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Why Organizations Use Competencies

Knowledge of competencies and competency modeling is increasingly important for workplace learning professionals tasked with learning results. Most front-line learning and performance professionals and their managers have encountered competencies or competency modeling in their careers, but few of these professionals have had any formal training on these topics. Our goal is to address this deficiency so that you can put these powerful, productivity-enhancing tools to work in your organization.

Why Competencies Are Important to Organizations

Research suggests that some individuals may be 20 times more productive than others. Clearly, any CEO would welcome as many of these individuals into an organization as could be mass produced. Matching individual competencies with job competency models puts individuals in positions where they can contribute most. Competency learning cannot promise a 20-fold increase in productivity, but it will move people in the right direction.

If developing talent is critical to the future success of organizations, then understanding and using competencies to create a more talented workforce is key to maintaining a competitive edge. Learning and performance professionals have an important role to play in this future success through the use of competencies.

Competencies in Organizations

Competencies are not about duties, they are about people. In that respect, they are different from job analysis (a process) and its traditional output (a job description). Theoretically, all HR efforts should be based on job descriptions. Unfortunately, job descriptions focus on the work, not on the unique characteristics of people who are successful doing the work. As a result, job descriptions often fail to address measurable results; and since job descriptions are based on activities or duties, they may change quickly as organizations recognize work assignments or change how the work is done.

As an example, consider the job description of an executive assistant. A typical work activity on a job description might read, "types letters, reports, travel vouchers, and other documents." But that description of an activity does not indicate how many letters, reports, travel vouchers, or other documents are actually produced, how much of the work involves typing, how critical typing is to overall job success, and what measures are used to determine success in that activity.

Competencies are more enduring than job tasks. Competencies focus on the characteristics of people who are successful performing the work. Competencies are part of people, not the work they do. Competencies do better in pinpointing the unique characteristics of people that lead to success. This has been overlooked or poorly identified in most traditional job descriptions, which typically have a brief list of knowledge, skills, and abilities that may not be specific to the job and may only cover technical skills.

As a simple example, a job description for a janitor might indicate that a successful applicant would possess a high school diploma. It might further indicate that job incumbents should "know how to operate floor polishing machines, use a broom and a mop." It might go further and indicate that "the janitor is willing to take initiative." But of course, these requirements provide little information about what is really needed to perform this job successfully. For instance, what competencies can we assume are present in a high school graduate and how many are really necessary to do this job?


Organizations that understand the characteristics of those who get the best results develop a competitive advantage. They are better positioned to recruit, select, develop, reward, and promote the most successful people. Hence, competencies are an important tool, much like a compass, to find direction in attracting, developing, retaining, and positioning the best, most productive and promotable people. In this regard, competencies are the "glue" that holds talent management programs together.

For example, ABC Corporation manages a chain of fast food restaurants. Several years ago, ABC developed competency models for all positions in the restaurant, such as cooks, counter personnel, and people at various levels of supervision and management. Now when hiring, they use the competency models to guide their behavioral interviews. Competency gaps identified during the hiring process help to determine appropriate individual development plans. Staff who are motivated to move up in their jobs work to develop competencies required by more advanced, higher-paying positions. Competencies support organizational capabilities.

Successful organizations possess capabilities that differentiate them from the competition and help them achieve strategic objectives. For example, organizations can excel at innovation, reliability, efficiency and low cost, or speedy delivery of services. These organizational capabilities must be supported by the right collective mix of competencies. Strategic objectives imply that some competencies will be needed more than others to achieve results. Organizational leaders can operationalize strategy by clarifying what competencies are needed to achieve future strategic objectives. For example, XYZ Corporation manages homes for senior citizens. XYZ has identified core competencies and values that are key to its growth strategy and are required of all associates. These include compassion, communication, and customer focus.

Why Learning Professionals Should Use Competencies

Whether the goal is to narrow a performance or developmental gap or to leverage a performance or developmental strength, competencies can be useful to learning and performance professionals for several reasons:

  • Competencies pinpoint what is important. By studying those who get good results and what makes them able to get those results, learning professionals can focus training or even create a developmental strategy. If it is true that most development occurs on the job, then training is only one way to build competencies. Other ways to build competencies include receiving coaching from one's supervisor, networking with peers, watching strong performers, accessing a knowledge database that provides standard operating procedures or information on how similar issues have been handled successfully in the past, participating in a problem-solving group, joining a community of practice, or using more traditional approaches such as reading books and articles or watching DVDs or online videos.
  • Some organizational leaders believe that developing people requires attention to a 70 - 20 - 10 percent rule. According to that view, 70 percent of all competencies should be developed through real-time, on-the-job experiences that are intended to build the competency; 20 percent of competencies should be developed through networking with associates in person or online (such as communities of practice or using Web 2.0 technology); and only 10 percent of competencies should be developed through planned training. For example, suppose a manager wishes to develop an individual's competencies in budgeting skills. Training is only one way to do that. A more effective way might be for the manager to assign the person to work on a current department budget with the coaching of the manager. The manager may identify others in the organization who do a good job in budgeting and ask the person who is being developed to approach those people for advice either through face-to-face meetings or by virtual interaction.
  • Competencies can tie training to other HR efforts. As common denominators, competencies help describe what abilities the organization needs and how to acquire them. Competencies can be part of employee hiring, on-boarding, performance appraisal, compensation, and succession planning.
  • Competencies can make it easier to communicate with workers about the qualifications needed to be considered for future work in the organization. With competency models, individuals are given ways to assess themselves - or involve others in providing valuable feedback. Multi-rater, 360-degree feedback assessments are frequently used for this purpose, particularly for soft skills, but increasingly for feedback on technical performance or skills. Individuals gain information that can be used to compare their own competencies to those required for other positions within the organization. Individuals receive valuable feedback for improving their readiness for more advanced positions and thus furthering their careers.

Competencies provide a means to discuss career paths and articulate specific ways to develop oneself or leverage one's strengths.
This is an excerpt from Competency-Based Training Basics, an ASTD Press publication. It can be purchased here.


William J. Rothwell is professor of learning and performance in the Workforce Education and Development program, Department of Learning and Performance Systems, at The Pennsylvania State University, University Park campus. Before arriving at Penn State in 1993, he worked 20 years as a training director in government and in business. He has also worked as a consultant for more than 40 multinational corporations - including Motorola, General Motors, Ford, and many others.

James Graber, organizational psychologist, is managing director of Business Decisions, Inc., Chicago, Illinois, a company he founded in 1981. During his 30 years of consulting, he has worked for more than 100 domestic and international clients, including organizations such as McDonalds, United Airlines, Panasonic, General Motors, Abbott Labs, the U.S. Navy, the City of Chicago, and for numerous clients in Australia, Europe, South America, Asia, and the Middle East.

About the Author
William J. Rothwell, PhD, SPHR, is the president of Rothwell & Associates ( and professor in the Workforce Education and Development Program at the University Park campus of Penn State University. As a researcher he has been involved with the last five competency studies conducted by Association for Talent Development (ATD, formerly ASTD). In 2012 he won the association's prestigious Distinguished Contribution Award. He is author of 81 books and 250 articles in the field and had 20 years of experience in government and the private sector before becoming a college professor in 1993.
1 Comment
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That one should be flexible about the 70:20:10 approach is a key take away for me. Great read!
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