The key tasks of human resources management in an organization are:

* To ensure right staff is recruited into the organization
* Retain top performers in the system
* Define a career path for the employees
* Improve non-performers and enable them to achieve

The common denominator in each of the above points is competency management. Competency is defined as the skill or the ability to do the assigned job effectively. Competency management starts with competency definition, where the human resources team brings together all stakeholders (for instance, executive management, operations and delivery and marketing) to the table. The human resources staff conducts interviews and workshops with the stakeholders and thereafter identifies the competency with the associated roles. Positive and negative indicators are set for the competencies identified. The competencies required for staff can be classified into two, viz. core competencies and job specific competency. An example of core competency would be team work and that of a job specific competency could be specialised knowledge in a particular domain.

Competency based management can be applied effectively to each key task of the human resources function.

Recruitment Process
The recruitment process is of paramount importance for an organization. It is the most difficult phase to judge a candidate due to lack of time available. Thus it is important that the tests used to evaluate the candidate are based on the core and specific competencies that the organization is looking for. In companies like Cisco Systems, the candidate needs to clear five rounds of interviews before being given an offer. Infosys for example stresses on the evaluation of analytical abilities of the candidate through puzzle solving exercises.

Key Employee Retention
To identify the top percentage of employees that the organization considers to be important, it is essential to have a competency based review framework. The competency evaluation of the employee can be clubbed together with the half yearly or yearly objectives reviews. While the objectives can be associated with measurement criteria, competency evaluations would be predominantly done through citing examples and positive or negative indicators related to the competency. Competency ratings can be effectively used to determine whether an individual is ready for promotion or not.

Defining a Career Path
Since competencies are defined for each role, it becomes simpler for the human resources staff to define a career map. Each step in a career map associated with a set of competencies implies that the employee can analyze the competency gap between her assessed competency and expected competency for the next role. Thus, the employee can work on the identified competency gaps and plan a role transition. Such a system if followed in spirit can create a healthy, transparent and high performance organization.

Improving non-performers
Not all individuals are alike, sometimes a push in the right direction is what it takes to make an individual a high performer. In large organizations, it is quite possible that individuals get neglected or incorrectly deployed by the system. For instance, staffing a project with a person whose competency or domain expertise doesn’t fit can turn a good performer to a non-performer. Having an institutionalized competency evaluation and recording system would not only help prevent such instances, but also help the individual to understand the gaps in her competency and work towards improving them. For example, a person might be an expert in her domain but having low competency in oral communication would make her being perceived as incompetent.

Based on the overall competency of an organization, a competency based management helps in identifying the training that would benefit the organization most.