Competency-based reviews help you evaluate and guide interviewees and current employees to focus on their strengths and help address their weaknesses.
Performance appraisals are a great way to evaluate how employees operate within your business and give them the guidance they need to improve their performance. As a manager, competency evaluation can be a powerful tool for you to use when interviewing recruits or coaching current employees to increase their value in the workforce.
You might be wondering, “What should I look for in competencies and how do I use them?” You’ll be surprised to hear that competency-based performance appraisals can be easily understood and, with the right approach, can be a powerful tool.
Every enterprise is a learning and teaching institution. Training and development must be built into it on all levels, training, and development that never stop.
What are Performance Competencies?
Performance competencies are integral components of a performance management system, representing the values and skills deemed essential for effective job performance within a company. When hiring a new employee, competencies are the standards on which you base your assessment of the interview.
Questions to consider when hiring someone: Do they match our core focus? Could we improve their skills to suit our business with training?
Evaluating current employees can help you understand how well they are working within the company and help focus training or efforts for improvement.
Questions to consider when reviewing an employee: Have they maintained their performance in the necessary competency categories? Is there room for improvement, and what is the best way to word my comments?
How to Define Core Competencies and develop a competency based performance management system?
As a manager, you can select the core competencies for your department or team. Depending on your business model, and what you’d like your employees to focus on, necessary competencies will change.
How should you determine what competencies are necessary for your employees? Consider these three areas:
1. Job Responsibilities
What are the core elements of an employee’s responsibilities?
Consider what their day-to-day tasks might be, challenges that will be faced, and how you expect them to respond to these challenges.
For example, if you are hiring someone for a front-end retail position, your core competencies might be: customer service, communication, and teamwork.
If you are reviewing the performance of an engineer, consider core competencies such as technical skill, decision-making, and planning and organizing.
2. Expectations
During a performance review, it’s wise for a manager to think about their expectations for the employee. Thinking about the level of performance that you anticipated for an employee as well as their potential for development, can help you evaluate the reality of their performance. Additionally, you may look at their previous work performance to see how their current performance measures up against the past, and if they’ve learned from experience.
It is a good practice to set clear expectations and assign goals to help current employees become a better asset to your business. If they excel in a competency, expect them to continue to excel—a dip in performance could indicate an issue needing immediate resolution. If there is room for improvement, set a specific goal for them to achieve in the period between reviews.
3. Lack of Competency
You might find that after setting core competencies, some people do not meet the required standards. This might be a major red flag– however, it’s important to evaluate your options.
Most core competencies can be developed through training or mentoring, and many can be improved with the right guidance. However, there are some competencies that cannot be easily developed, and can negatively impact an employee’s quality of work each day. For example, poor technical skills can greatly impact an employee’s contributions to an organization.
Competencies Evaluation
When evaluating employee performance competency evaluation plays a crucial role in identifying strengths and areas for improvement. But it’s not just about ticking boxes—it’s about aligning the individual’s capabilities with the business’s goals. To make competency evaluations more effective, here are some essential points to consider:
1. Clearly Define Core Competencies
- What are the key skills or behaviors required for success in each role?
- Are these competencies aligned with your business objectives and team needs?
Clearly defined competencies like teamwork, problem-solving, and communication help make the feedback specific and actionable.
2. Evaluate How Competencies Impact Daily Performance
- How does an employee demonstrate competencies like teamwork in day-to-day tasks?
- Are they using their strengths to solve problems effectively or contributing to group goals?
Competency evaluation should focus on how well an employee applies these skills to everyday tasks, which is crucial for the overall success of the team and company.
3. Provide Specific and Actionable Feedback
- Are you giving actionable feedback? For example, instead of saying, “Work better with the team,” suggest how they can improve collaboration, like initiating team discussions or sharing updates regularly.
Providing examples of success and where they can improve is needed for employees to understand precisely what they can work on.
4. Incorporate Regular Check-ins
- How often are you assessing competency? Is it part of ongoing feedback rather than only during formal performance reviews?
Regular check-ins allow continuous improvement for employees to stay on track or adjust as needed. This also helps to create a culture of transparency and trust.
5. Adapt Competencies to Changing Business Needs
- Are the competencies you’re evaluating still relevant to the current business goals?
- Are there new skills or competencies added as your company evolves?
As businesses grow and shift, competencies should evolve, too. Regularly revisiting your competency framework is vital to keeping it relevant to both employee and organizational needs.
Framing competency evaluation is a dynamic and ongoing process; these steps help managers and employees work together toward continuous improvement. Instead of a one-time event, competency evaluation becomes a tool for long-term growth, helping to build a stronger, more capable team.
Benefits of Evaluating Competencies
If you are looking to hire someone to fill a position, understanding core competencies can help you evaluate who would be a good choice for the job. Oftentimes, not all candidates will check all the necessary boxes, but by evaluating their core competencies you can understand if you’re able to train or build them into your ideal employees.
