What is a competency framework model

A competency framework model is a structured system organizations use to define, measure, and develop the skills and behaviors needed for employees to perform their roles effectively. 

Competency models outline the specific competencies required for each job function and provide a foundation for various HR processes, such as recruitment, performance management, and professional development.

The set-up of competency models can vary depending on the organization's size, industry, or employee career levels (for example, individual contributors versus leaders).

The competency model can integrate with various HR processes, such as:

• Talent management: Identifying and developing high-potential employees and planning their succession
• Learning and development: Designing training programs addressing competency gaps and supporting career growth
• Compensation and rewards: Aligning compensation and reward systems with the competencies valued by the organization
• Employee engagement: Enhancing engagement by providing clear career paths and development opportunities based on the competency framework
• Performance management: Providing a clear and objective basis for evaluating employee performance (with competency-based performance reviews)

What are the key elements of a competency framework model?

1. Competency categories

A model can consist of four broad categories of skills or behaviors: core, leadership, functional, and technical competencies. However, not all of these categories must apply to every organizational role.

Core competencies

Core competencies are unique combinations of skills, knowledge, and abilities that differentiate a company from its competitors and enable it to create value for its customers—they are deeply ingrained in the organization's culture, processes, and operations.

Core competencies are essential for all employees within the organization, regardless of their specific roles. Some examples of core competencies are:

• Communication
• Teamwork
• Empathy
• Problem-solving

Managerial and leadership competencies‍

Managerial and leadership competencies are the skills, behaviors, and traits individuals in managerial or leadership positions need to lead teams and organizations effectively. Some common leadership competencies are:

• Change management
• Strategic thinking
• Empowering others
• Business strategy
• Managing employee performance

Role-specific (functional and technical) competencies

Functional competencies are the specific knowledge, skills, and abilities required to perform tasks and responsibilities within a particular job or department. 

Technical competencies refer to the specialized knowledge and skills required to perform specific technical tasks and use particular tools or technologies. 

Both functional and technical competencies are often linked to specific roles or functions within an organization and are necessary for effective job performance in those areas.

Some examples of functional competencies for a marketing department include:

• Creativity and innovation
• Content strategy
• Copywriting

Some examples of technical competencies for a marketing department include:

• Search engine optimization (SEO)
• Technical SEO
• Content management systems

2. Competency definitions 

Competency definitions describe the specific skills, knowledge, abilities, and behaviors required for successful performance in a particular role or job function.

For example, copywriting is “the ability to write compelling and persuasive content to attract audiences, convey brand messages, and drive desired actions, ultimately supporting marketing goals and campaigns.”

3. Behavioral indicators

Behavioral indicators are specific, observable actions or behaviors demonstrating a particular competency. They provide concrete examples of how competency manifests in the workplace, helping to objectively assess whether an employee possesses and effectively utilizes the competency in their job performance. 

Behavioral indicators will explain specific proficiency levels.

4. Proficiency levels

Proficiency levels describe varying levels of expertise or performance for each competency, often ranging from basic to advanced. There are typically three to five levels, ranging from basic to expert proficiency.

For example, we can define behavioral indicators for five proficiency levels of a copywriter:

• Basic: Can craft clear and concise copy in brand voice for marketing materials
• Intermediate: Can research to understand the target audience, their needs, preferences, and behaviors to tailor the copy to resonate with them
• Competent: Can write copy for different marketing channels and target audiences
• Advanced: Can develop strategic messaging in marketing campaigns to drive conversions
• Expert: Can conduct A/B testing and analyze the performance of different copies to refine and improve future campaigns

Behavioral indicators and proficiency levels help managers and employees understand where an employee falls on the competency mastery spectrum and identify areas for improvement.

5. Performance metrics

Performance metrics are quantitative or qualitative measures used to evaluate an employee's performance in relation to competencies. These metrics provide a clear, objective way to assess how well an employee performs specific tasks or behaviors associated with a competency. They also help set clear performance expectations and track progress over time.

Example: For the competency of copywriting, we can define the following performance metrics:

• Basic: Number of marketing materials produced monthly
• Intermediate: Engagement metrics (likes, shares, comments) for content targeted at specific audiences
• Competent: Conversion rates from different marketing channels
• Advanced: Success rates of strategic messaging campaigns in achieving set goals
• Expert: Improvements in campaign performance metrics following A/B testing and analysis

By integrating performance metrics, organizations can ensure their competency frameworks are descriptive, actionable, and measurable, driving continuous improvement and alignment with organizational goals.

