Think about two workers, each of whom are hitting their targets.
Nevertheless, one is teaching her teammates and considering strategically, whereas the opposite is coasting.
Beneath many efficiency methods, they’d each get the identical rating.
Competency-based efficiency administration provides a fairer answer. By shifting focus from duties to behaviors, it helps managers give clearer suggestions, and helps HR help actual growth.
This text breaks down why and how one can begin utilizing competencies to measure and handle worker efficiency.
What Is Competency-Primarily based Efficiency Administration?
Competency-based efficiency administration (CBPM) is a structured strategy to managing efficiency primarily based not simply on what workers do, however how they do it.
It begins with a competency framework—a set of expertise and behaviors that outline what good efficiency appears like. Management, communication and teamwork are frequent examples.
Somewhat than focusing solely on objectives or activity completion, CBPM measures how persistently workers exhibit the competencies that you simply’ve designated as being necessary.
“When completed nicely, competency frameworks could be extremely precious,” explains Leanne Elliott, occupational psychologist and co-host of the “Reality, Lies and Work” podcast.
“They assist outline what good efficiency really appears like, help fairer decision-making and make suggestions and growth conversations extra constant throughout groups.”
For instance, let’s say you’re the supervisor of a customer support crew, placing collectively a efficiency evaluation for a rep.
that they persistently resolve tickets throughout the anticipated time, however that doesn’t give the complete image of their efficiency.
A competency-based evaluation would look past pace:
- Is the rep demonstrating empathy?
- Are they documenting edge instances to enhance the data base?
- Are they escalating points proactively or recognizing patterns?
Beneath CBPM, their efficiency is evaluated not simply on quantity, however on competencies like communication, problem-solving, and possession. This offers you each a greater sense of their affect and development potential.
What’s the distinction between competencies, expertise, and values?
Truthfully, in on a regular basis dialog, these phrases are fairly comparable. However in case you’re constructing a competency-based efficiency framework, the distinction issues.
Right here’s how they relate:
- Abilities are particular skills an individual can study and apply within the office. Suppose: coding, writing, presenting, or budgeting.
- Values are core beliefs that information how somebody chooses to behave, like integrity, inclusion, or curiosity.
- Competencies are observable behaviors that mix expertise, data, and values—for instance, cross-functional communication or strategic considering.
So, to take our buyer help rep from earlier for example:
- They know how one can navigate the helpdesk system (talent)
- They imagine in being affected person with customers (worth)
- They persistently observe up to ensure points are absolutely resolved (competency: buyer communication).
Competency-Primarily based Efficiency Administration Vs Conventional Efficiency Administration
Conventional efficiency administration often focuses extra narrowly on whether or not workers hit their objectives i.e. they’re both assembly expectations or they are not.
And not using a competency framework, efficiency administration additionally tends to be backward-looking, reviewing how somebody carried out over the earlier quarter or 12 months.
And it may be fairly inconsistent throughout groups. One supervisor would possibly worth consideration to element or collaboration, whereas one other simply cares about hitting monetary targets.
CBPM nonetheless displays efficiency outcomes, however it additionally appears at how the work will get completed.
That offers a extra consultant sense of the worker’s actual contribution, as Elliott explains:
“Most jobs contain a mixture of duties and behaviours, not simply outcomes. Competency frameworks assist us measure that behavioural facet extra clearly, so long as they’re written with care and used persistently.”
Right here’s a useful desk to check the 2 methodologies:
| Dimension | Competency-Primarily based | Conventional |
| Focus | How work is finished (behaviors, expertise, and capabilities) | What’s achieved (objectives, outcomes, and deliverables) |
| Analysis standards | Competencies like communication, management, adaptability | Quantitative metrics like KPIs, targets, or gross sales quotas |
| Suggestions fashion | Ongoing and developmental, centered on conduct enchancment | Periodic (typically annual), centered on outcomes and scores |
| Growth planning | Personalised primarily based on talent/competency gaps | Typically reactive after evaluation outcomes |
| Alignment with tradition | Sturdy emphasis on organizational values and expectations | Much less tied to cross-organizational requirements |
| Use in promotions | Helps choices by displaying readiness through demonstrated competencies | Typically pushed by tenure or aim completion |
| Worker engagement | Encourages development mindset and inner mobility | Can really feel punitive or disconnected from long-term development |
Abilities-Primarily based Vs Competencies-Primarily based Efficiency
Competencies-based and skills-based approaches to efficiency administration are considerably comparable. Each begin by constructing a framework or matrix to map out what it takes to do nicely in your group.
They differ in utility, although:
- Abilities-based efficiency administration is restricted solely to expertise—the particular skills required in your group. This strategy could be helpful for figuring out expertise gaps, particularly in quickly altering industries. They will also be useful in fast-growing organizations, the place workers might have to maneuver flexibly from one function to a different.
