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What is a Competency Management System?

By Karize Uy
Updated: May 17, 2024

A Competency Management System (CMS) is a tool that many companies and organizations use to determine and improve an employee’s level of competency. It is usually a web-based or software application, making it easier and more accessible to use. The CMS can also provide faster results and a more objective analysis of an employee’s competence.

A modern Competency Management System acknowledges the uniqueness of an individual. By identifying an employee’s strengths and weaknesses, it can create a learning and training program customized for each employee. Not only can the system help present employees, but it can also assist a company’s department of human resources to hire the most fitting applicants. When it comes to hiring applicants, one major issue is the “skills gap,” which refers to the disparity between an applicant’s existing skills and the skills that a certain profession requires. Using an evaluation test, the CMS determines the skills gap and helps reduce it.

Companies that use a Competency Management System also have an added advantage of matching an employee’s skills and knowledge with a certain job position. Usually, the CMS can create an employee’s profile that can be compared to a current job profile, making for an easier decision on which employee is most suitable for the position. The system can also create “succession planning,” which helps a company determine the candidates most deserving of a promotion or those qualified to move to another vacant position.

Not only does it analyze an employee's knowledge and skill level, but the system can also evaluate other traits as well, such as emotional intelligence (EQ). Companies often place an important value on how their employees associate with each other to create an ideal working environment. The Competency Management System can also be used to evaluate personalities and behaviors, as they have an effect on an applicant or employee’s creation of working habits and motivation methods.

The system can be created in a more conventional way with papered documents and tests, but the computerized version can be more convenient. The computerized database can be updated faster if, for instance, an employee’s profile changes or the company imposes a new policy. It can also consume less time and space in filing the documents. A Competency Management System also creates an atmosphere of transparency, wherein both employers and employees can access relevant information about each other and about the company as a whole.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
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