What are the different types of competency models?

Understanding the different types of competency models can help you choose the right one for your company's needs. Here’s a breakdown of the main types:

Core competency models 

These models identify the critical skills and competencies required for success in any job or role within the organization, such as innovation or adaptability. A core competency model might be sufficient for smaller organizations.

For example, in a startup with 30 employees, implementing a core competency model focusing on collaboration, teamwork, problem-solving, adaptability, and customer focus will enable a unified and agile workforce, essential for rapid growth and innovation.

Leadership competency models

Leadership competency models focus on the competencies necessary for effective leadership, such as emotional intelligence, strategic thinking, and decision-making.

For example, as a startup enters its growth phase, it introduces a leadership competency model to complement its core competency. This new model will nurture leadership skills in potential and current leaders to support its scaling phase.

Complementary guide: How to Develop a Leadership Competency Framework: Step-by-Step Guide

Job competency models 

Job or functional competency models define the skills and competencies necessary to perform a particular job or role within the organization.

For example, as a company expands, developing functional competency models for critical departments like sales, marketing, and business development will ensure that employees have specialized skills.

Technical competency model

Technical competency models focus specifically on employees' technical skills and knowledge, such as proficiency in programming languages or software. In industries requiring specific technical expertise, a technical competency model is essential. This model ensures employees have the technical skills and knowledge necessary for their roles.

For example, a technology company might implement a technical competency model for its software development team, focusing on competencies such as programming languages, software development methodologies, and cybersecurity.

Tip: Start with a core competency model to establish a solid foundation, then expand to job-specific or functional models as your organization grows and your needs become more complex. This approach ensures a scalable and adaptable framework for employee development.

Additional resources: 

• How to Create a Comprehensive Competency Model From Scratch
• How to Implement an Effective Competency-Based Performance Appraisal in Your Organization
• 9-Step Guide to an Effective Competency Mapping Process

Can a competency framework model be customized for different industries?

Yes. Organizations can customize their competency models based on their industries. While some core competencies may be universal, you might need to include industry-specific competencies to address your business sector's unique requirements and challenges. 

Customization ensures the framework is relevant and effective for an organization's specific context and goals.

For example, in a bank, the competency framework might include the following competencies:

• Financial acumen is a critical competency for roles such as investment advisors or financial analysts
• Risk management is a must-have for roles in credit analysis or portfolio management 
• For customer-facing roles, understanding and communicating regulatory requirements to clients is essential
• Competencies related to fraud detection and prevention are crucial for roles in compliance and security

Who is responsible for creating competency framework models in organizations?

Creating competency framework models in organizations is typically a collaborative effort involving several key stakeholders. The primary responsibility usually falls to the human resources department, but other key contributors include:

HR professionals

• Lead the development and implementation of the competency framework
• Ensure alignment with organizational goals and values
• Coordinate and gather information from various departments (e.g., via job analyses, questionnaires, and publicly available benchmarks)

Senior leadership and executives

• Provide strategic direction and ensure the framework supports long-term business objectives
• Endorse and promote the framework across the organization to ensure buy-in from employees and team managers 

Department heads and managers

• Offer insights into job-specific competencies required for different roles
• Ensure the functional and technical sets of competencies are relevant to their teams’ needs 

Subject matter experts (SMEs)

• Contribute technical knowledge and expertise relevant to their field and job roles
• Help define relevant competencies and behavioral indicators

External consultants (if applicable)

• Offer specialized knowledge and best practices from industry experience
• Assist in designing and refining the final set of competencies and the company-wide framework

Why is a competency framework model important for organizations?

A competency framework model is important for organizations because it helps align employee performance with business goals, ensures consistency in hiring and evaluation processes, and supports targeted development initiatives. 

By clearly defining the skills and behaviors necessary for success, competency frameworks support a range of HR processes, from recruitment and performance management to employee development and global hiring. When implemented effectively, it can drive improved performance, employee satisfaction, and business outcomes.