- Competency-based fashions give a fuller image of the worker’s efficiency, as a result of they embrace not solely expertise, but additionally behaviors and values.
Consequently, in case your major precedence is studying and growth or expertise auditing, then a skills-based strategy would be the higher possibility.
Nevertheless, if you wish to enhance the evaluation course of or get a greater understanding of workforce efficiency, a competency mannequin could be a greater match.
The Enterprise Case for Competency-Primarily based Efficiency Administration
There’s a strong case to be made for switching to a competency-based strategy. As efficiency administration developments shift towards higher flexibility and steady growth, competency-based efficiency administration turns into extraordinarily helpful—which is why it’s in place at many quickly rising corporations like Lattice and Toggl.
Our specialists flagged a number of bottom-line advantages for CBPM:
It reduces bias
As Mollie West Duffy, the Director of L&D at Lattice, explains, utilizing a standardized framework “helps keep away from bias in efficiency conversations,” since managers are evaluating folks in opposition to constant standards relatively than private impressions.
It makes efficiency expectations clearer
Lattice makes use of their competencies framework for profession growth, too. Staff can see what’s anticipated at their stage and what it takes to get to the subsequent one. That turns evaluations into actual development conversations, and might encourage workers to larger efficiency.
It turns imprecise traits into clear, observable behaviors
In Deloitte’s 2025 World Human Capital Traits survey, solely 26% of organizations stated their managers have been very or extraordinarily efficient at enabling the efficiency of individuals on their groups.
That is the place competencies might help, by making supervisor suggestions much more concrete. As a substitute of ranking somebody vaguely on “collaboration,” they could search for behaviors like “shares related info” or “builds on teammates’ concepts.” That form of specificity makes expectations simpler to evaluate and simpler to satisfy.
It brings wanted construction to efficiency administration
A loosely outlined course of would possibly work in a small, close-knit crew, however as corporations develop, the cracks begin to present.
Dajana Berisavljević Đakonović, Head of Folks at Toggl, shared:
“For efficiency administration, we initially had a really “versatile” setup, the place we merely hoped managers would focus on efficiency throughout their 1:1s. Finally, we realized that wasn’t sufficient. We wanted one thing extra structured to obviously outline expectations and observe whether or not folks have been assembly them.”
A competency-based strategy offers a typical language for efficiency, which makes it simpler to align worker objectives with firm aims.
The 4 Key Elements Of A Competency Framework
A robust competency framework goes past an inventory of traits. It offers managers and workers a transparent, constant option to assess and develop efficiency throughout roles and ranges. Right here’s what it ought to embrace:
1. An outlined checklist of competencies
These are the core behaviors and expertise that matter most for achievement in your group. You would possibly group them into core (relevant to everybody), management (for managers and execs), and purposeful (particular to a job or division).
Every competency ought to have a written definition, to ensure you’re all utilizing it the identical method.
2. Behavioral indicators
These are particular, observable actions that present what a competency appears like at completely different efficiency ranges. As an illustration, underneath “communication,” a behavioral indicator could be “actively listens and paraphrases to substantiate understanding”.
These indicators assist managers give extra useful suggestions and make conducting efficiency evaluations simpler.
Right here’s an instance of a competency (management) and behavioral indicators for a Folks Operations function at Toggl:
3. Evaluation instruments
A competency framework is barely helpful if it may be utilized persistently. This typically means utilizing instruments like 360-degree suggestions, self-assessments, supervisor scores, and peer evaluations.
You don’t have to make use of each methodology, however you do want a dependable option to assess efficiency in opposition to the framework.
4. Growth planning
Competencies shouldn’t simply come up throughout annual evaluations. They should be built-in into onboarding, coaching applications, profession growth paths, and succession planning.
Right here’s an instance of how Toggl ties competencies into worker growth and promotion. Every function stage has outlined behavioral indicators for key competencies.
On this instance, you possibly can see the progressive behavioral expectations for management. A stage 2 worker would possibly exhibit management by taking initiative to establish alternatives.
A senior supervisor could be anticipated to affect a number of groups to attain complicated objectives. This strategy helps workers perceive what development appears like and how one can get there.
How To Select Competencies
“Begin by understanding what you wish to base the competencies on,” suggests West Duffy. “For instance, some organizations use their values as competencies, whereas others use extra skill-based competencies, e.g. communication, collaboration, and so forth.”
There are an countless variety of potential competencies, however this course of doesn’t should be overwhelming.
Begin by breaking your competencies down into buckets:
- Core competencies apply to everybody. They’re the baseline expectations for anybody working in your group—issues like communication, accountability, and collaboration.
You may additionally wish to think about role-specific competencies. As an illustration:
- Add management competencies (like strategic considering, teaching, or stakeholder alignment) for folks managing others or influencing route.
