmanesh, 2012) (LeBrasseur,
at different levels needing different types of competencies.
Blanco, & Dodge, 2002). Industry specific or job specific
competencies can be categorized into technical or functional
Another perspective on classification of competencies is that
competence (Ennis, 2008). Managerial competencies such as
whether to look at competencies as theoretical concepts or the
operations management, decision making, managing people etc
ones derived empirically. Empirical competencies are more
are the competencies related to operations and results
popular than the theoretical ones. Empirical classification
(Capaldo, Iandoli, & Ponsiglione, 2004). Communication,
presents more varied competencies than that from theoretically
networking, conflict management etc. are the competencies
derived competencies as noted by Boyatzis et al. (2000).
related to relationship management (Boyatzis, Goleman, &
Rhee, 1999)(Capaldo, Iandoli, & Ponsiglione, 2004) while the
The competencies can also be looked at as managerial
competencies for workforce development include participative
competencies and functional or technical competencies (Celia
management, and people development (Leslie, 2009)(Sherron,
and Karthik,2012).
2000)(Winterton, 2002) whereas competencies related to self-
development include self-awareness and self-
To conclude, it is not much important how do we classify the
management(Yukl, 2001). So, it is concluded that certain
competencies since the classification depends to a good extent
competencies are context free while other are context specific.
on the context.

6. Perspectives on Types of Competencies

7. Rationale for Competency based human resource
The Competencies can be viewed as working at two levels; management
Organizational, and Individual. At the organizational level, it is
The concept of competency is closely linked to human
the core competencies that provide the competitive advantage
resources management. It is immediately related to the key
to the organization while at individual level, the competencies
strategic goal of HRM – winning and developing highly
comprise of knowledge, skills, attitude, behaviour, beliefs, and
competent people who will achieve their goals quickly and thus
values that enable the individuals to perform their jobs
will maximally increase their input into achieving the goals of the
effectively.
company (Armstrong, 2001, p. 248). Competency-based
management is a new trend in human resource management
There are several ways in which the competencies at
that emphasises specific competencies used in a given job,
individual level are classified by researchers, based on their
allowing for more individualised management and more
logic, theory, and purpose of study. However, following section
individual competency development within career paths. From
gives a brief account of the normal classifications of
this perspective, competencies are specific to the companies
competencies as put forth by researchers.
and the jobs (Braokmann, Cleark, and Mehaut,2008)
Boyatzis (1982), conceptualized competencies based on the
The concept of employees being the most important
need, as threshold competencies and Performance
resource of the organizations has been well recognized both in
Competencies. The threshold competencies are the minimum
theory and practice. Especially in the new knowledge-based
required while performance competencies are the ones which
economy it is the knowledge of the employees that will provide
differentiate the average performer from the excellent
the competitive advantage and not the other resources
performer. Woodruffe (2003, 1993) however criticised this
(Sienkiewicz,2014). Alvesson (2009) states that competency-
distinction by stating that it is the degree rather than category
based approach is specially significant for the firms offering
which may tilt the competency from one extreme to other.
knowledge intensive services. Emphasis on development of
competencies and a strong knowledge base are the key

