How to Improve Company Culture with Core Competencies

Culture was HR’s second highest priority in 2023, and for good reason. A positive company culture can support a variety of talent management initiatives. To name a few, a positive company culture can boost productivity, attract talent, and improve employee retention. When employees are happy, business thrives. So, company culture can also directly affect total revenue. People leaders use core competencies to set guidelines for how employees can demonstrate the company’s values. In this article, we’ll show you how to improve company culture with core competencies, so you can improve both retention and revenue.

What Are Core Competencies?

Core competencies are a type of competency that are needed by all jobs and are in every job description. They are closely tied to the organization’s values and vision. Organizations that use multi-level core competencies communicate exactly how an employee can demonstrate the company’s values through a list of specific behaviors. When every employee is held accountable for how they demonstrate the company’s values, the organization works more cohesively toward a common goal.

While aligned to the company’s values, core competencies are different than values.

How Do Core Competencies Improve Company Culture?

People behave at work according to the overall working environment. Employees also follow examples set by their company leaders. When a company posts its values on a wall and they’re never talked about, for example, employees don’t feel responsible to uphold them. Core competencies help by explaining how employees can demonstrate these values in observable behaviors.

Some organizations know their strategic vision and goals. They also know what overall success looks like for them, whether it’s improved revenue, company growth, or something else. Oftentimes, companies don’t know what needs to happen in the middle to achieve these goals. That’s where core competencies come in.

With multi-level core competencies, the company communicates how to put its values into practice. When a company includes its core competencies in every job description, they can be a topic of discussion in performance appraisals, as well. Ongoing feedback and development of core competencies support the improvement of overall company culture.

Elements of a Positive Company Culture

A positive company culture helps organizations through the ups and downs. In times of change, company culture can either motive employees to push through obstacles, or be their reason to resign. Thankfully, you can improve company culture with competencies. A lot of practices that are regularly used to build positive workplaces are supported by core competencies.

For example, Forbes lists out a few elements of a positive workplace culture. Here’s how core companies can support each function:

• Employee recognition: Core competencies lay out the observable behaviors an employee must demonstrate to show proficiency at each level. With these observable indicators, managers and peers can clearly map where an employee is exceeding expectations and recognize employees through their employee rewards program.
• Professional development: Likewise, managers can determine where an employee has gaps in their performance. Then, they can tailor a development plan for the employee to improve the specific behaviors outlined in their competency profile.
• Transparency: Core competencies are included in every job description, so every employee in the organization knows what the company values and expects of them.
• Trust in leadership: Every job description for every role in the organization should include the same core competencies. This means leaders are expected to demonstrate the same company values as their direct reports.

How to Identify Core Competencies

A company shouldn’t have a lengthy list of values, or else it isn’t clear what drives the company. Likewise, a company should only focus on a narrow set of core competencies. This way, everyone is clear on what the organizational priorities are. The core competencies organizations choose should contribute the most to superior performance and have the largest impact on competitive advantage. But how do you even choose these core competencies?

Our experts recently held a virtual workshop to help organizations do just that. Here are the key takeaways to get you started in identifying your company’s core competencies.

Involve the Right People

At minimum, the leadership team should be included in the process of identifying core competencies. This group may include anyone from departments heads to the executive team. The leaders at your company have strategic insight, industry knowledge, and understanding of organizational dynamics. These are all key to recognizing behaviors that drive your company's competitive advantage. These are the behaviors you will want to highlight and endorse through core competencies.

Depending on the size of your organization, you may also include HR in this process. Often, HR represents the championing of the initiative and can be a great resource for employees.

Reference the Right Resources

Those in charge of developing core competencies should look to the following company resources to understand the organization’s priorities:

• Value statements;
• Mission statements;
• Mandates;
• Goals; and
• Strategic documents.

After understanding internal priorities, leaders must also understand their capabilities and external factors. When defining your core competencies, assess your internal capabilities, analyze market trends, and evaluate your organization’s competitive positioning. By looking at these factors, you can choose which behaviors are most likely to drive a competitive advantage now and in the future.

The Key to Improve Company Culture

Core competencies align every single employee with the company’s values and goals. They also provide behavioral indicators so leaders can accurately measure how well an employee demonstrates these values at work. Download our free core competency sample pack to discover what popular core competencies other organizations are using. Want to learn more? Talk to one of our experts.