- Embody technical competencies, that are demonstrations of arduous expertise, akin to utilizing area or tool-specific data, like understanding Salesforce or how one can write a proposal.
- Layer on behavioral competencies, that are demonstrations of sentimental expertise akin to communication or adaptability.
You don’t want dozens of competencies. The truth is, much less is usually extra, says West Duffy: “Finest practices are to make use of a core set of competencies throughout all job tracks, for simplicity.”
The hot button is to jot down them clearly and tie them to particular behaviors, so suggestions doesn’t flip into imprecise character evaluations.
Elliott notes that it’s not at all times needed to begin from scratch, both. Many corporations start by adapting a generic mannequin, just like the SHL Common Competency Framework, then tailor it to replicate their very own wants.
The best way to Implement Competency-Primarily based Efficiency Administration
Able to get began constructing your individual competency framework? Right here’s how one can do it, step-by-step.
Step 1: Outline your aims
Get clear on why you are overhauling your efficiency administration program within the first place.
Do you wish to enhance worker growth? Create consistency throughout efficiency evaluations? Help higher promotions and profession paths?
Your objectives will form your framework and assist you to get management buy-in from day one.
Subsequent actions:
- Maintain discovery periods with HR, execs, and division leads
- Determine particular enterprise wants (e.g. stronger management pipeline, cultural alignment)
- Doc your aims and outline what success appears like
Step 2: Get stakeholder buy-in
A fantastic framework is ineffective if no one makes use of it. You want division heads, managers, and govt sponsors on board.
Begin by listening. Deal with how the dearth of a constant efficiency framework is at the moment impacting them. For instance:
- Managers could be feeling swamped by unstructured efficiency evaluations
- Executives could be extra involved about crew underperformance
- Gross sales leaders could be struggling to ramp new hires with out pointers on what makes a very good rep.
Then present how the brand new system can remedy these issues, with concrete examples.
Subsequent actions:
- Current your aims and early concepts to key stakeholders
- Share use instances that exhibit actual affect (e.g. lowering bias, bettering inner mobility)
- Safe help to pilot the framework with chosen groups
Step 3: Determine key roles and profession paths
Don’t begin with each function within the firm. Focus first on essentially the most crucial or frequent job households, that are often the place efficiency administration gaps are most blatant.
From there, map out how folks develop inside these roles. For instance, at Toggl, the Folks Ops profession path goes from Assistant, to Specialist, to Supervisor, to Senior Supervisor.
Subsequent actions:
- Determine on the high-impact roles or job households to begin with (e.g. buyer success, engineering, product)
- Map typical profession paths inside every operate
- Notice key transition factors, like IC to supervisor or junior to senior.
Step 4: Conduct job evaluation and collect enter
Now it’s time to dig into what excessive efficiency really appears like. You are able to do this by speaking to high performers, their managers, and cross-functional companions.
Evaluate job descriptions, suggestions developments, and efficiency knowledge. Keep in mind that you’re searching for expertise and behaviors, not simply outputs.
Subsequent actions:
- Interview 3–5 excessive performers per function
- Ask managers what units their high folks aside
- Doc behaviors, not simply duties, for every key function
Step 5: Construct your competency framework
Group your findings right into a centered set of competencies. Many corporations use a mixture of:
- Core competencies (e.g. communication, accountability — for everybody)
- Management competencies (e.g. strategic considering, creating others — for managers)
- Function-specific competencies (e.g. product data for gross sales, high quality assurance for engineers).
For every competency, write a brief definition and hyperlink it to your online business objectives. For instance:
Core Competency: Communication
Definition: Clearly and successfully shares info in written and verbal type, adjusting tone and strategy for various audiences.
Why it issues: Improves cross-functional collaboration and reduces expensive misalignment.
Subsequent actions:
- Finalize 6–12 core and/or management competencies
- Outline 4–8 role-specific competencies per job household, in case you determine you need that stage of granularity
- Write clear, action-based definitions for each
Step 6: Add behavioral indicators for every stage
For each competency, describe what it appears like at completely different ranges, from entry-level ICs to senior leaders.
These indicators assist managers give clearer suggestions and make development expectations express.
Instance (Management):
- IC Degree 3: Shares data and helps friends
- IC Degree 4: Mentors others and leads small initiatives
- IC Degree 5: Shapes crew technique and builds cross-functional alignment
Subsequent actions:
- Create 3–5 behavioral indicators per stage per competency
- Take a look at them with actual examples out of your groups
- Get suggestions from managers and workers to make certain they’re usable
Step 7: Combine into efficiency and growth methods
A framework solely works if it’s constructed into the methods managers already use, like efficiency evaluations, goal-setting templates, and growth plans. Make it a part of the method, not an additional activity.
