With the ever evolving and diversifying business challenges, the approach to the management of human resources has also undergone a paradigm shift. The competitive advantage achieved through technology, new products and information is short lived and vastly evaporating. The only distinguishing feature from the competition which remains, are the skills and contribution from the employees.

The organizational leadership therefore plays an important part as they directly influence the performance and the people of the organization. A well-defined and uniform competency framework is the first step towards an organized approach to the human resource management of the organization.

There is a constant need to increase efficiency and create and deliver value in each transaction. Therefore it is imperative that a more scientific approach like competencies be used to define and understand the knowledge, skills and attitude required to perform a job effectively. Evaluating an employee’s performance based on pre-defined competencies and their behavioural indicators, in turn is called competency based assessment.

The preliminary condition for a competency based assessment is a well-defined competency framework of the organization. Ideally, the competency framework needs to be in alignment with the long term organizational goals and its vision and mission. These competencies then need to be interpreted in the context of the tasks performed by employees at different levels, so a competency like fosters teamwork will be defined differently for a senior leader like COO and would further have to be contextualized for a junior manager.

The competencies are like the Pole Star for the organization especially the senior leaders and act as a constant check for the employees to direct and redirect their efforts to yield specific results. Since, competencies can be assessed and analyzed; it gives a fairly objective evaluation of an employee’s performance.

The best part about the competencies is that they can be learnt unlike personality traits which are characteristic to an individual. If the organization identifies criteria critical to its success in the form of core competencies, they can be cascaded down to the whole organization.

Having a competency framework and assessments based on it provides a comprehensive picture of the skill map of the organization, the development needs, and potential leaders and thus define the approach to effective talent management.

From the perspective of the employees, they get a better understanding of the potential progression of their careers which further augments their engagement with the organization.

Within the competency based assessment approach the organizations can find a structured model to integrate their management practices as well. A systematic approach like this can help define organizational priorities clearly and align the human resource strategies to create and build on key behaviours which are desired and would be rewarded. It also creates individual employees accountable and responsible for their performance and learning and development while creating a culture of transparency.

And most importantly competency based assessments go a step further to understand the individual and organizational fit to make correct hiring decisions, the starting point of the employee’s life-cycle in the organization.