WHITEPAPER

Competence, Performance, and

Competency Models
Dr. Karen L. McGraw
Cognitive Technologies Group, LLC

Web: www.cognitive-technologies.com
Ph: 770-551-8205
Email: info@cognitive-technologies.com
COMPETENCE, PERFORMANCE, AND COMPETENCY
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Competence
…a function of the ratio of valuable
accomplishments to costly behavior.
Competencies
Skills, knowledge, and traits, attitudes,
or abilities that enable effective
performance of a job within a specific
organizational context.
COMPETENCE, PERFORMANCE, AND COMPETENCY
MODELS
Introduction
Discussions about human competence have been occurring in academic and HR circles
since the ‘70s. However, because intellectual assets are now recognized as one of the
foundations for competitiveness, competence and competency management have
become strategic issues. The ability to implement strategy and achieve “bottom line”
results requires that organizations take stock of available competencies and manage them
in a way that increases the effectiveness of performance throughout the value chain.
Competence and Performance
While most people believe they know competence when they see it, they typically have
trouble defining it. In fact, it may be easier to think of competence in terms of what it is not.
It is not a specific set of behaviors, although these may be evidence of competence. One
way to define competence is as a “function of the ratio of valuable accomplishments to
costly behavior” (Gilbert, 1978). That is, a performer is competent to the extent he or she
can produce accomplishments that are of value to the organization without incurring more
costs than the accomplishment is worth. For example, a new performer may be able to
produce a desired accomplishment—but at what cost? How long does it take to do so?
How many times was it reworked before it was of acceptable quantity? If answers to
questions reveal that the accomplishment was produced at great cost, the organization
may not have achieved any real value. When someone is competent, they increase the
value of accomplishments while reducing the cost and energy put into the effort. The true
nature of competence is derived from the value of our accomplishments; as Gilbert noted,
competence is a comparative judgment about the worth of performance.
Finding competence that predicts exceptional performance in an organization or its value-
producing network requires examining the top performers in specific job roles. They are
able to consistently produce outcomes or accomplishments that are valued by, and bring
value to, the organization. Not only do they consistently produce these accomplishments,
but also are able to do so in a manner that increases the value of the accomplishment to
the organization. Exemplary performance must consider the quality of the work (accuracy,
etc.), the quantity or productivity of the work (the rate, timeliness, volume), and the
associated cost (labor, material, management). Top, or exemplary performers produce
accomplishments that meet or surpass a standard for quality, quantity, and cost.
Competencies and Other Factors Influencing Performance
Top performers are able to produce high-value accomplishments primarily because they
have the required competencies and they know how to do things more productively than
others. Competencies are abilities and traits that predict and enable effective or exemplary
performance of a job within a specific organizational context. To be deemed ‘competent’ in
an area a performer must have requisite skills, the appropriate body of knowledge, and
traits or personal characteristics that contribute to success. Some texts define
competencies as “skills, knowledge, and abilities or talents” or “skills, knowledge, and
attitudes”. Others use the terms “traits and personal characteristics” to encompass talents
and abilities, which we prefer. We can observe evidence of the existence of personal traits
and characteristics, and research has shown their impact on performance (Spencer and
Spencer, 1993).
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COMPETENCE, PERFORMANCE, AND COMPETENCY
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For example, one competency for the job of a project manager might be “customer
relationship management.” This could be defined as the ability to articulate project vision
and definition, define scope and success criteria, identify assumptions, and communicate
to ensure client satisfaction. Specific knowledge and skills would be required to enable an
individual to demonstrate this competency, such as: knowledge of the client’s business
need, and skills like listening and conflict resolution. Specific personal characteristics and
traits that would contribute to success include ‘interpersonal understanding’ and ‘client
focus’.
Competencies alone cannot ensure effective job performance, however. As Figure 1
illustrates, organizational support can make the occurrence of effective or exemplary
performance more or less likely. Organizational support includes the following, each of
which is known to influence performance:
ƒ Motivation & incentives—what performers are motivated to do, based on their
compensation structure and incentives
ƒ Environment & culture—the physical environment in which work occurs, and the
mindset and shared belief system of the organization (i.e., “the way we work”)
ƒ Job design—the way particular jobs are designed to spread responsibility and
accomplishments across the workforce
ƒ Management practices—how management acquires, develops, reinforces, and retains
competencies.

