Competency-based performance management systems mean employee-oriented performance management systems. The emphasis is on the “how” of performance.
This means that there is a shift in focus from why an organization conducts business and performs to how it achieves optimal performance levels.
Contemporary organizations emphasize the development of employee competencies or skills for the achievement of long-term optimal performance.
Competency-based management systems developed in conjunction with the popularisation of the learning organization model in the 1990s.
The focus shifted to the competency of human resources in an organization. Competencies or talents are the foundation for people to achieve superior performance in any job.
Few organizations, based on research and experience, have a performance management system that contains all the elements necessary for a highly productive and motivated workforce.
A system for effective performance management starts with the identification of critical positions; agreement on the top hard and soft skills required for those positions and then provides the hiring, promotion, training, and evaluation practices necessary to put the right people in the right job.
A competency-based PMS helps to identify core positions within the organization, identify soft skills and competencies for the position and then provide training and development in the necessary competencies so as to achieve superior performance in any job and also can better meet the competitive challenges of today’s market.