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Leaders of organizations today are always looking for a competitive edge. In that quest, many
organizational leaders have discovered a new, powerful way to reinvent Human Resource
Management. It is called competency-based human resource management.

But why is a new operating system needed for HR? What are competencies? What is
competency-based human resource management, and why is it worth implementing? This article
briefly addresses these questions.

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Pick up any college textbook on human resource management and you will discover that it
indicates that job analysis is the foundation of all HR management. Job analysis is thus an
operating system for HR, much like Linux is an operating system for a computer. The result of a
job analysis is, of course, a job description, which literally describes the job that people do, and a
job specification, which usually describes the minimum qualifications required of someone who
performs the job.

The problem is that job descriptions are increasingly out-of-touch with today¶s working world.
Job descriptions usually delineate what people do in a job. They tend to list work activities. But
work activities change quickly in light of competitive conditions and technological change. Job
descriptions usually do not clarify the measurable work outputs²that is, the final results²of the
work and how it is measured. Instead, they focus on volatile work activities.

Additionally, job descriptions do not clarify what kind of person should do the work. Instead,
they speak in terms of the work activities that people do. When managers try to pick out
someone to do the work based on a job description, they have to translate what it says they
should do (which is listed on the job description) and what kind of person is being chosen (which
is not listed anywhere). As a result, managers often make mistakes in hiring.

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While the term competency is sometimes a term in search of a meaning, the reality is that the
best way to define a competency is as a characteristic of a successful performer. Competencies
relate to the people who do the work²not, like job descriptions, to the work itself. Competencies
lead to successful work results. Anything contributing to successful work results is thus a
competency. A competency model is a narrative description of everything that describes a person
who is successful in getting results by doing work.
Competency models may be of two kinds. One kind describes the characteristics of a person who
meets the minimum requirements. An example might be a person promoted from within.
Selection may depend on picking someone who is adequate.

Another kind of competency model is much more important because better tied to productivity
improvement and competitive advantage. Research has shown that not all performers in an
organization produce equal results. Some people are simply more productive than other people.
The most productive person in a job category (such as supervisor or executive) is called the
exemplar. Every job category, or department, has them. The exemplar may be as much as 20
times more productive than an average, but fully-trained, performer in the same job category or
department. That means that each exemplar may equal 20 workers!

If you ask, ³how can that be? How can one person be as much as 20 times more productive than
others?,´ then you are really asking the question that competency modeling seeks to answer. A
competency model tries to describe the most productive performer²and what makes that person
so productive.

The stakes are high. If organizations could identify the differences between their average and
their exemplary performers, then they might be able to achieve quantum leaps in productivity
improvement. Alternatively, they may be able to save huge sums by preserving productivity with
fewer people²and thus pay less in wages and benefits.

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If job analysis (and their results²job descriptions) is the operating system for traditional HR
management, then competency modeling (and its results²competency models) is the operating
system for a new approach to HR management. That new approach is called competency-based
human resource management.

Competency-based HRM reinvents HR from a new foundation. It seeks to leverage up the

productivity of the organization by identifying the key differences between best-in-class and
average performers and then using an integrated approach to all functions of HR²such as hiring
and training²to narrow the gaps.

But it is worth emphasizing that it is not an all-or-nothing proposition. Some decision-makers

choose to reinvent only some HR functions from a competency-based foundation while leaving
others traditional (and thus job-based). It is thus possible to talk about traditional or competency-
based

÷ Workforce planning
÷ Recruitment
÷ Selection
÷ Orientation
÷ Training
÷ Career planning
 ÷ Compensation and benefits
÷ Performance management
÷ And any other HR functional area

The determining factor in deciding to move to a competency-based approach to HR is a sense of

priorities. To clarify: the old saying is that you cannot eat an elephant all at once, but you can eat
an elephant one bite at a time. The same principle holds in moving from a traditional to a
competency-based approach to HR. It is not easy to transition from a traditional to competency-
based approach. It must be taken one bite at a time. And that may require easing into a
competency-based implementation, one HR function at a time.



As the global economy spurs increasingly fierce competition, organizational leaders will be
thinking hard about what they could do to give themselves and their organizations a competitive
advantage. Since people may be the most important resource, it just makes sense to think how
the management of people might be improved. That leads to competency-based HR, which
reinvents traditional HR (based in job analysis and job descriptions) to focus on leveraging the
known productivity differences between average and best-in-class (because most productive)
performers.