Organizational Support Influences

Skills Knowledge Traits

Effective
Job
Performance
Motivation & Environment Job Design Management
Incentives & Culture Practices

Figure 1. It takes more than competencies to ensure effective job performance

Consequently, the existence of competencies alone does not ensure performance at the
desired level. Not only must requisite competencies be available, but also the organization
must do all it can to increase the likelihood that competent performers produce the desired
outcomes of value.

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Competency Modeling
• Generic models
• Custom, organization-specific models
• Customization of generic models
COMPETENCE, PERFORMANCE, AND COMPETENCY
MODELS
Competency Models
A competency model is a mechanism or framework to organize the skills, knowledge, and
traits that result in effective or exemplary performance of a specific job. Good competency
models can be extremely useful to an organization or enterprise as it attempts to
accomplish the following:
ƒ Explicitly link performance to business results
ƒ Develop a shared mindset about what is important in a job, what will be monitored, and
what should be measured
ƒ Develop behavioral interviewing questions and a model against which to judge
candidates to ensure the organization acquires the needed competencies
ƒ Identify priorities for development to fill the “gap” between the competencies an
individual has and those needed to perform a job at the desired level of proficiency
ƒ Facilitate more effective performance feedback, review, and appraisal
ƒ Help individuals plan career growth
ƒ Provide links from a needed competency to learning resources or interventions.
Approaches to Competency Modeling
The two primary approaches to the development of a competency model can be
envisioned as a continuum. At one end of the continuum is a highly generic competency
model, and at the other end is a highly customized model. Generic competency models
have been developed and validated across a number of organizations. They can be
purchased, typically as a database of competencies. The purpose of these models is to
present core competencies of a job across organizations. While this can be a useful place
to start, these models often do not provide the level of detail required for exemplary
performance within a particular business context. Generic competency models typically
cover approximately 50-60% of what one must do to produce an accomplishment that
would be considered exemplary within a specific organization (Boulter, Dalziel, Hill, 1998).
They are most appropriate for upper management positions, where well-understood
leadership characteristics and traits are so crucial to performance (Lucia & Lepsinger,
1999), or for positions that are relatively the same from organization to organization.
At the other end of the continuum is the organization-specific competency model. This
approach requires that a full competency assessment and analysis be conducted for each
position. One variation of this approach prescribes working with top performers only;
another prescribes working with both top and mediocre performers to identify
differentiating competencies. This approach most often requires analyzing the full
spectrum of a job. A competency model is developed to reflect performance within the
specific organization, and is validated by performers and their management. This
validation typically includes focus groups and trial ratings of existing employees using
blind sorting to determine if the model discriminates between exemplary and mediocre
performers. This approach costs more and takes more time to complete, but can have a
higher payoff in terms of enabling the organization to hire the right people and increasing
the percentage of exemplary performers.
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COMPETENCE, PERFORMANCE, AND COMPETENCY
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In the middle the spectrum is a combination approach. The organization purchases

existing competency models and refines them so they better represent their desired
outcomes and competencies. For example, the organization might perform a competency
assessment on top performers for critical jobs and analyze the information elicited to
refine some of the generic models.

Typical Problems with Competency Assessment and Modeling

People often encounter a similar set of problems when working through a competency
assessment and modeling activity. One of the most common problems is that they rarely
understand up front the true size of the endeavor and the amount of labor required to do it
well. Because they tend to underestimate it, they often fail to produce the results
promised within the timeframe required, and may lose their focus, funding, or both.
Another typical problem is that management may consider the project too “academic” or
impractical if any of the following conditions exist:
ƒ The resulting list of competencies for a job is too long to be practical or manageable. For
example, one model we reviewed had 54 competencies for one job, some of which were
obviously trivial and not likely to produce an accomplishment of great value.
ƒ The methodology is too arduous, takes too long, or is too costly. Some businesses will
not tolerate a methodology that can’t show results quickly, or one that takes months to
analyze mounds of statistics. The project dies a slow death.
ƒ Analysis paralysis sets in. Because the team does not approach the task looking for
accomplishments that matter, they don’t know where to focus. They try to cover the
whole job and each miniscule task instead of focusing on the competencies that produce
the accomplishments of value. Or in an effort to be diplomatic, they attempt to talk to
people performing the job from all over, without regard to who is doing it well. They end
up with too much data that is too hard to manage, compile, or analyze. The project
stalls.
ƒ The competency model is developed using a flawed methodology. For example, the
process produces models that would “clone” current employees in a position without
regard to the changing business strategies and new capabilities needed. Or the team
purchased and fielded generic competencies without regard to their ability to address
specific needs of the business. Perhaps the process did tap workers within the specific
organization during the competency assessment process, but failed to focus on top
performers. The resulting competency model might succeed in developing average
performers, but will not increase the percentage of exemplary or top performers.

