The Incompetence of Competency Models: Why They Fail (And How to Fix Them)

By Emily Lambert

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The Future of Competency Models, Part 1. The words “competency model” may feel a little dated, but competency models when created and used correctly are only just reaching their heyday.

At the end of the day, the goal of a competency model is to define potential. Competency models determine the competencies the knowledge, skills, and talents needed to be successful in a role and/or an organization. Competency models can be used at any stage of the employee lifecycle, informing talent decisions in hiring, internal mobility, employee feedback, promotions, succession planning, and identifying emerging leaders.

Competency models have had their share of problems and concerns over the years, but with the introduction of AI into HR practices, and with the collective shift from a focus on skills and knowledge in talent acquisition and management to focus on talents, we are entering a new age of competency models.

Why Competency Models?

Competency models can be extremely useful to your organization for a variety of reasons. First, they can summarize the expertise of people who know what success in leadership or a role looks like, so that it can be easily communicated with others. This can be extremely helpful when multiple stakeholders are involved in talent acquisition and management decisions.

Competency models can be applied across endless use cases, too. Are you hiring? Use a competency model to determine which capabilities should be used to select a person for a role. Do you need to provide employee feedback? Use a competency model to provide a common framework and language for what employees need to do to reach the strategic goals of the business. Do you need to identify emerging leaders for your high-potential programs? Use a competency model to determine which capabilities should be used for emerging leader selection.

All of these benefits, of course, hinge on whether or not your organization is leveraging competency models correctly. If not, the result can be disastrous.

The Problem(s!) With Competency Models

They're Too Subjective

Too often, competency models are based on subjective opinion. Decision-makers may sit in a room and pronounce, “I believe this is what makes a top performer in the role” or, “I believe this current employee has it, let’s base a competency model on it.” “It” refers to a “secret sauce” that makes up a top performer, but oftentimes, these decision-makers are unable to define what it is.

Not only is this process not very predictive of future on-the-job success, but it can actually be quite biased after all, when organizations hire and promote people based on subjective opinions that include “likeability,” organizations are going to get more of the same type of people, without giving diversity a fighting chance.

They're Too Expensive, Without the Scalability to Be Worth the Investment

If an organization wants to go from a subjective competency model to a data-driven one, there’s really only one option: hiring a consultant. 

Whether you're hiring a consultant like Korn Ferry or hiring a senior organizational development consultant as an internal full-time position, consultants who develop competency models often have PhDs in Industrial/Organizational (I/O) Psychology. The discipline of I/O Psychology has developed the method that is most widely agreed-upon to be the best at producing competency models that will predict with incredible accuracy what skills, knowledge, and talents will lead to success in a given role or organization. However, the process is very laborious. It can take weeks (even months) for consultants to observe and study roles within an organization and develop a predictive competency model based on that research (not to mention it costs an arm and a leg).

The result? Competency models informed by the expertise of I/O Psychology consultants are reserved for Fortune 500 companies, who have the resources to allocate to such research. Even then, these expensive competency models are usually only developed for a select few roles, oftentimes director-level or above.

The Pitfalls of Gamified Competency Models

Many organizations looking for an alternative to time- and resource-consuming consulting services when developing predictive and objective competency models turn to gamified assessments. These are often reserved just for talent acquisition (and are not designed for talent mobility at any other stage of the employee lifecycle, like succession planning and promotions) and require applicants to play a series of games that assess traits like agreeableness, effort, planning, and risk preference.

The competency models for these gamified assessments are determined by an internal benchmark. This often involves a several week process in which current employees play these neuroscience games to develop a benchmark for success.

The caveat? In order for these benchmarks to have any level of validity, 50-100 people in that specific role must play the games. That means these competency models can only predict on-the-job success for roles that have a critical mass of employees.

A New Age For Competency Models

For all the shortcomings that competency models have experienced over the years, competency models are truly at a turning point. The introduction of AI into HR practices means that the expertise of I/O Psychology can finally be scaled and democratized, making the predictability and objectivity of consulting services available to every organization and every job not just for senior positions or roles that have 50+ employees.

Stay tuned for the next blog post in our Future of Competency Models series, in which we make a case for talent-based competency models and how they’ll re-define how we acquire and manage talent in the future of work.