Subsequent actions:
Step 8: Prepare and talk
Be sure that managers and workers perceive the aim of your new system, in addition to the construction and the way it advantages them.
Subsequent actions:
- Run coaching periods and construct reference toolkits
- Share inner comms (emails, slides, intranet posts) that designate the “why”
- Use actual examples to make it relatable and sensible
Step 9: Hyperlink to studying and growth
Your framework ought to feed straight into growth plans. For instance, if somebody scores poorly on “cross-functional collaboration,” their studying plan ought to assist them enhance that conduct.
Subsequent actions:
- Companion with L&D to map studying sources to every competency
- Construct recommended studying paths tied to evaluation outcomes
- Encourage workers to set objectives primarily based on their suggestions
Step 10: Evaluate
This isn’t a one-and-done undertaking. Your framework should evolve as your organization grows, and competencies will should be up to date often.
Subsequent actions:
- Survey managers and workers after every evaluation cycle
- Analyze utilization and patterns in evaluation knowledge
- Run annual retrospectives with stakeholders to refine and enhance
Competency-Primarily based Efficiency Administration: 7 Finest Practices
We requested our specialists for his or her tips about how one can implement CBPM, and the pitfalls to be careful for. Listed here are their high seven suggestions:
1. Don’t construct it in case you’re not going to make use of it
“Solely construct a competency framework in case you plan to make use of it correctly,” warns Elliott. Too many companies implement CBPM “only for the sake of it.” This can be a huge waste of everybody’s time:
“In case you create a framework as a result of it appears like one thing it is best to have, however it’s filled with imprecise labels like ‘crew participant’ or ‘good communicator’ and nobody makes use of it, it rapidly turns into meaningless. Folks received’t know what’s anticipated, managers received’t know how one can assess pretty, and the entire thing finally ends up being ignored.”
As a substitute, embed your competency framework throughout your Folks program, from recruitment to onboarding, from growth to promotion. “This brings consistency to how choices are made and makes expectations clearer for everybody.”
2. Hold it updated
Elliott additionally factors out, “Like the rest in a enterprise, frameworks want upkeep. As roles evolve, the framework ought to evolve too. If it’s not up to date often, it rapidly stops reflecting the truth of how folks work, is now not helpful and begins getting ignored.”
So, how typically do you might want to replace your framework? West Duffy suggests, “Organizations ought to replace competency frameworks each two to 3 years as wanted, to align with organizational adjustments.”
3. Describe actions, not traits
Be sure that to maintain your competencies linked to behaviors, not imprecise traits, cautions Elliott:
“‘Collaboration’, for instance, turns into way more helpful when it’s damaged down into behaviours like ‘shares related info’, ‘asks others for enter’, or ‘builds on teammates concepts’.
This type of readability makes it simpler for managers to evaluate efficiency and for workers to know what’s anticipated.”
4. Tie to efficiency, not simply potential
There’s an actual danger that basing efficiency administration on competencies signifies that you solely give attention to an worker’s potential, relatively than on how they’re really performing.
For instance, simply because somebody is a reliable communicator doesn’t imply that they’re at the moment utilizing these expertise of their day-to-day work.
This can be a truthful concern, says Elliott. “It often comes all the way down to how the framework is written. You should watch out that you simply’re not drifting into potential relatively than efficiency. That’s the place bias can slip in. However a well-built competency framework avoids that by specializing in particular behaviours—issues you possibly can really see somebody doing.”
5. Contain workers the place attainable
“A bit session upfront can go a great distance in constructing belief, getting buy-in and making the language really feel related,” advises Elliott.
“Verify the framework is smart to the individuals who’ll really use it and be open to suggestions. Some organizations construct in area for groups to recommend further competencies that replicate their particular work.”
6. Help managers with complete coaching
Managers would be the ones utilizing your new framework—and an absence of coaching can severely undermine the brand new strategy.
“With out clear behavioural definitions, sensible examples and correct coaching, consistency goes out the window and belief within the course of disappears,” says Elliott.
As a substitute, supply managers thorough coaching within the course of, in addition to clear documentation on how one can use it. You may additionally wish to run calibration periods the place managers examine notes on how they’re making use of the framework. That method, you possibly can catch any inconsistencies early.
7. Don’t use it as a substitute for job descriptions
Competencies frameworks present an summary of what we count on of a person at every stage inside a given crew or function,” says West Duffy. “Nevertheless, they aren’t a substitute for job descriptions. Job descriptions needs to be extra in depth, and are simpler to replace on an ongoing foundation as jobs and roles change.”
Competency-based efficiency administration isn’t a silver bullet. However, carried out thoughtfully, it could actually deliver much-needed readability, equity, and construction to how your group develops its folks.
Accomplished proper, CBPM received’t simply enhance your efficiency evaluations. It provides you with a shared language for development, and assist each worker perceive what nice appears like.
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