Management By Competencies Explained

Management competencies are general descriptions of the underlying characteristics and behaviors needed to successfully perform a job. It identifies the key skills of every employee and develops those to reach company goals. That way, each employee is working at their strengths. It is a style that balances hard skill qualifications required by jobs and the actual soft skill qualifications used in the actual position. 

When management competencies are well-developed, they can lead to business success through improved leadership. The competencies of managers are crucial because they can lead to greater workflow productivity and happier employees. 

bright empty office indoor with computers

From this foundation, the company can grow and produce valuable customer service. Individual businesses may have multiple core competencies, creating a greater competitive advantage over other organizations. There are various competencies of management, including leadership, planning, organization, influencing others, and quality awareness. 

Core Competencies Definitions

The core competencies definition comes from an article by Prahalad and Hamel in Harvard Business Review which states core competencies are how the organization learns as a whole about coordinating a diversity of skills and blending in technology. 

Knowing the edge of your competency is important. If you think you know more than you do, you will get in trouble.

Warren Buffet

According to Prahalad and Hamel, there are three characteristics of core competency. The first is that it should not be easy for other companies to copy. The competency should contribute to benefitting the customer and providing valuable service. Lastly, it should be transferable to a wide range of markets. 

Core Competencies for Medical Students

For those in the medical field, the AAMC core competencies are slightly different. There are 15 competencies listed by the AAMC under four categories: Intrapersonal, Interpersonal, Thinking & Reasoning, and Science.

Medical students should successfully show their knowledge, abilities, and skills in these areas. More medical schools are looking at the applications using a more holistic approach. 

How Does It Work? 

Management by competencies focuses primarily on an employee’s performance and the competencies they bring to the job. When using a competency framework, companies identify, manage, and develop employee competencies. 

This requires businesses to first define the jobs and the skills required and then assess the skills of recruits and current employees to see whether their actual knowledge and skills match the job requirements. Then companies must create development plans to fill the gaps between actual skill and the required ability. Lastly, businesses need to monitor, measure and repeat these plans to achieve team, organizational, and individual goals. 

Developing A Core Competency Model

For companies wanting to develop their core competencies, they first need to discover what strengths they have that give their company an advantage. By turning those capabilities into the core competencies of the organization, companies can set themselves apart as unique. They can then develop those skills to stay ahead of their competitors. 

Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but are cheap.

Mark Cuban

The company’s strengths can guide the strategic visions of the business and its priorities for management. By communicating this value to employees and creating a work culture based on improving strengths, companies can sustain and develop these core competencies. Managing competencies in the workplace can lead to more effective employees and greater productivity in the long run.  

Why Is It Important? 

Management by competency can help in several ways. It leads employees to improve their skills and develop their workforce’s full potential. You can optimize your workforce by providing adequate training to improve their weak spots and improving capabilities that will make them better workers. 

Competency management can also lead to improved leadership development. You can use various tools to assess the leadership potential of your employees and give them more responsibility as you see fit. You can also use this model to identify future leaders and provide them with the necessary training and experience to develop their leadership competency

By developing future leaders, you also begin planning for the future transition when senior employees eventually retire. Competency programs can help prepare successors with the necessary tools, skills, and knowledge to step into a more executive role. 

Male employee browsing in laptop

In a competitive market, retaining highly skilled employees and providing them opportunities for growth and improving their performance is crucial. Instead of looking outwards for new talent, developing the abilities and skills of current employees can help create a thriving work culture of people invested in growing in their roles. 

Competencies For A Manager

There are three main competencies for managers: interpersonal, business, and personal skills. Within these three are various sub-competencies that connect people of a variety of levels. By choosing competencies and investing in those skills, a business can ensure success and long-term growth. 

This is not a complete list of all the core competencies. These are just some characteristics that managers may want to master. 

Interpersonal Communication

Communication is crucial in the workplace, especially during the pandemic. Having this skill allows you to understand, anticipate, and identify the thoughts, emotions, and concerns of others. By being aware of how others feel and reading their nonverbal behavior, word choice, and tone of voice, managers can meet the needs of others quickly and effectively.  

Motivating Others

Using interpersonal communication, management teams can encourage others and understand how to motivate people to achieve goals. Good leaders can gather people together to work effectively towards a goal. If employees perceive the management team in a positive light, they are more likely to be engaged at work. Clear and honest communication about goals and expectations can be a way to help employees feel more motivated and engaged. 


Any leader must learn how to solve problems to avoid conflicts and future issues. Whether it’s through seeking information, possible solutions, or mediating conflicts between employees, problem-solving is an important competency for any leader or business to have. 

Conflict Resolution

When conflicts arise in the workplace, a good leader can meet them head-on and resolve disagreements or problems between employees. If conflicts go unresolved, it can negatively impact the work environment and harm work relationships, so leaders must have this ability.


Companies are only as good as their hardworking employees, and it requires skill to manage their strengths well. The competencies of a manager are crucial to making other workers feel engaged towards achieving a goal together. Competencies management can go a long way with the right model and core strengths when the entire organization is on board. 

error: Protected content