Typically companies assign higher importance on meeting objectives than demonstrating competencies in performance review. But are we sure competencies are not important to our company?

1. Output (i.e. Target) is Important, so does Input (i.e. Competency)

Often, performance review focuses on what targets have been met, such as sales target or profit target. However, without knowing what it takes to meet the targets, whether the performance can be repeated may only be a random process.

We should pay attention to discover what competencies are required to deliver result and make sure staff members appreciate the importance of improving those competencies.

Meanwhile, it is true that luck plays a certain role in business. Competency-based appraisal means that even though, occasionally, output is not satisfactory due to bad luck, we still treasure employee's input through demonstration of certain competencies.

2. Competency is the Starting Point of Talent Management; Talent Management Drives Company's Value

Business models are getting more and more complex nowadays, and being more and more reliant on knowledge and competencies.

According to the book "The Strategy-Focused Organization" by Robert S. Kaplan and David P. Norton, it is believed that in 1980's, around 62 percent of company's value was "book value" which mainly consists of physical assets. Twenty years later in the beginning of twenty first century, however, 80 to 85 percent of the value was intangible assets, which are all driven by people, people's knowledge and people's competencies.

Needless to say, intangibles are even more important today. This is why we need formulate management system that can identify, review, reward and replicate employees' competencies across the company in order to optimize company's human resources and improving company's value.

3. What Competencies We Can Focus On?

  • Leadership
  • Communication
  • Team Work
  • Financial Management
  • Operation Quality
  • Technology
  • Project Management