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Competency - Based Hrm

  1. Competency-based HRM defined
  2. Competency and performance
  3. Competency definitions
  4. The most used competency framework headings
  5. Reasons for using competencies
  6. Developing a competency framework
  7. Applications of competency



Competency-based HRM uses the concept of competency and the results of competency analysis to inform and improve the processes of recruitment and selection, performance management, employee development and employee reward.



Competencies represent the language of performance. They can articulate both the expected outcomes from an individual’s efforts and the manner in which these activities are carried out. Because everyone in the organization can learn to speak this language, competencies provide a common, universally understood means of describing expected performance in many different contexts.



  1. Behavioural competencies (soft skills) – how people are expected to behave in order to perform their work well. ‘Competency is a person-based concept which refers to the dimensions of behaviour lying behind competent performance.’ (Woodruff, 1991)
  2. Technical or functional competencies (hard skills) – what people are expected to know and be able to do to perform their work well. They can also be described as work-based or occupational competencies which refer to expectations of workplace performance and the standards and outputs that people carrying out specified roles are expected to attain. The term ‘competences’ is sometimes used as an alternative to technical competencies. Woodruff (1990) defines competence as: ‘A work-related concept which refers to areas of work at which the person is competent’. It is what people have to know and be able to do to work well.
  3. Competence framework this contains definitions of all the competencies used in the whole or part of an organization (a function or occupation). It provides the basis for the use of competencies in such areas as recruitment, employee development and reward.


  1. Team orientationThe ability to work co-operatively and flexibly with other members of the team with a full understanding of the role to be played as a team member. 85%
  2. Communication The ability to communicate clearly and persuasively, orally or in writing. 73%
  3. People management The ability to manage and develop people and gain their trust and co-operation to achieve results. 67%
  4. Customer focusThe exercise of unceasing care in looking after the interests of external and internal customers to ensure that their wants, needs and expectations are met or exceeded. 65%
  5. Results orientation The desire to get things done well and the ability to set and meet challenging goals, create own measures of excellence and constantly seek ways of improving performance. 59%
  6. Problem-solving The capacity to analyse situations, diagnose problems, identify the key issues, establish and evaluate alternative courses of action and produce a logical, practical and acceptable solution. 57%
  7. Planning and organizing The ability to decide on courses of action, ensuring that the resources required implementing the action will be available and scheduling the programme of work required achieving a defined end-result. 51%
  8. Technical skills Possession of the knowledge, understanding and expertise required to carry out the work effectively. 49%
  9. Leadership The capacity to inspire individuals to give of their best to achieve a desired result and to maintain effective relationships with individuals and the team as a whole. 43%
  10. Business awareness The capacity continually to identify and explore business opportunities, understand the business needs and priorities of the organization and constantly to seek methods of ensuring that the organization becomes more business-like. 37%
  11. Decision-making The capacity to make sound and practical decisions that deal effectively with the issues and are based on thorough analysis and diagnosis. 37%
  12. Change-orientation The ability to manage and accept change. 33%
  13. Developing others The desire and capacity to foster the development of members of his or her team, providing feedback, support, encouragement and coaching. 33%
  14. Influence and persuasion The ability to convince others to agree on or to take a course of action. 33%
  15. Initiative The capacity to take action independently and to assume responsibility for one’s actions. 29%


The main reasons given by companies for the use of competencies are:

  1. The application of competencies to appraisal, training and other personnel processes will help to increase the performance of employees.
  2. Competencies provide a means of articulating corporate values and objectives so that their requirements can be embodied in HR practices and be readily understood by individuals and teams within the organization.
  3. Competencies are used as a means of achieving cultural change and raising skill levels.


  1. Programme launch decide on the reasons for developing a framework and make out the business case.
  2. Involvement and communication involve managers and staff in developing the framework. Set up a task force and inform everyone of what is happening and why.
  3. Chose competencies get the task force to draw up a list of the core competencies and values of the organization: what the organization should be good at doing and the values it believes should influence behaviour. This provides a foundation for an analysis of the competencies required by people in the organization. The aim is to identify and define the behaviours that contribute to the achievement of organizational success and there should be a powerful link between these people competencies and the organization’s core competencies.
  4. Define competencies definitions should be clear and unambiguous and should serve their intended purpose. The four questions that can be used to test the validity of a competency definition are (i) Can you describe the competency in terms that others understand and agree with? (ii) Can you observe it being demonstrated or failing to be demonstrated? (iii) Can you measure it? and (iv) Can you influence it in some way, eg by training, coaching or some other method of development? *
  5. Define how the framework will be used e.g. for recruitment, training, performance management.
  6. Test the framework test the framework in each of its applications.
  7. Finalize the framework amend as necessary following the test and produce notes for guidance on its use.
  8. Communicateinform staff of the outcome of the project and how it will affect them.
  9. Train train line managers and other appropriate staff in the uses of the framework.
  10. Implement and monitor launch the framework and check to ensure that it is working effectively.


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