What competency means

The term ‘competency’ could be perceived in different ways. Lawyers or civil servants are more likely to think it refers to the scope of authority on any subject in a legal context. However, in this article, we will look at another meaning for this term, as it applies to human resource management.

The literature offers a variety of definitions for the term ‘competency in the context of human resource management. One of the most general among them says that it is a skill or ability of an individual to effectively perform a certain job. Competencies are also defined as:

– a set of individual behavior models that can be observed, measured, and evaluated and which are essential for the successful performance of the individual and organization.[1]

– individual characteristics of a person that result in efficient work including, among other things, motivation and self-knowledge, and a desire and readiness to demonstrate efficiency at work.

The whole set of competencies imposed on employees as requirements for certain positions and for the achievement of organizational goals determines the competency model in such an organization. As a result, human resource management can be based on competencies.

A competency model is a complex personnel[2] management tool. Its complex nature is explained by the fact that is used in multiple, integrated, personnel management processes.

It is obvious that personnel performance has an influence on the organization’s effectiveness. A well-designed competency model helps to identify what kind of employees are required—their behavior, skills, and competencies—to make the organization perform effectively.

Technically speaking, a competency consists of:

• its name.
• its definition.
• the level of competency development (in most cases a scale of 3 to 4 levels, or different indicators are developed for different levels of positions).
• and indicators (often called competency descriptions) that help to identify the level of its development.

For instance, the Strategic Vision competency may be defined as the ability to plan the organization’s future possibilities taking into account a broader context, to bring unit tasks in line with the organization’s priorities, and anticipate the effects of the decisions for the entire organization. To identify the demonstrated level of this competency, behavior indicators can be applied:

• demonstrates future-oriented work.
• provides a full analysis of the company’s or unit’s strengths and weaknesses, opportunities, and threats.
• has the overall view of the organization and its mandate in a broader societal context, when priorities are determined.
• brings unit targets in line with the organization’s strategic goals.
• identifies strategic problems and risks that prevent the organization from achieving its strategic goals and eliminates them in a timely manner.
• steps away from operational issues and concentrates on the long-term perspective[3].

The demonstration of the basic or, in other words, the lowest level of competency usually shows that the assessed employee has the knowledge necessary for the role, the middle level would require experience gained through practically applied knowledge, the highest level of competency corresponds to acquire skills that are demonstrated and used in practice (it could be called for this purpose the expert level of competency).

To assess competency, such factors as independence when implementing assigned tasks, the frequency of the required behavior pattern, etc. can be applied in real life.

Below is an example of how data analysis competency is demonstrated in positions of different levels. The more senior the position, the higher the level of competency required.[4]

Behavior indicators for the lowest level	Recognizes recurring elements in the information Perceives links between data identifies essential information Identifies doubtful information Considers possible alternatives Distinguishes between essential and non-essential information
Behavior indicators for the middle level	Perceives links between data Analyses the received information critically Quickly finds necessary information in large amounts of data Does not accept information without prior consideration Assesses available information without bias, comprehensively and impartially Considers different alternatives before making a decision
Behavior indicators for the highest level	Identifies information structure Understands causes and consequences of an event Quickly and efficiently analyses complex situations Critically analyses information and detects contradictions in a timely manner Assesses available information without bias, comprehensively and impartially Recognizes compares and assesses alternatives

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When looking at the variety of competencies, the following types can be identified:

• general or corporate refers to competencies related to the organization’s values, which contribute to the achievement of results by the organization—all organization’s employees at all levels should have them—for example, teamwork, effective communication, data analysis.
• leadership refers to competencies that leaders require to manage the organization, a unit, or personnel, for example, strategic vision or management of employees.
• functional refers to specific competencies necessary to perform a job in a particular unit, for example in a human resources, strategic planning, or international relations unit.
• technically refers to competencies that could be important for a specific position/function and reflect technical skills, for example, language skills, or office equipment skills.

All organizations that wish to enhance their performance, think of ways to improve the performance of their employees. Both practitioners and theorists agree that competency-based personnel management is an excellent tool for improving an organization’s performance. How exactly can a competency model be applied in an organization and make it more effective?

