The Problem with Competency-Based Assessments

The Problem with Competency-Based Assessments by Dr. Greg Waddell

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Why do employee assessments sometimes fail to accomplish their purpose? In this post, I want to suggest a more complete approach to employee evaluations. The key to such an approach is the intersection between knowledge and wisdom.

Organizations use performance appraisals to check an employee’s skill level and potential for leadership. They use this information to place employees in the job for which they are most qualified and also to create a plan for their professional development. In an ideal situation, the goal is to both increase the employee’s value to the organization and also raise that person’s career potential.

To get the most out of such appraisals, organizations should try to find points of overlap between the individual, current operations, and the demands of a changing world.

When these appraisals fail to identify the link between knowledge and wisdom, they fall short of their objective. Only by taking a broader view of employee assessment can the organization understand the potential for improvement and growth.

Despite the wide usage of competency-based assessments — which would appear to argue for their effectiveness — I am convinced these systems begin with the following misguided assumptions:

  1. Skills at carrying out the activities necessary to perform a job with efficiency don’t necessarily translate into great organizational performance. The fact that you can shave a cat without wasting time or effort does not mean your customers want shaved cats.
  2. Another false assumption is that leadership is directly proportional to skill competency. In fact, many excellent leaders fail competency-based assessments. Cases even exist where such systems have been counterproductive to the goal of developing leaders. This is because such assessments use measures based on past performance, whereas what is needed for developing leadership is a way to assess how well an employee is able to tackle the unanticipated realities of the future and of change.
  3. Appraisals fail to measure wisdom, which is much more critical for leadership. They focus almost exclusively on observable behaviors, ignoring other critical qualities such as: personal values, emotional intelligence, and the spiritual dimension of human nature.
  4. Employee appraisals also rarely consider the organization’s internal strengths and weaknesses or the impact of the external environment on the organization’s success.

A holistic approach to assessment would not only measure knowledge and skills, but would also measure wisdom, including the internal dimensions of the individual such as values, hopes, personal vision, self-esteem, and one’s sense of meaning. Attempts to reduce employees to a set of external skills and cognitive intelligences are unable to detect the hidden potential of an individual.

A multi-dimensional approach to assessment would seek to discover the intersections between the employee’s total person and the organization’s plan for dealing with the future. Leaders would be able to examine the combination of an employee’s knowledge and wisdom and design strategies for developing both dimensions as it plans for the future.

Despite the problems and concerns regarding competency-based assessments, they can still play a role in the pursuit of organizational effectiveness. I would, however, encourage leaders to look at these assessments as only one part of a more complete approach to assessment.

Whatever systems you put into place, an effort should be made to identify people who have grown in wisdom and who may be ready to take on new challenges that would require the development of new knowledge. Leaders should also seek to identify the points of intersection between the individual as a total person and the organization as a total system, including its mission, strategy, internal culture, and external environment.

provides consulting services for churches and organizations. Contact Dr. Waddell today at gregwaddell[at]leadstrategic.com to discuss the needs of your organization.

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