What Is a Competency Assessment?

Providing objective, ongoing, and relevant feedback is key for organizations to keep and develop top talent. Engaging employees in this process can also boost their overall satisfaction. Employees who are highly engaged at work are 21% more profitable, and companies with engaged workers were 17% more productive. Many organizations are using competency management as groundwork to improve all talent programs. With competency management, leaders get visibility on how closely employee behavior models what the organization needs to succeed. It also helps HR make data-informed decisions. Competency assessments are a pillar of competency management and can help leaders give employees the feedback and development insights they need to thrive.

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What is a competency assessment?

Competency assessments are a systematic process of mapping an employee’s existing knowledge, skills, abilities, and traits against those needed to successfully perform in a role. This comparison helps employees and their managers visualize key performance gaps in specific areas. They can then target these areas with focused development plans. They may also discover superior performance in a competency, which can lead to further career pathing discussions.

Managers can use competency assessments as part of the employee’s overall performance evaluation. Hiring managers can also use competency assessments in recruitment to find the best fit for a vacant position. In the end, competency assessments help companies build and develop a strong workforce that can adapt to rapid changes in their job, company, or industry.

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Benefits of Competency Assessments

Competency assessments support performance management and other talent programs in the following ways:

• Is a communication tool to discuss expectations.

• Identifies strengths and areas for improvement.

• Explains reasons for sub-standard performance.

• Links to continuous improvement processes.

• Identifies key areas for team development.

• Determines your bench strength for planning.

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Where to Apply Competency Assessments

Recruitment and Selection

Competency assessments can accelerate recruitment efforts and help hiring managers find the best fit. Several major employers—including Google, Penguin Random House, Home Depot, and others—prefer evaluating applicants’ capabilities over their credentials. Some requirements and practices, such as academic credentials and interviews, help hiring managers quickly eliminate job applicants. But sometimes, these methods exclude applicants who would excel in the role.

Competency assessments fairly assess candidates on standardized criteria. They broaden the pool of potential candidates to include individuals without traditional qualifications like degrees or certifications. These candidates may still be suitable for the job. Structured behavioral interviews help hiring managers assess candidates on their competencies—not just credentials—to make fair and ethical hiring decisions. Learn more about the STAR method of interviewing.

When competencies are listed in the job posting, applicants can determine if they are a good fit for the position. This helps hiring managers attract better-quality applicants.

Learning and Development

Over one fifth (22%) of workers quit because they do not get enough advancement opportunities at their job. Leaders can improve retention and save on recruitment efforts to fill competency gaps with thoughtfully planned development programs. Competency assessments reveal where and how significantly employees are succeeding or struggling. They can then pinpoint exact behaviors employees need to improve.

Succession Planning

By mapping leadership roles to competencies, managers can quickly identify high-potential employees who could advance in the company. Assessing core competencies also reveals which employees are most aligned to the company’s mission and values.

How to Conduct Competency Assessments

To assess competency, evaluators review all behaviors under a single competency and determine which proficiency level the subject is currently demonstrating. Focused development programs can close the gap between the person’s current proficiency and where they need to be.

Organizations can choose from several types of assessments. Here are three of the most common:

1. Structured behavioral interviews: Hiring managers use these to evaluate the competencies of a candidate in recruitment. They ask candidates to describe a situation or task, the action the candidate took or did not take, and the result of their behavior. The concept behind these types of interviews is to evaluate past behavior as a predictor of future behavior.
2. Self-assessments: Employees reflect on their own behaviors and evaluate their performance against the defined proficiency levels. Involving employees in their own assessments improves engagement.
3. 180- or 360-degree feedback: These assessments involve multiple assessors (for example: the employee and their managers, peers, or direct reports) to get different perspectives and holistic data on an employee’s performance.

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Measure Competency Assessment Results

To measure how well competency assessments improve your talent programs, track:

• Performance metric improvements;
• Employee engagement scores;
• Retention rates; and
• The number of internal promotions and leadership development program positions.

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Competency Assessment Best Practices

To get the most out of your competency assessments, follow these best practices.

• Be honest and transparent. Employees can only develop the gaps they know about or boost the strengths you recognize.
• Assess employees individually and develop personalized plans to address their specific gaps and strengths.
• As part of your competency assessment discussion, talk about their career goals. This will give you context to know in which areas to focus development initiatives.
• Competency assessments are not a tool to punish poor performance. Reduce employee concerns about the competency assessment by emphasizing its role in career development and personal growth.
• Root out bias in competency assessments. Ensure methods and criteria do not directly or indirectly lead to bias against certain groups. Train leaders on fair evaluation methods.
• Base competency assessments around a stretch of time, not an isolated issue. This will give you a better picture of the employee’s overall performance.
• Stay positive throughout the process. When giving feedback to the employee, use the commend-recommend-commend approach and sandwich two positive acknowledgements around constructive criticism.

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Where to Begin and End

Any competency assessments relies on a complete and accurate competency profile. A culture of learning begins with feedback, but it shouldn’t end there. Constantly re-evaluate employees and the development programs you put in place to understand what is improving and what still needs refinement. A successful competency assessment will result in an increase in your workforce’s performance, productivity, and competitiveness.