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What Is Competency? Understanding the Competency with Practical Example

What is Competency?

Competency means any knowledge, skill, trait, motive, attitude, value, or another personal characteristic that is essential to perform the job and that differentiates superior from a solid performance.

Understanding Competency

People tend to mix up competencies and talents even though they are not similar. Competencies are cooperation abilities and understanding, on the other hand, talents are genetically inherited traits that an individual carries. Competencies are utilized as a baseline for evaluators to assess applicants in the hiring process and evaluations.

One of the most challenging issues a firm may encounter in recruiting is determining skill level in the first place; it can be hard to process what managers need to be efficient and effective.

Business Competencies

Firm competencies are information and skills that are crucial for setting priorities and running a business.

Some of the business competencies are listed below:

  • Ability to comprehend business
  • Expertise in cost-benefit analysis
  • Ability to delegate
  • Understanding organizational behavior
  • Organizational knowledge and understanding
  • Ability to manage projects
  • Marketing expertise
  • Ability to market ideas
  • Skills in documentation and record-keeping

Competencies have long been recognized as critical in shaping a person's thought processes. These have been used as part of a comprehensive plan to help employees focus their behavior on tasks that are absolutely essential to the organization's performance. 

They can give a standardized method for identifying and developing talent. Companies will benefit because it provides a representation of the benchmarks for present and prospective future positions - in other sense, it describes what "excellent" performance looks like.

Practical Example

K&G Limited has aimed to evaluate performance at various levels of the business using the same set of abilities. However, when the employee progresses up the ranks, he must demonstrate higher competency in the same.

An HR Executive may be considered to have a minimum of 7 (on a 10 point scale to 10) organizational skills as a competency, but a Regional HR Manager (to whom the content head responds) may be required to have a minimum of 8 or 9 in organizational skills to be competent. 

In Sentences

  • Competency means a collection of individual employee activities that are identifiable, demonstrable, and crucial to employees and organizational success.
  • Competencies are characteristics that a firm's hiring managers have determined are desirable in its employees.


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