Firstly, we should return to the fact that a competency model can become the backbone of personnel management and development in an organization. As we mentioned above, it integrates personnel management processes. Visually it can be presented as follows:

Elements of the personnel management system and how they correlate to the competency model

Source: prepared by EU4PFM experts

A competency model is, therefore, a link in the system of personnel management processes and a starting point when determining what kind of people an organization needs, and what should be considered when recruiting them. This also applies to assessing the performance of existing employees, what training they might need, and how to manage career development processes. The assessment of competencies can be used when:

• conducting competency-based interviews to assess required competencies and suitability for an organization.
• assessing performance, the level of competencies required to carry out duties.
• making a decision on career progression when competencies necessary for a more senior position are in place.
• making a decision on training needs when required competencies are underdeveloped, etc.

When an organization can recruit, develop and promote its employees using a defined competency framework, there is a much greater probability that the organization will implement the principle of the right people (having necessary competencies) in the right place. This principle is one of the main principles of personnel management and creates strong grounds for an organization’s success.

Another important aspect worth noting is that when defining the basic competencies of an organization, one should be guided by the organization’s needs for certain competencies derived from the organization’s mission, values, and long-term goals. Therefore, the list of competencies being developed should directly correlate to the actual needs of the organization. This will ensure both well-targeted selection and the effective professional development of personnel in the future.

The civil service competency model applied in practice

Today, the countries of the European Union that do not apply competencies in some or all personnel management process(s) are the exception. Moreover, there are competency models for specific professions at the transnational level, for example, the competency model of the European Union exists for tax service employees (the EU Tax Competency Framework) or for customs service employees (the EU Customs Competency Framework).

In this context, Ukraine is no exception. The standard procedure for assessing the performance of civil servants approved by the Resolution of the Cabinet of Ministers (No. 591 of 07.10.2019) provides for a list of competencies for a civil servant, which is assessed in the process of annual performance review for the purpose of further professional development. Despite the fact that this is only the beginning of the development of competency-based personnel management in the Ukrainian civil service, governmental institutions can develop such a tool at their own discretion and use it to identify missing competencies and their further development in the organization. For example, the EU4PFM Project has developed a competency model for the Ukrainian Ministry of Finance. The model includes general competencies (interpersonal, leadership, special, etc.) and functional competencies (14 groups of functional competencies based on the grouping of positions), behavioral indicators of competencies, and a system for their assessment. A competency model is also being developed at the Ukrainian Tax Service.

The fact that the legal framework of the civil service does not provide for the mandatory implementation of a competency model does not, therefore, prevent institutions from introducing innovations in personnel management.

When considering international practice for the introduction of a competency model, it should be noted that the Lithuanian practice of introducing a competency model is somewhat similar to the Ukrainian practice. The competence model of the Lithuanian civil service also stems from the annual assessment of civil servants. In the Lithuanian civil service, the definition of “competency” was introduced into the annual assessment of performance in 2007. Later, in 2013 a comprehensive competency model methodology was developed, which was applied in the civil service without the legal framework. It was used by those governmental institutions which saw the advantage in using this tool to develop organizational competencies. In 2020, the competency model was adopted by law and became mandatory for all institutions. Today, the competency model of the Lithuanian civil service is applied during the selection of civil servants, in the process of performance assessment, professional development, and career progression.

Notes on the introduction of the competency model

According to the international practice of introducing a competency model (not only the above-mentioned Lithuanian example, but also others, including the Irish, and Belgian practices), the initial stage of introduction requires a simpler version of the model in order to assess what practical effect it has, and then it can be developed gradually. It is recommended that at the beginning, the competency model be introduced with the support of experienced experts, with a developed methodology, and a pilot project model.

At the same time, for the competency model to be successfully implemented, it is important to pay sufficient attention to its explanation to employees and, what is equally important, is the understanding and support of the organization’s leadership.

Finally, the competency model is a tool for personnel development. It should not be used as a tool for negative measures against an employee who does not demonstrate a required competency. The assessed lack of competency should, first of all, provoke thought regarding in which direction it might be necessary to develop an employee.

Jurgita Domeikiene, Team Leader, International Key Expert on HR/PAR

Edvardas Žukauskas, International Expert on HR/PAR

[1] The method of behavior competencies was originally introduced by McClelland in 1973.

[2] ’Personnel‘ is used here as a more general notion to avoid using ’human resources, human capital, etc., not to encourage discussions relating to that terminology.

[3] Taken from the competency model developed by EU4PFM for the Ukrainian Ministry of Finance.

[4] Example of the Belgian civil service competency model