Competency-based assessment – why is it so important? In organizations, that attach importance to the development of human resources knowledge is seen as one of the most valuable resources, and the right measurement of competencies is crucial. Based on the received results the evaluation is being made. This evaluation has a key meaning for the identification of real competencies in comparison to those desired.

Competency-based assessment – table of contents:

  1. Competency-based assessment
  2. The best way to implement HR strategy
  3. How to conduct a competency-based assessment?
  4. Advantages and disadvantages of the competency-based assessment

Competency-based assessment

Competencies of employees mean the specific level of knowledge and skill necessary for the right performance of duties. While the measurement of competencies is based on the analysis of the requirements of the position, the employee’s behavior, and achieved work results. It can be called differently as the audit that evaluates the level of skill and qualification of the selected employees in comparison to the competencies profiles that reflect the requirements. The results obtained answer the question of whether the competencies needed in the company are those the employees possess.

The well-conducted assessment of employee competencies should be transparent, and consistent with the company values and organizational culture. Moreover, each assessment has to be realized on different levels of ability while maintaining the highest level of objectivity.

It has to be remembered that we do not judge the individual but we assess his abilities and his professional efficiency which is important from the point of view of realized work and the duties assigned. The objectivity of the assessment can be affected by the tools used for the measurement and the professional approach of the person that makes the assessment.

Assessment methods

  • Tests – are the most popular method of diagnosis. With tests, one can measure the level of ability, analysis skills, concentration, reaction speed, way to resolve conflicts, and coping with stress. There are different types of tests: substantive (knowledge, language, skill), competency (more expanded, multiple-choice), situational (representation of real professional events), psychometric (features of the individual, psychological interpretation)
  • Interviews – the supplementation of the information acquired by testing. There are several types of tests: biographical (social and professional experiences), behavioral (typical behavior assessment based on previous events), situational (an interactive version of competency tests)
  • Assessment & development center – so-called integrated assessment, which is multifactorial, is the most advanced method of evaluation of the occupational potential of the employee. The assessment of skill, ability, and other features is important for the effectiveness of the organization. The assessment is realized with the aid of team situational exercises that are judged by experts
  • 360-degree assessment – used to assess the efficiency and competencies of specialist and managerial staff. The determination of strengths and weaknesses by self-assessment and an external evaluation. The suppliers of feedback can be co-operators, superiors, clients, and suppliers.

During the assessment of competencies, it is worth combining different methods to obtain more reliable results. In practice, it is realized by a combination of psychometric tests with the interview with the employee.

competency-based assessment

How to conduct a competency-based assessment?

While designing the assessment one should take into account several key aspects. The first of them is the setting of employee goals that should be consistent with the objectives of the organization and the competencies required in the specific workplace. The employees have to understand the strategy, mission, and vision of the company.

The assessment based on competencies should be set in the realities of the company. Before starting the assessment it is worth reviewing current competencies to actualize them systematically to match them with the reals needs of the organization. It is worth making sure that the scope of duties of the employee reflects the actual state of the realized tasks.

The next important aspect of the assessment is the selection of the right tools of examination that have to be well adjusted to the nature of work and held position. To minimalize the risk of making a mistake it is worth training managers regularly not only in the area of assessment but in motivation and feedback as well. The process of competency-based assessment allows integrating the managerial staff with the employees by showing them the necessary support, knowing their needs, and understanding their opinions.

The competency-based assessment has four main stages:

  • Designing – identification of the behavior (competencies) that are key for the organization. It enables the standardization of the process and facilitates the implementation.
  • Preparation – a collection of information about the selected employee. All the right logistic and time requirements have to be fulfilled.
  • Evaluation – explaining the goal of the assessment to the employee. Listening and responding to his questions.
  • Interpretation – the obtained results should contain unequivocal and constructive feedback that has to be discussed with the employee. In case of negative evaluation, one should take appropriate corrective actions.

Advantages and disadvantages of the competency-based assessment

Undoubtedly, the realization of the competency-based assessment determines the achievement of great results in the future. Does it mean that all organizations should utilize this system of employee assessment? Before making the decision one should analyze the aim of the process and the cost of the competency-based assessment. Among the most notorious disadvantages of the method is the consumption of time, limited financial resources, false assumption that all employees expect that they will get the opportunity to increase their competencies and obtain new knowledge.

The preparation of the catalog of new skills and development of profiles of competencies surely is not an easy task and requires the deeper engagement of the management staff. One can use the ready-made profiles of competencies available on the market, but there is a risk that they may not be suited for the specificity of the organization.

The realization of this method of assessment is closely related to the implementation of the competencies management, in which design and implementation are not only time-consuming but require a huge financial investment. High costs appear already at the stage of the building of new competencies. The most important expenses are related to training, workshops, coaching, and delegations.

Hence why it is worth verifying if the advanced system of assessment does not exceed the financial capabilities of the company. Concerning the mere professional development of employees, it has to be taken into account that not all employees are interested in gaining new competencies, and it is not necessary for all of the available positions in the company.

After these considerations, it has to be mentioned that the competency-based assessment has some advantages too:

  • attracting to the organization and retention of employees with competencies to achieve the right level of productivity, and to maintain the balance
  • facilitation of recruitment of qualified employees that have special skills
  • reduction of recruitment cost by the employment of the right people, as well as the limitation of fluctuation level in the longer term
  • facilitation of identification of competencies gaps, by the adjustment of the training system to the factual needs


The main aim of the competency-based assessment is the realization of the business objectives and achievement of measurable benefits by the organization. To make this possible the criteria of evaluation have to be set to connect with the routinely performed tasks and the profile of activity of the company. Moreover, the process of evaluation should derive from the human resources management strategy that is based on competencies.

This makes easier the evaluation of requirements the organization puts in front of employees. On the other hand, the employee has well-defined duties and knows how to realize them to gain maximum efficiency and job satisfaction. The development of competencies is stable and guarantees additive value not only for the company and for the employees.

Read also: Global leadership trends in business for 2022 and 2023

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Author: Nicole Mankin

HR manager with an excellent ability to build a positive atmosphere and create a valuable environment for employees. She loves to see the potential of talented people and mobilize them to develop.