What is competency?

What is competency?

Wednesday, August 24, 2016 3:09 pm

Dada Adefolami

Dada Adefolami

By Dada Adefolami

A competency is the capability to apply or use a set of related knowledge, skills, and abilities required to successfully perform “critical work functions” or tasks in a defined work setting. Competencies often serve as the basis for skill standards that specify the level of knowledge, skills, and abilities required for success in the workplace as well as potential measurement criteria for assessing competency attainment.

Organizations operate in a climate of considerable change, often in highly competitive markets and have ever-increasing demands made upon them by their stakeholders and by the capital markets within which they operate.

Competence indicates sufficiency of knowledge and skills that enable someone to act in a wide variety of situations. Because each level of responsibility has its own requirements, competence can occur in any period of a person’s life or at any stage of his or her career.

Competence is the capacity of a person to understand a situation and to act reasonably. Disputes regarding the competence of an individual are settled by a judge and not by a professional such as a doctor or a psychiatrist, although the judge may seek expert opinion before delivering at a judgment..

More than ever before, there is a need for professionals at work to make a more effective contribution, almost immediately after appointment and to continuously improve their performance at work over time. The way this can be achieved is to ensure that those in work are appropriately qualified and trained to carry out their roles responsibly and competently.

Professional competency is defined as:

The ability to perform a work role to a defined standard with reference to real working environments. (IFAC, 2001)

What is a competency framework?

Competency frameworks are used as a benchmark for professional bodies to ensure that their members possess relevant and up-to-date skills which allow them to undertake their role competently and effectively. These frameworks are designed on the basis of consultation with a number of stakeholders including trainees, qualified members, tuition providers, employers, and trade and professional associations. This consultation can take the form of surveys, focus groups or critical incident reporting. The consultation process helps to ensure that the competences developed are relevant, practical and up to date.

global professional bodies have developed and used competency frameworks to guide education and training practice. Increasingly, government agencies use competency frameworks sometimes known as occupational standards as a basis for consistent and flexible qualification frameworks, where qualifications from different professions are required to include competences relating to these occupational standards to ensure that those qualified are ‘fit for the role’ and can make an immediate and continuing contribution at work.

IFAC has specified competences and skills required in professional accountants in IES 3, Professional Skills and General Education effective from 1 January 2005.

IES 3 groups together five broad sets of skills professional accountants require. Within these main groupings, the particular skills to be acquired are specified as follows:
1. Intellectual skills
1. Ability to locate, obtain, organize and understand information from human, print and electronic sources
2. Capacity for inquiry, research, logical and analytical thinking, powers of reasoning and critical analysis
3. Ability to identify and solve unstructured problems which may be in unfamiliar settings

2. Technical and functional skills
1. Numeracy (mathematical and statistical applications) and IT proficiency
2. Decision modeling and risk analysis
3. Measurement
4. Reporting
5. Compliance with legislative and regulatory requirements

3. Personal skills
1. Self-management
2. Initiative influence and self learning
3. Ability to select and prioritize within restricted resources and tight deadlines
4. Ability to anticipate and adapt to change
5. Consider implications of professional value, ethics and attitudes to decision making
6. Professional scepticism

4. Interpersonal and communication skills
1. Work with others in a consultative process to withstand and resolve conflict
2. Work in teams
3. Interact with culturally and intellectually diverse people
4. Negotiate acceptable solutions and agreements in professional situations
5. Work effectively in a cross-cultural setting
6. Present, discuss, report and defend views effectively through formal, informal, written and spoken communication
7. Listen and read effectively, including sensitivity to cultural and language differences

5. Organizational and business management skills
1. Strategic planning, project management, of people and resources and decision making
2. The ability to organize and delegate tasks, to motivate and to develop people
3. Leadership
4. Professional judgment and discernment

Developing a competency framework
The development of a competency framework requires a process starting with a detailed analysis of the environment in which the professional operates, identifying the key roles and responsibilities and sub-dividing these roles into tasks, specifying the attributes required for these tasks to be completed to a defined standard.

In this analysis, a set of defined standards for the identified tasks can be developed which are measurable and verifiable. Such measures used to determine competence must be valid, reliable, relevant, practical and transferable. By transferable, this means that the measure should verify that the task could be carried out by the person assessed, to the defined standard in a range of working contexts and settings other than the context in which the measure was originally taken. The measures used for assessing competence can include on-the-job tests, observation, simulations, and written exams.

Benefits of competency
There are a number of benefits that can be obtained from developing relevant competency frameworks for professionals at work. These are as follows:

· They provide clear guidance to professional qualifying bodies, tuition providers and employers on how to develop and assess competence, and how to maintain and update these competences during the member’s working life.

· They establish defined, consistent and current standards or attributes required to undertake professional roles competently, which are transferable from one context of the role to another.

· They can add value in the workplace by allowing a gap analysis between actual performance levels and the defined standards, to better target relevant training and development programmers at those who need it.

· Employers and business organizations that support and engage with their employees in training and development will benefit from more effective, efficient and motivated employees, who will contribute to increased performance, productivity and profitability.

Business organizations are made up of a number of departments and functional areas which themselves are formed of individuals. These individuals, often with professional responsibilities in such areas as procurement, production, marketing, accounting and other support services must be appropriately qualified and trained to undertake their roles efficiently and effectively. This is necessary to ensure that the organization remains competitive and continues to meet its obligations to stakeholders and the capital markets.

Competence is the ability of an individual to do a job properly. A competency is a set of defined behaviors that provide a structured guide enabling the identification, evaluation and development of the behaviors in individual employees. The term “competence” first appeared in an article authored by R.W. White in 1959 as a concept for performance motivation. Later, in 1970, Craig C. Lundberg defined the concept in “Planning the Executive Development Program”.

Well-researched and appropriately designed professional competency frameworks set a consistent benchmark for qualifying organizations, tuition providers and employers to set minimum defined standards of performance at work. Professionals who strive to meet and exceed these standards will contribute to increased productivity and to the greater flexibility and adaptability of the professional workforce, which provides benefits for all concerned.

The key to competency assessment is that it is based on actual skills and knowledge that a person can demonstrate in the workplace or other contexts. This is different to other approaches where there is no requirement to demonstrate knowledge and skills – like approaches where people just answer questions as a test of their knowledge and skills. The problem with testing is that it doesn’t guarantee that a person will be able to do something – it just verifies that they know something.

Dada Suraju Adefolami, Professor of Finance, School of Business Administration, UNEM University Costa Rica, is a Finance / Management Consultant and Certified Forensic Accountant. You can reach him via: [email protected]; 08052043855

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