Key findings show that approximately one-third of the respondents are actively using competency-based HR applications. Another third of this group are "very experienced" or "sophisticated users," and report measurable results more frequently than inexperienced users. 30 percent of experienced and sophisticated users are "very satisfied" or "satisfied" with their competency-based HR initiatives.

In contrast, 37 percent of competency implementers are "dissatisfied" or "very dissatisfied," a finding that Arthur Andersen and Schoonover believe is linked with either short-term or erratic usage. The most common barriers to effectiveness are lack of expertise, support, staff resources, fiscal resources and competing priorities.

"Although a relatively small segment of respondents actually use sophisticated competency-based programs, 80 to 90 percent of companies that do so have seen measurable results," said Don Nemerov, Principal, Arthur Andersen's Human Capital practice. "The results show that focused, long-term dedication yields significant strategic returns."

Implementers of competency-based applications reported that hiring and selection is the most effective intervention (53 percent), followed by performance management (50 percent), training (42 percent), job descriptions (38 percent), development planning (36 percent), career pathing (31 percent), succession planning (30 percent), strategic HR planning (29 percent) and compensation (19 percent).

Most common reasons for initiating competencies

The most common reasons for initiating competencies are to enhance performance expectations (33 percent) and to provide a more integrated HR process (20 percent). Other reasons include: to align behaviors with core values (11 percent), to provide individual career frameworks (8 percent), to develop bands or levels of competence (8 percent), to focus on how work gets done (7 percent), and to support superior performance (7 percent).

"Competency effectiveness is significantly correlated with the level of end user expertise. This reinforces the fact that organizations must make a long-term, top-down commitment to implementing competency-based models," said Dr. Stephen Schoonover, president of Schoonover Associates, Inc. "Like any significant change initiative, success occurs when best practices are consistently followed."

The survey also indicates that organizations of all kinds use competencies to drive performance. Competency-based initiatives occurs most commonly at the front-end of the performance development cycle, in key HR processes relating to hiring and selection, job description and standard setting.

Schoonover Associates, Inc specializes in the rapid prototyping of competency profiles and provides tools for assessment, coaching, development, career planning and strategic HR planning initiatives such as workforce analysis, succession planning, and performance management.

Arthur Andersen's Human Capital (HC) practice helps clients improve business performance by maximizing the value of and return on their human capital.