Setting standards for performance across the organization

Competency models provide a clear and objective framework for assessing employee performance. They enable:

• A clear and consistent set of expectations for each employee to perform their job successfully
• Managers to set performance goals aligned with organizational goals and needs
• Reviewers (peers, managers, direct reports) to evaluate employees based on their ability to demonstrate the required competencies
• Fair and consistent performance appraisals across the organization for all levels, ranging from an associate starting his career to a C-Suite executive
• A clear understanding of how “outstanding” performance is related to competencies and mastery levels
• Managers to identify areas where employees excel and where they need development, facilitating targeted coaching and training efforts

Enabling strategic employee development planning

Companies can use competency framework models to identify skill gaps and create personalized development plans. Training programs, mentoring, and other professional development activities can align with the competencies outlined in the framework, ensuring development efforts focus on building the skills and behaviors that are most valuable to the organization.

For example, after the latest competency-based performance appraisal, a software engineer identified gaps in the following technical skills: advanced coding in Python and cloud computing, which are key for their department's competency model.

As a result, they create a development plan with their manager covering the following actions:

• Mentoring: A senior software architect will provide guidance on advanced Python programming techniques and best practices in cloud computing
• On-the-job learning: The software engineer is assigned to a high-impact project that involves developing a cloud-based application, offering hands-on experience in advanced coding and cloud computing
• Training programs: They enroll in advanced Python and cloud computing courses to build theoretical knowledge and practical skills

At the end of the program, the software engineer develops the necessary technical competencies, making them well-prepared to take on more complex projects and aligning their growth with organizational goals.

Free resources: 

• Skills Gap Analysis Template
• Individual Employee Training Plan Template
• 70-20-10 Development Plan Template

Enabling career development and succession planning

Competency frameworks help identify potential leaders, create targeted development programs, and ensure continuity in critical roles. 

For example, a mid-level manager has strong strategic planning and team leadership skills, indicating their potential for a senior management role in the future.

Competency frameworks help managers create personalized development plans for high-potential employees, focusing on the skills they need to advance in their careers.

For example, if an employee shows potential for an executive role, their development plan might include training in financial management, strategic decision-making, and leadership coaching.

Enhancing employee retention

Competency frameworks contribute significantly to higher employee retention by providing a clear pathway for career development and growth within the organization. This transparency enhances their engagement and commitment to the organization. 

Employees who perceive that employers support their personal growth and career aspirations are likelier to remain loyal and committed to their organization, leading to higher retention rates. 

From an organizational perspective, higher retention rates translate into a more stable, experienced workforce.

Making recruitment more efficient

Competency models provide the basis for creating accurate and comprehensive job descriptions outlining the essential skills, knowledge, and behaviors needed for each role.

As a result, competency models enable HR teams and hiring managers to identify the right prospective employees during the recruitment process, ensuring new hires possess the required competencies for their positions.

For example, a startup requires a manager who can wear multiple hats, including finding and acquiring new clients, in addition to managing projects and supervising teams. In contrast, a large corporation might look for a manager whose primary focus is executing established projects and leading teams without the responsibility of business development.

A manager transitioning from a large corporation to a startup might struggle with the startup's need for proactive client acquisition and business development if their previous role did not require these competencies. Using competency models, the startup can clearly define these expectations in their job descriptions, ensuring they attract candidates with the right mix of skills and experience for their unique needs.

During selection, talent acquisition specialists can create interview questions and assessment methods to evaluate candidates' competencies, ensuring they choose the best fit for the role.

Free resources: Explore our gallery of job description templates. Discover templates for roles such as Financial Analyst, Technical Product Manager, and CEO.

Deel Engage: Your one-stop-shop for everything competency

Implementing a well-designed competency model is crucial for fostering a skilled workforce and achieving long-term organizational success.

However, developing competency models, especially a comprehensive company-wide model, can take up to 16 months.

Deel Engage helps you establish clear expectations and a path forward for everyone in your organization using competency models and career frameworks. You will get:

• Competency-based career progression frameworks: Retain your workforce with clear information on career growth and progression in your organization
• Competency-based performance assessments: Evaluate your team member’s performance on a competency level to identify skill gaps and growth opportunities
• Competency-based training: Access hundreds of learning resources through Deel Engage to provide workers with role-specific training materials 
• AI assistant: Fast track competency framework creation with AI

Talk to our experts about creating a custom competency model for your organization.