When a performance-based appraisal is done with current employees, you can address your employees with how the business wishes to function; what core values they should be focused on, what they can improve, and how they can meet the standards set by the company.
Overall, this can improve performance as you and your employees have a firm understanding of one another’s goals and how you plan to achieve those goals.
When Reviewing
When you are reviewing your employees and giving your comments, it’s important to do two key things:
1. Reinforce competencies
If your employee has continually demonstrated a special skill in a specific competency area throughout evaluations, it’s important to reinforce this with positive comments so that they continue. This is more important if you have marked growth in the employee. If you are able to, try to provide an example scenario. For example, “Your teamwork has been consistently amazing. We especially loved how you worked with John and Jane on the previous project.”
2. Provide Constructive Reviews
As stated by Charles Schwab when interviewed by Dale Carnegie in How to Win Friends and Influence People, “I consider my ability to arouse enthusiasm among my people the greatest asset I possess, and the way to develop the best that is in a person is by appreciation and encouragement. There is nothing else that so kills the ambitions of a person as criticism from superiors.”
Following this, try not to format criticism as a long list of all the ways an employee has failed to meet expectations. Instead, focus on encouraging them with constructive criticism to help them perform better.
Compare these two examples:
Bad: “You don’t communicate with your team well.”
Good: “Make a concentrated effort to communicate more with your team so that we can all work together towards our collective goals.”
How Competency Evaluation Drives Employee Development
Competency evaluation isn’t only about assessing performance; it’s a tool for boosting employee growth and aligning their goals with the company’s objectives. Here are some competency-based evaluations that can help
Identify Strengths & Opportunities for Growth
Use the evaluation to highlight what your employees do best and where they can improve. For example, if an employee excels at teamwork but needs help with time management, focus your feedback on developing both areas.
Set Clear Development Goals
After identifying areas for growth, set actionable goals with your employees. For instance, if communication is an area of improvement, you can set the goal for the employee to attend a communication skills workshop within the next quarter.
Use PIP (Performance Improvement Plans)
If a competency gap is significant, implement a performance improvement plan (PIP). This plan should include clear benchmarks, a timeline for improvement, and regular feedback sessions. For example, if an employee’s technical skills lag, outline specific milestones for progress and training sessions.
Utilize IDPs (Individual Development Plans)
IDPs are essential for ongoing development. These plans focus on long-term career growth. A good IDP might involve setting educational goals, mentorship opportunities, and projects that stretch the employee’s capabilities. If an employee shows potential in leadership but lacks experience, you can plan mentoring sessions and leadership training programs.
Connecting competencies with development strategies like PIPs and IDPs creates a roadmap for employees to grow, improve, and thrive. These plans help them focus on areas that need improvement and motivate them by showcasing a clear path to success within your company
12 Performance Appraisal Competency Examples
To help you build your core competencies for a performance review, here are 12 core competencies.
These examples are relatively general and can be adjusted for use in any department or industry. We’ll first provide a competency statement example to help you understand how these evaluations should be structured, and then we’ll offer up some examples of performance evaluation comments, including competency & career development plan appraisal comments
1. Problem Solving
Example: “Employees can identify problems in a timely manner and rectify them without issue.”
Praise: “Your ability to effectively diagnose complex problems and find simple solutions is outstanding.”
Constructive comments: “If you’re addressed with a problem you’re unsure how to solve, try to ask myself or one of your peers for help. Finding solutions is a team effort, and together, we can come up with solutions that work for everyone.”
2. Decision-Making
Example: “Employee has shown to make decisions when asked, and has been able to follow through on those decisions with the best of their ability.”
Praise: “You’ve shown great initiative making decisions that have led to good outcomes. We’re proud to have you as a part of our team.”
Constructive comments: “When making decisions, try to understand the whole situation so you can make the best judgment on it. One good idea is to weigh the pros and cons to understand if the outcome will be the best.”
3. Teamwork
Example: “Employee has been an integral part of the workforce and has acted in team efforts responsibly.”
Praise: “You’re great with working with our team, and everyone values your input.” Or, “You’ve shown great leadership and are great at playing to everyone’s strengths.”
Constructive comments: “It’s great that you succeed in doing your job, but when others need help, try to offer help or even praise to cheer them on.” Or, “Try to communicate more with your team to best understand how the team can work towards our collective goals.”
4. Work Ethics and Standards
Example: “Employee has worked hard towards the company’s goals and has met standards of goals worthy of praise.”
Praise: “We’re so thrilled you put in your best work and would love to extend our congratulations. Good job, as always.”
Constructive comments: “We want you to embody our company’s ethics and standards. Here are a few suggestions we can work on to improve that.”
5. Focus
Example: “Employees have focused on their tasks without giving in to distractions and been able to handle unavoidable distractions in the workplace without degrading their work performance.”
Praise: “We love how you’re able to tackle a job and get it done without breaking from it.”
Constructive comments: “Sometimes it seems like you’re distracted. Are there any tasks that you’re doing that seem like too much of a strain of attention, or anything distracting you we can change?”