© RRIJM 2015, All Rights Reserved 121 | Page

 Volume-03, Issue-05, May-2018
characteristics of knowledge intensive firms. Traditional job-
based HRM does not provide the answers to the questions like
How to simplify and integrate HR practices?
How to prompt employees to be innovative and take risk?
How to transform the organizational strategies into
employee performance?
How to transform HRM from an administrative to strategic
function?
How to from the functional structure especially when the
concept of job position is disappearing?
Application of competency-based approach provides
answers to these questions (McLAgan,1997)
While traditional HR is based on task-analysis and job
description to determine the character of the process of
recruitment and selection, induction, training, performance
appraisal and employee development, the competency-based
HR relies on identifying and developing the employee
competencies to enable them to perform their jobs effectively.
According to Oleksyn (2010) cited in Sienkiewicz,2014, the
universal main purpose of using competency-based approach to
HRM include
-to provide essential competencies-of individuals, of
organizations, and the whole society to ensure high quality of
living and work
-to achieve a high level of effectiveness and
competitiveness
- to provide and develop individual‟s abilities to perform
professional work and thus enable them to be self-fulfilled,
provide for their families and live a decent life
-to adjust competencies as per changing needs.
8. Competency Frameworks / Competency Models
A competency framework is a list of competencies in context
along with their definitions, and effective and ineffective
behaviour along with the measurement criteria. A competency
framework or a competency model as it is popularly known as,
helps managers identify the required competencies to
effectively perform a given job. A competency model is a
descriptive tool that identifies the knowledge, skills, abilities, and
behaviour needed to perform effectively in the organization
(Chung Herrera, Enz, and Lankau (2003). Once the required
competencies are known, it is easier to match the competencies
of the candidates with the identified competencies to make a
better selection decision. However, the challenge lies in
identifying the competencies required for the given jobs.
Incorporation of Competency Based Frameworks (CBF) has
many benefits for the organizations. However, implementation
of CBF has limited success if the competencies are poorly
developed, not properly explained and understood by
employees, and difficult to use. The effectiveness of CBF also
lessens if it is taken as an HR thing (Benayouny,2017)
9. Competency Mapping
Competency mapping is the process of identifying and
describing the competencies in terms of knowledge, skills,
abilities, and behaviour required to perform a job effectively and
comparing these with the competencies possessed by the
© RRIJM 2015, All Rights Reserved
RESEARCH REVIEW International Journal of Multidisciplinary
candidate /employee depending upon the purpose for which it is
being used. Competency based human resource practices
used competency framework as a foundation for recruitment,
selection, training and development, rewards, and other aspects
of employee management (Horton, 2000).
There are several methods like competency-based
interviews, competency mapping questionnaires, assessment
and development centres, critical incident technique,
psychometric tests, by which competency mapping is done. The
organizations use competency mapping to draw the competitive
advantage from human resources. To have the competitive
advantage at organizational level , the core competencies play
an important role. Core competency is an area of specialized
expertise that is the result of harmonizing complex streams of
technology and work activity (Prahalad, and Harnel, 1990). For
the organizations to have sustainable competitive advantage,
the competencies must be valuable, rare, and difficult or costly
to imitate and there should not be direct or easy substitutes for
competencies (King fowler, and Zaithmal, 2001). The core
competencies of an organization are unique capabilities which
cannot be easily imitated by the competitors. Usually core
competencies are put into two categories namely Core
Technical Competencies, and Core Marketing Competencies at
individual level. Identifying job competencies has traditionally
used more art than science. Despite availability of all the above
methods, there has not been a systematic process based on
sound performance models. Competencies are most often
identified through a combination of “techniques” and “models”
(Marrelli, 1998). Some organizations might use interviews
focusing on superior versus other performers while others might
use brainstorming to identify competencies against job
responsibilities, job profiles, or other combinations (Langdon
and Marelli (2002). Neither method results in accurate or
complete competency identification. Furthermore, Gayeski et al
(2007) rightly argue that many job requirements change rapidly.
So, using data from an expert performer today may not yield
competencies that will be necessary to perform the same job
successfully in future. They further state that the current
methods to identify competencies tend to be slow and
expensive as they consume lot of time and money especially in
the context of mergers and acquisitions situations. Hence there
is a need for a continuous evolution of methods of identifying
the competencies. Computer based methods can be a help in
this regard.
10. Competency Based Human Resource Management
in Practice
Competency based human resource management has been
in practice in different parts of the world across the industries.
Sylvia Horton (2009) found that competency based human
resource management practices are used in British central Govt
jobs for recruitment and selection, training and development,
performance evaluation, compensation, work force and
succession planning, and career guidance. Separate
competency frameworks have been designed incorporating core
competencies and specialist competencies. These frameworks
differentiate effective behaviour and ineffective behaviour with
respect to the given competencies. The competency
frameworks have also been used for identifying leadership
potential.
122 | Page
 Volume-03, Issue-05, May-2018
Competency based human resource management though
found quite useful, has its own problems. Farnham & Horton
(2002) identified the problems with it as poor understanding
among staff, lack of commitment by line management, lack of
ownership and support by senior management, resistance by
trade unions, difficulties in identifying competencies, and
problems associated with the content of frameworks, such as
lack of clarity and difficulty in applying competency criteria.
Despite the problems associated with competency
management, CIPD research (2003,2007) have confirmed the
early finding of research about civil services(Horton,2000)
stating that the competency management has benefits such as -
enables a common language and standard criteria to be applied
across a range of HR functions (comprehensive approach to
HRM),assists both managers and employees in identifying
training and development needs, enables the organisation to
promote its values, goals and objectives ,assists in the
management of change, enables employees to know what is
expected of them (transparency), and is a corollary of
performance management (Sharma and Khanna, 2015). To
explain the applicability of competency-based HR practices,
following section describes some cases where it has been
applied.
11. Application of Competency Mapping
Though the aspects of competency mapping studied by
researchers are numerous, following section touches upon few
of them.
Suguna and Selvi (2013) studying the impact of competency
mapping, found that competency mapping in garment sector
has an impact on organizational performance. They found that
all HR processes including talent induction, management
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