Quantifying the contribution of competencies toward performance

Purpose - Performance management (PM) is an important tool to enhance productivity. However, its Achilles heel is its lack of future orientation. The main reason for this is that PM systems fail to empirically link competencies to results. The purpose of this paper is to address this gap. Design/methodology/approach - This study uses literature review and deductive logic to evolve the concept of “Contribution of Competencies (CC)” and proof tests it quantitatively. Findings - The impact of a level of competency on the results of a job can be determined by CC. The gap between expected and actual CC can predict future performance, determine the training needs with precision and measure individual efficacy and human capital adequacy of a department/an organization. Research limitations/implications - This is single organization research for proof of concept. Multi-organizational research using empirical study linking CC with demonstrated performance can make the concept of CC more robust. Practical implications - CC helps to: prioritize training for competencies that would impact performance with surgical precision, fix responsibility for failure to perform on individual/organizational factors, compare individual employees across functions, determine interdepartmental/inter-firm human capital efficacy, and evaluate human capital of a firm. Originality/value - Empirical expression of the nature of relationship between competency levels and results through CC and its byproducts, individual efficacy ratio, and human capital adequacy ratio are original contributions.