6. Ambition and Motivation
Example: “Employee has shown great motivation for work, and has been ambitious within the workforce to improve performance and provide additional benefit to the company.”
Praise: “We can’t be more amazed that you’ve improved this much. Great effort, we’re proud of you.”
Constructive comments: “We’ve found that you sometimes focus on some aspects of your job over others. How about we talk about what’s bothering you with those areas and propose a solution?”
7. Honesty and Integrity
Example: “Employee has shown up for work on-time, shown honesty towards their level of work, and has been up-standing in their integrity of work.”
Praise: “You’ve had a stellar track record of timing-in that has kept this company working smoothly.” Or, “Your work has been great and you have great pride behind it. You should be proud.”
Constructive comments: “Remember it’s OK to speak openly about things that are problematic with myself or other people of management.” Or, “This one job was done great, you should borrow the same pride from that onto your other work and make them just as good.”
8. Adaptability and Flexibility
Example: “Employees have proven to be flexible in their duties and have easily adapted to scenarios outside their normal work duties.”
Praise: “No matter what is thrown at you, you seem to be able to handle it. That makes us proud to have you as a part of our company.”
Constructive comments: “We find your job duties might be overwhelming you. Let’s schedule some additional training in the field you seem to be hindered by to help you out a bit.”
9. Planning and Organizing
Example: “Employee has created plans that they have followed through with, and has shown great organizational abilities that benefit workflow.”
Praise: “It’s amazing how well you can plan and organize your job duties and we’re impressed on how thorough and simple to follow.”
Constructive comments: “When tasked with a big project, try to work out a plan of action and tackle each step one by one.” Or, “To ensure your working conditions are as efficient as possible so you don’t run into issues. Try to organize a bit more.”
10. Communication
Example: “Employee has respectfully and effectively communicated with customers, fellow workers, and management.”
Praise: “Customers and your fellow coworkers all feel like you can communicate with great ability. We really value that in our company.”
Constructive comments: “When explaining things to other people, try to keep in mind they might not know what you’re talking about. It’s best to thoroughly but concisely explain your thoughts.”
11. Technical Skill
Example: “Employee has shown great technical skill pertaining to their work.”
Praise: “Your skills are astounding and it really shows in the quality of work you do.”
Constructive comments: “Sometimes it seems like you lack a certain understanding of your job. That’s perfectly natural and fine, but we’d like to offer you some training or guidance to help you build your skills.”
12. Customer Service
Example: “Employee has been able to provide great customer service to ensure customers have the best experience the company can provide.”
Praise: “Customers always adore you and say you’re the reason why they do business with our store. We’re so happy to have you part of our team.”
Constructive comments: “Try always to keep an open mind with customers, even if they seem a little irate. Oftentimes, if you maintain a good demeanor and build relationships with them, they’ll appreciate your effort.”
Frequently asked questions on Competencies based performance management systems.
Question 1 : How do you write a good competency statement?
A good competency statement either reinforces the strengths or gives clear direction for improvement of weak competencies.
- A good competency statement in case of positive feedback should be about further reinforcing the competency and providing challenging opportunities to build the strength further.
- A good competency statement in case of negative feedback or weakness should always include a future plan of action for improvement.
Question 2 : What are the competencies of performance? What is an example of competency?
These are key competencies directly affecting an individual’s performance. Some of these can be personality based or learned competencies. The 12 performance competencies examples in the article are given below.
- Problem Solving
- Decision-Making
- Teamwork
- Work Ethics and Standards
- Focus
- Ambition and Motivation
- Honesty and Integrity
- Adaptability and Flexibility
- Planning and Organizing
- Communication
- Technical Skill
- Customer Service
Question 3 : What are competency statements?
Performance competencies are the values you and your company have selected as the most integral skills or characteristics an employee must possess to do their job effectively. The statements which assess, evaluate and analyze these key characteristics or skills are called competency statements.
Example of competency statement for communication competency:
“Make a concentrated effort to communicate more with your team so we can all work together towards our collective goals.”
Performance Competencies in Profit.co
Profit.co’s performance management software allows HR administrators and managers to conduct customizable, detailed, and efficient performance reviews that work for both reviewers and employees. Now users can create configurable Review templates and Q&A Templates based on their organizational needs. The review templates can be saved and used in the future.
Profit.co supports two types of performance reviews– standard reviews, and affinity-based reviews. Standard reviews– also called conversation and feedback reviews– allow HR administrators to customize a collection of open-ended questions answered by both managers and reviewed employees.
While standard reviews include competency rating scales, affinity-based reviews are more reliant on competency rating scales to help quantify employee skills and attributes.
HR administrators can assign competencies into groups, and designate competency groups for each department or team, ensuring that all the skills or attributes that employees in certain areas of the company need to be evaluated on are available during their review.
Managers can view employee’s previous performance reviews during new reviews and note any improvements or lags in performance.
This software makes it easier than ever to create competencies and evaluate employees with an organized record of performance, experience, and feedback.