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