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 COMPETENCE, PERFORMANCE, AND COMPETENCY
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Cognitive Technologies’ Solution to Competency Modeling

Cognitive Technologies believes that it may be pragmatic for a company to purchase
generic competency models and databases, or to develop organization-specific models.
However, we strongly suggest that groups choosing generic models for key technical and
professional positions consider refining these models to reflect the accomplishments and
performance that their company and its clients value. We applaud attempts to develop
organization- or enterprise-specific models, but caution those who undertake to carefully
consider the methodology they use and the problems that can occur.
We have developed a methodology to help clients interested in developing their own
specific competency models, or in refining generic models they may have purchased. Our
Performance-Centered Competency Assessment (PCCA) methodology is based on the
principles and guidelines that follow:
1. Start with the company’s mission and strategy, and an understanding of the business
context in which it competes.
2. Spend valuable resources wisely. Start with key job positions—those that are strategic in
nature and critical in terms of being able to accomplish strategy and business goals.
3. Identify and document the primary accomplishments and outcomes of value; link
accomplishments to business strategy and goals.
4. Document the primary events and activities that are performed to produce the desired
outcomes of value; do not attempt to capture every possible task involved in a job.
5. Analyze primary events and activities and work with top performers to understand the
required skills, knowledge, and personal characteristics or traits that predict or enable
effective performance.

PCCA Benefits
• Avoids analysis paralysis
• Produces definitions for outcomes and
metrics that can be used to measure
job performance
• Focuses on top performers
• Produces models that are appropriate
to client’s value-producing network
The output of the PCCA methodology is a preliminary model that can be validated both
internally (with staff and managers) and externally (through benchmarking). The result is
a valid, job-specific competency model that addresses accomplishments of value that are
important to the organization. Benefits of the PCCA include avoidance of some of the
typical problems associated with competency modeling. For example, the “analysis
paralysis” phenomenon can be avoided, and the model can be constructed in a timely
fashion. Additionally, the PCCA methodology results in the definition of outcomes for
which metrics can be defined to measure job performance. Furthermore, the PCCA
focuses on top performers to identify the accomplishments and outcomes that are valued
by the organization. Consequently, it eliminates the need to interview and analyze
mediocre performers to determine discriminating competencies.
The PCCA supports the development of competency models that are appropriate to the
client’s value-producing network. These models have high fidelity (e.g., they represent
how specific jobs are performed within a specific organization or enterprise) and reflect
good coverage of the competencies required within this context. As a result, the PCCA
methodology can be a very cost effective approach to the development of organization-
specific models.

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COMPETENCE, PERFORMANCE, AND COMPETENCY
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Apply What We Know

Cognitive Technologies is available to assist clients in using the PCCA methodology to

develop or refine their competency models. Our preferred engagement model is to begin
by working with senior management on strategy, vision, and challenges that impact
business success. Using this information we will work with the client team to select job
positions that are critical to the realization of strategy. Next, we provide team training on
the background and use of the PCCA methodology. After the initial training, we coach and
support the team as its members use it to assess and analyze one of the selected job
positions. This enables us to model and monitor the use of specific techniques for:
ƒ Eliciting critical information and performing the analysis that results in a preliminary
model, or refinements to an existing model
ƒ Compiling the information into a usable format
ƒ Validating the information using individual and group techniques.

After the competency model has been completed and validated for the selected job
position, Cognitive Technologies can provide follow-on review and coaching, if necessary,
as the client team builds models for other key positions within their organization or value-
producing network.

References:
Boulter, N., Dalziel, M. & Hill, J. (Eds.) (1998). Achieving the Perfect Fit, Gulf Publishing
Co.
Gilbert, T. (1978). Human Competence, McGraw-Hill.
Lucia, A. & Lepsinger, R. (1999). The Art & Science of Competency Models, Josey-Bass
Pfeiffer.
Spencer, L. & Spencer, S. (1993). Competence at Work: Models for Superior
Performance, John Wiley & Sons.

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