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Competence and Competency: A Microscopic Analysis

Are the two terms 'competence' and 'competency the same? On the face of it, these two terms sound like synonyms. However, that is a common misinterpretation. Often these two terms are used interchangeably. Very often, managers make erroneous evaluations because of the lack of conceptual understanding of these two terms. So let us study these two terms with an example, say, an accounts manager.

Distinction between Competence and Competency
In a typical organization, an accounts manager needs the following skills: knowledge of accounts and various taxation policies, numerical ability, financial acumen, and other such. If we were to presume that any person with the above mentioned skills has the competency to be an accounts manager, then we would be quite wrong. Merely job related skills are not adequate for a person to do his job well. To be a competent accounts manager, the person would need job related skills, and a disposition to be a good accounts manager. In other words, he also needs behavioral aspects to make him capable. For instance, the accounts manager would need to be methodical, organized, and accurate. These behavioral dimensions would enhance his job skills to make him a competent accounts manager. It therefore means that
  • Competence would refer to skills that are required to do the job well.
  • Competency refers to special attributes that enable a person to perform his job.
Using Competence and Competency in Employee Assessment
Competence is very essential for the purpose of doing the job. However, competence alone is not enough. Competencies are also important to improve performance. These are job related behaviors that enhance individual capability. Competency makes a person unique to his job. In the study of employee assessment, competency analysts should focus not just on the competences, but also on the competencies.

While doing competency analysis, the expert must take into account the various behavioral dimensions that clearly demarcate the high performer from the others. Competencies that correspond to superior performance should be isolated for assessment. All other behaviors which mildly affect performance should be ignored to make the task of assessment simpler. For example, in the case of a sales rep, competencies like negotiation skills, and confidence, would qualify as important for the success of a salesman.

Competency dimension analysis delves into the socio-psychological profile of personnel behavior. If probed thoroughly, companies can save thousands of dollars that go in wrong hiring decisions.

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