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Competency-based management (CBM) supports the integration of human resources planning with business planning by allowing organizations to assess the current human resource capacity based on their competencies against the capacity needed to achieve the vision, mission and business goals of the organization. Targeted human resource strategies, plans and programs to address gaps (e.g. recruitment, learning, career development, and succession planning) are then designed, developed and implemented to close the gaps.
Competency-based human resources planning serves as a link between human resources management and the overall strategic plan of an organization. Competencies are defined as observable abilities, skills, knowledge, motivations or traits defined in terms of the behaviors needed for successful job performance.
While competencies are not new to most organizations, what is new is their increased application across varied human resource functions (i.e., recruitment/selection; learning and development, performance management, career development and succession planning, human resource planning). Organizations are looking for new ways to acquire, manage and retain the precious talent needed to achieve their business goals.
Properly designed, competencies translate the strategic vision and goals for the organization into behavior or actions employees must display for the organization to be successful. Competency-based management standardizes and integrates all HR activities based on competencies that support organizational goals.
Connecting to organizational execution
CBM solutions typically provide input into and drive all aspects of employee career development. This allows organizations to improve productivity in most areas of human capital management human resources. CBM is typically referred to as "strategic" in that it attempts to link organizational planning to job execution.
- Strategic human resource planning
- Competency architecture
- Competency dictionary
- Competency-based recruitment
- Competency-based learning
- Competency-based performance management
- Competency-based career development
The role of CBM is to shape and guide employee behavior from "hire to retire". CBM helps talent acquisition, performance management and learning management systems to be more effective by assessing employees' skills and competencies. CBM also facilitates gap discovery and suggests learning methods (on the job, literature or formal courses) to help improve employee effectiveness.
The war for talent has driven a marked increase of attention and investment in the talent management space as new vendors continue to enter to support an ever-growing demand for strategic human resources applications. Many of these competitors have entered via the software as a service (SaaS) delivery model, affording small and medium business (SMB) new less-costly options. Competency-based management systems define the job to be done and the consequent required skills to perform said job. The outputs of CBM systems are parameters input into production talent management systems.
- Competency architecture
- Competency dictionary – A tool or data structure that includes all or most of the general competencies needed to cover all job families and competencies that are core or common to all jobs within an organization
- Human resource management systems
- Learning management system – Software system that serves the delivery of learning content and the organization of learning processes
- Talent management
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